NEW YORK A second large investor has called for SandRidge Energy Inc SD.N to replace Chief Executive Officer Tom Ward and overhaul its board, saying the oil and gas company has suffered from "critical failures of management and board oversight."
Mount Kellett Capital Management, which said it owned about 4.5 percent of SandRidge's outstanding shares, sent the company a letter on Thursday calling for the changes. Mount Kellett is following the lead of hedge fund TPG-Axon, which sent a similar letter last week.
SandRidge, which has been searching for a strategy to improve returns, has come under fire from investors because its shares have underperformed peers.
Mount Kellett also called for the company to consider selling itself, saying it believes SandRidge is worth more than $20 a share - nearly four times its current stock price.
SandRidge's shares rose 3.5 percent to $5.37 in early afternoon New York Stock Exchange trading.
SandRidge acknowledged in a statement last week that it needs to improve performance for shareholders and said it is open to constructive engagement with its investors.
Last week it said it planned to sell some of its assets in the Permian Basin in western Texas.
The company, which has shifted its focus from natural gas to oil in reaction to falling natural gas prices, also made a steep cut to its estimates on how much oil it believes it can recover from key wells in the Mississippian region of Oklahoma and Kansas.
Since that announcement, the company's shares have fallen 11 percent, and Mount Kellett said a Permian sale would reduce the company's value.
"In the interim, we urge the board not to take any hasty strategic actions, such as the precipitous sale of the Permian assets, which will permanently impair stockholder value," the Mount Kellett letter read.
Last week, hedge fund TPG-Axon, which controls a 6.2 percent stake in the company, called for SandRidge to consider selling itself, for Ward to step down, and for changes to the board, saying management's strategy has been "incoherent, unpredictable and volatile.
Ward bought into SandRidge's predecessor and took over the company in 2006 after leaving Chesapeake Energy (CHK.N) - a company he co-founded with Aubrey McClendon. Chesapeake has had to contend with its own governance and performance problems this year and McClendon has been stripped of his title of chairman of that company as a result.
(Reporting by Mike Erman in New York and Anna Driver in Houston; editing by Lisa Von Ahn and Maureen Bavdek)