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Sandridge Energy letter to investors, rebuts Icahn

I would like to take this opportunity to provide an update on our previously announced review of strategic alternatives, which is well underway.

We are moving forward expeditiously. As mentioned in our two most recent earnings calls, we have conducted a thorough and comprehensive assessment of the Company's entire undeveloped asset inventory. In conjunction with this assessment, we created an associated unrisked 3P reserve development plan that provides a clear understanding of the Company's long-term growth potential and net asset value. The quantified reserve potential and summary long term financial projections associated with this 3P plan are set forth on a Form 8-K furnished to the Securities and Exchange Commission on May 25, 2018. This plan provides the necessary foundation to properly assess all proposals received as a result of our strategic review process.

With the support of our independent financial advisor, RBC Capital Markets, we initiated solicitation of interested parties and the Company has entered into mutual non-disclosure agreements with several of them – including Carl C. Icahn and his affiliates (collectively, "Icahn"). These parties are thoroughly reviewing the information contained in our confidential data room and preparing to participate in management presentations that begin this week. As we previously announced, we will consider divestment or joint venture opportunities associated with our North Park Basin assets, potential corporate and asset combination options and a sale of the Company, including offers, if presented, from Icahn.

While we are moving quickly, we do not expect to complete the process prior to the Annual Meeting. Our priority is to ensure we reach out to any and all interested parties and provide sufficient time and resources to ensure the best possible outcome is presented for consideration. We expect to receive initial indications of interest before the end of June, after which the Board will evaluate, conduct diligence on and engage in negotiations with potential counter-parties that have submitted viable proposals. Our ultimate objective is that the process outcome provides the best platform for unlocking the full potential value and the realization of that value for the SandRidge shareholders.

Our Board is responsive and accountable to all shareholders and best positioned to conclude the ongoing strategic alternatives review process in a fair and impartial manner. In the past four months, in light of the feedback received from extensive discussions with our largest stockholders, SandRidge's Board has committed the Company to a new strategic direction, implemented a management transition plan to replace the Company's President and Chief Executive Officer and Chief Financial Officer and dramatically reduced the Company's general and administrative expenses. We have also refreshed our Board with 40% of our directors having joined in 2018.

The Board continues to demonstrate its commitment to responsive governance by announcing an expansion of the Board from five to seven members at the 2018 Annual Meeting in order to accommodate two additional independent directors recommended by Icahn and by using a "universal proxy card" at the upcoming Annual Meeting to enhance shareholders' ability to elect their desired directors. In an effort to avoid this proxy contest, we also invited two of Icahn's nominees to immediately join as directors which would have provided it with direct representation of more than 25% of our Board. Icahn unilaterally rejected our constructive offer because it did not give Icahn complete control.

Our nominees have extensive experience in conducting strategic alternatives processes – four of our five directors have successfully led many public company sales processes as board directors, executive team members, or as a financial advisor. A Board led by our nominees ensures we have the independence, experience, skills and knowledge necessary to lead the Company forward with an unrelenting focus on continuous improvement of our operations and maximizing value.

Icahn is seeking to gain control of SandRidge without paying an appropriate premium or participating in a competitive process. Icahn has made clear its desire to acquire SandRidge. However, having nominated for election a full slate of seven candidates, including two who work directly for Icahn and one former employee (the "Icahn Nominees"), to sidestep the ongoing impartial process, Icahn is not content to compete fairly with other potential counterparties in the thorough and even-handed process being conducted by the SandRidge Board.

The election of the Icahn Nominees would end the impartial process, drive away competition and position Icahn to consolidate control as cheaply as possible. 
Electing a Board dominated by Icahn Nominees would disadvantage our shareholders because of the distraction and delay caused by the need to fully educate them on the Company and their obvious competing priorities. Worse, a process led by an Icahn-dominated Board, in our view, would likely have a chilling effect on the participation of potential counterparties because such a process would be rigged in favor of Icahn, either in perception or reality. For this reason, we believe that otherwise interested third parties will be unwilling to incur the time, cost and expense of participating in a process controlled by Icahn.

Simply put, we believe it is impossible for a Board dominated by Icahn Nominees to run a fair, unbiased process that may result in selling the Company to Icahn. Do not let Icahn disrupt our progress or gain control of SandRidge without an appropriate premium or impartial, competitive process. Make no mistake, the disruption caused by turning control over to Icahn – which has offered no standalone plan – would leave SandRidge rudderless, jeopardizing your valuable investments and the substantial financial and operational progress your Board and management continue to achieve.