The vast majority of transactions in which WCT Resources acts in advance, or alongside, of SandRidge have never been disclosed by the Company. For only the small percentage of actual direct transactions in which land or rights were flipped to SandRidge, the Company has had very limited disclosure – this is the “one quarter of one percent” the Company refers to. Yet, even for these transactions, we do not believe the disclosure has been sufficient. As an example, to provide limited disclosure regarding transactions with WCT Resources, and yet not disclose that those very assets had been held by TLW Land & Cattle just months before being sold to SandRidge, is a significant omission. TPG-Axon has the following questions for the Board:
- Why did the Company not disclose the history of ownership of those assets?
- Why were assets transferred to the “independently managed” WCT Resources and then resold to SandRidge shortly thereafter?
- Is the Board now taking the position that TLW Land & Cattle is also an “independently managed” company?
- If not, then why did Mr. Ward, in his role at TLW Land & Cattle, choose to sell rights to WCT Resources only to then choose, in his role as CEO of SandRidge, to buy them for the Company?
- If these transactions were appropriate, why did the Company not disclose the history of ownership and the reasons for the complex transfer?
- Even leaving aside the claim that WCT Resources is independently managed, is it not relevant to disclose that the very assets being bought by the Company were indirectly owned by the CEO, by virtue of his ownership of TLW, just months prior to such acquisitions?