PITTSBURGH, Feb. 13,
2024 /PRNewswire/ -- EQT Corporation (NYSE: EQT)
today announced financial and operational results for the fourth
quarter and full year 2023 as well as financial and operational
guidance for 2024.
Fourth Quarter and Recent Highlights:
- Fourth quarter production of 564 Bcfe, toward the high-end of
guidance driven by continued operational efficiency gains and
strong well performance
- Capital expenditures of $539
million, near the low-end of guidance
- Cash operating expenses of $1.27
per Mcfe, near the low-end of guidance, as lease operating expense
continues to outperform expectations, reflecting benefits of EQT's
West Virginia water assets
- Net cash provided by operating activities of $624 million; generated $236 million of free cash flow(1)
- Retired all outstanding convertible notes, eliminating more
than $400 million of debt and
simplifying capital structure
- Monetized capped call associated with convertible notes,
generating $93 million of cash
proceeds
- Priced $750 million of 10-year
senior notes at 1.65% spread to comparable U.S. treasury rates;
proceeds used to pay down term loan, eliminating ~$10 million of interest expense per annum
- Entered into an agreement with a minority equity partner to
acquire their ~34% ownership in EQT-operated gathering systems for
$205 million; purchase price equates
to double-digit free cash flow yield(1,2)
Full Year 2023 Highlights:
- Generated ~$3.2 billion of net
cash provided by operating activities and $879 million of free cash flow,(1)
with NYMEX natural gas price averaging $2.74 per MMBtu for the year
- Retired $1.1 billion of debt and
increased base dividend by 5%
- Achieved all-time high operational efficiencies, with drilling
and completion pace up 6% and 16% year-over-year, respectively
- Improved environmental, health and safety (EHS)
intensity(3) by 22% year-over-year, outperforming
corporate goal of 15% improvement
- Closed on the strategic acquisitions of Tug Hill and XcL
Midstream and integrated the assets at an EQT record pace; recent
drilling performance suggests additional synergy upside
potential
- Total proved reserves of 27.6 Tcfe, up 10% year-over-year;
total standardized measure of discounted future net cash flows of
$9 billion at SEC pricing or
$23 billion PV-10(1) at
recent strip pricing
- Low-cost, peer-leading core inventory depth and environmental
attributes facilitated signing the largest long-term physical
supply deals ever executed in North
America, which are anticipated to improve corporate
differentials by $0.15–$0.20 per Mcfe
beginning in late 2027
- Continued on path toward differentiated LNG strategy leveraging
significant Gulf Coast firm transportation portfolio by signing
non-binding heads of agreements covering 2.5 million tons per annum
of LNG tolling capacity(4)
- Signed first-of-its kind forest management partnership with the
State of West Virginia, supporting
EQT's path to net zero(5) by 2025
President and CEO Toby Z. Rice
stated, "Coming into 2023, we set our overarching corporate mission
and goal for the year with two simple words, 'Peak Performance.' I
wanted our fourth year at EQT to be our best one yet, and the Qrew
certainly came through in delivering on that mission."
Rice continued, "On the operations front, we set multiple
drilling world records and achieved our highest completion
efficiency pace ever, while simultaneously improving our EHS
intensity by 22% year-over-year. This stellar execution allowed us
to generate roughly $880 million of
free cash flow(1) in 2023 despite natural gas prices
averaging just $2.74 per MMBtu, which
speaks to our advantaged position at the low end of the North
American natural gas cost curve. We also integrated the Tug Hill
and XcL Midstream assets at a company record pace while driving
incremental upside to synergies by leveraging our best-in-class
operating model. Additionally, we signed the largest long-term
physical supply deals ever executed in North America, highlighting EQT's unique
ability to meet significant growth in U.S. gas-fired power demand
while generating differentiated margin opportunities. This
impressive list of achievements is a showcase of what is possible
when you combine a world class asset base with an industry-leading,
digitally-enabled operations team underpinned by a culture that
deeply values trust, heart, teamwork and evolution."
(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.
|
(2)
|
Subject to certain
preferential purchase rights held by a third party, which, if
exercised, would reduce EQT's acquired interests to ~25% for a
purchase price of ~$155 million. Closing of this transaction is
subject to customary closing conditions, including the receipt of
applicable regulatory approvals.
|
(3)
|
EHS intensity
(previously referred to as safety intensity) is an internal
performance measure used in EQT's short-term incentive plan and is
based on the achievement of key environmental, health, and safety
goals. See EQT's most recent proxy statement for its annual meeting
of shareholders for additional detail.
|
(4)
|
Final terms remain
subject to negotiation of a definitive tolling agreement between
the parties thereto.
|
(5)
|
"Net zero" refers to
net zero Scope 1 and Scope 2 greenhouse gas emissions, in each case
from assets owned by EQT on June 30, 2021 (i.e., when EQT
announced its net zero goal). Scope 1 greenhouse gas emissions are
based exclusively on emissions reported to the U.S. Environmental
Protection Agency (EPA) under the EPA's Greenhouse Gas Reporting
Program (Subpart W) for the onshore petroleum and natural gas
production segment.
