Jana Partners LLC, the activist shareholder that’s agitated for changes in three energy companies since 2012, disclosed a 7.5 percent stake in oil and natural gas producer QEP Resources Inc. (QEP)
The New York-based hedge fund acquired 15.5 million shares, including options, of Denver-based QEP, the worst performer this year among peer oil and natural-gas producers, according to a regulatory filing today.
Jana’s Barry Rosenstein has held talks with company executives and plans to urge QEP to separate its “midstream” partnership that gathers and processes gas into a standalone business, change its compensation practices and add directors, according to the filing.
“We have attempted to work constructively to help refine the company’s strategic direction and to address the company’s consistent share price underperformance,” Rosenstein said in a letter today to the QEP board. Company executives have failed to realize the value of the midstream business and “have spurned our numerous attempts to help them do so.”
Greg Bensen, a spokesman for QEP, didn’t return a call or e-mail seeking comment for this story.
QEP earlier this year created a master-limited partnership that allowed the company to sell some of its midstream assets to investors while maintaining control. This has failed to realize the full potential value of the assets and QEP should pursue a complete separation, Rosenstein said in the letter.
Shareholders from Rosenstein to Carl Icahn continue to see energy companies as prime targets as executives fail to realize the value of reserves amid stable gas prices and $100-a-barrel oil. Icahn announced Oct. 7 that he had taken a 6 percent stake in Canadian oil and gas producer Talisman Energy Inc. (TLM), saying on Twitter that he may seek conversations with management regarding “strategic alternatives, board seats, etc.”
QEP rose 5.8 percent to $32.89 at 6:04 p.m. in New York. The company has risen 2.7 percent this year and is the worst performer on the Standard & Poor’s 5000 Oil & Gas (COG) Exploration and Production Index.
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