A full-blown war is on for the future of EQT. Yesterday Toby and Derek Rice released a proposed slate of EQT board members they want elected at the next annual meeting on July 10th. They propose replacing all existing board members–except for their brother Dan. The Rice boys say it’s necessary to have a board who is “with it” (our words) and will back up Toby and Derek as they take control of the company. On the other hand, current EQT board chairman Jim Rohr and board member/CEO Rob McNally are pushing back. It’s a fight to the “death” (figuratively speaking).
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Category: EQT Corp
EQT Accuses Fired Employees of Colluding with Rice Boys
We’re not quite sure what to make of this. In February, EQT filed lawsuits in both Pennsylvania and federal courts against two former employees it had fired, claiming the employees, before they were fired, had systematically copied confidential information from company computers and took it with them when they left (see EQT Claims 2 Fired Workers Stole Confidential Information). Now EQT is alleging the employees “stole” the information to help Toby and Derek Rice in their bid to take over EQT via a proxy war (see Proxy War: Rice Brothers Say Top EQT Mgmt, Board Must Go). That’s a serious charge.
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WV Supreme Court Ponders Important Case, Surface v Mineral Owners
A West Virginia Circuit Court case in September 2017, Crowder and Wentz v EQT, found in favor of surface landowners ruling that EQT did not have the right to extend underground shale wells to adjacent properties where EQT also owned the mineral rights (see WV Surface Owners Win Important Case Against EQT re Drill Pad). The decision was appealed all the way to the WV Supreme Court, where arguments were heard yesterday. This is a VERY important case.
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EQT Hires New COO for $1.1M – Tells Him to Cut Costs (Giggle)
EQT yesterday announced they’ve hired a new Chief Operating Officer–Gary E. Gould, hired away from Harold Hamm at Continental Resources where he oversaw production and resource development (essentially the same position). Gould is being paid $550,000 a year with a $500,000 signing bonus ($1.1 million total), for his first year. His salary goes up from there. Gould’s charter from EQT CEO Rob McNally? Cut costs. Which made us giggle.
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EQT Announces Late Annual Meeting, a “Screw You” to Rice Bros.
EQT is not holding their annual meeting in April this year, the month they’ve traditionally held the annual meeting until last year, when it was held in June due to an impending split of the company into upstream and midstream. Instead, the current board is using a legal loophole to delay this year’s annual meeting to July–as a way of obstructing the efforts of Toby and Derek Rice and their proxy war to take over the company.
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EQT Claims 2 Fired Workers Stole Confidential Information
On Tuesday EQT filed lawsuits in both Pennsylvania and federal courts against two former employees it had fired, claiming the employees, before they were fired (sensing it was coming) had systematically copied confidential information from company computers and took it with them when they left.
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EQT 2018: $2.2B Loss; CEO Ridicules Rice Plan, No “Magic App”
EQT released its fourth quarter and full year 2018 update yesterday. The numbers show the company lost, on paper, $2.2 billion–but the loss was from “impairments,” writing off the value of old assets they had sold. Not an actual $2.2B out-of-pocket loss. The company, which is the largest natural gas producer in the U.S., produced 1.49 trillion cubic feet equivalent of gas in 2018, up an incredible 68% from the 888 billion cubic feet produced in 2017.
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Rice Boys Goose EQT Board – Ask for April (not June) Annual Mtg
Earlier this month Toby and Derek Rice, formerly executives with Rice Energy (before it sold to EQT), launched a proxy war to nominate board members who will appoint Toby CEO of EQT (see Proxy War: Rice Brothers Say Top EQT Mgmt, Board Must Go). The Rice boys are goosing the EQT board, asking them to schedule the annual meeting (where a vote will be taken) in April and not two months later in June as currently planned.
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EQT Settles WV Class Action Royalty Lawsuit for $53.5M
In 2013 some 10,000 West Virginia landowners/rights owners filed a class action lawsuit against EQT over their practice of post-production deductions from royalty checks. The lawsuit was scheduled to go to trial last November, but at the last minute, it didn’t. Word leaked that EQT had settled out of court (see EQT Avoids Trial, Settles WV Class Action re Royalty Deductions). Since that time we haven’t heard a peep–until this morning when EQT announced the terms of a “tentative” settlement.
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Rice Boys Secret Sauce for Reviving EQT: Digital & Data
EQT CEO Rob McNally and board chairman Jim Rohr are in a pitched battle to maintain their control of the company. They dismiss a plan by Toby and Derek Rice to enhance EQT’s production at a lower cost as something that worked for small potatoes Rice Energy, but couldn’t work for a big, important company like EQT. The Rice boys shoot back that EQT is bloated and lumbering and needs a good house-cleaning. So what is the essence of the Rice plan to get EQT back on track? What’s the Rice boys’ secret sauce?
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Proxy War: Rice Brothers Say Top EQT Mgmt, Board Must Go
Let the fight begin. Yesterday the Rice brothers, Toby and Derek, held a conference call with EQT investors to lay out their detailed proposal for how EQT should be run. The Rice plan includes giving the boot to current EQT CEO Rob McNally and much of top management, and installing Toby as CEO, bringing along 15 Rice alumni to kick-start EQT’s “moribund performance” (our interpretation of what Toby said).
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Trend: Marcellus/Utica Drillers Will Drill Less in 2019
There’s just no getting around the obvious–that the shale industry is once again heading into something of a dip. We’re not just talking about shale oil drillers scaling back drilling new wells in places like Texas and North Dakota. We’re talking about big gas drillers in the Marcellus/Utica who are signaling that 2019 will see less spending and less drilling, although production won’t decline.
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EQT Issues 2019 Plan; Rice Boys Launch Proxy War to Take Over
We are positively bursting with news about EQT today. Yesterday EQT’s existing management issued plans for 2019 and the Rice brothers responded–by launching a proxy war to replace board members and top management. In addition, we unearthed news that the Rice boys held their meeting with EQT’s board on Jan. 15.
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Scalding Letter to EQT by Big Investor: Replace Top Mgmt Now
On Monday we told you about a letter written by investment firm D.E. Shaw, one of EQT’s largest shareholders (owns 4.5% of outstanding shares), to the EQT board (see WSJ Says EQT is “Failing”, DE Shaw Says EQT Mgmt “Not Up to Task”). At the time we hadn’t see a full copy of the letter–but we have now (copy below). The letter minces no words.
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WSJ Says EQT is “Failing”, DE Shaw Says EQT Mgmt “Not Up to Task”
More drama in the ongoing soap opera of EQT and the Rice brothers’ attempt to take it over. The latest items of interest: The Wall Street Journal ran an article in today’s online edition with a headline that says EQT is “failing.” And one of EQT’s biggest investors, D.E. Shaw, is telling the board that current top management “doesn’t have what it takes” to get the company financially performing again. Ouch.
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EQT Lays Off ~15% of Workforce – Fires Back at Rice Brothers
On Monday EQT Corporation, the largest natural gas producing company in the U.S., laid off “more than 100” (possibly as many as 132) employees, and issued a letter to shareholders trying to gin up support for the company’s “new” course of action.
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