PITTSBURGH, July 28, 2021 /PRNewswire/ -- EQT
Corporation (NYSE: EQT) today announced financial and operational
results for the second quarter 2021.
Second Quarter and Other Highlights:
- Sales volumes of 421 Bcfe, in-line with guidance
- Total per unit operating costs of $1.33/Mcfe, in-line with annual guidance
- Capital expenditures of $246 MM,
$19 MM below the low-end of guidance
range
- Net cash provided by operating activities of $43 MM; free cash flow(1) of
$155 MM
- Announced targets to achieve net zero Scope 1 & Scope 2 GHG
emissions by or before 2025
- Successfully closed the acquisition of Alta Resources on
July 21, 2021
- Received credit rating upgrade by Fitch Ratings in May 2021
- Upgraded by Moody's Investor Services and S&P Global in
July 2021
President and CEO Toby Rice
stated, "The closing of the Alta acquisition represents another
important step forward in creating value for our
stakeholders. These premier assets will accelerate our
deleveraging strategy, provide attractive free cash flow accretion,
and enhance strategic opportunities. We are excited to fully
integrate these high-margin assets into EQT's already robust
portfolio, while working alongside and building strong
relationships with the new business partners established with the
transaction. We are a values-driven organization designed to
perform for our stakeholders, and we are eager to deliver the
prolific value embedded in these assets."
Rice continued, "We have entered the sustainable shale era,
which is driven by free cash flow generation, balance sheet
strength, the pursuit of net zero emissions, and returning capital
to shareholders. These concepts are firmly embedded in our
multi-level strategy geared towards sustainable value creation. We
continue to Evolve to realize the full potential of
EQT's assets, diligently monitor the market in an effort to capture
accretive Consolidation opportunities, and explore
New Ventures in an effort to forge new paths and open
new markets to achieve sustainable growth. We are executing
this strategy with vision and purpose, as we continue on our path
to become the clear operator of choice for all stakeholders."
(1) A non-GAAP
financial measure. See the Non-GAAP Disclosures section of this
news release for the definition of, and other important information
regarding, this non-GAAP financial measure.
|
Second Quarter 2021 Financial and Operational
Performance
|
Three Months Ended
June 30,
|
|
|
($ millions,
except average realized price and EPS)
|
2021
|
|
2020
|
|
Change
|
Total sales volume
(Bcfe)
|
421
|
|
|
346
|
|
|
75
|
|
Average realized
price ($/Mcfe)
|
$
|
2.37
|
|
|
$
|
2.36
|
|
|
$
|
0.01
|
|
Net loss attributable
to EQT Corporation
|
$
|
(936)
|
|
|
$
|
(263)
|
|
|
$
|
(673)
|
|
Adjusted net income
(loss) attributable to EQT (a)
|
$
|
20
|
|
|
$
|
(45)
|
|
|
$
|
65
|
|
Adjusted EBITDA
(a)
|
$
|
445
|
|
|
$
|
334
|
|
|
$
|
111
|
|
Diluted earnings per
share (EPS)
|
$
|
(3.35)
|
|
|
$
|
(1.03)
|
|
|
$
|
(2.32)
|
|
Adjusted EPS
(a)
|
$
|
0.07
|
|
|
$
|
(0.18)
|
|
|
$
|
0.25
|
|
Net cash provided by
operating activities
|
$
|
43
|
|
|
$
|
447
|
|
|
$
|
(404)
|
|
Capital
expenditures
|
$
|
246
|
|
|
$
|
303
|
|
|
$
|
(57)
|
|
Free cash flow
(a)
|
$
|
155
|
|
|
$
|
(82)
|
|
|
$
|
237
|
|
(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 attributable to EQT Corporation for the three months
ended June 30, 2021 was $936
million, $3.35 per diluted
share, compared to net loss attributable to EQT Corporation for the
same period in 2020 of $263 million,
$1.03 per diluted share. The change
was attributable primarily to the loss on derivatives not
designated as hedges and lower income from investments, partly
offset by increased sales of natural gas, natural gas liquids
(NGLs) and oil and a higher income tax benefit. For the three
months ended June 30, 2021, the Company recognized a loss of
$1.3 billion on derivatives not
designated as hedges related primarily to decreases in the fair
market value of the Company's NYMEX swaps and options due to
increases in forward prices.
Sales volume increased compared to the same period in 2020
primarily as a result of prior period sales volume decreases of 36
Bcfe from the 2020 Strategic Production Curtailments (defined
below) and sales volume increases of 33 Bcfe from the assets
acquired from the Chevron Acquisition (defined below). The 2020
Strategic Production Curtailments refers to the Company's 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 and remaining shut in through the remainder of the
second quarter of 2020. The Chevron Acquisition refers to the
Company's acquisition of upstream assets from Chevron U.S.A. Inc. in the fourth quarter of 2020.
Net cash provided by operating activities decreased by
$404 million due primarily to
increased collateral and margin deposits associated with the
Company's over the counter (OTC) derivative instrument contracts
and exchange traded natural gas contracts. Free cash
flow(1) increased by $237
million compared to the same quarter last year due primarily
to increased revenues from higher sales volume and lower capital
expenditures.
