PITTSBURGH, July 27, 2020
/PRNewswire/ -- EQT Corporation (NYSE: EQT) today announced
financial and operational performance results for the second
quarter 2020.
Second Quarter Highlights:
- Delivered sales volumes of 346 Bcfe or 3.8 Bcfe per day, 21
Bcfe above midpoint of guidance for second quarter 2020
- Total operating revenues of $527
million; received an average realized price of $2.36 per Mcfe, a $0.56 premium to NYMEX pricing
- Capital expenditures of $303
million, $163 million lower
than the second quarter 2019 and in line with second quarter 2020
expectations
- Achieved well costs of $680 per
foot in the Pennsylvania Marcellus, surpassing target well cost by
$50 per foot
- Achieved an industry first 24-hour drilling record of 10,566
feet - over 2 miles per day
- Successfully issued $500 million
in convertible senior notes to address near-term debt
maturities
- Received $190 million in tax
refunds
- Divested certain non-strategic assets for an aggregate purchase
price of $125 million
- Reduced total debt by $417
million and net debt(1) by $401 million, fully retiring the 2021 term
loan
- Placed approximately $0.1 billion
in surety bonds, reducing outstanding letters of credit and
improving liquidity
President and CEO Toby Rice
stated, "Today I am particularly excited as we have recently
eclipsed our one-year anniversary at the company. Since last July,
this management team has been unrelenting in our quest to deliver
on our promises, which have been validated by our operational
results. We've proven our thesis that a well-planned
business, combined with leading technology, creates a
differentiated, durable and sustainable business model. By
leveraging our past experiences, we have retooled EQT into a
fit-for-purpose modern shale business."
Rice continued, "As evident in today's announced results, our
efforts have translated into a step-change in operational
performance, at a faster pace than originally projected. At
EQT, our mission is to be the clear operator of choice for all of
our stakeholders. I am proud to say that EQT stands firmly on
stable ground and we are primed to take this company to the next
level. EQT is truly a rate of change story being written by a
highly motivated and experienced management team, and I'm excited
to continue our path towards maximizing value for all
stakeholders."
Second Quarter 2020 Financial and Operational
Performance
|
Three Months Ended
June 30,
|
|
|
($ millions,
except average realized price and EPS)
|
2020
|
|
2019
|
|
Change
|
Total sales volume
(Bcfe)
|
346
|
|
|
370
|
|
|
(24)
|
|
Average realized
price ($/Mcfe)
|
$
|
2.36
|
|
|
$
|
2.59
|
|
|
$
|
(0.23)
|
|
Net (loss)
income
|
$
|
(263)
|
|
|
$
|
126
|
|
|
$
|
(389)
|
|
Adjusted net (loss)
income (a)
|
$
|
(45)
|
|
|
$
|
22
|
|
|
$
|
(67)
|
|
Adjusted EBITDA
(a)
|
$
|
334
|
|
|
$
|
461
|
|
|
$
|
(127)
|
|
Diluted earnings per
share (EPS)
|
$
|
(1.03)
|
|
|
$
|
0.49
|
|
|
$
|
(1.52)
|
|
Adjusted EPS
(a)
|
$
|
(0.18)
|
|
|
$
|
0.09
|
|
|
$
|
(0.27)
|
|
Net cash provided by
operating activities
|
$
|
447
|
|
|
$
|
444
|
|
|
$
|
3
|
|
Capital
expenditures
|
$
|
303
|
|
|
$
|
466
|
|
|
$
|
(163)
|
|
Free cash flow
(a)
|
$
|
(82)
|
|
|
$
|
(81)
|
|
|
$
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
A non-GAAP financial
measure. See the Non-GAAP Disclosures section of this news release
for the definition of, and other important information regarding,
this non-GAAP financial measure.
|
Net loss for the three months ended June 30, 2020 was
$263 million, $1.03 per diluted share, compared to net income
for the same period in 2019 of $126
million, $0.49 per diluted
share. The decrease was attributable primarily to decreased
operating revenues, the loss on sale/exchange of long-lived assets,
decreased dividend and other income and increased interest expense,
partly offset by a gain on investment in Equitrans Midstream
Corporation (Equitrans Midstream), increased income tax benefit,
decreased depreciation and depletion expense and decreased selling,
general and administrative expense.
On May 16, 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, which remained shut-in for the duration
of the second quarter 2020 (the Strategic Production Curtailments).
Total sales volumes decreased 24 Bcfe compared to the same quarter
last year due primarily to the Strategic Production Curtailments.
In addition, average realized price was 9% lower at $2.36 per Mcfe, due to lower NYMEX prices and
lower liquids prices, partly offset by higher cash settled
derivatives.
Net cash provided by operating activities increased by
$3 million and free cash
flow(1) decreased by $1
million compared to the same quarter last year. Despite the
impact of the Strategic Production Curtailments and a 9% lower
average realized price, free cash flow remained consistent with the
same quarter last year due to a $163
million decrease in capital expenditures. In addition,
during the second quarter of 2020, free cash flow was negatively
impacted by $54 million of premiums
paid for the purchase of options with the primary purpose of
reducing future NYMEX based payments that could be due in 2021,
2022 and 2023 associated with the new gas gathering agreement with
Equitrans Midstream.
Per Unit Operating Costs
The following presents
certain of the Company's production-related operating costs on a
per unit basis.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Per Unit
($/Mcfe)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Gathering
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
0.70
|
|
|
$
|
0.69
|
|
Transmission
|
0.35
|
|
|
0.40
|
|
|
0.36
|
|
|
0.39
|
|
Processing
|
0.10
|
|
|
0.09
|
|
|
0.09
|
|
|
0.09
|
|
Lease operating
expense (LOE), excluding
production taxes
|
0.07
|
|
|
0.05
|
|
|
0.07
|
|
|
0.05
|
|
Production
taxes
|
0.04
|
|
|
0.05
|
|
|
0.03
|
|
|
0.05
|
|
Exploration
|
—
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
SG&A
|
0.13
|
|
|
0.23
|
|
|
0.11
|
|
|
0.18
|
|
Total per unit
operating costs
|
$
|
1.42
|
|
|
$
|
1.52
|
|
|
$
|
1.36
|
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
Production
depletion
|
$
|
0.92
|
|
|
$
|
1.00
|
|
|
$
|
0.92
|
|
|
$
|
1.00
|
|
Adjusted SG&A
(a)
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Adjusted interest
expense (a)
|
$
|
0.17
|
|
|
$
|
0.14
|
|
|
$
|
0.16
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
A non-GAAP financial
measure. See the Non-GAAP Disclosures section of this news release
for the definition of, and other important information regarding,
this non-GAAP financial measure.
|
Liquidity
As of June 30, 2020, the Company had
$38 million of credit facility
borrowings and $0.8 billion of
letters of credit outstanding under its $2.5
billion credit facility. As of June 30, 2020, total
debt was $4,620 million and net
debt(1) was $4,617 million
compared to $5,293 million and
$5,288 million, respectively, as of
December 31, 2019.