|
Fourth Quarter 2023 Financial and Operational
Performance
|
Three Months
Ended
December
31,
|
|
|
($ millions, except
average realized price and EPS)
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
Total sales volume
(Bcfe)
|
564
|
|
459
|
|
105
|
Average realized price
($/Mcfe)
|
$
2.75
|
|
$
2.87
|
|
$
(0.12)
|
Net income attributable
to EQT
|
$
502
|
|
$
1,712
|
|
$
(1,210)
|
Adjusted net income
attributable to EQT (a)
|
$
214
|
|
$
167
|
|
$
47
|
Diluted earnings per
share (EPS)
|
$
1.13
|
|
$
4.28
|
|
$
(3.15)
|
Adjusted EPS
(a)
|
$
0.48
|
|
$
0.42
|
|
$
0.06
|
Net income
|
$
501
|
|
$
1,714
|
|
$
(1,213)
|
Adjusted EBITDA
(a)
|
$
840
|
|
$
679
|
|
$
161
|
Net cash provided by
operating activities
|
$
624
|
|
$
1,064
|
|
$
(440)
|
Adjusted operating cash
flow (a)
|
$
775
|
|
$
622
|
|
$
153
|
Capital expenditures,
excluding noncontrolling interests
|
$
539
|
|
$
396
|
|
$
143
|
Free cash flow
(a)
|
$
236
|
|
$
226
|
|
$
10
|
(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.
|
Full Year 2023 Financial and Operational Performance
|
Years
Ended
December
31,
|
|
|
($ millions, except
average realized price and EPS)
|
2023
|
|
2022
|
|
Change
|
|
|
|
|
|
|
Total sales volume
(Bcfe)
|
2,016
|
|
1,940
|
|
76
|
Average realized price
($/Mcfe)
|
$
2.79
|
|
$
3.17
|
|
$
(0.38)
|
Net income attributable
to EQT
|
$
1,735
|
|
$
1,771
|
|
$
(36)
|
Adjusted net income
attributable to EQT (a)
|
$
946
|
|
$
1,262
|
|
$
(316)
|
Diluted earnings per
share
|
$
4.22
|
|
$
4.38
|
|
$
(0.16)
|
Adjusted EPS
(a)
|
$
2.29
|
|
$
3.11
|
|
$
(0.82)
|
Net income
|
$
1,735
|
|
$
1,781
|
|
$
(46)
|
Adjusted EBITDA
(a)
|
$
2,998
|
|
$
3,523
|
|
$
(525)
|
Net cash provided by
operating activities
|
$
3,179
|
|
$
3,466
|
|
$
(287)
|
Adjusted operating cash
flow (a)
|
$
2,795
|
|
$
3,366
|
|
$
(571)
|
Capital expenditures,
excluding noncontrolling interests
|
$
1,917
|
|
$
1,427
|
|
$
490
|
Free cash flow
(a)
|
$
879
|
|
$
1,939
|
|
$
(1,060)
|
(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.
|
Per Unit Operating Costs
The following table presents
certain of the Company's production-related operating costs on a
per unit basis.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
Per Unit
($/Mcfe)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Gathering
|
$
0.58
|
|
$
0.70
|
|
$
0.64
|
|
$
0.68
|
Transmission
|
0.30
|
|
0.33
|
|
0.32
|
|
0.31
|
Processing
|
0.12
|
|
0.10
|
|
0.12
|
|
0.10
|
Lease operating expense
(LOE)
|
0.09
|
|
0.07
|
|
0.08
|
|
0.08
|
Production
taxes
|
0.06
|
|
0.07
|
|
0.05
|
|
0.07
|
Selling, general and
administrative (SG&A)
|
0.12
|
|
0.12
|
|
0.12
|
|
0.13
|
Total per unit
operating costs
|
$
1.27
|
|
$
1.39
|
|
$
1.33
|
|
$
1.37
|
|
|
|
|
|
|
|
|
Production
depletion
|
$
0.87
|
|
$
0.85
|
|
$
0.84
|
|
$
0.85
|
Gathering expense decreased on a per Mcfe basis for the three
months ended December 31, 2023
compared to the same period in 2022 due primarily to the impact of
the gathering assets acquired in the Company's acquisition of Tug
Hill and XcL Midstream (the Tug Hill and XcL Midstream
Acquisition), which are wholly owned by the Company and, therefore,
reduce the Company's gathering cost structure.
Gathering expense decreased on a per Mcfe basis for 2023
compared to 2022 due primarily to lower gathering rates on certain
contracts indexed to price as well as the impact of the gathering
assets acquired in the Tug Hill and XcL Midstream Acquisition.
Transmission expense increased on a per Mcfe basis for 2023
compared to 2022 due primarily to additional capacity acquired,
partly offset by increased credits received from the Texas Eastern
Transmission Pipeline.
Processing expense increased on a per Mcfe basis for 2023
compared to 2022 due primarily to processing expenses for the
liquids-rich assets acquired in the Tug Hill and XcL Midstream
Acquisition as well as inflation of third-party-contracted
processing rates.
Production taxes decreased on a per Mcfe basis for 2023 compared
to 2022 due to lower West Virginia
severance taxes due to lower TETCO M2 price and lower Pennsylvania impact fees due to lower NYMEX
price, partly offset by higher West
Virginia property taxes due to assets acquired in the Tug
Hill and XcL Midstream Acquisition and higher rates.
Liquidity
As of December 31, 2023, the Company had no revolving
credit facility borrowings and $15 million of letters of
credit outstanding under its $2.5
billion revolving credit facility. Total liquidity as of
December 31, 2023 was ~$2.6 billion.
As of December 31, 2023, total debt and net
debt(1) were $5.8 billion and $5.7 billion, respectively, compared to
$5.7 billion and $4.2 billion, respectively, as of
December 31, 2022.
(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.
|
Proved Reserves
The Company reported 2023 total proved reserves of
27.6 Tcfe, an increase of 2,594 Bcfe, or 10%, compared to 2022
due to extensions, discoveries and other additions and acquisitions
from the Tug Hill and XcL Midstream Acquisition, partly offset by
production and revisions to previous estimates. Proved undeveloped
reserves increased by 550 Bcfe, or 7%, compared to 2022.