Per Unit Operating Costs
The following presents
certain of the Company's production-related operating costs on a
per unit basis.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
Per Unit
($/Mcfe)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Gathering
|
$
|
0.68
|
|
|
$
|
0.73
|
|
|
$
|
0.68
|
|
|
$
|
0.70
|
|
Transmission
|
0.31
|
|
|
0.35
|
|
|
0.31
|
|
|
0.36
|
|
Processing
|
0.11
|
|
|
0.10
|
|
|
0.11
|
|
|
0.09
|
|
Lease operating
expense (LOE), excluding production taxes
|
0.06
|
|
|
0.07
|
|
|
0.06
|
|
|
0.07
|
|
Production
taxes
|
0.05
|
|
|
0.04
|
|
|
0.05
|
|
|
0.03
|
|
SG&A
(a)
|
0.12
|
|
|
0.13
|
|
|
0.11
|
|
|
0.11
|
|
Total per unit
operating costs
|
$
|
1.33
|
|
|
$
|
1.42
|
|
|
$
|
1.32
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
Production
depletion
|
$
|
0.90
|
|
|
$
|
0.92
|
|
|
$
|
0.90
|
|
|
$
|
0.92
|
|
Adjusted interest
expense (b)
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
(a) For the three
months ended June 30, 2021 and 2020, non-cash long-term
incentive compensation costs of $8 million and $3 million,
respectively, were included in SG&A. For the six months ended
June 30, 2021 and 2020, non-cash long-term incentive
compensation costs of $14 million and $8 million, respectively,
were included in SG&A.
|
|
(b) 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.
|
Gathering expense per Mcfe decreased when compared to the same
period in 2020 due primarily to increased sales volume, which
resulted in utilization of lower overrun rates as part of the
Company's consolidated gas gathering and compression agreement with
Equitrans Midstream Corporation (Equitrans Midstream), and a lower
gathering rate structure on the assets acquired from the Chevron
Acquisition. Transmission expense per Mcfe decreased when compared
to the same period in 2020 due primarily to increased sales volume,
some of which does not have associated transmission expense, such
as the assets acquired from the Chevron Acquisition.
Liquidity
As of June 30, 2021, the Company had no
credit facility borrowings and $0.7
billion letters of credit outstanding under its $2.5 billion credit facility. As of June 30,
2021, total debt was $5,496 million
and net debt(1) was $5,166
million, compared to $4,925
million and $4,907 million,
respectively, as of December 31, 2020.
As of July 27, 2021, 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 request of the Company pursuant to the
Company's OTC derivative instruments, midstream services contracts
and other contracts. As of July 27, 2021, such amounts could
be up to approximately $1.2 billion, inclusive of letters of
credit, OTC derivative instrument margin deposits and other
collateral posted of approximately $1.2 billion in the aggregate.
STRATEGIC UPDATE
As previously announced, on
July 16, 2021, the Company's
shareholders overwhelmingly approved the issuance of EQT common
stock as partial consideration for the acquisition of Alta
Resources Development, LLC's (Alta) upstream and midstream assets
(the Alta Acquisition). On July 21,
2021, the Company closed the Alta Acquisition for an
adjusted aggregate purchase price consisting of $1.0 billion in cash and approximately 98.8
million shares of the Company's common stock being issued directly
to Alta's equity holders or their designees.
As a result of the Alta Acquisition, the Company acquired
approximately 300,000 net Northeast Marcellus acres, approximately
1.0 Bcfe per day of current net production, approximately 300 miles
of midstream gathering systems, approximately 100 miles of a
freshwater system and an attractive firm transportation portfolio
to premium demand markets.
During the remainder of 2021, the Company anticipates capital
expenditures of approximately $100-$125 million
and sales volumes of approximately 155-175 Bcfe related to the Alta
Acquisition. Additionally, the Company expects the assets acquired
from the Alta Acquisition to contribute approximately $300-$325 million
in adjusted EBITDA and $150-$170 million
in free cash flow during 2021. On average, the Company expects to
deploy one operated horizontal rig and frac crew on the acquired
Alta assets during the remainder of 2021.
The Company is in the early stages of implementing its proven
integration framework, which provides a comprehensive and
transparent roadmap to fully assimilate all operational,
technological and administration functions from the acquisition.
This platform will drive seamless integration of the acquired
assets, while quickly identifying enhancement opportunities as the
assets are integrated. The Company anticipates being
completed with all operational integration tasks by the end of
2021.
OPERATIONAL UPDATE
The Company continues to deliver
operational results across the organization that meet or exceed
expectations. During the second quarter 2021, the Company averaged
approximately $710 per foot in the PA
Marcellus, and when combined with the $635 per foot delivered in the first quarter
2021, the Company's year-to-date 2021 average is $670 per foot in the PA Marcellus. The increase
in well cost per foot during the second quarter 2021 was solely
driven by the lateral lengths associated with the set of wells
developed during the period. The Company did not experience any
operational issues, or service cost inflationary pressures during
the period, and is on pace to meet or exceed its full-year PA
Marcellus well cost target of $675
per foot.
