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QEP Resources strikes deal with activist who threatened takeover

QEP Resources Inc. entered into a cooperation agreement with affiliates of Elliott Management Corp. to identify QEP board nominees and to agree on two new independent directors, the oil and gas producer said Aug. 7.

The directors are expected to have operating backgrounds in unconventional development and are expected to be appointed by October.

Elliott made an offer in January to acquire QEP.

The new directors will join QEP Resources CEO Tim Cutt and two current independent directors on an operations committee that will work with the management team to identify best practices and focus on continuous operational improvement, according to an Aug. 7 news release.

QEP on Aug. 7 also reported an adjusted net loss of $7.3 million, or a loss of 4 cents per share, during the second quarter, down from an adjusted net income of $13.8 million, or 6 cents per share, a year ago.

The Denver-based company missed the S&P Global Market Intelligence normalized consensus EPS estimate of 3 cents for the quarter.

On a GAAP basis, net income for the quarter totaled $48.8 million, topping a net loss of $336.0 million in the prior-year period.

Total revenues amounted to $296.2 million during the second quarter, falling from $532.4 million a year earlier.

Adjusted EBITDA decreased to $166.5 million during the quarter from $282.6 million a year earlier, primarily as a result of the November 2018 divestiture of its Haynesville/Cotton Valley and Uinta Basin assets.

For the quarter, production fell to 82,800 barrels of oil equivalent per day from 155,000 boe/d in the prior-year period.

The company spent $169.9 million for capital investment during the quarter, a cut from $365.7 million a year ago.

The oil and gas producer increased its full-year total oil equivalent production guidance to a range of 29.9 million boe to 31 million boe. The previous range was 28.5 million boe to 30.3 million boe. Capex guidance was lowered to a midpoint of $590 million, down from $640 million.

QEP also said it will reinstate its quarterly dividend of 2 cents per share.