A four-month battle for control of Oklahoma City–based SandRidge Energy has ended with the embattled oil and gas exploration company reaching a deal with activist hedge fund TPG-Axon Capital Management that could lead to SandRidge CEO Tom Ward‘s ouster by June 30.

Under the terms of the agreement announced Wednesday, SandRidge has agreed to add four seats to its board of directors and fill those spots with nominees put forward by TPG-Axon, which owns a 7.3 percent stake in the energy company. TPG-Axon had been pushing to replace the entire board.

If SandRidge does not dump Ward, who has drawn the ire of shareholders in recent months over a series of land deals that critics claim personally enriched him and his family at the company’s expense, TPG-Axon will get to fill another board seat and three of SandRidge’s current directors will step down. Such a move would effectively cede control of SandRidge to the hedge fund.

Covington & Burling is serving as board counsel to SandRidge in connection with its agreement with TPG-Axon. Scott Smith, the head of Covington’s M&A and private equity practice and a onetime Am Law Daily Dealmaker of the Week for his role advising the company on its $1.55 billion acquisition of oil and gas rival Arena Resources in 2010, is leading a 24-lawyer team from the firm working on the matter.

Other Covington lawyers advising SandRidge on its settlement with TPG-Axon include M&A partner Stephen Infante, securities cohead David Martin, securities partners David Engvall and Keir Gumbs, securities and derivatives litigation cochair C. William Phillips, litigation partners Mark Gimbel and Robert Haney Jr., employee benefits partner Michael Francese, finance special counsel Andrew Hyman, corporate and securities counsel Leonard Chazen, and associates Brian Alexander, Rachel Beller, David Dunn, Mark Finucane, Matthew Franker, Melissa Frayer, Alan Lau, Nishchay Maskay, Daniel Nazar, Sara Needles, Kyle Rabe, Spencer Walters, and Christopher Zirpoli.

For Covington, which backs SandRidge’s position that TPG-Axon has not yet taken complete control of the company, the agreement with the hedge fund is just the latest in a series of assignments the firm has handled in recent years for the energy company.

In December, Covington advised SandRidge on its $2.6 billion sale of assets in Texas’s Permian Basin to closely held Sheridan Production Partners, according to our previous reports. The firm also represented the company in connection with its $1.28 billion cash-and-stock acquisition of Dynamic Offshore Resources in early 2012, and worked on a $315 million royalty trust for SandRidge through an initial public offering in 2011 that yielded $1.3 million in legal fees, according to an SEC filing at the time.

Philip Warman, a former attorney at Vinson & Elkins, serves as general counsel and corporate secretary for SandRidge. (Vinson advised underwriters on the company’s royalty trust offering; the firm also handled SandRidge’s $746.2 million IPO in 2007 and a $500 million joint venture deal for the company in 2011 with an affiliate of South Korean private investment firm Atinum Partners.)

The terms of SandRidge’s settlement with TPG-Axon call for the company’s board to retain an outside firm to conduct an independent review of the transactions involving Ward and his family. Warman did not respond to a request for comment about whether a firm has yet been chosen to take on that role, and a SandRidge spokesman declined to comment in response to a similar request.

Taking the lead on its settlement with SandRidge for TPG-Axon, which was spun off several years ago from private equity giant TPG Capital, is renowned hedge fund adviser Schulte Roth & Zabel.

Marc Weingarten, chair of Schulte’s business transactions group, M&A partner David Rosewater, and litigation partner Michael Swartz are leading a team from the firm advising TPG-Axon on the matter. Mary Angel Lee serves as chief legal and compliance officer for the New York–based hedge fund, whose president, former Goldman Sachs partner David Weil, is a Yale Law School graduate who began his career at Washington, D.C.’s Ivins, Phillips & Barker.

TPG-Axon’s four nominees for the SandRidge board are Stephen Beasley, Edward Moneypenny, Alan Weber, and Dan Westbrook. As part of its agreement with TPG-Axon, SandRidge will slash the pay of its current directors from $375,000 per year to $250,000.

SandRidge, which has been fighting TPG-Axon and other activist investors for months, has also agreed to conduct a strategic review of its operations and costs in order to reduce overhead. Its stock has lost roughly half its value in recent months, but received a bit of a boost Thursday when hedge fund manager Prem Watsa—known to some as the "Canadian Warren Buffett"—bought into the company after its deal with TPG-Axon.

SandRidge’s decision to accept the agreement and the imposition of the four directors backed by TPG-Axon comes on the heels of an opinion issued late last week by Leo Strine Jr., chancellor of Delaware’s Chancery Court, who ruled that if the company did not make way for the dissident board nominees it would be prohibited from standing in the way of the hedge fund’s efforts to woo other shareholders to its side in the closing days of a proxy battle set to end Friday.

While SandRidge claimed that a change in board control or senior management could force the company to accelerate repayment of an estimated $4.7 billion in debt, Strine—who, as noted by our former colleague Alison Frankel, has not traditionally been friendly to hedge funds—ruled in favor of SandRidge shareholder Jerald Kallick, represented by plaintiffs firms Grant & Eisenhofer and Bernstein Litowitz Berger & Grossmann.

Strine, whose sometimes prickly demeanor was the subject of a profile in The American Lawyer last year by senior writer Susan Beck, granted the court order sought by Kallick barring SandRidge from interfering with the ability of shareholders to consider solicitations of support by TPG-Axon.

"The thin and shifting arguments of the incumbent board do not persuade me that any legitimate interest of SandRidge was served by the board’s failure to make an approval decision," Strine wrote in his 38-page opinion. "Rather, the incumbent board’s behavior is redolent more of the pursuit of an incremental advantage in a close contest . . . rather than of any good faith concern for the company. . . . I therefore conclude that the board has likely acted with absence of good faith and reasonableness inconsistent with their fiduciary duties."

The proxy fight for control of SandRidge is just the latest corporate drama to find activist shareholders—and their lawyers—flexing their muscles. The CommonWealth REIT, Dell Inc., Herbalife, Hess Corp., Lear Corp., and SPX Corp. have all recently come under pressure from such investors.

Wachtell, Lipton, Rosen & Katz founding partner Martin Lipton and Weil, Gotshal & Manges senior partner Ira Millstein have both recently opined on a new era of shareholder activism, and a recent Harvard Law School study found that more companies are holding annual board elections.