In July 2021, the Company placed
into service a 15-mile section of its planned 45-mile mixed-use
water system, which will serve as the backbone for the optimal
development of the Company's WV Marcellus assets. The
completed section has the ability to deliver up to 100 barrels of
water per minute to support completion activities and is expected
to service over 100 wells in Wetzel and Marion County, WV. By
partnering with the Company's service providers on cost savings
initiatives and effective work planning, the completed section was
delivered ahead of schedule and under budget. During 2021,
development activity in the WV Marcellus has been executed as
planned, and the Company has high confidence that it will meet or
exceed its full-year 2021 well cost target of $775 per foot in the WV Marcellus. Moving
forward, utilization of the water system is expected to enhance
development efficiencies, while also reducing environmental impacts
and improving long-term lease operating expenses.
The tables below reflect the Company's operational activity
during the second quarter 2021 and planned activity for the third
quarter 2021.
Wells Drilled
(SPUD)
|
|
SWPA
Marcellus
|
|
NEPA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
Net Wells
|
16
|
|
—
|
|
N/A
|
|
3
|
|
—
|
|
8
|
|
—
|
|
—
|
Net Avg. Lateral
(ft.)
|
9,730
|
|
—
|
|
N/A
|
|
6,680
|
|
—
|
|
16,520
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells Horizontally
Drilled
|
|
SWPA
Marcellus
|
|
NEPA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
Net Wells
|
6
|
|
12
|
|
N/A
|
|
7
|
|
6
|
|
9
|
|
—
|
|
—
|
Net Avg. Lateral
(ft.)
|
9,500
|
|
15,440
|
|
N/A
|
|
10,170
|
|
12,260
|
|
12,920
|
|
—
|
|
—
|
Wells Completed
(Frac)
|
|
|
|
|
|
SWPA
Marcellus
|
|
NEPA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
Net Wells
|
10
|
|
21
|
|
N/A
|
|
6
|
|
9
|
|
6
|
|
—
|
|
—
|
Net Avg. Lateral
(ft.)
|
10,960
|
|
10,860
|
|
N/A
|
|
9,370
|
|
9,890
|
|
13,200
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Turned-in-Line (TIL)
|
|
|
|
|
|
SWPA
Marcellus
|
|
NEPA
Marcellus
|
|
WV
Marcellus
|
|
OH
Utica
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
|
2Q21A
|
|
3Q21E
|
Net Wells
|
14
|
|
28
|
|
N/A
|
|
8
|
|
—
|
|
9
|
|
5
|
|
—
|
Net Avg. Lateral
(ft.)
|
11,880
|
|
11,950
|
|
N/A
|
|
9,270
|
|
—
|
|
9,890
|
|
11,760
|
|
—
|
2021 GUIDANCE
Production
|
|
Q3
2021
|
|
Full-Year
2021
|
Total sales volume
(Bcfe)
|
|
470 - 500
|
|
1,800 -
1,875
|
Liquids sales
volume, excluding ethane (Mbbls)
|
|
3,025 -
3,125
|
|
11,750 -
11,950
|
Ethane sales
volume (Mbbls)
|
|
1,450 -
1,550
|
|
5,600 -
5,800
|
Total liquids sales
volume (Mbbls)
|
|
4,475 -
4,675
|
|
17,350 -
17,750
|
|
|
|
|
|
Btu uplift (MMbtu /
Mcf)
|
|
1.045 -
1.055
|
|
1.045 -
1.055
|
|
|
|
|
|
Average differential
($ / Mcf)
|
|
($0.95) -
($0.85)
|
|
($0.75) -
($0.55)
|
|
|
|
|
|
Resource
Counts
|
|
|
|
|
Top-hole
Rigs
|
|
|
|
1 - 2
|
Horizontal
Rigs
|
|
|
|
2 - 3
|
Frac Crews
|
|
|
|
3 - 4
|
|
|
|
|
|
Per Unit Operating
Costs ($ / Mcfe)
|
|
|
|
|
Gathering
|
|
$0.66 -
$0.68
|
|
$0.66 -
$0.68
|
Transmission
|
|
$0.24 -
$0.26
|
|
$0.27 -
$0.29
|
Processing
|
|
$0.09 -
$0.11
|
|
$0.09 -
$0.11
|
LOE, excluding
production taxes
|
|
$0.09 -
$0.11
|
|
$0.06 -
$0.08
|
Production
taxes
|
|
$0.03 -
$0.05
|
|
$0.04 -
$0.06
|
SG&A
|
|
$0.09 -
$0.11
|
|
$0.10 -
$0.12
|
Total
per unit operating costs
|
|
$1.20 -
$1.32
|
|
$1.22 -
$1.34
|
|
|
|
|
|
Adjusted interest
expense ($ / Mcfe) (a)
|
|
|
|
$0.14 -
$0.15
|
|
|
|
|
|
Financial ($
Billions)
|
|
|
|
|
Adjusted EBITDA
(a)
|
|
|
|
$2.100 -
$2.175
|
Adjusted operating cash
flow (a)
|
|
|
|
$1.850 -
$1.925
|
Capital expenditures
(b)
|
|
$0.275 -
$0.325
|
|
$1.100 -
$1.175
|
Free cash flow
(a)
|
|
|
|
$0.725 -
$0.800
|
Based on NYMEX natural gas price of $3.45 per MMbtu as of July
23, 2021.
