EQt報告2024年第三季度結果和
宣佈非運營資產剝離
宣佈非運營資產剝離
2024年10月29日，匹茲堡 -- EQt公司（紐交所：EQT）今日宣佈2024年第三季度財務和運營結果。
2024年第三季度及近期要點：
•Equitrans中游公司（Equitrans）的整合工作在交易關閉後僅三個月就完成了60%以上；迄今所採取的措施預計將產生每年14500萬美元的基本協同效益，減輕了超過50%的總基本計劃協同風險
•銷售成交量達581 Bcfe，高於指導範圍的高端，得益於持續的運營效率提升和強勁的井效表現，儘管總淨削減約35 Bcfe
•資本支出爲55800萬美元; 按預測值(1) 57300萬美元的資本支出，低於指導範圍的下限，這是由效率提升和低於預期的中游-腦機支出所驅動
•不同的每Mcf價格比指導的中點緊湊，因戰術性減產與實時的供需匹配，最大化價值而不犧牲運營效率。
•每Mcfe單元的總運營成本爲$1.14；擬辦(1) 每Mcfe單元的總運營成本爲$1.07，低於指引的下限，主要由於低於預期的LOE和SG&A支出
•宣佈同意以12.5億現金賣掉位於賓夕法尼亞東北部的剩餘非運營天然氣資產
•成爲世界上首家實現淨零一、二範圍溫室氣體排放的大規模傳統能源生產商;(2) 在短短五年內消除或抵消了超過90萬公噸CO2e。
總裁兼首席執行官Toby Z. Rice表示：「第三季度的一個標誌性事件是我們成功完成了對Equitrans的戰略收購，這使EQt變成了美國唯一的大規模、垂直整合的天然氣業務。自收購Equitrans以來，我們的整合團隊一直在全力以赴，已完成超過60%的整合任務，並在短短三個月內實現了超過50%的基本協同效應。除了快速整合和協同效應的實現，我們還看到隨着Equitrans收購的直接後果而被釋放出來的運營效率提升，隨着時間的推移，這可能帶來更大的價值捕獲。」
Rice繼續說道，「此外，我們在減槓桿路徑上邁出了重要一步，宣佈達成協議，以12.5億現金出售我們在賓夕法尼亞東北地區剩餘的非經營上游資產。自2021年收購該業務以來，加上今年宣佈的兩項剝離，我們預計將實現約36億美元的總價值，相當於原始價值分配的3.3倍。這筆交易以及我們在受管制的中游-腦機資產出售過程中所看到的積極勢頭，使我們對能夠實現2025年年底的債務目標充滿信懇智能。」
(1)"Pro forma"是指截至2024年9月30日的三個月結果，假設Equitrans Midstream合併在2024年7月1日完成（參見下文的財務信息）。
(2)在這裏提到EQt實現「淨零排放」是基於（i）EQT向美國環境保護署（EPA）報告的2023年範圍1溫室氣體排放，涉及陸上石油股和天然氣生產環節以及採集和增壓環節， 加上 （ii）EQT使用基於地點的方法和美國環境保護局（EPA）排放與發電資源整合數據庫的州排放因子計算的2023年範圍2溫室氣體排放，適用於EQT運營區域， 減去（iii）EQt在2024年日曆年度產生的碳抵消。EQt的「淨零」聲明不包括範圍3溫室氣體排放，也不包括Equitrans及其相關資產的排放，這些資產在2024年7月22日被EQt收購。
第三季度 2024年財務和運營業績
| 截至9月30日的三個月 | |||||||||||||||||
| （單位：百萬美元，除每股平均實現價格和每股收益外） | 2024 | 2023 | 變更 | ||||||||||||||
| 銷售總成交量（十億立方英尺天然氣當量） | 581 | 523 | 58 | ||||||||||||||
| 平均實現價格（每百萬立方英尺天然氣當量美元） | $ | 2.38 | $ | 2.28 | $ | 0.10 | |||||||||||
| 歸屬於EQT的淨（虧損）收入 | $ | (301) | $ | 81 | $ | (382) | |||||||||||
調整後歸屬於EQT的淨收入（a） | $ | 69 | $ | 126 | $ | (57) | |||||||||||
| 每股攤薄淨（虧損）收入（每股收益EPS） | $ | (0.54) | $ | 0.20 | $ | (0.74) | |||||||||||
調整後的每股收益（a） | $ | 0.12 | $ | 0.30 | $ | (0.18) | |||||||||||
| 淨（虧損）利潤 | $ | (297) | $ | 81 | $ | (378) | |||||||||||
調整後EBITDA(a) | $ | 832 | $ | 521 | $ | 311 | |||||||||||
| 經營活動產生的現金流量淨額 | $ | 593 | $ | 455 | $ | 138 | |||||||||||
| 調整後的營業現金流量（a） | $ | 522 | $ | 443 | $ | 79 | |||||||||||
| 資本支出 | $ | (558) | $ | (445) | $ | (113) | |||||||||||
自由現金流(a) | $ | (121) | $ | (2) | $ | (119) | |||||||||||
(a)一項非通用會計準則財務指標。請參閱本新聞稿的非通用會計準則披露部分，了解有關該非通用財務指標的定義及其他重要信息。
每單位運營成本
以下表格列出了公司在每單位基礎上的部分合並運營成本。(a)
| 三個月之內結束 2020年9月30日 | 九個月結束 2020年9月30日 | ||||||||||||||||||||||
| 每單位（$/千立方英尺） | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| 收集 | $ | 0.20 | $ | 0.63 | $ | 0.44 | $ | 0.66 | |||||||||||||||
| 變速器 | 0.43 | 0.32 | 0.37 | 0.33 | |||||||||||||||||||
| 加工 | 0.13 | 0.11 | 0.13 | 0.11 | |||||||||||||||||||
| 租賃運營費用（LOE） | 0.09 | 0.08 | 0.09 | 0.07 | |||||||||||||||||||
| 生產稅 | 0.07 | 0.04 | 0.08 | 0.04 | |||||||||||||||||||
| 運營和維護（O&M） | 0.07 | — | 0.04 | — | |||||||||||||||||||
| 銷售、一般和行政管理費用（SG&A） | 0.15 | 0.11 | 0.14 | 0.12 | |||||||||||||||||||
