PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced the company’s 2012 capital expenditure (CAPEX) forecast of $1.6 billion. Sales of produced natural gas in 2012 are projected at between 255 and 260 Bcfe, approximately 32% higher than the 2011 estimate of 195 Bcfe.
The CAPEX forecast includes $1,190 million for EQT Production, $365 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 proceeds from the November 7, 2011 debt issuance. Operating cash flow is projected to be approximately $1,000 million in 2012 at current NYMEX natural gas prices.
EQT Production expects to invest more than 80% of its drilling capital to drill 132 Marcellus wells with an average length of 4,240 feet of pay, with 49 of these wells completed using 30 foot frac spacing. EQT Production also expects to drill 120 Huron wells with an average length of 5,200 feet of pay. Geological and geophysical activities supporting the drilling program are expected to total $10 million. The remainder of the EQT Production spending is for capitalized overhead, maintenance and to complete wells spud in 2011.
The company plans to spend $155 million on Equitrans’ transmission expansion and $125 million for Marcellus gathering. The Marcellus gathering investments are expected to increase capacity by 220 MMcf per day in Pennsylvania and 160 MMcf per day in West Virginia. The Equitrans expansion project is expected to increase transmission capacity by 450 MMcf per day in 2012. The remainder of the EQT Midstream spending is for maintenance and compliance activities.
The company has posted an updated analyst presentation reflecting the 2012 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 an accepted indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt. The company also includes this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements that the company may not control and may not relate to the period in which the operating activities occurred. 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 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 GAAP, 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, expected average feet of pay and the expected frac spacing) and infrastructure programs (including the Equitrans expansion project and the expected increase in gathering capacity from gathering expansion projects), production and sales volumes, 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, 2010, 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, 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.