Hedge fund calls for ouster of SandRidge CEO

NEW YORK (AP) -- A hedge fund shareholder of SandRidge Energy Inc. has called for the oil and gas company to oust its CEO and consider putting itself up for sale, citing a slew of problems including a languishing share price.

SandRidge shares jumped 9.8 percent in morning trading on the news, to $6.59, after the opening bell.

In a letter to the company Thursday, TPG-Axon Capital Management LP claims the stock market "has lost confidence in management." It calls SandRidge's management strategy "incoherent, unpredictable, and volatile" and says it is "amplifying uncertainty regarding the future course of the company." That includes accusations of "poor strategic planning and reckless spending."

The letter further asserts that the "stock has been a disastrous performer." The stock has lost one-third of its value over the last year. It says the stock has been the worst performing energy stock since its initial public offering five years ago.

SandRidge stock has declined 76 percent since 2007 and 91 percent from its 2008 peak.

The hedge fund, which owns about 3 percent of SandRidge, according to FactSet, said it wants CEO Tom Ward to be replaced, claiming his "credibility is too damaged to continue in his role." It also wants to shake-up the company's board, and is asking SandRidge to consider strategic alternatives, including a possible sale.

A call to the Oklahoma City-based company before business hours on Thursday wasn't immediately returned.

Ward joined the company in June 2006, buying a big stake as he became CEO and chairman. Ward was the co-founder of natural gas producer Chesapeake Energy with Aubrey McClendon.

McClendon is currently CEO of Chesapeake and has seen his own issues with angry shareholders and accusations of improprieties. He was stripped of his chairmanship in June after claims that he was using his personal stakes in company wells to get huge loans and other conflicts of interest.

Chesapeake was at the forefront of a boom in natural gas production just a few years ago, when it seemed the U.S. was running out of natural gas. But prices dropped earlier this year to the lowest point in a decade as extensive production significantly boosted supply. Prices have recovered some since.