(a) Non-GAAP
financial measure. See the Non-GAAP Disclosures section for the
definition of, and other important information regarding, the
non-GAAP financial measures included in this news release,
including reasons why EQT is unable to provide a projection of its
2021 net cash provided by operating activities, the most comparable
financial measure calculated in accordance with GAAP, to projected
adjusted operating cash flow and free cash flow, or a projection of
its 2021 net income, the most comparable financial measure
calculated in accordance with GAAP, to projected adjusted
EBITDA.
|
(b) Excludes
amounts attributable to noncontrolling interests.
|
Second Quarter 2021 Earnings Webcast Information
The
Company's conference call with securities analysts begins at
10:00 a.m. ET on Thursday
July 29, 2021 and will be broadcast live via the Company's web
site at www.eqt.com and on the investor information page of the
Company's web site at ir.eqt.com, with a replay available for seven
days following the call.
HEDGING (as of July 23, 2021)
The Company's total
natural gas production NYMEX hedge positions are:
|
|
2021
(a)
|
|
2022
|
|
2023
|
|
2024
|
Swaps:
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
741
|
|
|
1,277
|
|
|
166
|
|
|
2
|
|
Average Price
($/Dth)
|
|
$
|
2.77
|
|
|
$
|
2.77
|
|
|
$
|
2.53
|
|
|
$
|
2.67
|
|
Calls – Net
Short:
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
180
|
|
|
391
|
|
|
77
|
|
|
15
|
|
Average Short Strike
Price ($/Dth)
|
|
$
|
2.92
|
|
|
$
|
2.96
|
|
|
$
|
2.89
|
|
|
$
|
3.11
|
|
Puts – Net
Long:
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
105
|
|
|
169
|
|
|
69
|
|
|
15
|
|
Average Long Strike
Price ($/Dth)
|
|
$
|
2.59
|
|
|
$
|
2.65
|
|
|
$
|
2.40
|
|
|
$
|
2.45
|
|
Fixed Price Sales
(b):
|
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
|
36
|
|
|
4
|
|
|
3
|
|
|
—
|
|
Average Price
($/Dth)
|
|
$
|
2.49
|
|
|
$
|
2.38
|
|
|
$
|
2.38
|
|
|
$
|
—
|
|
|
|
(a)
|
July 1 - December 31,
2021.
|
(b)
|
The difference
between the fixed price and NYMEX price is included in average
differential presented in the Company's price
reconciliation.
|
For 2021 (July 1 - December 31),
2022, 2023 and 2024, the Company has natural gas sales agreements
for approximately 9 MMDth, 18 MMDth, 88 MMDth and 11 MMDth,
respectively, that include average NYMEX ceiling prices of
$3.17, $3.17, $2.84 and
$3.21, respectively. The Company has
also entered into transactions 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 Income (Loss) Attributable to EQT and Adjusted
Earnings per Diluted Share (Adjusted EPS)
Adjusted net
income (loss) attributable to EQT is defined as net loss
attributable to EQT Corporation, excluding (gain) loss on
sale/exchange of long-lived assets, impairments, 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 income
(loss) attributable to EQT divided by diluted weighted average
common shares outstanding. Adjusted net income (loss) attributable
to EQT 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 income (loss) attributable to EQT 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 income (loss) attributable to EQT and adjusted EPS should not
be considered as alternatives to net loss attributable to EQT
Corporation or diluted EPS presented in accordance with GAAP.
The table below reconciles adjusted net income (loss)
attributable to EQT and adjusted EPS with net loss attributable to
EQT Corporation 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, 2021.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands, except
per share information)
|
Net loss attributable
to EQT Corporation
|
$
|
(936,457)
|
|
|
$
|
(263,075)
|
|
|
$
|
(976,975)
|
|
|
$
|
(430,214)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
(Gain) loss on
sale/exchange of long-lived assets
|
(16,816)
|
|
|
49,207
|
|
|
(18,023)
|
|
|
98,059
|
|
Impairment and
expiration of leases
|
25,634
|
|
|
41,279
|
|
|
42,391
|
|
|
95,047
|
|
Loss (gain) on
derivatives not designated as hedges
|
1,345,532
|
|
|
(26,426)
|
|
|
1,534,345
|
|
|
(415,862)
|
|
Net cash settlements
(paid) received on derivatives not designated as hedges
|
(71,441)
|
|
|
315,393
|
|
|
(109,581)
|
|
|
561,129
|
|
Premiums (paid)
received for derivatives that settled during the period
|
(9,579)
|
|
|
2,076
|
|
|
(19,305)
|
|
|
(1,479)
|
|
Other operating
expenses (a)
|
5,225
|
|
|
4,745
|
|
|
14,668
|
|
|
4,745
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
—
|
|
|
(187,223)
|
|
(Income) loss from
investments
|
(11,829)
|
|
|
(82,983)
|
|
|
(23,677)
|
|
|
307,645
|
|
Loss on debt
extinguishment
|
5,332
|
|
|
353
|
|
|
9,756
|
|
|
16,963
|
|
Non-cash interest
expense (amortization)
|
7,815
|
|
|
5,481
|
|
|
15,073
|
|
|
7,741
|
|
Tax impact of non-GAAP
items (b)
|
(323,455)
|
|
|
(91,286)
|
|
|
(365,437)
|
|
|
(63,866)
|
|
Adjusted net income
(loss) attributable to EQT
|
$
|
19,961
|
|
|
$
|
(45,236)
|
|
|
$
|
103,235
|
|
|
$
|
(7,315)
|
|
Diluted weighted
average common shares outstanding
|
283,525
|
|
|
255,524
|
|
|
282,729
|
|
|
255,477
|
|
Diluted
EPS
|
$
|
(3.35)
|
|
|
$
|
(1.03)
|
|
|
$
|
(3.50)
|
|
|
$
|
(1.68)
|
|
Adjusted
EPS
|
$
|
0.07
|
|
|
$
|
(0.18)
|
|
|
$
|
0.37
|
|
|
$
|
(0.03)
|
|
|
|
(a)
|
Other operating
expenses includes transaction costs, reorganization costs, changes
in legal reserves including settlements and other costs which
affect the comparability of results or that are not indicative of
trends in the ongoing business.
