Natural gas producer WPX Energy said it would add a nominee of hedge fund shareholder Taconic Capital Advisors LP to its board, a day after the company announced the sudden departure of its CEO.
Taconic Capital is the second-largest shareholder in WPX, which has suffered from a steep slide in natural gas prices over the last eight years and has reported seven quarterly losses in a row.
WPX, spun off from pipeline operator Williams Cos Inc in 2011, said the new board member would assist in the search for a new company head.
WPX said on Tuesday that CEO Ralph Hill would step down, without giving any reason for his departure.
"(We) see the change as a positive but think redirecting the company's assets and capital will take time, years not months," analysts at investment bank Tudor, Pickering, Holt & Co wrote in a note.
Taconic, an $8.2 billion hedge fund co-founded by former Goldman Sach executive Kenneth Brody, is the second-largest shareholder in WPX with a 6.9 percent stake, WPX said.
Describing itself as an "event-driven fund", Taconic bought creditor claims against Icelandic banks and Lehman Brothers in the wake of the financial crisis.
WPX holds assets in the Piceance basin of Colorado, the Bakken shale in North Dakota and the Marcellus shale in Pennsylvania.
It has suffered as gas prices fell to below $2 per million British thermal units (BTU) last year from $14 per million BTU in 2005. They have since recovered to around $4.
Natural gas made up nearly 80 percent of WPX's daily production in the third quarter ended Sept. 30. WPX has posted a wider-than-expected loss for the last seven quarters.
Moreover, output from the company's operations in the Marcellus field is expected to be flat because of infrastructure constraints, although it is looking to ramp up liquids production in the Bakken and Colorado's Niobrara shale field.
WPX also plans to form a master limited partnership with mature, natural gas properties in the Piceance Basin and take it public in the first half of 2014.
The company said on Wednesday that it will increase the size of its board to 12 from 11 on or before Jan. 10.
WPX shares closed at $19.86 on Tuesday on the New York Stock Exchange, after rising more than 4 percent on news of CEO Hill's departure.
Copyright 2017 Thomson Reuters. Click for Restrictions.
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