PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced first quarter 2014 net
income attributable to EQT of $192.2 million, or $1.26 per diluted
share, compared to first quarter 2013 earnings of $100.3 million, or
$0.66 per diluted share. Adjusted earnings, excluding $22.3 million of
hedging ineffectiveness, were $206.6 million, or $1.35 per diluted share
– which was 214% higher than first quarter 2013 adjusted earnings of
$65.5 million, or $0.43 per diluted share, excluding $35.0 million from
discontinued operations. Operating cash flow in the quarter was $481.9
million, compared to $306.2 million; and adjusted cash flow per share
was $3.16, compared to $2.03. The Non-GAAP financial measures are
reconciled in the Non-GAAP Disclosures section of this news release.
First Quarter Highlights 2014 vs. 2013:
-
Production sales volume was 30% higher
-
Production operating expenses per Mcfe were 17% lower
-
Midstream transmission revenues were 40% higher
-
Midstream gathered volume was 25% higher
EQT’s first quarter 2014 operating income was $356.8 million, a 147%
increase from the same quarter 2013. Earnings per share and adjusted
cash flow per share were higher due to increases in production sales
volume, realized price, contracted transmission capacity, and gathered
volume. Net operating revenues increased 63% to $616.5 million in the
quarter, while net operating expenses increased only 11% to $259.7
million.
RESULTS BY BUSINESS
EQT
PRODUCTION
With its continued focus on the Marcellus Shale, EQT
Production achieved sales volume of 106.1 Bcfe in the first quarter
2014, representing a 30% increase compared to the first quarter
2013. Sales volume from the Marcellus/Upper Devonian averaged 923.6
MMcfe per day, 50% higher. Natural gas liquids (NGL) volume totaled
1,295 Mbbls, 16% higher.
Production operating income for the first quarter totaled $277.2
million, an increase of 274% from last year. As a result of increases in
sales volume and average realized price, net operating revenue for the
quarter was $467.7 million, 87% higher.
Consistent with the significant growth in sales volume, EQT Production’s
operating expenses for the quarter were $190.5 million, $14.1 million
higher than the same period last year. Depreciation, depletion and
amortization expense (DD&A) was $6.3 million higher; production taxes
were $5.2 million higher; selling, general and administrative expense
(SG&A) was $3.1 million higher; lease operating expense (LOE), less
production taxes, was $1.8 million higher; and exploration expense was
$2.3 million lower. Per unit SG&A decreased 14% to $0.24 per Mcfe; and
per unit LOE decreased 13% to $0.14 per Mcfe, as volume growth
dramatically outpaced higher costs.
The Company drilled (spud) 64 gross wells during the quarter -- 46 wells
targeted the Marcellus with an average length-of-pay of 5,870 feet; 14
wells targeted the Huron with an average length-of-pay of 6,395 feet;
and 4 wells targeted the Upper Devonian with an average length-of-pay of
5,460 feet. In 2014, the Company will complete and evaluate 5 Utica
wells drilled in 2013 but has decided to delay further drilling on its
Ohio Utica acreage until after this year. Alternatively, the Company now
expects to drill 8 additional Marcellus wells and 13 additional Upper
Devonian wells for a total of 194 Marcellus wells and 43 Upper Devonian
wells in 2014. This change will have no net impact to the Company’s 2014
CAPEX budget.
Production sales volume for 2014 is projected to be 465 – 480 Bcfe; and
liquids volume is expected to be 6,800 – 6,900 MBBls. Production sales
volume for the second quarter 2014 is projected to be 113 - 115 Bcfe;
and liquids volume is expected to be 1,600– 1,650 MBBls.
Realized Price
The NYMEX price of natural gas averaged $4.94
per MMBtu in the first quarter 2014, which was 48% higher than the
average of $3.34 for the same period last year. EQT’s realized price
varies from NYMEX due to revenue deductions for the net cost of
gathering, transporting and processing, regional basis, and hedging. In
the first quarter, the Company’s average realized price was $5.34 per
Mcfe, 28% higher than the $4.16 per Mcfe realized last year – with $4.40
per Mcfe allocated to EQT Production and $0.94 per Mcfe allocated to EQT
Midstream. This increase in the realized price includes negative $0.21
per Mcfe related to hedge ineffectiveness. During the first quarter
2014, which was unusually cold, EQT utilized its firm capacity to move
gas to higher priced markets. The sale of gas in these markets resulted
in gains that more than offset the cost of third-party gathering and
transmission, and resulted in positive net revenue of $0.64 per
Mcfe. This is a significant improvement over last year when EQT realized
a net cost of $0.26 per Mcfe in the first quarter 2013 for third-party
gathering and transmission. Basis averaged a negative $0.22 per Mcfe in
the first quarter compared to zero in 2013.
