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PITTSBURGH, Oct. 25 /PRNewswire-FirstCall/ -- Equitable Resources, Inc. (NYSE: EQT - News) today announced third quarter 2007 earnings of $0.27 per diluted share on net income of $32.9 million. This compares with diluted earnings of $0.26 per share on net income of $31.8 million in the third quarter of 2006.
Quarterly Results by Business
Equitable Supply
Equitable Supply had operating income for the quarter of $62.2 million, slightly lower than the $63.2 million earned in the same period last year. Production revenues were $93.4 million, essentially unchanged from the third quarter 2006 as slightly lower reported volumes were offset by a higher average well-head price. Production sales volumes decreased by 0.5 Bcfe to 19.0 Bcfe as volumes from new wells were more than offset by 1.2 Bcfe from wells sold in the second quarter of 2007 and by normal declines. The average well-head sales price increased by 3% to $4.78 per Mcfe.
Gathering operating income was $6.3 million, $3.2 million lower than the third quarter 2006. The decrease in operating income was a result of the gathering asset contribution to Nora Gathering, LLC. Gathered volumes, gathering revenues and gathering-related expenses related to the Nora Field gathering activities are no longer included in Equitable Supply's operating results. The Company reported Equity in Earnings of $1.3 million from its ownership in Nora Gathering, LLC.
Total operating expenses for the 2007 third quarter totaled $55.0 million compared to $57.8 million in the 2006 third quarter. The decrease is primarily attributable to lower expenses due to the Nora Field transaction and lower selling, general and administrative expenses related to reserves established in the third quarter 2006 for royalty disputes and legal expenses, partially offset by higher depreciation, depletion and amortization.
Equitable Utilities
Equitable Utilities had operating income for the third quarter of $4.1 million compared to $4.0 million reported for the same period last year. Net operating revenues for the three months ended September 30, 2007 were $40.9 million compared to $39.7 million for the same period last year, as higher Marketing net revenues resulting from storage optimization were partially offset by lower distribution and pipeline net revenues.
Total operating expenses for the quarter were $36.8 million, $1.1 million higher than the $35.7 million reported during the same period last year. Increases in general overhead and operating and maintenance costs were partially offset by a reduction of expenses incurred in connection with the transition planning for the pending acquisition of Peoples Natural Gas and Hope Gas. Equitable incurred $1.3 million of costs associated with transition planning for Peoples and Hope in the quarter, $2.4 million less than in the third quarter of 2006.
Other Business
Roaring Fork Field
In September 2007, the Company purchased 12.3 Bcf of proved reserves in the Equitable operated Roaring Fork Field in Virginia, consisting of approximately 10.1 Bcf of proved developed reserves and approximately 2.2 Bcf of proved undeveloped reserves, for $28.5 million. The purchase increased the Company's working interest by 13.5% to approximately 97.0%.
Hedging
There was no change to the Company's hedge position during the quarter. The approximate volumes and prices of Equitable's hedges for the last three months of 2007 through 2009 are:
Operating Income
The Company reports operating income by segment in this press release. Both interest and income taxes are controlled on a consolidated, corporate- wide basis, and are not allocated to the segments.
The following table reconciles operating income by segment as reported in this press release to the consolidated operating income reported in the Company's financial statements:
Other segment financial measures identified in this press release are reconciled to the most comparable financial measures calculated in accordance with GAAP on the attached operational and financial reports.
Equitable's teleconference with securities analysts, which begins at 10:30 a.m. Eastern Time today, will be broadcast live via Equitable's website, http://www.eqt.com, and will be available for seven days.
Equitable Resources is an integrated energy company with emphasis on Appalachian area natural gas supply, gathering, processing, transmission and distribution. For information, please visit Equitable's website, http://www.eqt.com. Equitable Resources management speaks to investors from time to time. Slides for these discussions will be available online via Equitable's website. The slides are updated periodically.
Forward-Looking Statements
Disclosures in this press release contain forward-looking statements. 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 press release specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Company and its subsidiaries, including guidance regarding the Company's drilling programs and initiatives, infrastructure projects, production and sales volumes, marketing revenues and margins, executive compensation, capital expenditures, the pending acquisition of The Peoples Natural Gas Company and Hope Gas, Inc. and the financing of that acquisition and the Company's move to a holding company structure. A variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of the Company's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of the Company's most recently filed Form 10-K.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