| 營業成本 | $ | 1.14 | $ | 1.29 | $ | 1.29 | $ | 1.33 | |||||||||||||||
| 生產折耗 | $ | 0.91 | $ | 0.84 | $ | 0.90 | $ | 0.83 | |||||||||||||||
(a)本公告中提及的「公司」是指EQt公司及其合併子公司。如在本公告中所述，每單位運營成本反映了每個期間呈現的公司（無論業務部門）的該運營成本的合併金額，該金額除以天然氣和液體（Mcfe）的總銷售量。
每Mcfe的收集費用在2024年9月30日結束的三個月內與2023年同期相比有所下降，主要是由於公司擁有的於2024年7月收購Equitrans時的收集、變速器和儲存資產（Equitrans Midstream合併）以及公司對位於賓夕法尼亞州東北部的收集資產的額外利益。
2024年9月30日止的三個月，每Mcfe的輸送費用增加，與2023年同期相比，主要是由於額外的承包能力增加，包括在Mountain Valley Pipeline（MVP）上於2024年7月1日開始長期的有限容量義務。
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截至2024年9月30日，每Mcfe的處理費用與2023年同期相比增加，主要原因是液體豐富區域開發規模增加以及EQT從THQ Appalachia I, LLC收購的液體豐富資產和從THQ-XcL Holdings I, LLC於2023年8月收購的採集和處理資產（Tug Hill和XcL 中游-腦機 收購）導致處理費用增加。
2024年9月30日結束的三個月裏，每Mcfe的生產稅支出相比於2023年同期有所增加，主要是由於從Tug Hill和XcL中游-腦機併購中獲得的資產導致了西弗吉尼亞州財產稅支出的增加，以及由於銷售量增加導致了分離稅支出的增加。
每Mcfe的控制項支出在截至2024年9月30日的三個月內增加，這是由於公司控制項收集、變速器和儲存資產在Equitrans Midstream Merger中獲得的。
截至2024年9月30日為止的三個月內，每Mcfe的SG&A費用與2023年同期相比增加，主要是由於人員成本增加，包括由於equitrans midstream合併導致員工人數增加。
截至2024年9月30日的三個月內，每個Mcfe的生產耗損費用相比2023年同期有所增加，這主要是由於銷售成交量的增加和更高的年度耗損率。
Pro Forma Financial Information
The Equitrans Midstream Merger closed on July 22, 2024, and, as such, the Company's results of operations for the three months ended September 30, 2024 include the results of operations of the assets acquired for the period subsequent to the closing date.
The following table presents certain pro forma combined financial information for the three months ended September 30, 2024 presented as though the Equitrans Midstream Merger had been completed on July 1, 2024. Such pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Equitrans Midstream Merger occurred on July 1, 2024 nor is such information indicative of future consolidated results of operations.
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| Three Months Ended September 30, 2024 | |||||||||||
| EQT Corporation As Reported | Pro Forma Combined (a) | ||||||||||
| Per Unit ($/Mcfe) | |||||||||||
| Gathering | $ | 0.20 | $ | 0.10 | |||||||
| Transmission | 0.43 | 0.43 | |||||||||
| Processing | 0.13 | 0.13 | |||||||||
| LOE | 0.09 | 0.09 | |||||||||
| Production taxes | 0.07 | 0.07 | |||||||||
| O&M | 0.07 | 0.08 | |||||||||
| SG&A | 0.15 | 0.17 | |||||||||
| Operating costs | $ | 1.14 | $ | 1.07 | |||||||
| Production depletion | $ | 0.91 | $ | 0.91 | |||||||
| Selected financial information ($ in millions) | |||||||||||
| Pipeline, net marketing services and other revenues | $ | 117 | $ | 142 | |||||||
| Capital contributions to equity method investments | $ | (85) | $ | (160) | |||||||
| Capital expenditures | $ | (558) | $ | (573) | |||||||
(a)"Pro forma" refers to results for the three months ended September 30, 2024 as though the Equitrans Midstream Merger had been completed on July 1, 2024.
