Chesapeake Co-Founder Ward Funding New Energy-Production Company
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 today at a 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 between 2009 and 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. (CHK), which he co-founded with Aubrey McClendon.
“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 over 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.
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