EQT Issues Gold Proxy Card, Letter to Shareholders Refuting Rice Plan

On Monday Toby and Derek Rice–the Rice brothers (formerly owners of Rice Energy that sold itself to EQT in 2017) sent an open letter to EQT shareholders and a “white” proxy card, asking shareholders to vote for the Rices’ picks as board members (see Rice Brothers Drop 2 Proposed Board Members from Rice Proxy Card). Yesterday EQT responded by issuing its own letter to shareholders along with a copy of a “gold” proxy card, which contains the names for EQT’s board picks, calling them “highly qualified nominees.”
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EQT Urges Shareholders to Skip White Proxy Card, Wait for Gold Card

The battle to control EQT continues. Yesterday we brought you the news that Toby and Derek Rice–the Rice brothers, formerly owners of Rice Energy that sold itself to EQT in 2017–sent an open letter to EQT shareholders asking them to vote on the white proxy card that will soon be issued (see Rice Brothers Drop 2 Proposed Board Members from Rice Proxy Card). Today we have EQT’s response, which is a letter to shareholders asking them to “ignore any solicitation materials and discard any white proxy cards you may receive” and instead wait for EQT’s soon-to-be-issued gold proxy card.
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Rice Brothers Drop 2 Proposed Board Members from Rice Proxy Card

A few new developments to report in the war to control EQT. Late last week brothers Toby and Derek Rice, formerly of Rice Energy, announced they are trimming their slate of proposed EQT board members by two (from nine to seven). There was no explanation for why the two were dropped from consideration, other than the Rice boys said they had reviewed EQT’s proposal to add three new board members (replacing three existing board members), and that two of the three, in the Rices’ opinion, “appear qualified” to serve on the board and “as a result” Rice dropped two of its proposed slate of board members.
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WV Gov. Justice’s Top Adviser Bray Cary Leaving EQT Board in July

Bray Cary

Bray Cary, the EQT board member who refused to leave the administration of West Virginia Gov. Jim Justice even though many said he had a conflict of interest by staying, is finally leaving the EQT board in July. We first told you about Cary’s exit last week (see EQT Issues List of Board Nominees; Adopts Universal Proxy Card). Cary had a few comments for the media about his departure.
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Rice Boys Respond to Scorching Letter from EQT Board

Another day, another episode of the ongoing soap opera that is the power struggle to retain (or take over) control of the country’s largest natural gas producer: EQT. Yesterday we told you about current CEO Rob McNally’s bold and gutsy move in adopting a “universal proxy” and about going on offense with a scorching letter written to Toby Rice (see EQT Issues List of Board Nominees; Adopts Universal Proxy Card). Following EQT’s letter, Toby and brother Derek Rice issued a rebuttal letter of their own.
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EQT Issues List of Board Nominees; Adopts Universal Proxy Card

In the fight to control EQT, it appears like the momentum has just shifted in favor of EQT’s existing management. No more defense, EQT’s management team and board are now on offense. Yesterday the board and CEO Rob McNally released their list of proposed nominees to be voted on at the annual meeting in July. Three longtime members of the existing board including (surprisingly) board chairman Jim Rohr, will be out. Three new members have been named to replace them. Most important, in a bold move, EQT is adopting a “universal proxy card”–something advocated by Toby and Derek Rice in their attempt to replace the board. We explain this important development below…
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Court Lets EQT Examine Cell Phone of Worker Accused of Helping Rice

A Pennsylvania federal judge has ordered a former EQT employee to turn over his cell phone to EQT so they can have experts examine it for deleted text messages to Toby Rice and others helping him. You may recall EQT accused two fired workers of stealing company secrets and sharing those secrets with Toby and Derek Rice, who are trying to take over EQT (see EQT Accuses Fired Employees of Colluding with Rice Boys). EQT maintains one of the fired workers has evidence on his phone that can corroborate their claims of collusion. Hence the judge’s order.
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PA DEP Fines EQT $330K for Minor Erosion Violations in SWPA

The Pennsylvania Dept. of Environmental Protection (DEP) has just fined EQT $330,775 for erosion and sedimentation violations at two well sites in Forward Township, Allegheny County, PA. Water with sediment in it leaked from the well sites in early 2018, which sometimes happens. The reason for the stiff fine is that EQT failed to notify the DEP when it happened. If the DEP finds out via its own inspections first, the cost goes way up.
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Rice Brothers Drop EQT Proxy Lawsuit – Feud Continues