Liquidity
As of September 30, 2024, the Company had $2.0 billion of borrowings outstanding under EQT's $3.5 billion revolving credit facility. Total liquidity, excluding available capacity under Eureka Midstream, LLC's revolving credit facility, as of September 30, 2024 was $1.6 billion.
As of September 30, 2024, total debt and net debt(1) were $13.8 billion and $13.7 billion, respectively, compared to $5.8 billion and $5.7 billion, respectively, as of December 31, 2023.
(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.
Sale of Remaining Non-Operated Assets
EQT announced it has entered into an agreement with Equinor USA Onshore Properties Inc. and Equinor Natural Gas LLC to sell the Company's remaining interest in its non-operated natural gas assets in Northeast Pennsylvania, representing approximately 350 MMcf/d of forecasted 2025 net production. Consideration for the transaction is $1.25 billion of cash, subject to customary purchase price adjustments, which the Company intends to use towards debt repayment. The transaction has an effective date of December 31, 2024 and is expected to close in the fourth quarter of 2024, subject to required regulatory approvals and clearances.
Jefferies LLC acted as a financial advisor to EQT. Kirkland & Ellis LLP is serving as EQT's legal counsel on the transaction.
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Fourth Quarter 2024 Guidance
| Production | Q4 2024 | |||||||
| Total sales volume (Bcfe) | 555 – 605 | |||||||
| Liquids sales volume, excluding ethane (Mbbl) | 4,100 – 4,400 | |||||||
| Ethane sales volume (Mbbl) | 1,350 – 1,500 | |||||||
| Total liquids sales volume (Mbbl) | 5,450 – 5,900 | |||||||
| Btu uplift (MMBtu/Mcf) | 1.060 – 1.070 | |||||||
| Average differential ($/Mcf) | ($0.60) – ($0.50) | |||||||
| Resource Counts | ||||||||
| Top-hole rigs | 1 – 2 | |||||||
| Horizontal rigs | 2 | |||||||
| Frac crews | 2 – 3 | |||||||
| Midstream Revenue ($ Millions) | ||||||||
| Third-party revenue | $130 – $155 | |||||||
| Mountain Valley Pipeline (MVP) ($ Millions) | ||||||||
| Distributions from MVP | $50 – $60 | |||||||
| Capital contributions to MVP | $70 – $80 | |||||||
| Per Unit Operating Costs ($/Mcfe) | ||||||||
| Gathering | $0.09 – $0.11 | |||||||
| Transmission | $0.42 – $0.44 | |||||||
| Processing | $0.13 – $0.15 | |||||||
| Upstream LOE | $0.09 – $0.11 | |||||||
| Production taxes | $0.08 – $0.10 | |||||||
| Midstream operating and maintenance (O&M) | $0.08 – $0.10 | |||||||
| SG&A | $0.18 – $0.20 | |||||||
| Total per unit operating costs | $1.07 – $1.21 | |||||||
| Capital Expenditures ($ Millions) | ||||||||
| EQT maintenance | $475 – $525 | |||||||
| EQT strategic growth | $65 – $90 | |||||||
| Equitrans | $90 – $115 | |||||||
| Total capital expenditures | $630 – $730 | |||||||
Third Quarter 2024 Earnings Webcast Information
The Company's conference call with securities analysts begins at 10:00 a.m. ET on Wednesday October 30, 2024 and will be broadcast live via webcast. An accompanying presentation is available on the Company's investor relations website, www.ir.eqt.com under "Events & Presentations." To access the live audio webcast, visit the Company's investor relations website at ir.eqt.com. A replay will be archived and available for one year in the same location after the conclusion of the live event.
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Hedging (as of October 25, 2024)
The following table summarizes the approximate volume and prices of the Company's NYMEX hedge positions. The difference between the fixed price and NYMEX price is included in average differential presented in the Company's price reconciliation. With the additional hedges added since July and pro-forma for the recently announced non-operated asset sale, the Company is now approximately 60% hedged for 2025 at an average floor price of $3.25.
| Q4 2024 (a) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | |||||||||||||||||||||||||
| Hedged Volume (MMDth) | 377 | 332 | 336 | 281 | 281 | ||||||||||||||||||||||||
| Hedged Volume (MMDth/d) | 4.1 | 3.7 | 3.7 | 3.1 | 3.1 | ||||||||||||||||||||||||
| Swaps – Short | |||||||||||||||||||||||||||||
| Volume (MMDth) | 304 | 250 | 290 | 281 | 95 | ||||||||||||||||||||||||
| Avg. Price ($/Dth) | $ | 3.18 | $ | 3.49 | $ | 3.11 | $ | 3.26 | $ | 3.27 | |||||||||||||||||||
| Calls – Long | |||||||||||||||||||||||||||||
| Volume (MMDth) | 13 | — | — | — | — | ||||||||||||||||||||||||
| Avg. Strike ($/Dth) | $ | 3.20 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
| Calls – Short | |||||||||||||||||||||||||||||
| Volume (MMDth) | 91 | 188 | 46 | — | 137 | ||||||||||||||||||||||||
| Avg. Strike ($/Dth) | $ | 4.23 | $ | 4.19 | $ | 3.48 | $ | — | $ | 5.49 | |||||||||||||||||||
| Puts – Long | |||||||||||||||||||||||||||||
| Volume (MMDth) | 73 | 82 | 46 | — | 186 | ||||||||||||||||||||||||
| Avg. Strike ($/Dth) | $ | 3.54 | $ | 3.19 | $ | 2.83 | $ | — | $ | 3.30 | |||||||||||||||||||
| Option Premiums | |||||||||||||||||||||||||||||
| Cash Settlement of Deferred Premiums (millions) | $ | — | $ | — | $ | — | $ | — | $ | (45) | |||||||||||||||||||
(a)October 1 through December 31.