The Marcellus Shale comprises 91% of the Company's total proved
developed reserves, 98% of the Company's total proved undeveloped
reserves and 93% of the Company's total proved reserves.
The following table presents the Company's reserves,
standardized measure of discounted future net cash flow (the
Standardized Measure) and PV-10 as compared to five-year strip
pricing sensitivity.
|
Year Ended December
31, 2023
|
|
Proved
Developed
|
|
Proved
Undeveloped
|
|
Total
|
|
(Millions)
|
SEC pricing
(a):
|
|
|
|
|
|
Reserves
(Bcfe)
|
19,558
|
|
8,039
|
|
27,597
|
Standardized
Measure
|
$
8,386
|
|
$
876
|
|
$
9,262
|
PV-10 (b)
|
$
10,077
|
|
$
1,443
|
|
$
11,520
|
|
|
|
|
|
|
Five-year strip
pricing sensitivity (c):
|
|
|
|
|
|
Reserves
(Bcfe)
|
19,997
|
|
8,045
|
|
28,042
|
Standardized
Measure
|
$
14,273
|
|
$
3,903
|
|
$
18,176
|
PV-10 (b)
|
$
17,564
|
|
$
5,339
|
|
$
22,903
|
(a)
|
Reserves as of December
31, 2023 are based on a natural gas price (NYMEX) of $2.637 per
MMBtu. Pricing was determined in accordance with the SEC
requirement to use the unweighted arithmetic average of the
first-day-of-the-month price for the preceding twelve months
without giving effect to derivative transactions. The average
adjusted product prices including regional adjustments, weighted by
production over the remaining lives of the properties were $63.86
per barrel of oil, $28.44 per barrel of natural gas liquids (NGLs)
and $1.700 per Mcf of gas.
|
|
|
(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.
|
|
|
(c)
|
The prices used in the
calculation of the five-year strip pricing sensitivity reflects
five-year strip pricing as of December 29, 2023 and held constant
thereafter using (i) the NYMEX five-year strip adjusted for
regional differentials using Texas Eastern Transmission Corp. M-2,
Transcontinental Gas Pipe Line, Leidy Line, and Tennessee Gas
Pipeline Co., Zone 4-300 Leg for gas and (ii) the NYMEX West Texas
Intermediate (WTI) five-year strip for oil, adjusted for regional
differentials consistent with those used in the SEC pricing, and
holding all other assumptions constant. The average realized
product prices weighted by production over the remaining lives of
the properties would be $49.71 per barrel of oil, $23.08 per barrel
of NGLs and $2.846 per Mcf of gas.
|
|
|
|
The NYMEX strip price
for proved reserves and related metrics are intended to illustrate
reserve sensitivities to market expectations of commodity prices
and should not be confused with SEC pricing for proved reserves and
do not comply with SEC pricing assumptions. The Company believes
that the presentation of reserve volume and related metrics using
NYMEX forward strip prices provides investors with additional
useful information about the Company's reserves because the forward
prices are based on the market's forward-looking expectations of
oil and gas prices as of a certain date. The price at which the
Company can sell its production in the future is the major
determinant of the likely economic producibility of the Company's
reserves. The Company hedges certain amounts of future production
based on futures prices. In addition, the Company uses such
forward-looking market-based data in developing its drilling plans,
assessing its capital expenditure needs and projecting future cash
flows. While NYMEX strip prices represent a consensus estimate of
future pricing, such prices are only an estimate and are not
necessarily an accurate projection of future oil and gas prices.
Actual future prices may vary significantly from NYMEX prices;
therefore, actual revenue and value generated may be more or less
than the amounts disclosed. Investors should be careful to consider
forward prices in addition to, and not as a substitute for, SEC
pricing, when considering the Company's reserves.
|
Netherland, Sewell & Associates, Inc. an independent
consulting firm hired by management, reviewed 100% of the total net
natural gas, NGLs and oil proved reserves attributable to EQT as of
December 31, 2023.
2024 Outlook
In 2024, the Company expects total
sales volume of 2,200 – 2,300 Bcfe. The Company expects maintenance
capital expenditures to total $1,950
– $2,050 million in 2024. The Company
also plans to spend $200 –
$300 million on strategic growth
capital expenditures, which targets opportunistic, high-return
water, midstream and other infrastructure and land opportunities.
During 2024, the Company plans to turn-in-line (TIL) 110 – 140 net
wells, including 22 – 36 net wells expected to TIL in the first
quarter of 2024. Total sales volume in the first quarter of 2024 is
expected to be 525 – 575 Bcfe, which includes the impact of 10 – 15
Bcfe of lower sales volume due to non-operated midstream
constraints. Inclusive of the Company's advantaged hedge position,
the Company estimates a 2024 NYMEX Henry Hub free cash flow
breakeven price of ~$2.20 per
MMBtu.(1,2)
(1)
|
A non-GAAP financial
measure. See the Non-GAAP Disclosures section of this news release
for the definition of, and other important information regarding,
this non-GAAP financial measure.
|
(2)
|
Defined as the average
Henry Hub price needed to generate positive free cash flow in 2024,
inclusive of the impact of 2024 hedges.
