SandRidge CEO Resigns as Icahn-Backed Board Eyes Spending Plan
(Bloomberg) -- SandRidge Energy Inc., the oil and natural gas producer pushed by activist investor Carl Icahn to pursue a sale last year, said Chief Executive Officer Paul McKinney will resign as the company evaluates its 2020 spending plan.
John Suter, SandRidge’s chief operating officer, will service as interim president and CEO, the company said Friday in a statement. McKinney became CEO in January, after serving previously as COO of Yuma Energy Inc.
“In light of the current challenging price environment, we are reevaluating our 2020 capital plans with an emphasis on cost control and free cash flow generation,” Jonathan Frates, SandRidge’s Icahn-backed chairman of the board, said in the statement. “Our goal is to maintain our strong balance sheet and pursue only high return opportunities.”
- SandRidge shares slumped last year after saying “multiple” potential bids for the company undervalued the producer and its resources. Instead, following a strategic review, SandRidge said it would pursue a plan to develop its holdings in Oklahoma and Colorado.
- Icahn, who held about 13% of the company as of Sept. 30, won control of five of eight board seats last year following a proxy fight in which he argued the company couldn’t be trusted to get the best value for shareholders.
- SandRidge was the second act of Tom Ward, who co-founded Chesapeake Energy Corp. with Aubrey McClendon. Oklahoma City-based SandRidge was once worth $11 billion and now has a market capitalization of about $141 million.
- Shale drillers, pummeled by volatile oil and gas prices, have been pressured by shareholders to cut spending and boost free cash flow. Public equity and debt markets are increasingly shunning all but the largest producers.
- SandRidge operates primarily in Oklahoma’s Stack play and in Colorado. Shale drillers outside the Permian Basin, the most prolific U.S. oil play, have struggled amid lower prices for crude and gas.
- The shares were little-changed in pre-market trading in New York. SandRidge had tumbled about 48% this year through Thursday.
- For more on the SandRidge statement, click here.
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