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
This news release includes the non-GAAP financial measures described below. These non-GAAP measures are intended to provide additional information only and should not be considered as alternatives to, or more meaningful than, net income attributable to EQT Corporation, net income, diluted earnings per share, net cash provided by operating activities, total operating revenues, total debt, or any other measure calculated in accordance with GAAP. Certain items excluded from these non-GAAP measures are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital, tax structure, and historic costs of depreciable assets.
As a result of the completion of the Equitrans Midstream Merger, the Company adjusted its non-GAAP measures of adjusted EBITDA and free cash flow. In particular, adjusted EBITDA (and the related non-GAAP financial measure of adjusted EBITDA attributable to EQT) has been changed to include distributions received from equity method investments, and free cash flow (and the related non-GAAP financial measure of free cash flow attributable to EQT) has been changed to exclude capital contributions to equity method investments. In addition, certain prior period amounts have been recast for comparability.
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Adjusted Net Income Attributable to EQT and Adjusted Earnings per Diluted Share (Adjusted EPS)
Adjusted net income attributable to EQT is defined as net income attributable to EQT Corporation, excluding loss (gain) 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 the Company's management believes do not reflect the Company's core operating performance. Adjusted EPS is defined as adjusted net income attributable to EQT divided by diluted weighted average common shares outstanding. The Company's management believes adjusted net income attributable to EQT and adjusted EPS provide useful information to investors regarding the Company’s financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods by excluding the impact of items that, in their opinion, do not reflect the Company’s core operating performance. For example, adjusted net income attributable to EQT and adjusted EPS 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.
The table below reconciles adjusted net income attributable to EQT and adjusted EPS with net income attributable to EQT Corporation and diluted earnings per share, 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 September 30, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands, except per share amounts) | |||||||||||||||||||||||
| Net (loss) income attributable to EQT Corporation | $ | (300,823) | $ | 81,255 | $ | (187,818) | $ | 1,233,177 | |||||||||||||||
| Add (deduct): | |||||||||||||||||||||||
| Loss (gain) on sale/exchange of long-lived assets | 10,117 | 1,511 | (309,865) | 17,814 | |||||||||||||||||||
| Impairment and expiration of leases | 12,095 | 6,419 | 58,963 | 22,290 | |||||||||||||||||||
| Gain on derivatives | (66,816) | (177,906) | (234,660) | (1,167,144) | |||||||||||||||||||
| Net cash settlements received on derivatives | 288,136 | 255,804 | 1,037,321 | 625,051 | |||||||||||||||||||
| Premiums paid for derivatives that settled during the period | (4,971) | (65,216) | (44,565) | (232,128) | |||||||||||||||||||
| Other expenses (a) | 279,751 | 36,209 | 328,913 | 69,265 | |||||||||||||||||||
| (Income) loss from investments | (34,242) | 546 | (36,674) | (5,310) | |||||||||||||||||||
| Loss (gain) on debt extinguishment | 365 | 1,089 | 5,651 | (55) | |||||||||||||||||||
| Non-cash interest expense (amortization) | 4,206 | 3,538 | 10,309 | 10,397 | |||||||||||||||||||
| Tax impact of non-GAAP items (b) | (118,734) | (17,494) | (228,312) | 159,318 | |||||||||||||||||||
| Adjusted net income attributable to EQT | $ | 69,084 | $ | 125,755 | $ | 399,263 | $ | 732,675 | |||||||||||||||
| Diluted weighted average common shares outstanding | 563,956 | 416,190 | 484,526 | 401,859 | |||||||||||||||||||
| Diluted EPS | $ | (0.54) | $ | 0.20 | $ | (0.39) | $ | 3.08 | |||||||||||||||
| Adjusted EPS | $ | 0.12 | $ | 0.30 | $ | 0.82 | $ | 1.82 | |||||||||||||||
(a)Other expenses consist primarily of transaction costs associated with acquisitions and other strategic transactions, costs related to exploring new venture opportunities and executive severance. For the nine months ended September 30, 2024, other expenses included a nonrecurring corporate litigation expense.
(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 income attributable to EQT Corporation, which resulted in blended tax rates of 24.3% and 28.2% for the three months ended September 30, 2024 and 2023, respectively, and 28.0% and 24.1% for the nine months ended September 30, 2024 and 2023, respectively. The rates differ from the Company's statutory tax rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits.
