For information on TPG-Axon’s proposals and on the process for voting shares in favor of those proposals, go to

A full copy of TPG-Axon’s letter to SandRidge stockholders can be found below:


Dear Fellow SandRidge Energy Stockholders:

Strategic blunders, extraordinary spending and poor governance have caused SandRidge stock to decline almost 80 percent since the 2007 IPO. This destruction of value is not an accident – it has been a result of the choices made, and actions taken, by Tom Ward and the current Board of Directors. If the Company were run properly, we believe stockholders should realize Net Asset Value (NAV) per share of $10 to $12. However, without immediate change, we believe value will continue to be destroyed by wasteful spending, high financing costs and unsustainable levels of capital expenditures.

To restore value, we must take action now to replace Tom Ward and a majority of his incumbent Board.

We are at a critical point for SandRidge – over the next year, the Company is planning on spending an amount equal to almost 80 percent of our entire remaining market capitalization on compensation, overhead, financing costs, and capital expenditures. We cannot afford any more waste or missteps.

Can we trust Tom Ward and the current Board to make decisions in our best interests? Is the Company moving in the right direction, as he claims?

Consider the following:
  • Nine research analysts recently downgraded their rating on SandRidge – there are now more sell ratings on SandRidge stock than any of its self-described peers!
  • The share price has continued to decline sharply and severely underperformed its peers
  • Management reduced guidance for the Mississippian returns on the third quarter conference call, and has been forced to sell assets to make up for increased shortfalls in projected cashflow
  • Weak results from producing Mississippian wells in the SandRidge Royalty Trusts, which management has offered little explanation for

Institutional Shareholder Services (ISS), a respected independent and impartial proxy advisory firm, after examining arguments from both sides, has recommended that SandRidge stockholders replace a majority of the Board, stating:
  • “The apparent failures of stewardship on this board are legion.”
  • “The company’s abrupt, piecemeal approach to corporate strategy and concomitant lack of capital discipline have increasingly limited the company’s financial flexibility, and engendered a deep distrust in the market.”
  • “From a stutterstepping business strategy and weak capital discipline which reduced financial flexibility so far that the sale of the company’s most valuable non-core asset cannot close its anticipated funding gap—to a compensation program which failed to tie pay to performance, making the CEO one of the highest paid in his industry even as shareholder value declined by nearly three quarters over his tenure—to approving numerous related-party transactions which, under public scrutiny, begin to look more like front-running the company’s own lease acquisitions than adding value unavailable through a less conflicted means—there is little reason to believe the outside directors who are specially charged with looking out for the interests of unaffiliated shareholders are best equipped to effect the necessary change at SandRidge.”
  • “Given the fact pattern underlying the dissidents’ extensive case for change, and the evidence of appropriately extensive advance planning to mitigate risks of unintended consequences, shareholder support for a majority change of the SandRidge board is warranted.”

Mr. Ward and the current Board have failed to adequately address serious governance and related party transaction issues we have outlined in extraordinary detail and that ISS has characterized as “transactions which, under public scrutiny, begin to look … like front-running the company.” While Mr. Ward and the Board would have you believe these issues are “non-material,” our continuing and exhaustive investigation into SandRidge’s related-party land transactions has identified an undeniable pattern of conflicted transactions of large proportions. The disregard for good governance and stockholder interests is appalling.

The following commentary from respected journalists summarizes the sentiment:
  • “Mr. Ward’s sense of entitlement is only exceeded by his disregard and hostility towards the shareholders, the owners of the company. Not surprisingly, as the fortunes of SandRidge are sloping down, he has been unloading his shares all along the way.” – Richard Finger, Forbes, 2/11/13
  • “Given SandRidge's documented governance shortcomings, the company needs to justify its current board, not just object to any alternative.” – Christopher Swann, Reuters Breakingviews, 2/11/13
  • “The language in Ward's contract "doesn't pass the smell test," said Anne Sheehan, director of corporate governance for the California pension fund CalSTRS, which owns 880,000 SandRidge shares. This board has sanctioned what Ward is doing." – Michael Erman, Reuters, 2/6/13

As ‘Rome Burns’ for stockholders, what has our current Board of Directors done?
  • Announced $21 million in compensation for Mr. Ward for 2012; yet again, an extraordinary amount relative to peers, and outrageous relative to the poor stock performance of the Company
  • Amended Mr. Ward’s employment agreement (December 2011) to actually expand the ability for Mr. Ward to compete with the Company!
  • Purchased a new, and even better, private jet for Mr. Ward’s personal use – a Falcon 900EX (which has a 6,000 mile flying range and lists for $35 million)
  • Approved more unexpected M&A, including the acquisition of Dynamic Offshore, and the sale of the Permian assets
  • Enacted a poison pill, and amended the bylaws to make changing the board more difficult


Unlike Mr. Ward, our interests are totally aligned with yours, and the independent director nominees we are proposing are committed to taking the necessary actions to “right the ship” to maximize stockholder value. We own 34,216,000 shares or seven percent (7 percent) of the Company. We are convinced that our shares, and yours, are significantly undervalued IF the Company can be better run, with a new CEO and new independent Board.


However, without change, we believe that there will be little or no upside for stockholders in the coming years. Financing costs and overhead expenditures are simply too high and will continue to burn tremendous value at an alarming rate. Given the strain of massive financing needs for years to come, we believe the Company’s current model is unsustainable.

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