On April 25 the Rice brothers (Toby and Derek) sued EQT alleging the company is trying to confuse shareholders by requiring some of the board candidates the Rice boys are proposing get commingled with EQT’s own slate of candidates (see Rice Brothers Sue EQT to Prevent Proxy Manipulation). The Rice boys said the lawsuit was aimed at “preventing EQT from manipulating shareholder election.” Over the weekend the Rice boys dropped the lawsuit, claiming victory, saying EQT has relented. EQT says the lawsuit was a “tactic intended to distract focus” away from the company’s stellar first quarter results.
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Turmoil Inside EQT – Company’s Top Driller Leaving This Week

Fair or not, anything and everything that happens at EQT right now, which is under extreme pressure by the Rice brothers and several other large shareholders (see Rice Brothers Attempt to Take Over EQT, Install Toby as CEO), is under a magnifying glass. So when the company’s top driller, the person in charge of production, ups and hands in her two week notice (leaving this Friday) after getting the job just six months ago, well, that’s big news.
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EQT Announces Good 1Q19, Drills Longest Marcellus Well Ever!

Two days ago EQT issued its first quarter 2019 update. Yesterday they held a conference call to discuss the company’s performance. EQT performed better in 1Q19 both financially and operationally than it did in 1Q18. What most caught our interest were CEO Rob McNally’s remarks, both his prepared remarks at the beginning of the conference call, and his unscripted remarks during the Q&A. We gained some important insights on where and how much EQT plans to drill for the balance of 2019.
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Rice Brothers Sue EQT to Prevent Proxy Manipulation

In addition to EQT’s 1Q19 update yesterday, Toby and Derek Rice filed a lawsuit against EQT, alleging the company is trying to confuse shareholders by requiring some of board candidates the Rice boys are proposing get commingled with EQT’s own slate of candidates. The Rice boys say the lawsuit is aimed at “preventing EQT from manipulating shareholder election.” The Rices want to elect their own board, tossing out the existing board and following that, tossing out EQT’s current senior management.
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Rice Boys Issue Proxy Card, Ask EQT Shareholders for New Board

On Monday, Toby and Derek Rice filed a proxy statement with the Securities and Exchange Commission and sent EQT shareholders a package and special proxy card (for voting) in an effort to elicit votes for their slate of nine board members at the upcoming July annual meeting–so they can take control of the company. Normally proxy statements are pretty dry affairs. Not this one! There are bombshell accusations in the proxy statement made by the Rice boys against EQT’s current management.
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EQT COO Awarded $5M+ if He Stays for Next 3 Years

Gary Gould

In early March, EQT hired a new Chief Operating Officer–Gary E. Gould, hired away from Harold Hamm at Continental Resources where he oversaw production and resource development (see EQT Hires New COO for $1.1M – Tells Him to Cut Costs). Gould is being paid $550,000 a year with a $500,000 signing bonus ($1.1 million total), for his first year. Turns out that doesn’t come close to the money he’ll make if he sticks around a few years.
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EQT Looking for New HQ Building in Pittsburgh

EQT Plaza

EQT’s headquarters is located in a massive 250,000 square foot building known as EQT Plaza at 625 Liberty Ave. in Pittsburgh. Last week we told you that EQT is looking to sublease 46,000 sq. ft. of the building following layoffs (see EQT Downsizing Pittsburgh Office; Williams Keeping Big Office). This week we spotted the rumor that EQT is also looking for a new HQ building!
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EQT Downsizing Pittsburgh Office; Williams Keeping Big Office

It’s no secret that upstream companies (drillers) like EQT are trimming head count and reducing annual spending. So it probably won’t come as a surprise that EQT has put 46,000 square feet (out of 250,000 sq. ft.) in its palatial headquarters in downtown Pittsburgh up for sublease. Meanwhile, in a contrasting bit of news, midstream (pipeline) company Williams has just renewed the lease for its big regional Pittsburgh headquarters at Park Place Corporate Center–a 112,481 sq. ft. building.
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