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Adjusted EBITDA and Adjusted EBITDA Attributable to EQT
Adjusted EBITDA is defined as net income excluding interest expense, income tax (benefit) expense, depreciation, depletion and amortization, loss (gain) 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 the Company's management believes do not reflect the Company's core operating performance. Adjusted EBITDA attributable to EQT is defined as adjusted EBITDA less adjusted EBITDA attributable to noncontrolling interests. Adjusted EBITDA attributable to noncontrolling interests is defined as the proportionate share of adjusted EBITDA attributable to the Company's consolidated subsidiaries that is not wholly-owned by the Company. The Company's management believes that these measures provide useful information to investors regarding the Company’s financial condition and results of operations because they help facilitate comparisons of operating performance and earnings trends across periods by excluding the impact of items that, in their opinion, do not reflect the Company’s core operating performance. For example, adjusted EBITDA reflects only the impact of settled derivative instruments and excludes the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement. In addition, adjusted EBITDA includes the impact of distributions received from equity method investments, which excludes the impact of depreciation included within equity earnings from equity method investments and helps facilitate comparisons of the core operating performance of the Company's equity method investments.
The table below reconciles adjusted EBITDA and adjusted EBITDA attributable to EQT with net 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 September 30, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands) | |||||||||||||||||||||||
| Net (loss) income | $ | (297,432) | $ | 80,730 | $ | (185,130) | $ | 1,233,097 | |||||||||||||||
| Add (deduct): | |||||||||||||||||||||||
| Interest expense, net | 158,299 | 60,427 | 268,390 | 146,856 | |||||||||||||||||||
| Income tax (benefit) expense | (104,870) | (126,853) | (124,790) | 217,975 | |||||||||||||||||||
| Depreciation, depletion and amortization | 589,299 | 446,886 | 1,542,031 | 1,230,255 | |||||||||||||||||||
| Loss (gain) on sale/exchange of long-lived assets | 10,117 | 1,511 | (309,865) | 17,814 | |||||||||||||||||||
| Impairment and expiration of leases | 12,095 | 6,419 | 58,963 | 22,290 | |||||||||||||||||||
| Gain on derivatives | (66,816) | (177,906) | (234,660) | (1,167,144) | |||||||||||||||||||
| Net cash settlements received on derivatives | 288,136 | 255,804 | 1,037,321 | 625,051 | |||||||||||||||||||
| Premiums paid for derivatives that settled during the period | (4,971) | (65,216) | (44,565) | (232,128) | |||||||||||||||||||
| Other expenses (a) | 279,751 | 36,209 | 328,913 | 69,265 | |||||||||||||||||||
| (Income) loss from investments | (34,242) | 546 | (36,674) | (5,310) | |||||||||||||||||||
| Distributions from equity method investments | 2,212 | 1,457 | 11,187 | 18,073 | |||||||||||||||||||
| Loss (gain) on debt extinguishment | 365 | 1,089 | 5,651 | (55) | |||||||||||||||||||
| Adjusted EBITDA | 831,943 | 521,103 | 2,316,772 | 2,176,039 | |||||||||||||||||||
| Less: Adjusted EBITDA attributable to noncontrolling interests | 7,805 | 732 | 7,339 | 4,254 | |||||||||||||||||||
| Adjusted EBITDA attributable to EQT | $ | 824,138 | $ | 520,371 | $ | 2,309,433 | $ | 2,171,785 | |||||||||||||||
(a)Other expenses consist primarily of transaction costs associated with acquisitions and other strategic transactions, costs related to exploring new venture opportunities and executive severance. For the nine months ended September 30, 2024, other expenses included a nonrecurring corporate litigation expense.
8
Adjusted Operating Cash Flow, Free Cash Flow, Free Cash Flow Attributable to EQT
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. Free cash flow attributable to EQT is defined as free cash flow excluding the proportionate share of free cash flow attributable to the Company's consolidated subsidiaries that is not wholly-owned by the Company.
The Company's management believes adjusted operating cash flow, free cash flow and free cash flow attributable to EQT provide useful information to investors regarding the Company's liquidity, including the Company's ability to generate cash flow in excess of its capital requirements and return cash to shareholders.
The table below reconciles adjusted operating cash flow, free cash flow and free cash flow attributable to EQT 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 September 30, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 592,989 | $ | 454,583 | $ | 2,070,697 | $ | 2,554,464 | |||||||||||||||
| Increase in changes in other assets and liabilities | (70,703) | (11,831) | (192,830) | (533,834) | |||||||||||||||||||
| Adjusted operating cash flow (a) | 522,286 | 442,752 | 1,877,867 | 2,020,630 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Capital expenditures | (557,889) | (444,585) | (1,683,011) | (1,386,736) | |||||||||||||||||||
| Capital contributions to equity method investments | (85,196) | — | (87,804) | (5,000) | |||||||||||||||||||
| Free cash flow (a) | (120,799) | (1,833) | 107,052 | 628,894 | |||||||||||||||||||
| Less: Free cash flow attributable to noncontrolling interests | 4,106 | 755 | 3,640 | (2,014) | |||||||||||||||||||
| Free cash flow attributable to EQT | $ | (124,905) | $ | (2,588) | $ | 103,412 | $ | 630,908 | |||||||||||||||
(a)Included in adjusted operating cash flow and free cash flow for the three and nine months ended September 30, 2024 is the impact of $172.2 million and $196.3 million, respectively, of cash transaction costs related to the Equitrans Midstream Merger.