|
2024 Guidance(a)
Production
|
|
Q1
2024
|
|
Full Year
2024
|
Total sales volume
(Bcfe)
|
|
525 – 575
|
|
2,200 –
2,300
|
Liquids sales volume,
excluding ethane (Mbbl)
|
|
3,650 –
3,950
|
|
14,550 –
15,350
|
Ethane sales volume
(Mbbl)
|
|
1,250 –
1,400
|
|
5,250 –
5,650
|
Total liquids sales
volume (Mbbl)
|
|
4,900 –
5,350
|
|
19,800 –
21,000
|
|
|
|
|
|
Btu uplift
(MMBtu/Mcf)
|
|
1.050 –
1.060
|
|
1.050 –
1.060
|
|
|
|
|
|
Average differential
($/Mcf)
|
|
($0.35) –
($0.25)
|
|
($0.70) –
($0.50)
|
|
|
|
|
|
Resource
Counts
|
|
|
|
|
Top-hole
rigs
|
|
1 – 2
|
|
1 – 2
|
Horizontal
rigs
|
|
3 – 4
|
|
2 – 3
|
Frac crews
|
|
4 – 5
|
|
3 – 4
|
|
|
|
|
|
Per Unit Operating
Costs ($/Mcfe)
|
|
|
|
|
Gathering
|
|
$0.56 –
$0.58
|
|
$0.52 –
$0.54
|
Transmission
|
|
$0.30 –
$0.32
|
|
$0.42 –
$0.44
|
Processing
|
|
$0.11 –
$0.13
|
|
$0.11 –
$0.13
|
LOE
|
|
$0.11 –
$0.13
|
|
$0.11 –
$0.13
|
Production
taxes
|
|
$0.08 –
$0.10
|
|
$0.07 –
$0.09
|
SG&A
|
|
$0.13 –
$0.15
|
|
$0.14 –
$0.16
|
Total per unit
operating costs
|
|
$1.29 –
$1.41
|
|
$1.37 –
$1.49
|
|
|
|
|
|
Capital Expenditures
($ Millions)
|
|
|
|
|
Maintenance
|
|
$475 – $525
|
|
$1,950 –
$2,050
|
Strategic
growth
|
|
$50 – $75
|
|
$200 – $300
|
Total capital
expenditures
|
|
$525 –
$600
|
|
$2,150 –
$2,350
|
(a) Assumes
Mountain Valley Pipeline in-service date during April
2024.
|
Fourth Quarter and Full Year 2023 Earnings Webcast
Information
The Company's conference call with securities
analysts begins at 10:00 a.m. ET on Wednesday February 14, 2024 and will be broadcast
live via webcast. An accompanying presentation is available on the
Company's investor relations website, www.ir.eqt.com, under "Events
& Presentations." To access the live audio webcast, visit the
Company's investor relations website at ir.eqt.com. A replay will
be archived and available for one year in the same location after
the conclusion of the live event.
Hedging (as of February 9,
2024)
The following table summarizes the approximate
volume and prices of the Company's NYMEX hedge positions. The
difference between the fixed price and NYMEX price is included in
average differential presented in the Company's price
reconciliation.
|
Q1
2024(a)
|
|
Q2
2024
|
|
Q3
2024
|
|
Q4
2024
|
Hedged Volume
(MMDth)
|
283
|
|
260
|
|
237
|
|
127
|
Hedged Volume
(MMDth/d)
|
3.1
|
|
2.9
|
|
2.6
|
|
1.4
|
Swaps –
Short
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
136
|
|
215
|
|
192
|
|
95
|
Avg. Price
($/Dth)
|
$
3.52
|
|
$
3.26
|
|
$
3.27
|
|
$
3.26
|
Calls –
Long
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
13
|
|
13
|
|
13
|
|
13
|
Avg. Strike
($/Dth)
|
$
3.20
|
|
$
3.20
|
|
$
3.20
|
|
$
3.20
|
Calls –
Short
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
162
|
|
61
|
|
62
|
|
46
|
Avg. Strike
($/Dth)
|
$
6.16
|
|
$
4.22
|
|
$
4.22
|
|
$
4.27
|
Puts –
Long
|
|
|
|
|
|
|
|
Volume
(MMDth)
|
147
|
|
45
|
|
45
|
|
32
|
Avg. Strike
($/Dth)
|
$
4.20
|
|
$
4.05
|
|
$
4.05
|
|
$
4.10
|
Option
Premiums
|
|
|
|
|
|
|
|
Cash Settlement of
Deferred Premiums (millions)
|
$
(34)
|
|
$
(4)
|
|
$
(4)
|
|
$
—
|
(a) January
1 through March 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
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 impact comparability between periods. Adjusted EPS
is defined as adjusted net income attributable to EQT divided by
diluted weighted average common shares outstanding. Adjusted net
income 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 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 attributable to EQT and adjusted EPS
should not be considered as alternatives to net income attributable
to EQT Corporation or diluted earnings per share presented in
accordance with GAAP.
