UPDATE 1-SandRidge says default possible if board replaced

Feb 8 (Reuters) - SandRidge Energy Corp said replacing its board, as suggested by its third-largest shareholder, TPG-Axon, would lead to a default under its credit agreement and require the company to make an offer to repurchase its senior notes.

The U.S. oil and gas producer said, however, that a default under the credit agreement would not have a material consequence.

The holders of the senior notes would be unlikely to accept an offer to repurchase, because the notes are trading at values in excess of the repurchase price specified in the note agreement, the company said in a regulatory filing released Friday.

Mark Hanson, oil analyst at Morningstar in Chicago, said SandRidge would likely have a number of options in the event of a default.

"There's probably a workaround in the credit agreement," Hanson said. "All these agreements have so many triggers."

Shareholders TPG-Axon Capital Management and Mount Kellett Capital Management are seeking to replace the company's board and chief executive. The investors have also asked that CEO Tom Ward step down, citing poor management of the company.

The hedge funds, which own more than 11 percent of SandRidge, have accused the company of poor performance and of allowing Chief Executive Tom Ward to engage in land deals in which he stands to profit at the expense of the company.

Shares of SandRidge edged up 3 cents to $5.97 in morning trading on the New York Stock Exchange.