Production Adjusted Operating Revenues
Production adjusted operating revenues (also referred to as total natural gas and liquids sales, including cash settled derivatives; and, prior to the Equitrans Midstream Merger, was referred to as 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 pipeline, net marketing services and other revenues. The Company’s management believes that this measure provides useful information to investors regarding the Company's financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods. Production adjusted operating revenues 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 pipeline, net marketing services and other revenues because it is unrelated to the revenue from the Company's natural gas and liquids production.
9
The table below reconciles Production adjusted operating revenues with total operating revenues, 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 September 30, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands, unless otherwise noted) | |||||||||||||||||||||||
Total operating revenues | $ | 1,283,802 | $ | 1,186,102 | $ | 3,648,582 | $ | 4,865,924 | |||||||||||||||
| (Deduct) add: | |||||||||||||||||||||||
| Gain on derivatives | (66,816) | (177,906) | (234,660) | (1,167,144) | |||||||||||||||||||
| Net cash settlements received on derivatives | 288,136 | 255,804 | 1,037,321 | 625,051 | |||||||||||||||||||
| Premiums paid for derivatives that settled during the period | (4,971) | (65,216) | (44,565) | (232,128) | |||||||||||||||||||
| Pipeline, net marketing services and other | (117,234) | (6,313) | (120,748) | (18,214) | |||||||||||||||||||
Production adjusted operating revenues | $ | 1,382,917 | $ | 1,192,471 | $ | 4,285,930 | $ | 4,073,489 | |||||||||||||||
| Total sales volume (MMcfe) | 581,414 | 522,700 | 1,622,976 | 1,452,344 | |||||||||||||||||||
| Average realized price ($/Mcfe) | $ | 2.38 | $ | 2.28 | $ | 2.64 | $ | 2.80 | |||||||||||||||
Net Debt
Net debt is defined as total debt less cash and cash equivalents. Total debt includes the Company's current portion of debt, revolving credit facility borrowings, term loan facility borrowings, senior notes and, as of December 31, 2023, the Company's note payable to EQM Midstream Partners, LP (EQM). The Company's management believes net debt provides useful information to investors regarding the Company's financial condition and assists them in evaluating the Company's leverage since the Company could choose to use its cash and cash equivalents to retire debt.
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 September 30, 2024.
| September 30, 2024 | December 31, 2023 | ||||||||||
| (Thousands) | |||||||||||
| Current portion of debt (a) | $ | 400,150 | $ | 292,432 | |||||||
| Revolving credit facility borrowings (b) | 2,297,000 | — | |||||||||
| Term loan facility borrowings | 497,970 | 1,244,265 | |||||||||
| Senior notes | 10,598,428 | 4,176,180 | |||||||||
| Note payable to EQM | — | 82,236 | |||||||||
| Total debt | 13,793,548 | 5,795,113 | |||||||||
| Less: Cash and cash equivalents | 88,980 | 80,977 | |||||||||
| Net debt | $ | 13,704,568 | $ | 5,714,136 | |||||||
(a)As of September 30, 2024, the current portion of debt included EQM's 6.000% senior notes due 2025, which were consolidated by the Company as a result of the Equitrans Midstream Merger. As of December 31, 2023, the current portion of debt included EQT's 1.75% convertible notes and a portion of EQT's note payable to EQM. See the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 for further discussion.
(b)As of September 30, 2024, revolving credit facility borrowings included $330 million of borrowings under Eureka Midstream, LLC's revolving credit facility. Eureka Midstream, LLC is a wholly-owned subsidiary of Eureka Midstream Holdings, LLC, a consolidated joint venture EQT acquired a controlling, 60% interest in upon the close of the Equitrans Midstream Merger.
10
Investor Contact
Cameron Horwitz
Managing Director, Investor Relations & Strategy
412.445.8454
Cameron.Horwitz@eqt.com
About EQT Corporation
EQT Corporation is a premier, vertically integrated American natural gas company with production and midstream operations focused 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.
11
Cautionary Statements Regarding Forward-Looking Statements
This news release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this news release specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of EQT Corporation (EQT) and its consolidated subsidiaries (collectively, the Company), including guidance regarding EQT’s strategy to develop its reserves; drilling plans and programs (including the number and type of drilling rigs and the number of frac crews to be utilized by the Company, the projected amount of wells to be turned-in-line and the timing thereof); 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 volumes, including liquified natural gas (LNG) volumes and sales; projected production curtailments, including the volume and duration thereof; projected well costs and unit costs; the Company's ability to successfully implement and execute its operational, organizational, technological and environmental, social and governance (ESG) initiatives, including the Company's emissions goals, the timing thereof and the Company's ability to achieve the anticipated results of such initiatives; potential acquisitions, asset sales or other strategic transactions, including the proposed sale of the remaining interest in the Company's non-operated natural gas assets in Northeast Pennsylvania, the timing thereof and the Company's ability to achieve the intended operational, financial and strategic benefits from any such transactions or from any recently completed strategic transactions; the amount and timing of any redemptions, repayments or repurchases of EQT's common stock, the Company's 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; 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 and projected margin posting obligations; the Company’s tax position and projected effective tax rate; and the expected impact of changes in laws.