As of July 22, 2020, the Company had sufficient unused
borrowing capacity under its credit facility, net of letters of
credit, to satisfy any collateral requests that its counterparties
would be permitted to seek. As of July 22, 2020, such amounts
could be up to approximately $1.1 billion, inclusive of assurances posted
of approximately $0.8 billion of
letters of credit and $0.1 billion of surety bonds.
OPERATIONAL UPDATE
In early July, the Company began a
moderated approached to bring back on-line production which was
curtailed in May as a result of the Strategic Production
Curtailments. To-date, the Company has seen no degradation to well
performance and all curtailed production has been returned to
sales.
During the second quarter 2020, the Company continued to realize
a step-change in operational performance, driven by strong schedule
design, consistent application of a proven well design, and
efficient drilling and completion operations. These efficiencies
required less resources necessary to deliver planned activity
levels and led to improved capital deployment during the second
quarter 2020, as the Company developed its Pennsylvania Marcellus
wells for $680 per foot, $50 per foot below its well cost target of
$730 per foot.
Since the change in management in July
2019, the Company has realized steady and consistent
operational improvements. Production uptime on producing
wells was over 98% during the second quarter 2020, horizontal
drilling speeds have improved by 63% year-over-year and 12%
quarter-over-quarter, and the utilization of next generation frac
technology has driven a 20% improvement in pumping time and stages
per day, since July 2019.
In June, EQT reached an industry first by drilling 10,566 feet,
or more than 2-miles, in a 24-hour period, exemplifying the
Company's enhanced operational performance. EQT continues to push
the operational and technological boundaries to drive value
creation.
The tables below reflect the Company's operational activity
during the second quarter 2020 and planned activity for the third
quarter and full year 2020.
Wells Drilled
(SPUD)
|
|
PA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
Net Wells
|
21
|
|
17
|
|
69
|
|
3
|
|
15
|
|
24
|
|
2
|
|
—
|
|
3
|
Net Avg. Lateral
(ft.)
|
12,980
|
|
11,560
|
|
12,560
|
|
13,360
|
|
11,530
|
|
11,860
|
|
12,150
|
|
—
|
|
13,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells Horizontally
Drilled
|
|
PA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
Net Wells
|
21
|
|
21
|
|
82
|
|
—
|
|
7
|
|
9
|
|
4
|
|
1
|
|
8
|
Net Avg. Lateral
(ft.)
|
11,870
|
|
13,400
|
|
12,060
|
|
—
|
|
9,020
|
|
10,030
|
|
12,200
|
|
12,030
|
|
12,190
|
Wells Completed
(Frac)
|
|
PA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
Net Wells
|
27
|
|
21
|
|
79
|
|
3
|
|
—
|
|
3
|
|
10
|
|
—
|
|
15
|
Net Avg. Lateral
(ft.)
|
11,100
|
|
12,390
|
|
11,730
|
|
4,420
|
|
—
|
|
4,420
|
|
9,980
|
|
—
|
|
10,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Turned-in-Line (TIL)
|
|
PA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
|
2Q20A
|
|
3Q20E
|
|
FY20E
|
Net Wells
|
14
|
|
15
|
|
89
|
|
3
|
|
—
|
|
7
|
|
10
|
|
0
|
|
10
|
Net Avg. Lateral
(ft.)
|
10,840
|
|
13,540
|
|
11,470
|
|
4,420
|
|
—
|
|
7,130
|
|
9,980
|
|
—
|
|
9,980
|
2020 GUIDANCE
Production
|
|
Q3
2020
|
|
Full-Year
2020
|
Total sales volume
(Bcfe)
|
|
360 - 380
|
|
1,450 -
1,500
|
Liquids sales
volume, excluding ethane (Mbbls)
|
|
1,700 -
1,800
|
|
7,600 -
7,700
|
Ethane sales
volume (Mbbls)
|
|
1,100 -
1,200
|
|
4,400 -
4,500
|
Total liquids sales
volume (Mbbls)
|
|
2,800 -
3,000
|
|
12,000 -
12,200
|
|
|
|
|
|
Btu uplift (MMbtu /
Mcf)
|
|
|
|
1.045 -
1.055
|
|
|
|
|
|
Average differential
($ / Mcf)
|
|
$(0.50) -
$(0.30)
|
|
$(0.40) -
$(0.20)
|
|
|
|
|
|
Resource
Counts
|
|
|
|
|
Top-hole
Rigs
|
|
|
|
2
|
Horizontal
Rigs
|
|
|
|
2 - 3
|
Frac
Crews
|
|
|
|
2 - 3
|
|
|
|
|
|
Per Unit Operating
Costs ($ / Mcfe)
|
|
|
|
|
Gathering
(a)
|
|
|
|
$0.71 -
$0.73
|
Transmission
(a)
|
|
|
|
$0.35 -
$0.37
|
Processing
|
|
|
|
$0.07 -
$0.09
|
LOE, excluding
production taxes
|
|
|
|
$0.07 -
$0.09
|
Production
taxes
|
|
|
|
$0.03 -
$0.05
|
SG&A
|
|
|
|
$0.09 -
$0.11
|
Total
per unit operating costs
|
|
|
|
$1.32 -
$1.44
|
|
|
|
|
|
Adjusted interest
expense (b)
|
|
|
|
$0.16 -
$0.17
|
|
|
|
|
|
Financial ($
Billions)
|
|
|
|
|
Adjusted EBITDA
(b)
|
|
|
|
$1.500 -
$1.600
|
Adjusted operating cash
flow (b)
|
|
|
|
$1.350 -
$1.450
|
Capital
expenditures
|
|
|
|
$1.075 -
$1.175
|
Free cash flow
(b)
|
|
|
|
$0.250 -
$0.350
|
Based on NYMEX natural gas price of $1.91 per MMbtu as of June
30,2020.
