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Chesapeake Co-Founder Ward Funding New Energy Company

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Oct. 18 (Bloomberg) -- Tom Ward, who built SandRidge Energy Inc. into a $10 billion company before being fired as chief executive officer in June, has begun a new venture to acquire oil and natural gas wells.

Ward, 54, said he is dipping into his own capital to fund closely held Tapstone Energy. He was removed from Oklahoma City-based SandRidge after investors questioned transactions he and his family members had with the company, days before an activist shareholder was poised to gain control of the board.

“I am long-term bullish on natural gas in the U.S. so I would lean toward natural gas,” Ward said yesterday at the Bloomberg Link Oil & Gas Conference in Houston. Since leaving SandRidge earlier this year, Ward has been trading energy and agricultural commodities, he said.

While at SandRidge, Ward avoided following other energy producers into oil-shale formations, instead favoring older conventional resources. The company’s market value reached $10 billion in 2008 before dropping to around $3 billion today. Ward spent $3.6 billion from 2009 to 2012 on older reserves, with the goal of cutting production costs as crude prices rose. His buying spree turned SandRidge into the most leveraged independent producer by early last year.

Ward was dismissed before reaching his goal of doubling oil production by the end of 2014, tripling earnings before interest, taxes, depreciation and amortization, and reducing its debt ratio. He started SandRidge in 2006 after leaving Chesapeake Energy Corp., which he co-founded with Aubrey McClendon.

Fast Runner

“He’s a company builder,” Jason Wangler, an analyst at Wunderlich Securities in Houston, said in a phone interview. “He runs very fast, runs very hard and doesn’t want 100,000 acres, he wants 1 million.”

McClendon, who left Chesapeake in April, said last week he had raised about $1.7 billion from private-equity firms for his new company, American Energy Partners LP.

Because the SandRidge termination was without cause, Ward was eligible to receive a $53.3 million lump sum, vesting of 6.3 million shares of previously issued restricted stock and his base salary for the next 36 months, the company said at the time.

The termination of Ward was the latest in a series of shareholder campaigns that have shaken up the U.S. oil and natural gas industry in the past year. Chesapeake’s McClendon, who co-founded the company with Ward in 1989, stepped down after shareholders criticized personal loans he got using company wells as collateral.

Ward said he is reluctant to take his new exploration company public. Self-funding the company rather than seeking private-equity money at this point gives him more flexibility in doing what he wants to do, Ward said.

“They can tend to be fairly graspy,” Ward said of private-equity players. “You just have a lot more choices on what you do with your life.”

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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