|
|
|
(b)
|
The tax impact of
non-GAAP items represents the incremental tax (expense) benefit
that would have been incurred had these items been excluded from
net loss attributable to EQT Corporation, which resulted in blended
tax rates of 25.3% and 29.5% for the three months ended June 30,
2021 and 2020, respectively, and 25.3% and 13.1% for the six months
ended June 30, 2021 and 2020, respectively. The 2021 rate differs
from the Company's statutory tax rate primarily due to state taxes,
including valuation allowances limiting certain state tax benefits
and West Virginia tax legislation enacted on April 13, 2021 that
changed the way taxable income is apportioned to West Virginia for
tax years beginning on or after January 1, 2022. The 2020 rate
differs from the Company's statutory tax rate primarily due to
valuation allowances provided against federal and state deferred
tax assets for additional unrealized losses on the Company's
investment in Equitrans Midstream that, if sold, would result in
capital losses.
|
Adjusted EBITDA
Adjusted EBITDA is defined as net
loss, excluding interest expense, income tax benefit, depreciation
and depletion, amortization of intangible assets, (gain) loss on
sale/exchange of long-lived assets, impairments, 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 presented in accordance with GAAP.
The table below reconciles adjusted EBITDA with net loss, 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, 2021.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands)
|
Net loss
|
$
|
(936,519)
|
|
|
$
|
(263,075)
|
|
|
$
|
(977,551)
|
|
|
$
|
(430,214)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Interest
expense
|
76,986
|
|
|
65,386
|
|
|
152,085
|
|
|
127,760
|
|
Income tax
benefit
|
(347,846)
|
|
|
(103,003)
|
|
|
(362,340)
|
|
|
(70,181)
|
|
Depreciation and
depletion
|
380,288
|
|
|
323,096
|
|
|
757,404
|
|
|
680,622
|
|
Amortization of
intangible assets
|
—
|
|
|
7,477
|
|
|
—
|
|
|
14,955
|
|
(Gain) loss on
sale/exchange of long-lived assets
|
(16,816)
|
|
|
49,207
|
|
|
(18,023)
|
|
|
98,059
|
|
Impairment and
expiration of leases
|
25,634
|
|
|
41,279
|
|
|
42,391
|
|
|
95,047
|
|
Loss (gain) on
derivatives not designated as hedges
|
1,345,532
|
|
|
(26,426)
|
|
|
1,534,345
|
|
|
(415,862)
|
|
Net cash settlements
(paid) received on derivatives not designated as hedges
|
(71,441)
|
|
|
315,393
|
|
|
(109,581)
|
|
|
561,129
|
|
Premiums (paid)
received for derivatives that settled during the period
|
(9,579)
|
|
|
2,076
|
|
|
(19,305)
|
|
|
(1,479)
|
|
Other operating
expenses (a)
|
5,225
|
|
|
4,745
|
|
|
14,668
|
|
|
4,745
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
—
|
|
|
(187,223)
|
|
(Income) loss from
investments
|
(11,829)
|
|
|
(82,983)
|
|
|
(23,677)
|
|
|
307,645
|
|
Loss on debt
extinguishment
|
5,332
|
|
|
353
|
|
|
9,756
|
|
|
16,963
|
|
Adjusted
EBITDA
|
$
|
444,967
|
|
|
$
|
333,525
|
|
|
$
|
1,000,172
|
|
|
$
|
801,966
|
|
|
|
(a)
|
Other operating
expenses includes transaction costs, reorganization costs, changes
in legal reserves including settlements and other costs which
affect the comparability of results or that are not indicative of
trends in the ongoing business.
