[Editor’s note: This story was updated at 4:38 a.m. CT Jan. 27.]
Kimmeridge Energy Management Co. launched a proxy fight on Jan. 26 against Ovintiv Inc. to win three seats on the North American energy producer's board.
The private investment firm urged Ovintiv to alter its capital spending and focus on governance and said the board had allowed Ovintiv to become an environmental laggard, trailing peers on key environmental metrics.
Speaking to Reuters, Mark Viviano, managing partner and head of public equities at Kimmeridge, said the move came after months of attempting to engage with the Denver-based producer.
Kimmeridge has nominated its founder, Ben Dell, Cambiar Investors' Katherine Minyard and Columbia University research scholar Erin Blanton as independent directors for Ovintiv's 12-member board.
Viviano said Kimmeridge was not currently pushing to replace Ovintiv CEO Doug Suttles.
Ovintiv, responding to the Kimmeridge notice, said in a statement it would carefully review the nominations.
"We have made significant changes to our board since 2019, including adding three new directors, appointing a new independent chairman, and realigning our committee composition to more closely align with each element of our ESG (environmental, social and governance) strategy."
Kimmeridge, one of Ovintiv's top 10 shareholders with 2.5% of its common shares, warned earlier this month it could launch a proxy challenge if the company did not address its concerns, including high levels of executive compensation.
Management remuneration has emerged as a hot topic in U.S. shale in recent months, after the industry produced years of lackluster shareholder returns versus other sectors of the economy.
Kimmeridge wanted to see the company sell some operations to concentrate drilling in the Permian Basin of Texas, with proceeds from asset sales used to pay down debt, Viviano added.
Ovintiv had $7.1 billion of long-term debt as of Sept. 30, according to a regulatory filing. Reuters reported in November the company had put its Eagle Ford acreage in South Texas up for sale.
One of the largest independent producers in North America, Ovintiv operates a multibasin portfolio anchored by large, contiguous positions in the heart of the Permian and Anadarko basins, and Canada Montney's shale.
Recommended Reading
Midstream M&A Adjusts After E&Ps’ Rampant Permian Consolidation
2024-10-18 - Scott Brown, CEO of the Midland Basin’s Canes Midstream, said he believes the Permian Basin still has plenty of runway for growth and development.
Post Oak-backed Quantent Closes Haynesville Deal in North Louisiana
2024-09-09 - Quantent Energy Partners’ initial Haynesville Shale acquisition comes as Post Oak Energy Capital closes an equity commitment for the E&P.
Analyst: Is Jerry Jones Making a Run to Take Comstock Private?
2024-09-20 - After buying more than 13.4 million Comstock shares in August, analysts wonder if Dallas Cowboys owner Jerry Jones might split the tackles and run downhill toward a go-private buyout of the Haynesville Shale gas producer.
Aethon, Murphy Refinance Debt as Fed Slashes Interest Rates
2024-09-20 - The E&Ps expect to issue new notes toward redeeming a combined $1.6 billion of existing debt, while the debt-pricing guide—the Fed funds rate—was cut on Sept. 18 from 5.5% to 5%.
Dividends Declared Sept.16 through Sept. 26
2024-09-27 - Here is a compilation of dividends declared from select upstream, midstream and service and supply companies.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.