PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) announces the company’s 2011 capital
expenditure (CAPEX) forecast of $970 million; 19% lower than the 2010
CAPEX forecast. Sales of produced natural gas in 2011 are projected to
be 175 Bcfe, 31% higher than the 2010 estimate of 134 Bcfe.
The CAPEX forecast includes $691 million for EQT Production, $244
million for EQT Midstream and $35 million for distribution
infrastructure projects and other corporate items. Funding will be
provided by cash generated from operations plus approximately $230
million in proceeds from the sale of the Kentucky natural gas processing
complex announced today. Operating cash flow is projected to be
$750-$800 million in 2011 at current NYMEX natural gas prices, net of
approximately $18 million of annual cash flow associated with the sold
Kentucky assets.
EQT Production expects to invest $413 million to drill 86 Marcellus
shale wells with an average length of 4,200 feet of pay and $84 million
to drill 58 Huron/Berea wells with an average length of 5,200 feet of
pay. The company expects to invest $45 million in land and geological
and geophysical activities supporting the drilling program. The
remainder of the EQT Production spending is for capitalized overhead,
maintenance and to finish wells spud in 2010.
EQT Midstream projects will support the Marcellus drilling program. The
company plans to spend $94 million on Equitrans transmission expansion
and $69 million for Marcellus gathering in Pennsylvania. The Equitrans
expansion project, projected to cost $220 million over two years, is
expected to increase transmission capacity by 230 MMcf per day in 2011
and 330 MMcf per day in 2012 and will, among other things, connect the
outlet of the MarkWest processing plant in West Virginia to five
interstate pipelines. The Marcellus gathering investments are expected
to increase capacity by 130 MMcf per day in Pennsylvania in 2011. The
remainder of the EQT Midstream spending is for maintenance and
compliance activities.
EQT will continue to evaluate additional asset sales and joint ventures
to fund further development of its extensive reserves.
The company has posted an updated analyst presentation reflecting the
2011 CAPEX forecast on the Investors page to its website at http://ir.eqt.com.
Cautionary Statements
Operating cash flow represents net cash provided by operating
activities, less changes in operating assets and liabilities. Operating
cash flow is a supplemental financial measurement in the evaluation of
EQT’s business. EQT believes that it provides additional information
regarding EQT’s ability to meet its future debt service, capital
expenditures and working capital requirements. This measure is widely
used by investors and rating agencies in the valuation, comparison,
rating and investment recommendations of companies. Operating cash flow
is not a measure of financial performance under generally accepted
accounting principles (GAAP). Accordingly, it should not be considered
as a substitute for net income, operating income, or net cash provided
by operating activities prepared in accordance with GAAP. EQT is unable
to provide a reconciliation of its projected operating cash flow to
projected net cash provided by operating activities, the most comparable
financial measure calculated in accordance with generally accepted
accounting principles, because of uncertainties associated with
projecting future net income and changes in assets and liabilities.
Disclosures in this press release contain certain 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, and
objectives, and anticipated financial and operational performance of the
company and its subsidiaries, including guidance regarding the company's
projected operating cash flows, drilling programs (including the
expected number of wells to be drilled and expected average feet of pay)
and infrastructure programs (including the Equitrans expansion project),
production and sales volumes, transactions, including asset sales and/or
joint ventures involving the company’s assets, the proceeds from the
recently announced sale of Kentucky processing assets, capital
expenditures, capital budget and sources of funds for capital
expenditures. These statements involve risks and uncertainties that
could cause actual results to differ materially from projected results.
Accordingly, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. The
company has based these forward-looking statements on current
expectations and assumptions about future events. 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, most of which are
difficult to predict and many of which are beyond the company's control.
The risks and uncertainties that may affect the operations, performance
and results of the company's business and forward-looking statements
include, but are not limited to, those set forth under Item 1A, "Risk
Factors" of the company's Form 10-K for the year ended December 31,
2009, as updated by any subsequent Form 10-Qs.
Any forward-looking statement applies 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.
EQT Corporation is an integrated energy company with emphasis on
Appalachian area natural gas production, gathering, processing,
transmission and distribution. Additional information about the company
can be obtained through the company’s web site, http://www.eqt.com;
Investor information is available on that site at http://ir.eqt.com.
EQT Corporation uses its web site as a channel of distribution of
important information about the company, and routinely posts financial
and other important information regarding the company and its financial
condition and operations on the Investors web pages.