|
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 income (loss) includes the impact of
depreciation and depletion expense, income tax (benefit) 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, excluding capital
expenditures attributable to noncontrolling interests. 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, 2021.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands)
|
Net cash provided by
operating activities
|
$
|
43,479
|
|
|
$
|
446,859
|
|
|
$
|
443,394
|
|
|
$
|
947,121
|
|
Decrease (increase) in
changes in other assets and liabilities
|
353,114
|
|
|
(226,134)
|
|
|
448,637
|
|
|
(213,749)
|
|
Adjusted operating cash
flow
|
$
|
396,593
|
|
|
$
|
220,725
|
|
|
$
|
892,031
|
|
|
$
|
733,372
|
|
Less: capital
expenditures
|
(245,507)
|
|
|
(302,700)
|
|
|
(483,715)
|
|
|
(564,832)
|
|
Add: capital
expenditures attributable to noncontrolling interests
|
3,785
|
|
|
—
|
|
|
5,057
|
|
|
—
|
|
Free cash
flow
|
$
|
154,871
|
|
|
$
|
(81,975)
|
|
|
$
|
413,373
|
|
|
$
|
168,540
|
|
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 revenues, 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, 2021.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands, unless
noted)
|
Total operating
revenues
|
$
|
(260,116)
|
|
|
$
|
527,074
|
|
|
$
|
689,807
|
|
|
$
|
1,634,131
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Loss (gain) on
derivatives not designated as hedges
|
1,345,532
|
|
|
(26,426)
|
|
|
1,534,345
|
|
|
(415,862)
|
|
Net cash settlements
(paid) received on derivatives not designated as hedges
|
(71,441)
|
|
|
315,393
|
|
|
(109,581)
|
|
|
561,129
|
|
Premiums (paid)
received for derivatives that settled during the period
|
(9,579)
|
|
|
2,076
|
|
|
(19,305)
|
|
|
(1,479)
|
|
Net marketing services
and other
|
(7,512)
|
|
|
(1,876)
|
|
|
(15,297)
|
|
|
(4,296)
|
|
Adjusted operating
revenues
|
$
|
996,884
|
|
|
$
|
816,241
|
|
|
$
|
2,079,969
|
|
|
$
|
1,773,623
|
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
420,595
|
|
|
345,647
|
|
|
835,785
|
|
|
730,717
|
|
Average realized
price ($/Mcfe)
|
$
|
2.37
|
|
|
$
|
2.36
|
|
|
$
|
2.49
|
|
|
$
|
2.43
|
|
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, 2021.
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands, unless
noted)
|
Interest
expense
|
$
|
76,986
|
|
|
$
|
65,386
|
|
|
$
|
152,085
|
|
|
$
|
127,760
|
|
Less: Non-cash
interest expense (amortization)
|
7,815
|
|
|
5,481
|
|
|
15,073
|
|
|
7,741
|
|
Adjusted interest
expense
|
$
|
69,171
|
|
|
$
|
59,905
|
|
|
$
|
137,012
|
|
|
$
|
120,019
|
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
420,595
|
|
|
345,647
|
|
|
835,785
|
|
|
730,717
|
|
Adjusted interest
expense per unit ($/Mcfe)
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
The table below reconciles the full-year 2021 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, 2021
|
|
(Thousands, unless
noted)
|
Interest
expense
|
$
|
300,000
|
|
|
$
|
310,000
|
|
Less: Non-cash
interest expense (amortization)
|
32,000
|
|
|
32,000
|
|
Adjusted interest
expense
|
$
|
268,000
|
|
|
$
|
278,000
|
|
|
|
|
|
Forecasted sales
volume (MMcfe)
|
1,875,000
|
|
|
1,800,000
|
|
Adjusted interest
expense per unit ($/Mcfe)
|
$
|
0.14
|
|
|
$
|
0.15
|
|
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, 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, 2021.
|
June 30,
2021
|
|
December 31,
2020
|
|
(Thousands)
|
Current portion of
debt (a)
|
$
|
399,699
|
|
|
$
|
154,161
|
|
Credit facility
borrowings
|
—
|
|
|
300,000
|
|
Senior
notes
|
4,999,502
|
|
|
4,371,467
|
|
Note payable to EQM
Midstream Partners, LP
|
97,117
|
|
|
99,838
|
|
Total
debt
|
5,496,318
|
|
|
4,925,466
|
|
Less: Cash and cash
equivalents
|
330,770
|
|
|
18,210
|
|
Net
debt
|
$
|
5,165,548
|
|
|
$
|
4,907,256
|
|
|
|
(a)
|
Pursuant to the terms
of the Company's convertible senior notes indenture, a sale price
condition for conversion of the convertible notes was satisfied as
of June 30, 2021, and, accordingly, holders of convertible notes
may convert any of their convertible notes, at their option, at any
time during the quarter beginning on July 1, 2021 and ending on
September 30, 2021, subject to all terms and conditions set forth
in the convertible notes indenture. Therefore, as of June 30, 2021,
the net carrying value of the liability portion of the Company's
convertible notes of $370 million was included in current portion
of debt on the Condensed Consolidated Balance Sheet. See the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2021 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 EQT's investor relations 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, 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; 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 well costs and
unit costs; 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
projects, including the projected benefits and timing of
implementation of the Company's West
Virginia mixed-use water system; the Company's ability to
successfully implement and execute its operational, organizational,
technological and ESG-related initiatives, including the projected
timing of achieving net zero Scope 1 and Scope 2 GHG emissions, and
the Company's ability to achieve the anticipated results of such
initiatives; 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; potential acquisition
transactions or other strategic transactions, the timing thereof
and the Company's ability to achieve the intended operational,
financial and strategic benefits from any such transactions; the
projected benefits, production estimates and improvements to free
cash flow associated with the Alta Acquisition; the Company's
ability to successfully integrate the assets acquired in the Alta
Acquisition, including the timing of completion of such
integration; 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 dividends, 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,
and the timing of achieving such improvements, if at all; the
Company's hedging strategy; the Company's tax position and
projected effective tax rate; and the expected impact of changes in
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. These risks and uncertainties 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; 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, 2020 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. 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.