(a)
|
Certain in-basin
transportation expenses previously recorded in Transmission have
been reclassified to Gathering to provide additional clarity into
costs associated with transporting EQT's gas outside of the
Appalachian Basin and to align with the reporting of such expenses
in EQT's financial statement disclosures.
|
(b)
|
Non-GAAP financial
measure. See the Non-GAAP Disclosures section for the definition
of, and other important information regarding, the non-GAAP
financial measures included in this news release, including reasons
why EQT is unable to provide a projection of its 2020 net cash
provided by operating activities, the most comparable financial
measure calculated in accordance with GAAP, to projected adjusted
operating cash flow and free cash flow, or a projection of its 2020
net income, the most comparable financial measure calculated in
accordance with GAAP, to projected adjusted EBITDA.
|
Second Quarter 2020 Earnings Webcast Information
The
Company's conference call with securities analysts begins at
10:30 a.m. ET today and will be
broadcast live via the Company's web site at www.eqt.com and on the
investor information page of the Company's web site at ir.eqt.com,
with a replay available for seven days following the call.
HEDGING (as of July 22, 2020)
The Company's total
natural gas production NYMEX hedge positions are:
|
|
2020
(a)
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
575
|
|
|
467
|
|
|
—
|
|
|
2
|
|
|
2
|
|
Average Price
($/Dth)
|
|
$
|
2.74
|
|
|
$
|
2.50
|
|
|
$
|
—
|
|
|
$
|
2.67
|
|
|
$
|
2.67
|
|
Calls – Net
Short:
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
200
|
|
|
219
|
|
|
284
|
|
|
77
|
|
|
15
|
|
Average Short Strike
Price ($/Dth)
|
|
$
|
2.91
|
|
|
$
|
2.90
|
|
|
$
|
2.89
|
|
|
$
|
2.89
|
|
|
$
|
3.11
|
|
Puts – Net
Long:
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
69
|
|
|
57
|
|
|
135
|
|
|
69
|
|
|
15
|
|
Average Long Strike
Price ($/Dth)
|
|
$
|
2.29
|
|
|
$
|
2.38
|
|
|
$
|
2.35
|
|
|
$
|
2.40
|
|
|
$
|
2.45
|
|
Fixed Price Sales
(b):
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
5
|
|
|
72
|
|
|
3
|
|
|
3
|
|
|
—
|
|
Average Price
($/Dth)
|
|
$
|
2.66
|
|
|
$
|
2.50
|
|
|
$
|
2.52
|
|
|
$
|
2.38
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
July 1 - December 31,
2020.
|
(b)
|
The difference
between the fixed price and NYMEX price is included in average
differential presented in the Company's price
reconciliation.
|
For 2020 (July 1 - December 31),
2021, 2022, 2023 and 2024, the Company has natural gas sales
agreements for approximately 6 MMDth, 18 MMDth, 18 MMDth, 88 MMDth
and 11 MMDth, respectively, that include average NYMEX ceiling
prices of $3.60, $3.17, $3.17,
$2.84 and $3.21, respectively. The Company has also entered
into derivative instruments to hedge basis. The Company may use
other contractual agreements from time to time to implement its
commodity hedging strategy.
NON-GAAP DISCLOSURES
Adjusted Net (Loss) Income and Adjusted Earnings per Diluted
Share (Adjusted EPS)
Adjusted net (loss) income is
defined as net (loss) income, excluding impairments, transaction,
proxy and reorganization costs, the revenue impact of changes in
the fair value of derivative instruments prior to settlement and
certain other items that impact comparability between periods.
Adjusted EPS is defined as adjusted net (loss) income divided by
diluted weighted average common shares outstanding. Adjusted net
(loss) income and adjusted EPS are non-GAAP supplemental financial
measures used by the Company's management to evaluate
period-over-period earnings trends. The Company's management
believes that these measures provide useful information to external
users of the Company's consolidated financial statements, such as
industry analysts, lenders and ratings agencies. Management uses
adjusted net (loss) income and adjusted EPS to evaluate earnings
trends because the measures reflect only the impact of settled
derivative contracts; thus, the measures exclude the often-volatile
revenue impact of changes in the fair value of derivative
instruments prior to settlement. These measures also exclude other
items that affect the comparability of results or that are not
indicative of trends in the ongoing business. Adjusted net (loss)
income and adjusted EPS should not be considered as alternatives to
net (loss) income or diluted EPS presented in accordance with
GAAP.
