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PDC Energy calls on shareholders to reject activist investor's board nominees


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PDC Energy calls on shareholders to reject activist investor's board nominees

Denver-based PDC Energy Inc. urged its shareholders to reject the nominations of private equity firm Kimmeridge Energy Management Co. LLC to the PDC board of directors, ahead of its annual stockholders meeting slated for May 29. Kimmeridge holds a 5.1% stake in the oil and gas producer.

In a letter to shareholders dated May 17, PDC said Kimmeridge's nominees lack board experience, large-scale oil and gas operating and technical expertise, and Colorado regulatory experience. The company added that Kimmeridge founder and managing partner Ben Dell, who is one of the nominees along with Alice Gould and James Adelson, could bring potential conflicts and independence issues.

The firm instead nominated PDC CEO Barton Brookman and independent directors Mark Ellis and Larry Mazza for reelection.

In a March 7 presentation, Kimmeridge blamed a 25% decline in PDC's stock price over three years on a "bloated corporate cost structure" and "sub-scale positions" that limit "opportunities to reap the benefits of size and efficiency" despite doubled production.

PDC said it has a history of operational excellence that Kimmeridge has consistently ignored and that its general and administrative spending is consistent with its peer group.

Independent advisory firm Glass Lewis & Co. also recommended that shareholders vote for PDC's nominees, saying Kimmeridge has failed to present a case for changes at the board level.