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 Annual Report on Form
10-K for the year ended December 31, 2023.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands, except
per share information)
|
Net income attributable
to EQT Corporation
|
$ 502,055
|
|
$
1,711,982
|
|
$
1,735,232
|
|
$
1,770,965
|
(Deduct)
add:
|
|
|
|
|
|
|
|
(Gain) loss on
sale/exchange of long-lived
assets
|
(369)
|
|
(5,991)
|
|
17,445
|
|
(8,446)
|
Impairment of contract
asset
|
—
|
|
29,250
|
|
—
|
|
214,195
|
Impairment and
expiration of leases
|
87,131
|
|
79,070
|
|
109,421
|
|
176,606
|
(Gain) loss on
derivatives
|
(671,797)
|
|
(907,096)
|
|
(1,838,941)
|
|
4,642,932
|
Net cash settlements
received (paid) on
derivatives
|
275,599
|
|
(1,254,700)
|
|
900,650
|
|
(5,927,698)
|
Premiums (paid)
received for derivatives that
settled during the period
|
(90,741)
|
|
3,731
|
|
(322,869)
|
|
(27,587)
|
Other operating
expenses
|
14,778
|
|
18,379
|
|
84,043
|
|
57,331
|
(Income) loss from
investments
|
(2,286)
|
|
(9,400)
|
|
(7,596)
|
|
4,931
|
Loss on debt
extinguishment
|
135
|
|
944
|
|
80
|
|
140,029
|
Non-cash interest
expense (amortization)
|
4,087
|
|
3,492
|
|
14,484
|
|
12,987
|
Tax impact of non-GAAP
items (a)
|
94,913
|
|
497,212
|
|
254,231
|
|
206,190
|
Adjusted
net income attributable to EQT
|
$ 213,505
|
|
$ 166,873
|
|
$ 946,180
|
|
$
1,262,435
|
Diluted weighted
average common shares
outstanding
|
445,400
|
|
400,122
|
|
413,224
|
|
406,495
|
Diluted EPS
|
$
1.13
|
|
$
4.28
|
|
$
4.22
|
|
$
4.38
|
Adjusted EPS
|
$
0.48
|
|
$
0.42
|
|
$
2.29
|
|
$
3.11
|
(a)
|
The tax impact of
non-GAAP items represents the incremental tax benefit (expense)
that would have been incurred had these items been excluded from
net income attributable to EQT Corporation, which resulted in
blended tax rates of 24.8% and 24.3% for the three months ended
December 31, 2023 and 2022, respectively, and 24.4% and 28.8%
for the years ended December 31, 2023 and 2022, respectively.
The rates differ from the Company's statutory tax rate due
primarily to state taxes, including valuation allowances limiting
certain state tax benefits.
|
Adjusted EBITDA
Adjusted EBITDA is defined as
net income, excluding interest expense, income tax expense
(benefit), depreciation and depletion, 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 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 income
presented in accordance with GAAP.
The table below reconciles adjusted EBITDA 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 Annual Report on Form
10-K for the year ended December 31, 2023.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands)
|
Net income
|
$ 501,447
|
|
$
1,713,839
|
|
$
1,734,544
|
|
$
1,780,942
|
Add
(deduct):
|
|
|
|
|
|
|
|
Interest expense,
net
|
72,804
|
|
55,630
|
|
219,660
|
|
249,655
|
Income tax
expense
|
150,979
|
|
558,977
|
|
368,954
|
|
553,720
|
Depreciation and
depletion
|
501,887
|
|
396,026
|
|
1,732,142
|
|
1,665,962
|
(Gain) loss on
sale/exchange of long-lived
assets
|
(369)
|
|
(5,991)
|
|
17,445
|
|
(8,446)
|
Impairment of contract
asset
|
—
|
|
29,250
|
|
—
|
|
214,195
|
Impairment and
expiration of leases
|
87,131
|
|
79,070
|
|
109,421
|
|
176,606
|
(Gain) loss on
derivatives
|
(671,797)
|
|
(907,096)
|
|
(1,838,941)
|
|
4,642,932
|
Net cash settlements
received (paid) on
derivatives
|
275,599
|
|
(1,254,700)
|
|
900,650
|
|
(5,927,698)
|
Premiums (paid)
received for derivatives that
settled during the period
|
(90,741)
|
|
3,731
|
|
(322,869)
|
|
(27,587)
|
Other operating
expenses
|
14,778
|
|
18,379
|
|
84,043
|
|
57,331
|
(Income) loss from
investments
|
(2,286)
|
|
(9,400)
|
|
(7,596)
|
|
4,931
|
Loss on debt
extinguishment
|
135
|
|
944
|
|
80
|
|
140,029
|
Adjusted
EBITDA
|
$ 839,567
|
|
$ 678,659
|
|
$
2,997,533
|
|
$
3,522,572
|
The Company has not provided projected net income or a
reconciliation of projected adjusted EBITDA to projected net
income, the most comparable financial measure calculated in
accordance with GAAP. Net income includes the impact of
depreciation and depletion expense, income tax expense (benefit),
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,
and a reconciliation of projected adjusted EBITDA to projected net
income, are not available without unreasonable effort.
Adjusted Operating Cash Flow, Free Cash Flow and Free Cash
Flow Yield
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 yield is defined as free cash flow divided by market
capitalization. Adjusted operating cash flow, free cash flow and
free cash flow yield 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, free cash flow and free
cash flow yield 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 Annual Report on Form 10-K for the
year ended December 31, 2023.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands)
|
Net cash provided by
operating activities
|
$
624,386
|
|
$
1,063,802
|
|
$
3,178,850
|
|
$
3,465,560
|
Decrease (increase) in
changes in other
assets and liabilities
|
150,202
|
|
(441,955)
|
|
(383,632)
|
|
(99,229)
|
Adjusted operating cash
flow
|
$
774,588
|
|
$
621,847
|
|
$
2,795,218
|
|
$
3,366,331
|
Less: Capital
expenditures
|
(538,507)
|
|
(398,115)
|
|
(1,925,243)
|
|
(1,440,112)
|
Add: Capital
expenditures attributable to
noncontrolling interests
|
—
|
|
1,800
|
|
8,549
|
|
12,796
|
Free cash
flow
|
$
236,081
|
|
$
225,532
|
|
$
878,524
|
|
$
1,939,015
|
The Company has not provided projected net cash provided by
operating activities or reconciliations of projected adjusted
operating cash flow, free cash flow and free cash flow yield 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, free cash flow and free cash flow yield, 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, free
cash flow and free cash flow yield to projected net cash provided
by operating activities, without unreasonable effort.