The table below reconciles adjusted net (loss) income and
adjusted EPS with net (loss) income and diluted EPS, respectively,
the most comparable financial measures calculated in accordance
with GAAP, each as derived from the Statements of Condensed
Consolidated Operations to be included in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, except
per share information)
|
Net (loss)
income
|
$
|
(263,075)
|
|
|
$
|
125,566
|
|
|
$
|
(430,214)
|
|
|
$
|
316,257
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Loss on sale/exchange
of long-lived assets
|
49,207
|
|
|
—
|
|
|
98,059
|
|
|
—
|
|
Impairment and
expiration of leases
|
41,279
|
|
|
48,584
|
|
|
95,047
|
|
|
78,118
|
|
Transaction, proxy and
reorganization
|
4,745
|
|
|
21,518
|
|
|
4,745
|
|
|
25,607
|
|
Gain on derivatives
not designated as hedges
|
(26,426)
|
|
|
(407,635)
|
|
|
(415,862)
|
|
|
(275,639)
|
|
Net cash settlements
received (paid) on
derivatives not designated as hedges
|
315,393
|
|
|
53,144
|
|
|
561,129
|
|
|
(10,490)
|
|
Premiums received
(paid) for derivatives that
settled during the period
|
2,076
|
|
|
4,769
|
|
|
(1,479)
|
|
|
7,206
|
|
Litigation
expense
|
—
|
|
|
37,786
|
|
|
—
|
|
|
45,786
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
(187,223)
|
|
|
—
|
|
(Gain) loss on
investment in Equitrans
Midstream Corporation
|
(82,983)
|
|
|
104,741
|
|
|
307,645
|
|
|
15,686
|
|
Loss on debt
extinguishment
|
353
|
|
|
—
|
|
|
16,963
|
|
|
—
|
|
Non-cash interest
expense (amortization) (a)
|
5,481
|
|
|
—
|
|
|
7,741
|
|
|
—
|
|
Tax impact of non-GAAP
items (b)
|
(91,286)
|
|
|
33,524
|
|
|
(63,866)
|
|
|
31,339
|
|
Adjusted net (loss)
income
|
$
|
(45,236)
|
|
|
$
|
21,997
|
|
|
$
|
(7,315)
|
|
|
$
|
233,870
|
|
Diluted weighted
average common shares
outstanding
|
255,524
|
|
|
255,223
|
|
|
255,477
|
|
|
255,211
|
|
Diluted
EPS
|
$
|
(1.03)
|
|
|
$
|
0.49
|
|
|
$
|
(1.68)
|
|
|
$
|
1.24
|
|
Adjusted
EPS
|
$
|
(0.18)
|
|
|
$
|
0.09
|
|
|
$
|
(0.03)
|
|
|
$
|
0.92
|
|
(a)
|
As a result of
increased significance of non-cash interest expense (amortization)
in 2020, this line item was added as an adjustment to the
calculation of adjusted net income for the three and six months
ended June 30, 2020. Had adjusted net income been calculated on a
consistent basis, it would have been $2.2 million and $4.6 million
higher for the three and six months ended June 30, 2019,
respectively, than the numbers presented herein.
|
|
|
(b)
|
The tax impact of
non-GAAP items represents the incremental tax (benefit) expense
that would have been incurred had these items been excluded from
net (loss) income, which resulted in blended tax rates of 29.5% and
24.5% for the three months ended June 30, 2020 and 2019,
respectively, and 13.1% and 27.6% for the six months ended June 30,
2020 and 2019, respectively. The 2020 rate differs from the
Company's statutory tax rate due primarily to valuation allowances
provided against federal and state deferred tax assets for
additional unrealized losses on the Company's investment in
Equitrans Midstream Corporation that, if sold, would result in
capital losses.
|
Adjusted EBITDA
Adjusted EBITDA is defined as net
(loss) income, excluding interest expense, income tax (benefit)
expense, depreciation and depletion, amortization of intangible
assets, impairments, transaction, proxy and reorganization costs,
the revenue impact of changes in the fair value of derivative
instruments prior to settlement and certain other items that impact
comparability between periods. Adjusted EBITDA is a non-GAAP
supplemental financial measure used by the Company's management to
evaluate period-over-period earnings trends. The Company's
management believes that this measure provides useful information
to external users of the Company's consolidated financial
statements, such as industry analysts, lenders and ratings
agencies. Management uses adjusted EBITDA to evaluate earnings
trends because the measure reflects only the impact of settled
derivative contracts; thus, the measure excludes the often-volatile
revenue impact of changes in the fair value of derivative
instruments prior to settlement. The measure also excludes other
items that affect the comparability of results or that are not
indicative of trends in the ongoing business. Adjusted EBITDA
should not be considered as an alternative to net (loss) income
presented in accordance with GAAP.
The table below reconciles adjusted EBITDA with net (loss)
income, the most comparable financial measure as calculated in
accordance with GAAP, as reported in the Statements of Condensed
Consolidated Operations to be included in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands)
|
Net (loss)
income
|
$
|
(263,075)
|
|
|
$
|
125,566
|
|
|
$
|
(430,214)
|
|
|
$
|
316,257
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Interest
expense
|
65,386
|
|
|
50,503
|
|
|
127,760
|
|
|
107,076
|
|
Income tax (benefit)
expense
|
(103,003)
|
|
|
38,865
|
|
|
(70,181)
|
|
|
77,099
|
|
Depreciation and
depletion
|
323,096
|
|
|
372,413
|
|
|
680,622
|
|
|
763,526
|
|
Amortization of
intangible assets
|
7,477
|
|
|
10,342
|
|
|
14,955
|
|
|
20,684
|
|
Loss on sale/exchange
of long-lived assets
|
49,207
|
|
|
—
|
|
|
98,059
|
|
|
—
|
|
Impairment and
expiration of leases
|
41,279
|
|
|
48,584
|
|
|
95,047
|
|
|
78,118
|
|
Transaction, proxy and
reorganization
|
4,745
|
|
|
21,518
|
|
|
4,745
|
|
|
25,607
|
|
Gain on derivatives
not designated as
hedges
|
(26,426)
|
|
|
(407,635)
|
|
|
(415,862)
|
|
|
(275,639)
|
|
Net cash settlements
received (paid) on
derivatives not designated as hedges
|
315,393
|
|
|
53,144
|
|
|
561,129
|
|
|
(10,490)
|
|
Premiums received
(paid) for derivatives
that settled during the period
|
2,076
|
|
|
4,769
|
|
|
(1,479)
|
|
|
7,206
|
|
Litigation
expense
|
—
|
|
|
37,786
|
|
|
—
|
|
|
45,786
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
(187,223)
|
|
|
—
|
|
(Gain) loss on
investment in Equitrans
Midstream Corporation
|
(82,983)
|
|
|
104,741
|
|
|
307,645
|
|
|
15,686
|
|
Loss on debt
extinguishment
|
353
|
|
|
—
|
|
|
16,963
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
333,525
|
|
|
$
|
460,596
|
|
|
$
|
801,966
|
|
|
$
|
1,170,916
|
|
The Company has not provided projected net income (loss) or a
reconciliation of projected adjusted EBITDA to projected net income
(loss), the most comparable financial measure calculated in
accordance with GAAP. Net (loss) income includes the impact of
depreciation and depletion expense, income tax expense, the revenue
impact of changes in the projected fair value of derivative
instruments prior to settlement and certain other items that impact
comparability between periods and the tax effect of such items,
which may be significant and difficult to project with a reasonable
degree of accuracy. Therefore, projected net income (loss), and a
reconciliation of projected adjusted EBITDA to projected net income
(loss), are not available without unreasonable effort.
