Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Proxy Contest (February 2013)
32 slides from Sandridge Energy's proxy contest presentation, Feb 20, 2013
Slide 1: Updated Information on SandRidge Related-Party Land Transactions
February 2013 Updated Information on SandRidge Related - Party Land Transactions
Slide 2: Disclaimer
1 DISCLAIMER THIS PRESENTATION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY. IT DOES NOT HAVE REGARD TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY, OR THE PARTICULAR NEED OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS
Slide 3: Massive scale of competition could yield billions in profit for the Ward family
2 Massive scale of competition could yield billions in profit for the Ward family • We believe the Ward family has acquired massive mineral rights in the Mississippian – ½ million acres! • Extensive overlap with SandRidge – in 22 counties in Oklahoma and Kansas…and often acquired in advance of, or a
Slide 4: Extraordinary investment by SandRidge stockholders could yield enormous profit for the Ward family
3 Extraordinary investment by SandRidge stockholders could yield enormous profit for the Ward family The Mississippian is still a play in its developmental stage There is still controversy about the size of the play, and whether it is statistical (equally good across the play) or has sweet spots It
Slide 5: Questions on competing buyers of mineral rights
4 Is it not logical that the existence of another buyer, acquiring massive amounts of mineral rights in the same areas, would affect the price SandRidge had to pay ? Were SandRidge resources and information used for the benefit of the Ward family entities? Given how expensive infrastructure developm
Slide 6: CEO Tom Ward and his family have been an aggressive competitor to SandRidge
5 CEO Tom Ward and his family have been an aggressive competitor to SandRidge, as we noted in the past They aggressively buy land, often in advance of the company, and then either keep it, sell it to others or even in a few instances, sell it to SandRidge We think this competition is abhorrent . The
Slide 7: The scale of this competition is truly massive
6 … and the scale of this competition is truly massive! WCT Resources has been among the largest acquirers of mineral rights in the Mississippian Previously, we had not yet completed enough work to assess the degree of competition and overlap. Based on our additional work, it is now clear to us that
Slide 8: Scope of WCT Resources
7 Scope of WCT Resources So far we have found overlap between WCT Resources and SandRidge in 22 counties
Slide 9: Estimated Size of WCT Resources
8 Estimated Size of WCT Resources County Acreage Thomas, KS 105,120 Wallace, KS 85,594 Kingman, KS 59,664 Sherman, KS 42,395 Pratt, KS 32,973 Scott, KS 25,900 Gove, KS 18,765 Logan, KS 16,776 Cowley, KS 14,290 Barber, KS 12,690 Reno, KS 12,549 Sedgwick, KS 11,055 Sumner, KS 9,589 Kay, OK 7,088 Pawne
Slide 10: WCT Resources in context
9 WCT Resources in context Operator Mississippian Acres (000s) Mississippian Current Rigs SandRidge 2,300 29 Chesapeake 2,000 8 Shell 600 2 Devon 545 12 WCT Resources ~475 0 Chaparral 260 4 Range Resources 157 4 Highmount 100 3 Midstates 97 4 Redfork 75 3 Calyx 60 0 PetroQuest 27 1 Source: SmithBits
Slide 11: How does the Board justify what has happened?
10 How does the Board justify what has happened? By claiming the family - related entities are “independent” of SandRidge ! Under Tom Ward’s 2006 employment agreement, acquisition of mineral rights was expressly prohibited If Tom Ward were found to have any meaningful involvement in the activities o
Slide 12: Should WCT Resources be presumed to be independent of SandRidge?
