PITTSBURGH, May 26, 2020 /PRNewswire/ -- EQT Corporation
(NYSE: EQT) today announced that it has closed a transaction to
sell certain non-strategic assets and implemented a strategic
volume curtailment program.
Asset Sale:
EQT has closed a transaction to sell
certain non-strategic assets located in Pennsylvania and West Virginia to Diversified Gas and Oil
PLC, for an aggregate purchase price of $125
million in cash, subject to customary closing adjustments.
The transaction includes potential contingent consideration of up
to an additional $20 million, payable
based on certain future commodity price targets. Additionally, the
transaction relieves EQT of approximately $47 million in asset
retirement obligations and other liabilities associated with the
assets. Proceeds from the sale have been used to pay down EQT's
term loan due 2021.
Asset Description:
- Pennsylvania: Cameron, Clarion, Clearfield, Elk, Indiana,
Jefferson, and Tioga
Counties
-
- 80 Marcellus wells with current net production of approximately
50 MMcfe per day
- Leasehold and drilling rights retained on all acreage,
excluding Tioga County
- 33 miles of gathering lines
- West Virginia: Doddridge, Harrison, Marion, Monongalia, Ritchie, Taylor, Tyler, and Wetzel Counties
-
- 809 Conventional wells with current net production of
approximately 3 MMcfe per day
- Leasehold and drilling rights retained on all acreage
- 154 miles of gathering lines
President and CEO Toby Rice
stated: "The closing of this non-strategic asset sale demonstrates
our commitment to improving the balance sheet and reducing debt.
These assets sit outside our core focus area and the
divestment will enable a heightened focus on our core asset
portfolio. Additionally, the transaction relieves EQT of the higher
relative operating costs and substantial asset retirement
obligations associated with these assets and will improve our
financial standing."
Strategic Volume Curtailment:
On May 14, 2020, EQT made the
strategic decision to temporarily curtail approximately 1.4 Bcfe
per day of gross production, equivalent to approximately 1.0 Bcfe
per day of net production, beginning on May
16, 2020. The Company believes these actions to be value
accretive, as the deferred production will be monetized at a higher
forward commodity price. The duration of the curtailment will be
subject to commodity price movements, relationships and resulting
economics, and could potentially continue through the end of the
second quarter 2020.
Assuming production remains curtailed at this level through
June 30, 2020, EQT would expect its
second quarter 2020 total sales volumes to be 315 – 335 Bcfe,
approximately 45 Bcfe lower than its previously announced guidance
range of 360 – 380 Bcfe. The Company reiterates its second quarter
2020 average differential guidance of $(0.45) – $(0.25)
per Mcf. Due to the fixed cost nature of certain operating costs,
second quarter 2020 total per unit operating costs are expected to
be at the high-end of the Company's full-year guidance range of
$1.34 – $1.46 per Mcfe.
EQT expects no changes to its full-year 2020 guidance and
reiterates its previously announced full-year 2020 production and
financial guidance.
About EQT Corporation:
EQT Corporation is a leading
independent natural gas production company with operations focused
in the cores of the Marcellus and Utica Shales in the Appalachian
Basin. We are dedicated to responsibly developing our world-class
asset base and being the operator of choice for our
stakeholders. By leveraging a culture that prioritizes
operational efficiency, technology and sustainability, we seek to
continuously improve the way we produce environmentally
responsible, reliable and low-cost energy. We have a
longstanding commitment to the safety of our employees,
contractors, and communities, and to the reduction of our overall
environmental footprint. Our values are evident in the way we
operate and in how we interact each day – trust, teamwork, heart,
and evolution are at the center of all we do.
Visit EQT Corporation at https://www.EQT.com; and to learn more
about EQT's sustainability efforts, please visit
https://csr.eqt.com
Cautionary Statements
This news release contains
certain forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended. Statements that do
not relate strictly to historical or current facts are
forward-looking. Without limiting the generality of the foregoing,
forward-looking statements contained in this news release
specifically include the expectations of plans, strategies,
objectives and growth and anticipated financial and operational
performance of EQT and its subsidiaries (collectively, the
Company), including guidance regarding the Company's strategy to
develop its reserves; projected production and sales volume and
growth rates (including liquids sales volume and growth rates);
projected operating costs and average differential; the anticipated
benefits resulting from the sale of certain of the Company's assets
to Diversified Gas and Oil PLC, including the projected relief from
liabilities by the Company, the anticipated total proceeds from
such sale and the use of such proceeds; projected curtailments in
production and the duration of such curtailments and the
anticipated financial benefits of implementing such curtailments;
the Company's expectations regarding forward commodity prices; and
the Company's liquidity, funding sources and availability. The
forward-looking statements included in this new release involve
risks and uncertainties that could cause actual results to differ
materially from projected results. Accordingly, investors should
not place undue reliance on forward-looking statements as a
prediction of actual results. The Company has based these
forward-looking statements on current expectations and assumptions
about future events, taking into account all information currently
available to the Company. While the Company considers these
expectations and assumptions to be reasonable, they are inherently
subject to significant business, economic, competitive, regulatory
and other risks and uncertainties, many of which are difficult to
predict and beyond the Company's control and which include, but are
not limited to, volatility of commodity prices; the costs and
results of drilling and operations; access to and cost of capital;
uncertainties about estimates of reserves, identification of
drilling locations and the ability to add proved reserves in the
future; the assumptions underlying production forecasts; the
quality of technical data; the Company's ability to appropriately
allocate capital and resources among its strategic opportunities;
inherent hazards and risks normally incidental to drilling for,
producing, transporting and storing natural gas, natural gas
liquids and oil; cyber security risks; availability and cost of
drilling rigs, completion services, equipment, supplies, personnel,
oilfield services and water required to execute the Company's
exploration and development plans; the ability to obtain
environmental and other permits and the timing thereof; government
regulation or action; environmental and weather risks, including
the possible impacts of climate change; uncertainties related to
the severity, magnitude and duration of the COVID-19 pandemic; and
disruptions to the Company's business due to acquisitions and other
significant transaction. These and other risks and uncertainties
are described under Item 1A, "Risk Factors," of the Company's Form
10-K for the year ended December 31, 2019 as filed with the
SEC, as updated by any subsequent Form 10-Qs, and in the other
documents the Company files from time to time with the SEC.
Any forward-looking statement speaks only as of the date on
which such statement is made, and the Company does not intend to
correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by law.
Analyst inquiries please contact:
Andrew Breese - Director, Investor Relations
ABreese@eqt.com
412.395.2555
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SOURCE EQT Corporation