Adjusted Operating Cash Flow and Free Cash
Flow
Adjusted operating cash flow is defined as net cash
provided by operating activities less changes in other assets and
liabilities. Free cash flow is defined as adjusted operating cash
flow less accrual-based capital expenditures. Adjusted operating
cash flow and free cash flow are non-GAAP supplemental financial
measures used by the Company's management to assess liquidity,
including the Company's ability to generate cash flow in excess of
its capital requirements and return cash to shareholders. The
Company's management believes that these measures provide useful
information to external users of the Company's consolidated
financial statements, such as industry analysts, lenders and
ratings agencies. Adjusted operating cash flow and free cash flow
should not be considered as alternatives to net cash provided by
operating activities or any other measure of liquidity presented in
accordance with GAAP.
The table below reconciles adjusted operating cash flow and free
cash flow with net cash provided by operating activities, the most
comparable financial measure calculated in accordance with GAAP, as
derived from the Statements of Condensed Consolidated Cash Flows to
be included in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands)
|
Net cash provided by
operating activities
|
$
|
446,859
|
|
|
$
|
443,546
|
|
|
$
|
947,121
|
|
|
$
|
1,314,833
|
|
Decrease (increase) in
changes in other assets
and liabilities
|
(226,134)
|
|
|
(57,845)
|
|
|
(213,749)
|
|
|
(281,779)
|
|
Adjusted operating cash
flow
|
$
|
220,725
|
|
|
$
|
385,701
|
|
|
$
|
733,372
|
|
|
$
|
1,033,054
|
|
Less: capital
expenditures
|
302,700
|
|
|
466,387
|
|
|
564,832
|
|
|
942,409
|
|
Free cash
flow
|
$
|
(81,975)
|
|
|
$
|
(80,686)
|
|
|
$
|
168,540
|
|
|
$
|
90,645
|
|
The Company has not provided projected net cash provided by
operating activities or reconciliations of projected adjusted
operating cash flow and free cash flow to projected net cash
provided by operating activities, the most comparable financial
measure calculated in accordance with GAAP. The Company is unable
to project net cash provided by operating activities for any future
period because this metric includes the impact of changes in
operating assets and liabilities related to the timing of cash
receipts and disbursements that may not relate to the period in
which the operating activities occurred. The Company is unable to
project these timing differences with any reasonable degree of
accuracy without unreasonable efforts such as predicting the timing
of its payments and its customers' payments, with accuracy to a
specific day, months in advance. Furthermore, the Company does not
provide guidance with respect to its average realized price, among
other items, that impact reconciling items between net cash
provided by operating activities and adjusted operating cash flow
and free cash flow, as applicable. Natural gas prices are volatile
and out of the Company's control, and the timing of transactions
and the income tax effects of future transactions and other items
are difficult to accurately predict. Therefore, the Company is
unable to provide projected net cash provided by operating
activities, or the related reconciliations of projected adjusted
operating cash flow and free cash flow to projected net cash
provided by operating activities, without unreasonable effort.
Adjusted Operating Revenues
Adjusted operating
revenues is defined as total operating revenues, less the revenue
impact of changes in the fair value of derivative instruments prior
to settlement and net marketing services and other revenues.
Adjusted operating revenues (also referred to as total natural gas
& liquids sales, including cash settled derivatives) is a
non-GAAP supplemental financial measure used by the Company's
management to evaluate period-over-period earnings trends. The
Company's management believes that this measure provides useful
information to external users of the Company's consolidated
financial statements, such as industry analysts, lenders and
ratings agencies. Management uses adjusted operating revenues to
evaluate earnings trends because the measure reflects only the
impact of settled derivative contracts; thus, the measure excludes
the often-volatile revenue impact of changes in the fair value of
derivative instruments prior to settlement. The measure also
excludes net marketing services and other revenues because it is
unrelated to the revenue for the Company's natural gas and liquids
production. Adjusted operating revenues should not be considered as
an alternative to total operating revenues presented in accordance
with GAAP.
The table below reconciles adjusted operating revenues to total
operating revenue, the most comparable financial measure calculated
in accordance with GAAP, as reported in the Statements of Condensed
Consolidated Operations to be included in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, unless
noted)
|
Total operating
revenues
|
$
|
527,074
|
|
|
$
|
1,310,252
|
|
|
$
|
1,634,131
|
|
|
$
|
2,453,425
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Gain on derivatives
not designated as hedges
|
(26,426)
|
|
|
(407,635)
|
|
|
(415,862)
|
|
|
(275,639)
|
|
Net cash settlements
received (paid) on
derivatives not designated as hedges
|
315,393
|
|
|
53,144
|
|
|
561,129
|
|
|
(10,490)
|
|
Premiums received
(paid) for derivatives that
settled during the period
|
2,076
|
|
|
4,769
|
|
|
(1,479)
|
|
|
7,206
|
|
Net marketing services
and other
|
(1,876)
|
|
|
(2,090)
|
|
|
(4,296)
|
|
|
(5,646)
|
|
Adjusted operating
revenues
|
$
|
816,241
|
|
|
$
|
958,440
|
|
|
$
|
1,773,623
|
|
|
$
|
2,168,856
|
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
345,647
|
|
|
370,114
|
|
|
730,717
|
|
|
753,584
|
|
Average realized
price ($/Mcfe)
|
$
|
2.36
|
|
|
$
|
2.59
|
|
|
$
|
2.43
|
|
|
$
|
2.88
|
|
Adjusted SG&A Per Unit
Adjusted SG&A per unit
is defined as SG&A less litigation expense, divided by total
sales volume. Adjusted SG&A per unit is a non-GAAP supplemental
financial measure used by the Company's management to evaluate
period-over-period earnings trends. The Company's management
believes that this measure provides useful information to external
users of the Company's consolidated financial statements, such as
industry analysts, lenders and ratings agencies. Management uses
adjusted SG&A per unit to evaluate earnings trends because the
measure excludes items that affect the comparability of results or
that are not indicative of trends in the ongoing business. Adjusted
SG&A per unit should not be considered as an alternative to
SG&A presented in accordance with GAAP.
