Market Overview

Activist Investors, EQT Corporation Clash Ahead Of Natural Gas Producer's Annual Meeting

Activist Investors, EQT Corporation Clash Ahead Of Natural Gas Producer's Annual Meeting

EQT Corporation (NYSE: EQT) shareholders known as the Rice Team said in a Friday press release that the natural gas producer is deflecting attention from its underperformance ahead of a July 10 annual meeting where the activist investors are backing 12 candidates. 

Toby Rice, Derek Rice, Kyle Derham and William Jordan issued a 188-page presentation analyzing EQT’s past performance and plan.

The Rice Team previously led Rice Energy, a company acquired by EQT Corp. for $8.2 billion in 2017, according to the activist investors' website. 

Clashing Views On FCF, Management

EQT said it is focused on transforming into a "free cash flow machine" in a letter mailed Friday to its shareholders. 

EQT is poised to generate $300 to $400 million in adjusted free cash flow this year and at least $3 billion in adjusted free cash flow through 2023, the company said. 

The Rice Team said that last figure depends on "a central, unjustified assumption that EQT buried in an appendix" that future natural gas prices will rise above market expectations. 

"Without that assumption, EQT's own plan will not allow it to return capital to EQT shareholders until 2023 without exceeding EQT's target leverage," the activist investors said. 

The Rice Team said its plan for EQT includes driving down well costs, increasing well productivity and focusing the company on large-scale development projects that Rice Energy successfully and efficiently executed.

The natural gas company said in its investor letter that Toby Rice is unqualified to lead the company and said it found issues with his management style in an examination of Rice Energy records. 

The Rice Team called the statements about the executive "selective excerpts and summaries of cherry-picked internal Rice Energy emails from more than four years ago in an effort to impugn Toby Rice's performance as president and chief operating officer of Rice Energy."  

Price Action 

EQT Corporation shares were down 2.96% at $15.09 at the time of publication Friday. 

Related Links:

Despite Recent Rally, Kinder Morgan Analyst Sees Outperformance Ahead

Winter Is Over: Is It Time To Buy Natural Gas? 



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