Kimmeridge to launch proxy for oil, gas producer Ovintiv: WSJ

An investment firm plans to launch a proxy fight at Ovintiv Inc., arguing the oil-and-gas producer should alter its spending and improve governance to boost the company’s share price.

Ticker Security Last Change Change %
OVV OVINTIV INC 17.23 +0.08 +0.47%

Kimmeridge Energy Management Co. will nominate three candidates, including its founder Ben Dell, to Ovintiv’s board Tuesday, Kimmeridge officials said. It holds a 2.5% stake valued at about $100 million in Ovintiv, which has a market value of $4.4 billion.

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Denver-based Ovintiv produces oil and natural gas. Formerly known as Encana Corp., it has significant assets in the Permian and Anadarko basins and Canada’s Montney region. Small and midsize producers have been hurt by the severe drop in crude-oil prices in recent years and have been under pressure from investors to deliver more consistent cash flows.

An Ovintiv spokeswoman said the company is focused on creating sustainable value for investors. “We have generated significant free cash flow for each of the last three years and we’re entering this year with strong momentum,” she said.

An investment firm plans to launch a proxy fight at Ovintiv Inc., arguing the oil-and-gas producer should alter its spending and improve governance to boost the company’s share price. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via

Kimmeridge managing partner Mark Viviano said in an interview that Ovintiv has underperformed its peers, which he blamed on a board that he says has limited experience in shale.

Ovintiv shares are down about 9% over the past year.

Kimmeridge this month called on Ovintiv to take actions including selling noncore assets, better aligning executive pay with performance and strengthening environmental commitments.

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Mr. Viviano said the firm is nominating directors after meeting resistance from the company since discussions began in the fall. Assuming the two sides don’t call a truce ahead of Ovintiv’s annual meeting this spring, it could be one of the year’s first major proxy fights headed to a shareholder vote.

Ovintiv this month said it plans to reduce debt from the second half of 2020 to the end of 2021 by at least $1 billion. It named a new board member in November, former Tellurian Inc. Chief Executive Meg Gentle, and is set to report its fourth-quarter earnings and 2021 guidance on Feb. 17.

Kimmeridge’s other board nominees are Erin Blanton, a senior research scholar at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs, and Katherine Minyard, investment principal and partner at Cambiar Investors.

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Kimmeridge, which was founded in 2012 and has roughly $2 billion under management, focuses on unconventional oil and gas assets. It previously agitated at companies including Resolute Energy Corp. and ran an unsuccessful proxy fight for three board seats at PDC Energy Inc. in 2019.

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