(Reuters) - Hedge fund Elliott Management Corp has scrapped its bid for Denver-based QEP Resources Inc (N:QEP) and will instead work with the company to identify two board nominees, the oil and gas producer said on Wednesday.
Elliott, which owns about 4.9% in QEP, in January offered to buy the company for $2.07 billion, saying QEP remained undervalued despite its focus on the lucrative Permian Basin, the largest U.S. shale oilfield.
QEP said it will create a five-person operations committee, chaired by Chief Executive Officer Tim Cutt, that will include two current independent directors and two new board members as part of the agreement with Elliott.
Elliott agreed to customary standstill, voting and other provisions, QEP said.
QEP, which also reported an adjusted loss, also reinstated its quarterly dividend of 2 cents per share and cut its 2019 spending by about $50 million at its midpoint.
Investors in the energy sector have been pushing energy companies to cut down on drilling and instead boost shareholder returns.
The company also raised its 2019 production forecast to 29.9 million barrels of oil equivalent (boe) to 31 million boe, from 28.5 million boe and 30.3 million boe expected earlier.
Production fell 47% to 7.5 million boe in the second quarter as the company sold assets in Haynesville and Uinta Basin.