12
The forward-looking statements included in this news release involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by 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; 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 other resources among its strategic opportunities; access to and cost of capital; the Company’s hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; operational risks and hazards incidental to the gathering and transmission and storage of natural gas as well as unforeseen interruptions; cybersecurity risks and acts of sabotage; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and sand and water required to execute the Company’s exploration and development plans, including as a result of supply chain and inflationary pressures; risks associated with operating primarily in the Appalachian Basin; the ability to obtain environmental and other permits and the timing thereof; construction, business, economic, competitive, regulatory, judicial, environmental, political and legal uncertainties related to the development and construction by the Company or its joint ventures of pipeline and storage facilities and transmission assets and the optimization of such assets; the Company’s ability to renew or replace expiring gathering, transmission or storage contracts at favorable rates, on a long-term basis or at all; risks relating to the Company’s joint venture arrangements; government regulation or action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; risks related to the Company's ability to integrate the operations of Equitrans in a successful manner and in the expected time period and the possibility that any of the anticipated benefits and projected synergies of the Equitrans Midstream Merger will not be realized or will not be realized within the expected time period; and disruptions to the Company's business due to acquisitions, divestitures and other strategic transactions. These and other risks are described under the “Risk Factors” section in EQT's Annual Report on Form 10-K for the year ended December 31, 2023, the “Risk Factors” section to be included in EQT’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, and other documents EQT files from time to time with the Securities and Exchange Commission (the SEC).
Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, EQT does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
13
EQT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands, except per share amounts) | |||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||
| Sales of natural gas, natural gas liquids and oil | $ | 1,099,752 | $ | 1,001,883 | $ | 3,293,174 | $ | 3,680,566 | |||||||||||||||
| Gain on derivatives | 66,816 | 177,906 | 234,660 | 1,167,144 | |||||||||||||||||||
| Pipeline, net marketing services and other | 117,234 | 6,313 | 120,748 | 18,214 | |||||||||||||||||||
| Total operating revenues | 1,283,802 | 1,186,102 | 3,648,582 | 4,865,924 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Transportation and processing | 440,845 | 554,788 | 1,529,093 | 1,592,934 | |||||||||||||||||||
| Production | 93,842 | 62,858 | 273,042 | 163,963 | |||||||||||||||||||
| Operating and maintenance | 40,518 | 4,235 | 65,824 | 6,108 | |||||||||||||||||||
| Exploration | 282 | 447 | 2,576 | 2,602 | |||||||||||||||||||
| Selling, general and administrative | 88,470 | 56,942 | 228,730 | 168,999 | |||||||||||||||||||
| Depreciation, depletion and amortization | 589,299 | 446,886 | 1,542,031 | 1,230,255 | |||||||||||||||||||
| Loss (gain) on sale/exchange of long-lived assets | 10,117 | 1,511 | (309,865) | 17,814 | |||||||||||||||||||
| Impairment and expiration of leases | 12,095 | 6,419 | 58,963 | 22,290 | |||||||||||||||||||
| Other operating expenses | 290,174 | 36,209 | 354,337 | 69,265 | |||||||||||||||||||
| Total operating expenses | 1,565,642 | 1,170,295 | 3,744,731 | 3,274,230 | |||||||||||||||||||
| Operating (loss) income | (281,840) | 15,807 | (96,149) | 1,591,694 | |||||||||||||||||||
| (Income) loss from investments | (34,242) | 546 | (36,674) | (5,310) | |||||||||||||||||||
| Other income | (3,960) | (132) | (23,596) | (869) | |||||||||||||||||||
| Loss (gain) on debt extinguishment | 365 | 1,089 | 5,651 | (55) | |||||||||||||||||||
| Interest expense, net | 158,299 | 60,427 | 268,390 | 146,856 | |||||||||||||||||||
| (Loss) income before income taxes | (402,302) | (46,123) | (309,920) | 1,451,072 | |||||||||||||||||||
| Income tax (benefit) expense | (104,870) | (126,853) | (124,790) | 217,975 | |||||||||||||||||||
