Nearly a month after the founders of a company acquired by EQT Corp. challenged its CEO to a proxy fight, Rob McNally is fighting back.
In a letter to shareholders issued on Monday — the same day that the Downtown-based oil and gas firm laid off more than 100 employees and promised the cuts would save $50 million annually — Mr. McNally offered confidence for the company’s future and said returning money to shareholders would be among EQT’s top priorities for the year.
“I can assure you that our team is up to the challenge,” he wrote. “We understand that our recent operational performance was disappointing to shareholders, as it was to the EQT team. EQT can and must deliver improved financial and operational results.”
The letter comes after a long silence from the company which faced public criticism from two former executives of Rice Energy Corp., a company that EQT bought in a $6.7 billion deal in 2017. Derek and Toby Rice, with the support of at least one hedge fund, want to replace Mr. McNally with Toby Rice and to reconfigure the board of directors.
Last month, the Rice brothers sent a letter outlining their concerns with the company’s current direction and asking for a meeting.
“We have not [met] yet, although it’s scheduled,” Mr. McNally told the Post-Gazette Monday.
He did not mention the Rice brothers in his letter to investors, which, while praising the current management team, also said EQT will “continue to look for people outside of our organization who can make valuable contributions to help achieve our goals.”
“Our entire organization is operating with a sense of urgency and working aggressively to address the legacy operational challenges facing EQT,” Mr. McNally wrote.
He promised to reveal the 2019 capital budget and guidance “in the next few weeks.” The announcement was originally scheduled for Dec. 13, but was called off on Dec. 10 — the day the Rice team made its letter public and three days after the call was announced — due to a scheduling conflict arising from death in Mr. McNally’s family.
A date for the rescheduled call has not been announced yet.
Mr. McNally had no additional comment on the layoffs after EQT issued a statement saying the move was the result of the company’s new management team taking “a number of decisive actions to improve operational efficiency, cash flow and EQT’s financial position.”
Having fewer managers and more streamlined operations will lead to even faster decision-making, the company said.
Meanwhile, Monday’s job cuts follow the layoffs of more than 200 employees in November 2017 after the close of the Rice deal.
In a statement on Monday, EQT thanked its departing employees and promised to treat them “with the utmost dignity and respect.”
Anya Litvak: alitvak@post-gazette.com or 412-263-1455.
Updated at 5:08 p.m. on January 7, 2019.
First Published: January 7, 2019, 8:26 p.m.