Adjusted EBITDA to Free Cash Flow Reconciliation
The
table below reconciles adjusted EBITDA to free cash flow.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands)
|
Adjusted
EBITDA
|
$ 839,567
|
|
$ 678,659
|
|
$
2,997,533
|
|
$
3,522,572
|
(Deduct)
add:
|
|
|
|
|
|
|
|
Interest expense,
net
|
(72,804)
|
|
(55,630)
|
|
(219,660)
|
|
(249,655)
|
Non-cash interest
expense (amortization)
|
4,087
|
|
3,492
|
|
14,484
|
|
12,987
|
Other operating
expenses
|
(14,778)
|
|
(18,379)
|
|
(84,043)
|
|
(57,331)
|
Non-cash share-based
compensation expense
|
11,655
|
|
11,495
|
|
49,834
|
|
45,201
|
Current income tax
benefit (expense)
|
5,986
|
|
(10,136)
|
|
15,712
|
|
(19,108)
|
Distribution of
earnings from equity method
investment
|
620
|
|
11,470
|
|
18,693
|
|
50,220
|
Amortization and
other
|
255
|
|
876
|
|
2,665
|
|
61,445
|
Adjusted operating cash
flow
|
$ 774,588
|
|
$ 621,847
|
|
$
2,795,218
|
|
$
3,366,331
|
Less: Capital
expenditures
|
(538,507)
|
|
(398,115)
|
|
(1,925,243)
|
|
(1,440,112)
|
Add: Capital
expenditures attributable to
noncontrolling interests
|
—
|
|
1,800
|
|
8,549
|
|
12,796
|
Free cash
flow
|
$ 236,081
|
|
$ 225,532
|
|
$ 878,524
|
|
$
1,939,015
|
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
and 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 Annual Report on Form 10-K for the year ended
December 31, 2023.
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands, unless
otherwise noted)
|
Total operating
revenues
|
$
2,042,999
|
|
$
3,479,828
|
|
$
6,908,923
|
|
$
7,497,689
|
(Deduct)
add:
|
|
|
|
|
|
|
|
(Gain) loss on
derivatives
|
(671,797)
|
|
(907,096)
|
|
(1,838,941)
|
|
4,642,932
|
Net cash settlements
received (paid) on
derivatives
|
275,599
|
|
(1,254,700)
|
|
900,650
|
|
(5,927,698)
|
Premiums (paid)
received for derivatives that
settled during the period
|
(90,741)
|
|
3,731
|
|
(322,869)
|
|
(27,587)
|
Net marketing services
and other
|
(7,000)
|
|
(4,593)
|
|
(25,214)
|
|
(26,453)
|
Adjusted
operating revenues
|
$
1,549,060
|
|
$
1,317,170
|
|
$
5,622,549
|
|
$
6,158,883
|
|
|
|
|
|
|
|
|
Total sales volume
(MMcfe)
|
563,929
|
|
458,585
|
|
2,016,273
|
|
1,940,043
|
Average realized price
($/Mcfe)
|
$
2.75
|
|
$
2.87
|
|
$
2.79
|
|
$
3.17
|
Net Debt and Leverage
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 note
payable to EQM Midstream Partners, LP. Leverage is defined as net
debt divided by adjusted EBITDA (a non-GAAP supplemental financial
measure defined above). 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 Annual Report on Form 10-K
for the year ended December 31, 2023.
|
December
31,
|
|
2023
|
|
2022
|
|
(Thousands)
|
Current portion of debt
(a)
|
$
292,432
|
|
$
422,632
|
Term loan facility
borrowings
|
1,244,265
|
|
—
|
Senior notes
|
4,176,180
|
|
5,167,849
|
Note payable to EQM
Midstream Partners, LP
|
82,236
|
|
88,484
|
Total debt
|
5,795,113
|
|
5,678,965
|
Less: Cash and cash
equivalents
|
80,977
|
|
1,458,644
|
Net debt
|
$
5,714,136
|
|
$
4,220,321
|
(a)
|
Pursuant to the terms
of the Company's convertible notes indenture and, for December 31,
2023, the delivery of the Company's irrevocable notice of
redemption on January 2, 2024, the net carrying value of the
Company's convertible notes was included in current portion of debt
in the Consolidated Balance Sheets as of December 31, 2023 and
2022. See the Company's Annual Report on Form 10-K for the year
ended December 31, 2023 for further discussion.
|
The Company has not provided a reconciliation of projected net
debt to projected total debt, the most comparable financial measure
calculated in accordance with GAAP. The Company is unable to
project total debt for any future period because total debt is
dependent on the timing of cash receipts and disbursements that may
not relate to the periods in which the operating activities
occurred. The Company is unable to project these timing differences
with any reasonable degree of accuracy and therefore cannot
reasonably determine the timing and payment of revolving credit
facility borrowings or other components of total debt without
unreasonable effort. Furthermore, the Company does not provide
guidance with respect to its average realized price, among other
items that impact reconciling items between certain of the
projected total debt and projected net debt, as applicable. Natural
gas prices are volatile and out of the Company's control, and the
timing of transactions and the distinction between cash on hand as
compared to revolving credit facility borrowings are too difficult
to accurately predict. Therefore, the Company is unable to provide
a reconciliation of projected net debt to projected total debt,
without unreasonable effort.
PV-10
PV-10 is derived from the Standardized Measure,
which is the most directly comparable financial measure computed
using GAAP. PV-10 differs from the Standardized Measure because it
does not include the effects of income taxes on future net
revenues. The Company's management believes the presentation of
PV-10 is relevant and useful to investors because it presents the
discounted future net cash flows attributable to proved reserves
held by companies without regard to the specific income tax
characteristics of such entities and is a useful measure of
evaluating the relative monetary significance of the Company's oil
and natural gas properties. Investors may utilize PV-10 as a basis
for comparing the relative size and value of the Company's proved
reserves to other companies. PV-10 should not be considered as a
substitute for, or more meaningful than, the Standardized Measure
as determined in accordance with GAAP. Neither PV-10 nor the
Standardized Measure represents an estimate of the fair market
value of the Company's oil and natural gas properties.