The table below reconciles adjusted SG&A per unit with
SG&A, the most comparable financial measure calculated in
accordance with GAAP, as derived from the Statements of Condensed
Consolidated Operations to be included in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, unless
noted)
|
Selling, general and
administrative
|
$
|
43,341
|
|
|
$
|
86,208
|
|
|
$
|
78,279
|
|
|
$
|
135,186
|
|
Less: Litigation
expense
|
—
|
|
|
37,786
|
|
|
—
|
|
|
45,786
|
|
Adjusted
SG&A
|
$
|
43,341
|
|
|
$
|
48,422
|
|
|
$
|
78,279
|
|
|
$
|
89,400
|
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
345,647
|
|
|
370,114
|
|
|
730,717
|
|
|
753,584
|
|
Adjusted SG&A per
unit ($/Mcfe)
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Adjusted Interest Expense Per Unit
Adjusted interest
expense per unit is defined as interest expense less non-cash
interest expense (amortization) of debt discounts and issuance
costs divided by total sales volume. Adjusted interest expense per
unit is a non-GAAP supplemental financial measure used by the
Company's management to evaluate period-over-period interest
expense which required cash payments. The Company's management
believes that this measure provides useful information to external
users of the Company's consolidated financial statements, such as
industry analysts, lenders and ratings agencies. Management uses
adjusted interest expense per unit to evaluate interest expense
which required cash payments because the measure excludes non-cash
interest expense (amortization) that affects the comparability of
results and does not result in cash payments. Adjusted interest
expense per unit should not be considered as an alternative to
interest expense presented in accordance with GAAP.
The table below reconciles adjusted interest expense per unit
with interest expense, the most comparable financial measure
calculated in accordance with GAAP, as derived from the Statements
of Condensed Consolidated Operations to be included in the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, unless
noted)
|
Interest
expense
|
$
|
65,386
|
|
|
$
|
50,503
|
|
|
$
|
127,760
|
|
|
$
|
107,076
|
|
Less: Non-cash
interest expense (amortization) (a)
|
5,481
|
|
|
—
|
|
|
7,741
|
|
|
—
|
|
Adjusted interest
expense
|
$
|
59,905
|
|
|
$
|
50,503
|
|
|
$
|
120,019
|
|
|
$
|
107,076
|
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
345,647
|
|
|
370,114
|
|
|
730,717
|
|
|
753,584
|
|
Adjusted interest
expense per unit ($/Mcfe)
|
$
|
0.17
|
|
|
$
|
0.14
|
|
|
$
|
0.16
|
|
|
$
|
0.14
|
|
(a)
|
As a result of
increased significance of non-cash interest expense (amortization)
in 2020, this line item was added as an adjustment to the
calculation of adjusted interest expense for the three and six
months ended June 30, 2020. Had adjusted interest expense been
calculated on a consistent basis, it would have been $2.2 million
and $4.6 million lower for the three and six months ended June 30,
2019, respectively, than the numbers presented herein.
|
The table below reconciles the full-year 2020 forecasted ranges
of adjusted interest expense per unit with interest expense, the
most comparable financial measure calculated in accordance with
GAAP.
|
Year Ended
December 31, 2020
|
|
(Thousands, unless
noted)
|
Interest
expense
|
$
|
260,000
|
|
|
$
|
270,000
|
|
Less: Non-cash
interest expense (amortization)
|
22,000
|
|
|
22,000
|
|
Adjusted interest
expense
|
$
|
238,000
|
|
|
$
|
248,000
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
1,500,000
|
|
|
1,450,000
|
|
Adjusted interest
expense per unit ($/Mcfe)
|
$
|
0.16
|
|
|
$
|
0.17
|
|
Net Debt
Net debt is defined as total debt less cash
and cash equivalents. Total debt includes the Company's current
portion of debt, credit facility borrowings, term loan borrowings,
senior notes and note payable to EQM Midstream Partners, LP. Net
debt is a non-GAAP supplemental financial measure used by the
Company's management to evaluate leverage since the Company could
choose to use its cash and cash equivalents to retire debt. The
Company's management believes that this measure provides useful
information to external users of the Company's consolidated
financial statements, such as industry analysts, lenders and
ratings agencies. Net debt should not be considered as an
alternative to total debt presented in accordance with GAAP.
The table below reconciles net debt with total debt, the most
comparable financial measure calculated in accordance with GAAP, as
derived from the Statements of Condensed Consolidated Balance
Sheets to be included in the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2020.
|
June 30,
2020
|
|
March 31,
2020
|
|
December 31,
2019
|
|
(Thousands)
|
Current portion of
debt
|
$
|
16,309
|
|
|
$
|
16,256
|
|
|
$
|
16,204
|
|
Credit facility
borrowings
|
38,000
|
|
|
—
|
|
|
294,000
|
|
Term loan facility
borrowings
|
—
|
|
|
799,574
|
|
|
999,353
|
|
Senior notes
(a)
|
4,463,548
|
|
|
4,117,256
|
|
|
3,878,366
|
|
Note payable to EQM
Midstream Partners, LP
|
102,483
|
|
|
103,778
|
|
|
105,056
|
|
Total debt
|
4,620,340
|
|
|
5,036,864
|
|
|
5,292,979
|
|
Less: Cash and cash
equivalents
|
2,968
|
|
|
18,651
|
|
|
4,596
|
|
Net
debt
|
$
|
4,617,372
|
|
|
$
|
5,018,213
|
|
|
$
|
5,288,383
|
|
(a)
|
Senior notes included
the convertible senior notes which, at issuance, were recorded in
the consolidated financial statements at fair value. The debt
discount, which is the excess of the principal amount of $500
million over its fair value at issuance, will be amortized to
interest expense over the term of the convertible senior notes,
which is approximately 6 years. As of June 30, 2020, the
carrying amount of the convertible senior notes was approximately
$349 million. See the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2020 for further
discussion.
|
Investor Contact:
Andrew
Breese
Director, Investor Relations
412.395.2555
ABreese@eqt.com
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.
EQT Management speaks to investors from time to time and the
analyst presentation for these discussions, which is updated
periodically, is available via the Company's investor relationship
website at https://ir.eqt.com.
Cautionary Statements
Total sales volume per day (or
daily production) is an operational estimate of the daily
production or sales volume on a typical day (excluding
curtailments).