| Net (loss) income | (297,432) | 80,730 | (185,130) | 1,233,097 | |||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 3,391 | (525) | 2,688 | (80) | |||||||||||||||||||
| Net (loss) income attributable to EQT Corporation | $ | (300,823) | $ | 81,255 | $ | (187,818) | $ | 1,233,177 | |||||||||||||||
| (Loss) income per share of common stock attributable to EQT Corporation: | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Weighted average common stock outstanding | 559,603 | 383,359 | 480,354 | 368,936 | |||||||||||||||||||
| Net (loss) income attributable to EQT Corporation | $ | (0.54) | $ | 0.21 | $ | (0.39) | $ | 3.34 | |||||||||||||||
Diluted: | |||||||||||||||||||||||
| Weighted average common stock outstanding | 559,603 | 416,190 | 480,354 | 401,859 | |||||||||||||||||||
| Net (loss) income attributable to EQT Corporation | $ | (0.54) | $ | 0.20 | $ | (0.39) | $ | 3.08 | |||||||||||||||
14
EQT CORPORATION AND SUBSIDIARIES
PRICE RECONCILIATION
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Thousands, unless otherwise noted) | |||||||||||||||||||||||
| NATURAL GAS | |||||||||||||||||||||||
| Sales volume (MMcf) | 547,225 | 491,472 | 1,520,574 | 1,374,527 | |||||||||||||||||||
| NYMEX price ($/MMBtu) | $ | 2.15 | $ | 2.55 | $ | 2.12 | $ | 2.68 | |||||||||||||||
| Btu uplift | 0.12 | 0.13 | 0.12 | 0.14 | |||||||||||||||||||
| Natural gas price ($/Mcf) | $ | 2.27 | $ | 2.68 | $ | 2.24 | $ | 2.82 | |||||||||||||||
| Basis ($/Mcf) (a) | $ | (0.56) | $ | (0.93) | $ | (0.40) | $ | (0.39) | |||||||||||||||
| Cash settled basis swaps ($/Mcf) | (0.09) | 0.12 | (0.10) | (0.08) | |||||||||||||||||||
| Average differential, including cash settled basis swaps ($/Mcf) | $ | (0.65) | $ | (0.81) | $ | (0.50) | $ | (0.47) | |||||||||||||||
| Average adjusted price ($/Mcf) | $ | 1.62 | $ | 1.87 | $ | 1.74 | $ | 2.35 | |||||||||||||||
| Cash settled derivatives ($/Mcf) | 0.61 | 0.27 | 0.75 | 0.37 | |||||||||||||||||||
| Average natural gas price, including cash settled derivatives ($/Mcf) | $ | 2.23 | $ | 2.14 | $ | 2.49 | $ | 2.72 | |||||||||||||||
| Natural gas sales, including cash settled derivatives | $ | 1,222,498 | $ | 1,053,146 | $ | 3,786,058 | $ | 3,741,247 | |||||||||||||||
| LIQUIDS | |||||||||||||||||||||||
| NGLs, excluding ethane: | |||||||||||||||||||||||
| Sales volume (MMcfe) (b) | 22,253 | 16,629 | 63,393 | 41,805 | |||||||||||||||||||
| Sales volume (Mbbl) | 3,710 | 2,772 | 10,566 | 6,968 | |||||||||||||||||||
| NGLs price ($/Bbl) | $ | 35.20 | $ | 35.42 | $ | 38.18 | $ | 35.34 | |||||||||||||||
| Cash settled derivatives ($/Bbl) | (0.11) | (1.10) | (0.20) | (1.54) | |||||||||||||||||||
| Average NGLs price, including cash settled derivatives ($/Bbl) | $ | 35.09 | $ | 34.32 | $ | 37.98 | $ | 33.80 | |||||||||||||||
| NGLs sales, including cash settled derivatives | $ | 130,140 | $ | 95,120 | $ | 401,232 | $ | 235,509 | |||||||||||||||
| Ethane: | |||||||||||||||||||||||
| Sales volume (MMcfe) (b) | 9,864 | 11,528 | 32,416 | 29,198 | |||||||||||||||||||
| Sales volume (Mbbl) | 1,644 | 1,921 | 5,403 | 4,866 | |||||||||||||||||||
| Ethane price ($/Bbl) | $ | 5.56 | $ | 5.23 | $ | 5.97 | $ | 5.90 | |||||||||||||||
| Ethane sales | $ | 9,135 | $ | 10,039 | $ | 32,237 | $ | 28,699 | |||||||||||||||
| Oil: | |||||||||||||||||||||||
| Sales volume (MMcfe) (b) | 2,072 | 3,071 | 6,593 | 6,814 | |||||||||||||||||||
| Sales volume (Mbbl) | 345 | 512 | 1,099 | 1,136 | |||||||||||||||||||
| Oil price ($/Bbl) | $ | 61.25 | $ | 66.75 | $ | 60.43 | $ | 59.91 | |||||||||||||||
| Oil sales | $ | 21,144 | $ | 34,166 | $ | 66,403 | $ | 68,034 | |||||||||||||||
| Total liquids sales volume (MMcfe) (b) | 34,189 | 31,228 | 102,402 | 77,817 | |||||||||||||||||||
| Total liquids sales volume (Mbbl) | 5,699 | 5,205 | 17,068 | 12,970 | |||||||||||||||||||
| Total liquids sales | $ | 160,419 | $ | 139,325 | $ | 499,872 | $ | 332,242 | |||||||||||||||
| TOTAL | |||||||||||||||||||||||
| Total natural gas and liquids sales, including cash settled derivatives (c) | $ | 1,382,917 | $ | 1,192,471 | $ | 4,285,930 | $ | 4,073,489 | |||||||||||||||
| Total sales volume (MMcfe) | 581,414 | 522,700 | 1,622,976 | 1,452,344 | |||||||||||||||||||
| Average realized price ($/Mcfe) | $ | 2.38 | $ | 2.28 | $ | 2.64 | $ | 2.80 | |||||||||||||||
(a)Basis represents the difference between the ultimate sales price for natural gas, including the effects of delivered price benefit or deficit associated with the Company's firm transportation agreements, and the NYMEX natural gas price.
(b)NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.
(c)Also referred to herein as Production adjusted operating revenues, a non-GAAP supplemental financial measure.
15