The table below reconciles PV-10 to the Standardized Measure,
the most comparable financial measure calculated in accordance with
GAAP, as derived from the footnotes to be included in the Company's
Annual Report on Form 10-K for the year ended December 31,
2023.
|
Year Ended December
31, 2023
|
|
Proved
Developed
|
|
Proved
Undeveloped
|
|
Total
|
|
(Millions)
|
Standardized
Measure
|
$
8,386
|
|
$
876
|
|
$
9,262
|
Estimated income taxes
on future net revenues
|
1,691
|
|
567
|
|
2,258
|
PV-10
|
$
10,077
|
|
$
1,443
|
|
$
11,520
|
|
|
|
|
|
|
Standardized Measure,
reflecting five-year strip
pricing as of December 29, 2023
|
$
14,273
|
|
$
3,903
|
|
$
18,176
|
Estimated income taxes
on future net revenues
|
3,291
|
|
1,436
|
|
4,727
|
PV-10, reflecting
five-year strip pricing as of
December 29, 2023
|
$
17,564
|
|
$
5,339
|
|
$
22,903
|
Investor Contact
Cameron
Horwitz
Managing Director, Investor Relations & Strategy
412.395.2555
cameron.horwitz@eqt.com
About EQT Corporation
EQT Corporation is a leading
independent natural gas production company with 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.
Cautionary Statements
This news release contains
certain forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended. Statements that do
not relate strictly to historical or current facts are
forward-looking. Without limiting the generality of the foregoing,
forward-looking statements contained in this news release
specifically include the expectations of plans, strategies,
objectives and growth and anticipated financial and operational
performance of EQT 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 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 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 reduction goals, and the Company's ability to achieve the
anticipated results of such initiatives; potential acquisitions or
other strategic transactions, including the timing and final terms
of the Company's proposed acquisition of additional ownership
interests in its operated gathering systems, if at all; projected
synergies from the Tug Hill and XcL Midstream Acquisition and the
timing thereof; 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 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 and projected margin posting obligations; the
Company's tax position and projected effective tax rate; and the
expected impact of changes in laws.
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, including as a result
of rising interest rates, inflation and other economic
uncertainties; the Company's hedging and other financial contracts;
inherent hazards and risks normally incidental to drilling for,
producing, transporting and storing natural gas, NGLs and oil;
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 and obtaining a
substantial amount of the Company's midstream services from
Equitrans Midstream Corporation; the ability to obtain
environmental and other permits and the timing thereof; 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; 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 and elsewhere in the Company's
Annual Report on Form 10-K for the year ended December 31,
2023 to be filed with the SEC and in other documents the Company
files from time to time with the SEC.
Any forward-looking statement speaks only as of the date on
which such statement is made, and, except as required by law, the
Company does not intend to correct or update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
EQT CORPORATION AND
SUBSIDIARIES
STATEMENTS OF
CONSOLIDATED OPERATIONS
|
|
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands except per share amounts)
|
Operating
revenues:
|
|
|
|
|
|
|
|
Sales of natural gas,
natural gas liquids and oil
|
$
1,364,202
|
|
$
2,568,139
|
|
$
5,044,768
|
|
$
12,114,168
|
Gain (loss) on
derivatives
|
671,797
|
|
907,096
|
|
1,838,941
|
|
(4,642,932)
|
Net marketing services
and other
|
7,000
|
|
4,593
|
|
25,214
|
|
26,453
|
Total operating
revenues
|
2,042,999
|
|
3,479,828
|
|
6,908,923
|
|
7,497,689
|
Operating
expenses:
|
|
|
|
|
|
|
|
Transportation and
processing
|
564,326
|
|
520,076
|
|
2,157,260
|
|
2,116,976
|
Production
|
84,629
|
|
65,632
|
|
254,700
|
|
300,985
|
Exploration
|
728
|
|
568
|
|
3,330
|
|
3,438
|
Selling, general and
administrative
|
67,172
|
|
57,042
|
|
236,171
|
|
252,645
|
Depreciation and
depletion
|
501,887
|
|
396,026
|
|
1,732,142
|
|
1,665,962
|
(Gain) loss on
sale/exchange of long-lived assets
|
(369)
|
|
(5,991)
|
|
17,445
|
|
(8,446)
|
Impairment of contract
asset
|
—
|