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 Corporation and its subsidiaries (collectively,
the Company), including guidance regarding the Company's strategy
to develop its reserves; drilling plans and programs (including the
number, type, spacing, average lateral length and location of wells
to be drilled or turned-in-line, the number and type of drilling
rigs and, the number of frac crews); projections of wells SPUD,
horizontally drilled, completed and turned-in-line; projected
natural gas prices, basis and average differential; potential
impacts to the Company's business and operations resulting from the
COVID-19 pandemic; the effects of the COVID-19 pandemic and actions
taken by the Organization of the Petroleum Exporting Countries and
other allied countries (collectively known as OPEC+) as it pertains
to the global supply and demand of, and prices for, natural gas,
NGLs and oil; the impact of commodity prices on the Company's
business; total resource potential; projected production and sales
volume and growth rates (including liquids sales volume and growth
rates); projected drilling and completions (D&C) costs, other
well costs, unit costs and G&A expenses; projected reductions
in expenses, capital costs and well costs, the projected timing of
achieving such reductions and the Company's ability to achieve such
reductions; infrastructure programs; the Company's ability to
successfully implement and execute the executive management team's
operational, organizational and technological initiatives, and
achieve the anticipated results of such initiatives; the projected
reduction of the Company's gathering and compression rates
resulting from the Company's consolidated gas gathering and
compression agreement with EQM Midstream Partners, LP, and the
anticipated cost savings and other strategic benefits associated
with the execution of such agreement; monetization transactions,
including asset sales, joint ventures or other transactions
involving the Company's assets, the timing of such monetization
transactions, if at all, the projected proceeds from such
monetization transactions and the Company's planned use of such
proceeds; the amount and timing of any redemptions, repayments or
repurchases of the Company's common stock, outstanding debt
securities or other debt instruments; the Company's ability to
reduce its debt and the timing of such reductions, if any;
projected free cash flow, adjusted interest expense, adjusted
operating cash flow, and adjusted EBITDA, liquidity and financing
requirements, including funding sources and availability; the
Company's ability to maintain or improve its credit ratings,
leverage levels and financial profile; the Company's hedging
strategy; the Company's tax position and projected effective tax
rate; and the expected impact of changes in tax laws. These
forward-looking statements 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. The risks and uncertainties that may affect
the operations, performance and results of the Company's business
and forward-looking statements 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, NGLs 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 transactions.
These and other risks are described under Item 1A, "Risk Factors,"
and elsewhere in the Company's Annual Report on Form 10-K for the
year ended December 31, 2019, as
updated by Part II, Item 1A, "Risk Factors" in the Company's
subsequently filed Quarterly Reports on Form 10-Q and other
documents the Company files from time to time with the Securities
and Exchange Commission. In addition, the Company may be subject to
currently unforeseen risks that may have a materially adverse
impact on it.
EQT CORPORATION AND
SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED
OPERATIONS (UNAUDITED)
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, except per share amounts)
|
Operating
revenues:
|
|
|
|
|
|
|
|
Sales of natural gas,
natural gas liquids and oil
|
$
|
498,772
|
|
|
$
|
900,527
|
|
|
$
|
1,213,973
|
|
|
$
|
2,172,140
|
|
Gain on derivatives
not designated as hedges
|
26,426
|
|
|
407,635
|
|
|
415,862
|
|
|
275,639
|
|
Net marketing services
and other
|
1,876
|
|
|
2,090
|
|
|
4,296
|
|
|
5,646
|
|
Total operating
revenues
|
527,074
|
|
|
1,310,252
|
|
|
1,634,131
|
|
|
2,453,425
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Transportation and
processing
|
405,636
|
|
|
436,984
|
|
|
845,470
|
|
|
876,230
|
|
Production
|
38,329
|
|
|
36,316
|
|
|
78,709
|
|
|
79,724
|
|
Exploration
|
876
|
|
|
1,857
|
|
|
1,799
|
|
|
2,864
|
|
Selling, general and
administrative
|
43,341
|
|
|
86,208
|
|
|
78,279
|
|
|
135,186
|
|
Depreciation and
depletion
|
323,096
|
|
|
372,413
|
|
|
680,622
|
|
|
763,526
|
|
Amortization of
intangible assets
|
7,477
|
|
|
10,342
|
|
|
14,955
|
|
|
20,684
|
|
Loss on sale/exchange
of long-lived assets
|
49,207
|
|
|
—
|
|
|
98,059
|
|
|
—
|
|
Impairment and
expiration of leases
|
41,279
|
|
|
48,584
|
|
|
95,047
|
|
|
78,118
|
|
Transaction, proxy and
reorganization
|
4,745
|
|
|
21,518
|
|
|
4,745
|
|
|
25,607
|
|
Total operating
expenses
|
913,986
|
|
|
1,014,222
|
|
|
1,897,685
|
|
|
1,981,939
|
|
Operating (loss)
income
|
(386,912)
|
|
|
296,030