EQT CORPORATION
AND SUBSIDIARIES
|
STATEMENTS OF
CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands, except per share amounts)
|
Operating
revenues:
|
|
|
|
|
|
|
|
Sales of natural gas,
natural gas liquids and oil
|
$
|
1,077,904
|
|
|
$
|
498,772
|
|
|
$
|
2,208,855
|
|
|
$
|
1,213,973
|
|
(Loss) gain on
derivatives not designated as hedges
|
(1,345,532)
|
|
|
26,426
|
|
|
(1,534,345)
|
|
|
415,862
|
|
Net marketing services
and other
|
7,512
|
|
|
1,876
|
|
|
15,297
|
|
|
4,296
|
|
Total operating
revenues
|
(260,116)
|
|
|
527,074
|
|
|
689,807
|
|
|
1,634,131
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Transportation and
processing
|
464,016
|
|
|
405,636
|
|
|
909,800
|
|
|
845,470
|
|
Production
|
47,546
|
|
|
38,329
|
|
|
94,776
|
|
|
78,709
|
|
Exploration
|
1,779
|
|
|
876
|
|
|
2,728
|
|
|
1,799
|
|
Selling, general and
administrative
|
49,853
|
|
|
43,341
|
|
|
94,859
|
|
|
78,279
|
|
Depreciation and
depletion
|
380,288
|
|
|
323,096
|
|
|
757,404
|
|
|
680,622
|
|
Amortization of
intangible assets
|
—
|
|
|
7,477
|
|
|
—
|
|
|
14,955
|
|
(Gain) loss on
sale/exchange of long-lived assets
|
(16,816)
|
|
|
49,207
|
|
|
(18,023)
|
|
|
98,059
|
|
Impairment and
expiration of leases
|
25,634
|
|
|
41,279
|
|
|
42,391
|
|
|
95,047
|
|
Other operating
expenses
|
5,225
|
|
|
4,745
|
|
|
14,668
|
|
|
4,745
|
|
Total operating
expenses
|
957,525
|
|
|
913,986
|
|
|
1,898,603
|
|
|
1,897,685
|
|
Operating
loss
|
(1,217,641)
|
|
|
(386,912)
|
|
|
(1,208,796)
|
|
|
(263,554)
|
|
Gain on Equitrans
Share Exchange
|
—
|
|
|
—
|
|
|
—
|
|
|
(187,223)
|
|
(Income) loss from
investments
|
(11,829)
|
|
|
(82,983)
|
|
|
(23,677)
|
|
|
307,645
|
|
Dividend and other
income
|
(3,765)
|
|
|
(3,590)
|
|
|
(7,069)
|
|
|
(28,304)
|
|
Loss on debt
extinguishment
|
5,332
|
|
|
353
|
|
|
9,756
|
|
|
16,963
|
|
Interest
expense
|
76,986
|
|
|
65,386
|
|
|
152,085
|
|
|
127,760
|
|
Loss before income
taxes
|
(1,284,365)
|
|
|
(366,078)
|
|
|
(1,339,891)
|
|
|
(500,395)
|
|
Income tax
benefit
|
(347,846)
|
|
|
(103,003)
|
|
|
(362,340)
|
|
|
(70,181)
|
|
Net loss
|
(936,519)
|
|
|
(263,075)
|
|
|
(977,551)
|
|
|
(430,214)
|
|
Less: Net loss
attributable to noncontrolling interest
|
(62)
|
|
|
—
|
|
|
(576)
|
|
|
—
|
|
Net loss attributable
to EQT Corporation
|
$
|
(936,457)
|
|
|
$
|
(263,075)
|
|
|
$
|
(976,975)
|
|
|
$
|
(430,214)
|
|
|
|
|
|
|
|
|
|
Loss per share of
common stock attributable to EQT Corporation:
|
Basic:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
279,156
|
|
|
255,524
|
|
|
278,996
|
|
|
255,477
|
|
Net loss
|
$
|
(3.35)
|
|
|
$
|
(1.03)
|
|
|
$
|
(3.50)
|
|
|
$
|
(1.68)
|
|
Diluted:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
279,156
|
|
|
255,524
|
|
|
278,996
|
|
|
255,477
|
|
Net loss
|
$
|
(3.35)
|
|
|
$
|
(1.03)
|
|
|
$
|
(3.50)
|
|
|
$
|
(1.68)
|
|
EQT CORPORATION
AND SUBSIDIARIES
|
PRICE
RECONCILIATION
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Thousands, unless
noted)
|
NATURAL
GAS
|
|
|
|
|
|
|
|
Sales volume
(MMcf)
|
394,268
|
|
|
325,248
|
|
|
784,566
|
|
|
694,990
|
|
NYMEX price
($/MMBtu)
|
$
|
2.84
|
|
|
$
|
1.71
|
|
|
$
|
2.76
|
|
|
$
|
1.84
|
|
Btu uplift
|
0.16
|
|
|
0.09
|
|
|
0.15
|
|
|
0.09
|
|
Natural gas price
($/Mcf)
|
$
|
3.00
|
|
|
$
|
1.80
|
|
|
$
|
2.91
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