|
29,250
|
|
—
|
|
214,195
|
Impairment and
expiration of leases
|
87,131
|
|
79,070
|
|
109,421
|
|
176,606
|
Other operating
expenses
|
14,778
|
|
18,379
|
|
84,043
|
|
57,331
|
Total operating
expenses
|
1,320,282
|
|
1,160,052
|
|
4,594,512
|
|
4,779,692
|
Operating
income
|
722,717
|
|
2,319,776
|
|
2,314,411
|
|
2,717,997
|
(Income) loss from
investments
|
(2,286)
|
|
(9,400)
|
|
(7,596)
|
|
4,931
|
Dividend and other
income
|
(362)
|
|
(214)
|
|
(1,231)
|
|
(11,280)
|
Loss on debt
extinguishment
|
135
|
|
944
|
|
80
|
|
140,029
|
Interest expense,
net
|
72,804
|
|
55,630
|
|
219,660
|
|
249,655
|
Income before income
taxes
|
652,426
|
|
2,272,816
|
|
2,103,498
|
|
2,334,662
|
Income tax
expense
|
150,979
|
|
558,977
|
|
368,954
|
|
553,720
|
Net income
|
501,447
|
|
1,713,839
|
|
1,734,544
|
|
1,780,942
|
Less: Net (loss) income
attributable to noncontrolling
interests
|
(608)
|
|
1,857
|
|
(688)
|
|
9,977
|
Net income attributable
to EQT Corporation
|
$ 502,055
|
|
$
1,711,982
|
|
$
1,735,232
|
|
$
1,770,965
|
|
|
|
|
|
|
|
|
Income per share of
common stock attributable to EQT Corporation:
|
Basic:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
416,792
|
|
366,263
|
|
380,902
|
|
370,048
|
Net income attributable
to EQT Corporation
|
$
1.20
|
|
$
4.67
|
|
$
4.56
|
|
$
4.79
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
Weighted average
common stock outstanding
|
445,400
|
|
400,122
|
|
413,224
|
|
406,495
|
Net income attributable
to EQT Corporation
|
$
1.13
|
|
$
4.28
|
|
$
4.22
|
|
$
4.38
|
EQT CORPORATION AND
SUBSIDIARIES
PRICE
RECONCILIATION
|
|
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Thousands, unless
otherwise noted)
|
NATURAL
GAS
|
|
|
|
|
|
|
|
Sales volume
(MMcf)
|
532,816
|
|
435,329
|
|
1,907,343
|
|
1,842,044
|
NYMEX price
($/MMBtu)
|
$
2.88
|
|
$
6.27
|
|
$
2.74
|
|
$
6.64
|
Btu uplift
|
0.16
|
|
0.36
|
|
0.14
|
|
0.35
|
Natural gas price
($/Mcf)
|
$
3.04
|
|
$
6.63
|
|
$
2.88
|
|
$
6.99
|
|
|
|
|
|
|
|
|
Basis ($/Mcf)
(a)
|
$
(0.82)
|
|
$
(1.02)
|
|
$
(0.51)
|
|
$
(0.77)
|
Cash settled basis
swaps ($/Mcf)
|
0.08
|
|
0.18
|
|
(0.03)
|
|
(0.02)
|
Average differential,
including cash settled basis swaps ($/Mcf)
|
$
(0.74)
|
|
$
(0.84)
|
|
$
(0.54)
|
|
$
(0.79)
|
Average adjusted price
($/Mcf)
|
2.30
|
|
5.79
|
|
2.34
|
|
6.20
|
Cash settled
derivatives ($/Mcf)
|
0.28
|
|
(3.05)
|
|
0.34
|
|
(3.20)
|
Average natural gas
price, including cash settled derivatives ($/Mcf)
|
$
2.58
|
|
$
2.74
|
|
$
2.68
|
|
$
3.00
|
Natural gas sales,
including cash settled derivatives
|
$
1,371,031
|
|
$
1,194,152
|
|
$
5,112,278
|
|
$
5,529,963
|
|
|
|
|
|
|
|
|
LIQUIDS
|
|
|
|
|
|
|
|
NGLs, excluding
ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
23,054
|
|
13,692
|
|
64,859
|
|
56,735
|
Sales volume
(Mbbl)
|
3,842
|
|
2,282
|
|
10,810
|
|
9,456
|
NGLs price
($/Bbl)
|
$
38.29
|
|
$
40.71
|
|
$
36.39
|
|
$
53.26
|
Cash settled
derivatives ($/Bbl)
|
(0.77)
|
|
(2.21)
|
|
(1.27)
|
|
(3.91)
|
Average NGLs price,
including cash settled derivatives ($/Bbl)
|
$
37.52
|
|
$
38.50
|
|
$
35.12
|
|
$
49.35
|
NGLs sales, including
cash settled derivatives
|
$
144,154
|
|
$ 87,853
|
|
$
379,663
|
|
$
466,664
|
Ethane:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
5,243
|
|
8,029
|
|
34,441
|
|
35,100
|
Sales volume
(Mbbl)
|
874
|
|
1,338
|
|
5,740
|
|
5,850
|
Ethane price
($/Bbl)
|
$
6.54
|
|
$
13.32
|
|
$
6.00
|
|
$
14.20
|
Ethane sales
|
$
5,718
|
|
$ 17,820
|
|
$ 34,417
|
|
$ 83,096
|
Oil:
|
|
|
|
|
|
|
|
Sales volume (MMcfe)
(b)
|
2,816
|
|
1,535
|
|
9,630
|
|
6,164
|
Sales volume
(Mbbl)
|
469
|
|
255
|
|
1,605
|
|
1,027
|
Oil price
($/Bbl)
|
$
59.98
|
|
$
67.82
|
|
$
59.93
|
|
$
77.06
|
Oil sales
|
$ 28,157
|
|
$ 17,345
|
|
$ 96,191
|
|
$ 79,160
|
|
|
|
|
|
|
|
|
Total liquids sales
volume (MMcfe) (b)
|
31,113
|
|
23,256
|
|
108,930
|
|
97,999
|
Total liquids sales
volume (Mbbl)
|
5,185
|
|
3,875
|
|
18,155
|
|
16,333
|
Total liquids
sales
|
$
178,029
|
|
$
123,018
|
|
$
510,271
|
|
$
628,920
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
Total natural gas and
liquids sales, including cash settled derivatives (c)
|
$
1,549,060
|
|
$
1,317,170
|
|
$
5,622,549
|
|
$
6,158,883
|
Total sales volume
(MMcfe)
|
563,929
|
|
458,585
|
|
2,016,273
|
|
1,940,043
|
Average realized price
($/Mcfe)
|
$
2.75
|
|
$
2.87
|
|
$
2.79
|
|
$
3.17
|
(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 adjusted operating revenues, a non-GAAP supplemental financial
measure.
|
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SOURCE EQT Corporation (EQT-IR)