|
|
|
(263,554)
|
|
|
471,486
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
(187,223)
|
|
|
—
|
|
(Gain) loss on
investment in Equitrans Midstream
Corporation
|
(82,983)
|
|
|
104,741
|
|
|
307,645
|
|
|
15,686
|
|
Dividend and other
income
|
(3,590)
|
|
|
(23,645)
|
|
|
(28,304)
|
|
|
(44,632)
|
|
Loss on debt
extinguishment
|
353
|
|
|
—
|
|
|
16,963
|
|
|
—
|
|
Interest
expense
|
65,386
|
|
|
50,503
|
|
|
127,760
|
|
|
107,076
|
|
(Loss) income before
income taxes
|
(366,078)
|
|
|
164,431
|
|
|
(500,395)
|
|
|
393,356
|
|
Income tax (benefit)
expense
|
(103,003)
|
|
|
38,865
|
|
|
(70,181)
|
|
|
77,099
|
|
Net (loss)
income
|
$
|
(263,075)
|
|
|
$
|
125,566
|
|
|
$
|
(430,214)
|
|
|
$
|
316,257
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share of common stock:
|
Basic:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
255,524
|
|
|
255,099
|
|
|
255,477
|
|
|
254,975
|
|
Net (loss)
income
|
$
|
(1.03)
|
|
|
$
|
0.49
|
|
|
$
|
(1.68)
|
|
|
$
|
1.24
|
|
Diluted:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
255,524
|
|
|
255,223
|
|
|
255,477
|
|
|
255,211
|
|
Net (loss)
income
|
$
|
(1.03)
|
|
|
$
|
0.49
|
|
|
$
|
(1.68)
|
|
|
$
|
1.24
|
|
EQT CORPORATION AND
SUBSIDIARIES
PRICE RECONCILIATION
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Thousands, unless
noted)
|
NATURAL
GAS
|
|
|
|
|
|
|
|
Sales volume
(MMcf)
|
325,248
|
|
|
351,211
|
|
|
694,990
|
|
|
714,928
|
|
NYMEX price ($/MMBtu)
(a)
|
$
|
1.71
|
|
|
$
|
2.64
|
|
|
$
|
1.84
|
|
|
$
|
2.90
|
|
Btu uplift
|
0.09
|
|
|
0.12
|
|
|
0.09
|
|
|
0.14
|
|
Natural gas price
($/Mcf)
|
$
|
1.80
|
|
|
$
|
2.76
|
|
|
$
|
1.93
|
|
|
$
|
3.04
|
|
|
|
|
|
|
|
|
|
Basis ($/Mcf)
(b)
|
$
|
(0.36)
|
|
|
$
|
(0.36)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.20)
|
|
Cash settled basis
swaps (not designated as hedges) ($/Mcf)
|
(0.02)
|
|
|
(0.05)
|
|
|
0.02
|
|
|
(0.08)
|
|
Average differential,
including cash settled basis swaps ($/Mcf)
|
$
|
(0.38)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.28)
|
|
|
|
|
|
|
|
|
|
Average adjusted price
($/Mcf)
|
$
|
1.42
|
|
|
$
|
2.35
|
|
|
$
|
1.66
|
|
|
$
|
2.76
|
|
Cash settled
derivatives (not designated as hedges) ($/Mcf)
|
1.00
|
|
|
0.20
|
|
|
0.79
|
|
|
0.07
|
|
Average natural gas
price, including cash settled derivatives ($/Mcf)
|
$
|
2.42
|
|
|
$
|
2.55
|
|
|
$
|
2.45
|
|
|
$
|
2.83
|
|
Natural gas sales,
including cash settled derivatives
|
$
|
786,595
|
|
|
$
|
896,441
|
|
|
$
|
1,702,006
|
|
|
$
|
2,025,642
|
|
|
|
|
|
|
|
|
|
LIQUIDS
|
|
|
|
|
|
|
|
Natural gas
liquids (NGLs), excluding ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(c)
|
10,572
|
|
|
11,201
|
|
|
21,392
|
|
|
23,750
|
|
Sales volume
(Mbbl)
|
1,762
|
|
|
1,867
|
|
|
3,565
|
|
|
3,958
|
|
Price
($/Bbl)
|
$
|
13.52
|
|
|
$
|
21.15
|
|
|
$
|
16.08
|
|
|
$
|
25.75
|
|
Cash settled
derivatives (not designated as hedges) ($/Bbl)
|
(0.52)
|
|
|
2.86
|
|
|
(0.26)
|
|
|
2.22
|
|
Average NGLs price,
including cash settled derivatives ($/Bbl)
|
$
|
13.00
|
|
|
$
|
24.01
|
|
|
$
|
15.82
|
|
|
$
|
27.97
|
|
NGLs sales
|
$
|
22,910
|
|
|
$
|
44,821
|
|
|
$
|
56,421
|
|
|
$
|
110,724
|
|
Ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(c)
|
8,769
|
|
|
6,455
|
|
|
12,098
|
|
|
12,393
|
|
Sales volume
(Mbbl)
|
1,461
|
|
|
1,076
|
|
|
2,016
|
|
|
2,066
|
|
Price
($/Bbl)
|
$
|
3.38
|
|
|
$
|
6.54
|
|
|
$
|
3.56
|
|
|
$
|
6.87
|
|
Ethane
sales
|
$
|
4,941
|
|
|
$
|
7,038
|
|
|
$
|
7,186
|
|
|
$
|
14,190
|
|
Oil:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(c)
|
1,058
|
|
|
1,247
|
|
|
2,237
|
|
|
2,513
|
|
Sales volume
(Mbbl)
|
176
|
|
|
208
|
|
|
373
|
|
|
419
|
|
Price
($/Bbl)
|
$
|
10.17
|
|
|
$
|
48.78
|
|
|
$
|
21.48
|
|
|
$
|
43.69
|
|
Oil sales
|
$
|
1,795
|
|
|
$
|
10,140
|
|
|
$
|
8,010
|
|
|
$
|
18,300
|
|
|
|
|
|
|
|
|
|
Total liquids sales
volume (MMcfe) (c)
|
20,399
|
|
|
18,903
|
|
|
35,727
|
|
|
38,656
|
|
Total liquids sales
volume (Mbbl)
|
3,399
|
|
|
3,151
|
|
|
5,954
|
|
|
6,443
|
|
Total liquids
sales
|
$
|
29,646
|
|
|
$
|
61,999
|
|
|
$
|
71,617
|
|
|
$
|
143,214
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
Total natural gas and
liquids sales, including cash settled derivatives (d)
|
$
|
816,241
|
|
|
$
|
958,440
|
|
|
$
|
1,773,623
|
|
|
$
|
2,168,856
|
|
Total sales volume
(MMcfe)
|
345,647
|
|
|
370,114
|
|
|
730,717
|
|
|
753,584
|
|
Average realized
price ($/Mcfe)
|
$
|
2.36
|
|
|
$
|
2.59
|
|
|
$
|
2.43
|
|
|
$
|
2.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Company's volume
weighted NYMEX natural gas price (actual average NYMEX natural gas
price ($/MMBtu)) was $1.72 and $2.64 for the three months ended
June 30, 2020 and 2019, respectively, and $1.83 and $2.89 for the
six months ended June 30, 2020 and 2019, respectively.
|
(b)
|
Basis represents the
difference between the ultimate sales price for natural gas and the
NYMEX natural gas price.
|
(c)
|
NGLs, ethane and oil
were converted to Mcfe at the rate of six Mcfe per
barrel.
|
(d)
|
Also referred to in
this report as adjusted operating revenues, a non-GAAP supplemental
financial measure.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/eqt-reports-second-quarter-2020-results-301099871.html
SOURCE EQT Corporation