February 1, 2013
DiNapoli Reaches Agreement with Cabot Oil and Gas to Disclose Policies on Hydraulic Fracturing Fluid
New York State Comptroller Thomas P. DiNapoli announced today that Cabot Oil and Gas Corporation has agreed to publicly disclose its policy and procedures for eliminating or minimizing the use of toxic substances in its hydraulic fracturing fluids. As a result of the agreement, DiNapoli has withdrawn his shareholder proposal submitted for the company’s 2013 proxy statement calling for a report on the use of these substances in Cabot’s shale energy operations.
“Cabot has taken a positive step to reduce risk to shareholders, the environment and the communities in which it operates,” DiNapoli said. “This agreement means that Cabot will publicly release what it is doing to use less toxic substances in its hydraulic fracturing fluids and detail how it is ensuring these efforts are being carried out. Shareholder value is better protected when companies disclose the risks associated with the hydraulic fracturing process.”
DiNapoli, trustee of the $150.1 billion New York State Common Retirement Fund, has filed several resolutions over the past three years with oil and natural gas companies in which the Fund owns stock concerning disclosure of legal and regulatory risk, chemicals used in the hydraulic fracturing process and identification and reduction of potential hazards associated with hydraulic fracturing.
DiNapoli’s resolutions for these disclosures have been gaining support with shareholders. In 2010, resolutions addressing legal, regulatory and environmental issues went to votes at Cabot and Chesapeake, winning more than 25 percent of the shares voted. A shareholder vote at Carrizo Oil and Gas in 2011 on environmental impacts and material risks to the company’s finances or operations related to hydraulic fracturing was supported by over 43 percent of shareholders voting.
DiNapoli has also reached agreements with portfolio companies Hess Corp., Range Resources and SM Energy to disclose potential business and environmental risks linked to their hydraulic fracturing activities. In 2013, DiNapoli is engaging with a number of oil and gas companies seeking to reach agreements on ways that they can reduce risk and protect shareholder value by limiting environmental harm and liability from company operations.
As of Feb. 4, 2013, the Common Retirement Fund held 681,692 shares of Cabot valued at $35.8 million.