11 Should WCT Resources be presumed to be “independent” of SandRidge ? Ward Children’s Trust, WCT Resources and SandRidge have historical overlap in addresses, employees, and sources of funding. We believe it is absurd for the company to tell stockholders to simply presume the entities’ independence
Slide 13: Appendix: Additional Illustrative Examples of Related-Party Land Transactions
Appendix: Additional Illustrative Examples of Related - Party Land Transactions 12
Slide 14: Kay County, Oklahoma example
13 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On December 9, 2010, Continental Land Resources acquired mineral rights in Kay County, Oklahoma¹ We believe Continental Land is a company that provides land acquisition services. Land acquisition companie
Slide 15: Kay County, Oklahoma example
14 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On November 11, 2010, Continental Land Resources acquired mineral rights in Kay County, Oklahoma¹ » (2) Two months later , on January 18, 2011, SandRidge acquired partial mineral rights covering the same
Slide 16: Kay County, Oklahoma example
15 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » ( 1) O n November 17, 2010, Continental Land Resources acquired mineral rights in Kay County, Oklahoma ¹ » (2) Three months later , o n February 17, 2011, Superior Title Services assigned mineral rights to Sa
Slide 17: Kay County, Oklahoma example
16 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » ( 1) O n November 17, 2010, Continental Land Resources acquired mineral rights in Kay County, Oklahoma ¹ » (2) Two weeks later , o n November 29, 2010, SandRidge acquired partial mineral rights covering the s
Slide 18: Kay County, Oklahoma example
17 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » ( 1) O n November 23, 2010 and December 9, 2010, Continental Land Resources acquired mineral rights in Kay County, Oklahoma ¹ » (2) Two months later , o n February 17, 2011, 2011, Superior Title Services assi
Slide 19: Reno County example
18 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On May 20, 2011, WCT Resources acquired mineral rights in Reno County, Kansas¹ » (2) Three months later , on August 11, 2011, Bearcat Land acquired mineral rights in adjacent acreage We believe Bearcat La
Slide 20: Reno County example
19 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On May 5, 2011, WCT Resources acquired mineral rights in Reno County, Kansas¹ » (2) Three months later , on August 11, 2011, Bearcat Land acquired mineral rights in adjacent acreage » (3) One month later
Slide 21: Reno County example
20 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On May 20, 2011, WCT Resources acquired mineral rights in Reno County, Kansas¹ » (2) Two months later , on July 15, 2011, Bearcat Land acquired mineral rights in adjacent acreage » (3) Three months later
Slide 22: Reno County example
21 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On February 24, 2011, Bearcat Land acquired mineral rights in Reno County, Kansas¹ » (2) Three months later , on May 18, 2011, WCT Resources acquired mineral rights in adjacent acreage » (3) Five months l
Slide 23: Sedgwick County example
22 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On March 28, 2011, WCT Resources acquired mineral rights in Sedgwick County, Kansas¹ » (2) Six months later , on September 28, 2011, WCT assigned those mineral rights to Shell » (3) One week later , on Oc
Slide 24: Payne County, Oklahoma example
23 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On June 15, 2010, Jackfork Land assigned mineral rights to WCT Resources in Payne County, Oklahoma¹ » (2) Seven months later , on January 14, 2011, SandRidge acquired mineral rights in adjacent acreage »
Slide 25: Wallace County example
24 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On December 20, 2011, Continental Land Resources assigned mineral rights to WCT Resources in Wallace County, Kansas¹ » (2) Three months later , on March 28, 2012, SandRidge acquired mineral rights in adja
Slide 26: Alfalfa County, Oklahoma example
25 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) I n October 2010, SandRidge acquired mineral rights in Alfalfa County, Oklahoma¹ » (2) One year later , on July 28, 2011, TLW Land and Cattle purchased the surface rights and a 50 percent interest in the
Slide 27: Sumner County example
26 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On March 10, 2011 and April 4, 2011, WCT Resources acquired mineral rights in Sumner County, Kansas¹ » (2) Three months later , on July 25, 2011, SandRidge acquired mineral rights in adjacent acreage » (3
Slide 28: Kingman County example
27 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On June 6, 2011 and June 20, 2011, Bent Tree assigned mineral rights to WCT Resources and 192 Investments in Kingman County, Kansas¹ » ( 2) Two months later , on August 17, 2011, Bearcat Land acquired min
Slide 29: Gove County example
28 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On December 20, 2011, SandRidge acquired mineral rights in Gove County, Kansas¹ » (2) Four weeks later , on January 27, 2012, Continental Land Resources acquired mineral rights in adjacent acreage » (3) E
Slide 30: Gove County example
29 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On November 11, 2011, Continental Land Resources acquired mineral rights in Gove County, Kansas¹ » (2) Four months later , on March 28, 2012, SandRidge acquired mineral rights in adjacent acreage » (3) Fi
Slide 31: Gove County example
30 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On November 11, 2011, Continental Land Resources acquired mineral rights in Gove County, Kansas¹ » (2) One month later , on December 20, 2011, SandRidge acquired mineral rights in adjacent acreage » (3) E
Slide 32: Gove County example
31 Examples of adjacent acquisitions » SEC disclosure : » None » What actually happened : » (1) On November 18, 2011, Continental Land Resources acquired mineral rights in Gove County, Kansas¹ » (2) Eight months later , on July 1, 2012, SandRidge acquired mineral rights in adjacent acreage » ( 3) On