PDC Energy Inc. shareholders have voted to reelect three directors, rejecting activist investor Kimmeridge Energy Management Co. LLC’s efforts to oust them, according to preliminary results released on Wednesday after the annual meeting.
The vote caps a roughly three-month effort by Kimmeridge to install three director nominees, including founder Ben Dell. The private equity firm, which owns slightly more than 5% of the company’s shares, launched its first salvo in February when it argued that PDC shares were underperforming and trading at a steep discount to the company’s actual value.
PDC management largely shrugged off Kimmeridge’s efforts, indicating the deep spending cuts and a robust dividend proposed would hurt the company.
Shareholders voted to reelect three directors including CEO Bart Brookman.
PDC management said the vote was a show of support for this year’s strategy, an indication that investors “remain confident in our team and operating plan focused on capital discipline, free cash flow generation, profitable growth and return of capital to shareholders.”
The company, which operates in the Denver-Julesburg Basin of Colorado and the Permian Basin’s Delaware sub-basin, is aiming to cut year/year spending by $150 million in 2019, grow production by 20% over the same time and generate positive free cash flow.
Preliminary results show that shareholders also approved all other proposals considered at the annual meeting, including the executive compensation plan. The vote comes after two shareholder advisory firms recently issued differing opinions. Glass Lewis & Co. supported the current directors, while Institutional Shareholder Services Inc. recommended that investors keep Brookman on the board and vote for two of Kimmeridge’s nominees.