PDC Energy President & CEO Bart Brookman Mails Letter to Shareholders
Reflects on PDC’s Strong Operational and Financial Performance, and Kimmeridge’s Deeply Conflicted Efforts to Replace Directors on the PDC Board with Less Qualified Candidates
Urges Shareholders to Vote "FOR" All Three of Company’s Nominees on the WHITE Proxy Card
The full text of the letter is below:
Dear PDC Shareholders,
PDC Energy2019 Annual Shareholder meeting is fast approaching, I feel it is an appropriate time to reflect on the shareholder activism facing our organization. As stockholders in PDC, you have an important decision to make — one that will impact the future of this organization, and the value of your investment. I write to you today regarding this choice, both as a fellow shareholder and as a 14-year executive at this Company who is deeply invested in its long term success.
The last few years have been turbulent for our industry and PDC has been buffeted by challenges that have directly impacted the performance of your investment, including extreme commodity price volatility, unpredictable third party midstream constraints, and an uncertain
Coloradopolitical climate. Despite these challenges, the Company has quickly adapted to change and repeatedly prevailed, reflecting our resilient strategy, dedicated people, and best-in-class operations.
PDC’s Board and management team have taken decisive actions to capitalize on our premium assets while positioning the Company for long-term success, all the while regularly soliciting the feedback of our shareholders and responding in concrete ways. We are currently executing a business plan that differentiates PDC from its peers and reflects a focus on financial discipline, free cash flow generation and profitable growth. As demonstrated by our recently authorized share repurchase program, the Company is well positioned to return capital to shareholders in both the near- and long-term. PDC’s momentum and strong operating results underscore the value and potential of our portfolio, as well as our focus on technical excellence. The Board’s commitment to this core strategy stands strong.
At the same time, we have been unwavering in our dedication to responsible and sustainable development. This includes a focus on operating safely and being a responsible member of the communities in which we operate. Respect for the environment and the safety of our employees and communities remains central to PDC’s core values.
It is in this light I share with you my deep concerns regarding Kimmeridge Energy’s efforts to elect three individuals to PDC’s Board, in opposition to the Company’s slate of directors. I have personally known and observed the Kimmeridge leadership for several years. Their constantly changing ideas and criticisms reflect a fundamental lack of understanding of how to run a public E&P company for long-term success. Kimmeridge also erroneously criticized PDC’s operating performance and used misleading information in its materials to shareholders. I can assure you that our leadership team and Board have significant operational and technical expertise that has, and will continue to, improve capital efficiency and drive shareholder returns. Further, Kimmeridge has employed extreme tactics and a polarizing interpersonal approach, which would be destructive throughout the organization. PDC has established an effective and cohesive organization built on technical excellence, hard work, loyalty and dedication, and I believe Kimmeridge’s presence and ideas would severely jeopardize this working environment, the Company as a whole and, most importantly, the value of your investment.
Many of Kimmeridge’s proposals would destroy economic value over time, negatively impact PDC employees, impair our safety programs and threaten the longstanding rapport we have established with regulatory bodies, communities and landowners. Kimmeridge’s short-sighted ideas would be a dramatic step in the wrong direction and would be dangerous for PDC and the communities in which we live and work.
Lastly, Kimmeridge’s board candidates have no significant public board experience, no depth of knowledge in large-scale operational matters, and no familiarity with the
Coloradoregulatory environment. I also believe that Ben Dell, Kimmeridge’s leader, is primarily focused on pushing PDC to engage in mergers with our competitors, including transactions in which he would be a financial participant. I believe that this, together with possible other economic interests he holds, present serious conflicts of interest. Leading independent proxy advisory firm Glass Lewisagrees that Kimmeridge’s nominees are not compelling for a company of PDC’s scope and scale, and further expressed their concern with Kimmeridge’s, “objectively aggressive recommendations that often fade into more broadly phrased suggestions.”
In stark contrast, I have seen first-hand the considerable experience and thoughtful business approach the PDC Board has taken in governing this Company. Each PDC director is unafraid to make the serious and sometimes difficult decisions necessary to implement our strategy. We have also taken a critical eye to our Board composition. Over the past five years, we have undertaken an aggressive refreshment program, adding four new directors with unique skill sets and backgrounds to ensure that the PDC Board has the diversity of experience necessary to guide an E&P company through the challenges facing our industry. The continued leadership of our Board is critical to the Company’s ongoing success.
For these reasons, I strongly encourage you to protect the value of your investment, and vote the WHITE proxy card FOR all three of your Board’s highly qualified nominees today.
It is an honor to serve as PDC’s President and CEO and as a member of your Board. I feel fortunate to have met and interacted with so many of you, and I thank you for your investment and continued support. I look forward to our ongoing communications and assure you that my commitment to continue making PDC exceptional remains undaunted.
President and Chief Executive Officer
Mr. Brookman’s letter to shareholders can be found at www.votewhiteforPDC.com/letters. Additional materials regarding the Board’s recommendation for the 2019 Annual Meeting can be found at https://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.