PDC Energy Issues Statement Regarding Kimmeridge’s Conflicts of Interest
Kimmeridge’s attempt to rebut PDC’s concerns about Ben Dell’s conflicts of interest underscores the existence of those conflicts and demonstrates his lack of understanding of public company corporate governance best practices. While Mr. Dell asserts that his interests are aligned with other PDC shareholders, and that he will not benefit in a manner that differs from other PDC shareholders, the reality is different.
Below are the key concerns the PDC Board of Directors continues to have regarding Mr. Dell’s possible conflicts of interest and independence issues if he were elected to the PDC Board of Directors:
- Preferential Treatment – Mr. Dell has consistently focused his priorities on engaging in M&A transactions with and through PDC, including as a financial participant. In fact, he indicated that engaging with PDC on M&A matters is the driving force for the proxy contest and is seeking preferential treatment from other shareholders. Kimmeridge’s proxy, when describing the last meeting Mr. Dell had with PDC’s independent directors, confirms that Mr. Dell was willing to resolve the proxy contest if PDC gave Kimmeridge confidential information and entered into a “stand-still agreement.”
- Future Drilling and A&D Activity – In Kimmeridge’s recent press release, Mr. Dell, who controls Kimmeridge, stated that he manages minerals acreage leased to PDC and in other areas. We still do not know the full scope of those interests. We believe such ownership rights present a misalignment of interest with other PDC shareholders and create potential conflicts. Both drilling decisions and potential acquisition targets should be considered by directors without regard to personal economics. Mr. Dell’s involvement with over 65 companies in the
Delaware Basinwould present conflicts with regard to critical strategic questions the Board is likely to address in the coming years.
- Competitive Alignment – If Mr. Dell attempts to acquire further interests in the
Delaware Basinthrough Kimmeridge, as he has in the past, he may be in direct competition with PDC’s own acquisition efforts. These conflicts raise significant concerns PDC has regarding potential diversion of the Company’s corporate opportunities as well as leakage of competitive information to Kimmeridge.
- Lack of Independence – Kimmeridge completed a sizeable transaction with PDC within the last three years and Mr. Dell and an entity controlled by
James Adelson, another Kimmeridge nominee to the PDC Board, received significant sums in connection with this transaction. Additionally, Kimmeridge has disclosed to the Company an ongoing commercial relationship with PDC from which Kimmeridge periodically receives revenues from royalties, lease bonus, surface use and other agreements. These facts continue to raise doubts as to whether they would be considered independent of PDC.
Mr. Dell and Kimmeridge have refused to provide more specific information about Mr. Dell’s mineral interests, and they have still not adequately addressed the serious concerns we have about independence. PDC’s Board and management team remain focused on continuing to take actions in the best interest of all shareholders.
The PDC Board of Directors strongly recommends that shareholders protect the value of their investment by voting on the WHITE proxy card “FOR” PDC’s nominees,
Additional materials regarding the Board’s recommendation for the 2019 Annual Meeting can be found at https://www.votewhiteforpdc.com.
EVERY SHAREHOLDER’S VOTE IS EXTREMELY IMPORTANT,
NO MATTER HOW MANY SHARES ARE OWNED.
Shareholders who have questions or require any assistance voting their shares should contact PDC Energy’s proxy solicitor:
Stockholders may call toll-free: (800) 322-2885
Banks and Brokers may call collect: (212) 929-5500
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 ("Securities Act"), Section 21E of the Securities Exchange Act of 1934 ("Exchange Act") and
Further, we urge you to carefully review and consider the cautionary statements and disclosures, specifically those under the heading "Risk Factors," made in our Annual Report on Form 10-K for the year ended
PDC has filed a definitive proxy statement and WHITE proxy card with the
CERTAIN INFORMATION REGARDING PARTICIPANTS
PDC, its directors and certain of its executive officers may be deemed to be participants in connection with the solicitation of proxies from PDC’s shareholders in connection with the matters to be considered at the 2019 Annual Meeting. Information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the proxy statement and other materials to be filed with the
Senior Director Investor Relations
Source: PDC Energy, Inc.