The company has concluded that the separation of QEP Field Services from QEP creates a number of significant advantages, each of which is expected to maximize shareholder value. The decision will allow for the separate valuation of QEP’s midstream business. The value of QEP’s midstream business is not fully recognized in the QEP share price and a separation is expected to unlock shareholder value. The move will also allow each business to independently deploy resources and allocate capital according to their strategic initiatives and growth strategies, and it will permit each business to compete more effectively in their respective markets.
The board has directed management to begin the necessary work of establishing QEP Field Services as a separate entity from QEP, including engaging a search firm to assist in recruitment of additional senior management with experience running a stand-alone midstream business. In addition, the board has asked management to work with the company’s financial and legal advisers to evaluate the shareholder value impact of various separation alternatives.
Deutsche Bank Securities Inc. and Goldman, Sachs & Co. are acting as financial advisors to QEP, and Latham & Watkins LLP and Wachtell, Lipton, Rosen and Katz are serving as legal advisors. QEP expects to update shareholders on the progress of the separation during the first quarter of 2014.