Basis ($/Mcf)
(a)
|
$
|
(0.57)
|
|
|
$
|
(0.36)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.29)
|
|
Cash settled basis
swaps (not designated as hedges) ($/Mcf)
|
(0.02)
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
0.02
|
|
Average differential,
including cash settled basis swaps ($/Mcf)
|
$
|
(0.59)
|
|
|
$
|
(0.38)
|
|
|
$
|
(0.46)
|
|
|
$
|
(0.27)
|
|
Average adjusted price
($/Mcf)
|
$
|
2.41
|
|
|
$
|
1.42
|
|
|
$
|
2.45
|
|
|
$
|
1.66
|
|
Cash settled
derivatives (not designated as hedges) ($/Mcf)
|
(0.13)
|
|
|
1.00
|
|
|
(0.07)
|
|
|
0.79
|
|
Average natural gas
price, including cash settled derivatives ($/Mcf)
|
$
|
2.28
|
|
|
$
|
2.42
|
|
|
$
|
2.38
|
|
|
$
|
2.45
|
|
Natural gas sales,
including cash settled derivatives
|
$
|
897,429
|
|
|
$
|
786,595
|
|
|
$
|
1,869,923
|
|
|
$
|
1,702,006
|
|
|
|
|
|
|
|
|
|
LIQUIDS
|
|
|
|
|
|
|
|
Natural gas
liquids (NGLs), excluding ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
16,158
|
|
|
10,572
|
|
|
30,758
|
|
|
21,392
|
|
Sales volume
(Mbbl)
|
2,693
|
|
|
1,762
|
|
|
5,126
|
|
|
3,565
|
|
Price
($/Bbl)
|
$
|
34.83
|
|
|
$
|
13.52
|
|
|
$
|
36.00
|
|
|
$
|
16.08
|
|
Cash settled
derivatives (not designated as hedges) ($/Bbl)
|
(9.31)
|
|
|
(0.52)
|
|
|
(6.31)
|
|
|
(0.26)
|
|
Average NGLs price,
including cash settled derivatives ($/Bbl)
|
$
|
25.52
|
|
|
$
|
13.00
|
|
|
$
|
29.69
|
|
|
$
|
15.82
|
|
NGLs sales
|
$
|
68,737
|
|
|
$
|
22,910
|
|
|
$
|
152,180
|
|
|
$
|
56,421
|
|
Ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
7,803
|
|
|
8,769
|
|
|
16,390
|
|
|
12,098
|
|
Sales volume
(Mbbl)
|
1,301
|
|
|
1,461
|
|
|
2,732
|
|
|
2,016
|
|
Price
($/Bbl)
|
$
|
6.58
|
|
|
$
|
3.38
|
|
|
$
|
6.62
|
|
|
$
|
3.56
|
|
Ethane
sales
|
$
|
8,560
|
|
|
$
|
4,941
|
|
|
$
|
18,094
|
|
|
$
|
7,186
|
|
Oil:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
2,366
|
|
|
1,058
|
|
|
4,071
|
|
|
2,237
|
|
Sales volume
(Mbbl)
|
394
|
|
|
176
|
|
|
678
|
|
|
373
|
|
Price
($/Bbl)
|
$
|
56.18
|
|
|
$
|
10.17
|
|
|
$
|
58.61
|
|
|
$
|
21.48
|
|
Oil sales
|
$
|
22,158
|
|
|
$
|
1,795
|
|
|
$
|
39,772
|
|
|
$
|
8,010
|
|
|
|
|
|
|
|
|
|
Total liquids sales
volume (MMcfe) (b)
|
26,327
|
|
|
20,399
|
|
|
51,219
|
|
|
35,727
|
|
Total liquids sales
volume (Mbbl)
|
4,388
|
|
|
3,399
|
|
|
8,536
|
|
|
5,954
|
|
Total liquids
sales
|
$
|
99,455
|
|
|
$
|
29,646
|
|
|
$
|
210,046
|
|
|
$
|
71,617
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
Total natural gas and
liquids sales, including cash settled derivatives (c)
|
$
|
996,884
|
|
|
$
|
816,241
|
|
|
$
|
2,079,969
|
|
|
$
|
1,773,623
|
|
Total sales volume
(MMcfe)
|
420,595
|
|
|
345,647
|
|
|
835,785
|
|
|
730,717
|
|
Average realized
price ($/Mcfe)
|
$
|
2.37
|
|
|
$
|
2.36
|
|
|
$
|
2.49
|
|
|
$
|
2.43
|
|
|
|
(a)
|
Basis represents the
difference between the ultimate sales price for natural gas,
including the effects of delivered price benefit or deficit
associated with our firm transportation agreements, and the NYMEX
natural gas price.
|
(b)
|
NGLs, ethane and oil
were converted to Mcfe at the rate of six Mcfe per
barrel.
|
(c)
|
Also referred to in
this report as adjusted operating revenues, a non-GAAP supplemental
financial measure.
|
View original content to download
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SOURCE EQT Corporation