Based on current market conditions, EQT is forecasting third-party
gathering and transmission to average $0.00 to negative $0.05 per Mcfe;
and basis to average negative $0.40 to negative $0.60 per Mcfe for the
full-year 2014.
EQT MIDSTREAM
EQT Midstream’s first quarter 2014 operating
income was $83.1 million, or $8.9 million higher than the first quarter
of 2013. Net operating revenue was $148.7 million, 15% higher. Net
gathering revenue was $89.4 million, an increase of 9%, which was
primarily due to a 25% increase in gathered volume, partly offset by
lower gathering rates. Net transmission revenue totaled $52.1 million, a
40% increase over last year as a result of higher contracted capacity.
Net storage, marketing and other revenues totaled $7.2 million, $2.5
million lower; and operating expenses for the quarter were $65.6
million, $11.0 million higher, consistent with the volume growth. Per
unit gathering and compression expense decreased by 16% as volumes grew
faster than expenses.
OTHER BUSINESS
EQT Midstream
Partners, LP
EQT has a 42.6% limited partner interest and a 2%
general partner interest in EQT Midstream Partners, LP, whose results
are consolidated in EQT’s results. For the quarter, EQT Corporation
recorded $18.7 million, or $0.12 of earnings per diluted share,
attributable to non-controlling interests. EQT Midstream Partners’
results were released today and are available at www.eqtmidstreampartners.com.
On April 22, 2014, EQT Midstream Partners announced a cash distribution
to its unitholders of $0.49 per unit for the first quarter, from which
EQT will receive $10.2 million on its limited partner units. In
addition, EQT will receive $0.5 million related to its 2% general
partner interest, and $1.0 million for its incentive distribution rights
as EQT receives 25% of the amount in excess of $0.4375 per unit.
Hedging
The Company’s total natural gas hedge positions
through December 2016 production are
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2014**
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2015
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2016***
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Fixed Price
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Total Volume (Bcf)
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171
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132
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60
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Average Price per Mcf (NYMEX)*
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$
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4.36
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$
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4.37
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$
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4.45
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Collars
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Total Volume (Bcf)
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18
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23
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–
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Average Floor Price per Mcf (NYMEX)*
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$
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5.05
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$
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5.03
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$
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–
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Average Cap Price per Mcf (NYMEX)*
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$
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8.85
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$
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8.97
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$
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–
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*The average price is based on a conversion rate of 1.05 MMBtu/Mcf
**April
through December
***The Company also executed a natural gas sales
agreement for approximately 35 Bcf that includes a NYMEX ceiling price
of $4.88 per Mcf
Operating Income
The Company reports operating income by
segment in this news release. Interest, income taxes and unallocated
expense are controlled on a consolidated, corporate-wide basis and are
not allocated to the segments. The Company’s management reviews and
reports segment results for operating revenues and purchased gas costs,
net of third-party transportation costs.
The following table reconciles operating income by segment, as reported
in this news release, to the consolidated operating income reported in
the Company’s financial statements:
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Three Months Ended
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March 31,
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2014
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2013
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Operating income (thousands):
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EQT Production
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$
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277,205
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$
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74,097
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EQT Midstream
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83,069
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74,214
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Unallocated expense
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(3,483
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)
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(3,832
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)
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Operating income
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$
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356,791
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$
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144,479
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Unallocated expense is primarily due to certain incentive compensation
and administrative costs in excess of budget that are not allocated to
the operating segments.
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Marcellus Horizontal Well Status (cumulative since inception)
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As of
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As of
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As of
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As of
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As of
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3/31/14
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12/31/13
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9/30/13
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6/30/13
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3/31/13
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Wells spud
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573
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527
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486
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444
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404
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Wells online
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390
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373
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338
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322
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279
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Wells complete, not online
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42
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32
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20
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11
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30
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Frac stages (spud wells)*
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13,512
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11,991
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10,613
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9,754
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8,327
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Frac stages online
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8,012
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7,567
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6,596
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6,297
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4,788
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Frac stages complete, not online
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959
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|
708
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|
553
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|
224
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925
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*Includes planned stages for spud wells that have not yet been
hydraulically fractured.
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NON-GAAP DISCLOSURES
Adjusted
Operating Income, Adjusted Net Income and Adjusted Earnings Per Diluted
Share
Adjusted operating income, adjusted net income and
adjusted earnings per diluted share are non-GAAP supplemental financial
measures that are presented because they are important measures used by
management to evaluate period-to-period comparisons of earnings trends.
Adjusted operating income, adjusted net income and adjusted earnings per
diluted share should not be considered as alternatives to operating
income, net income or earnings per diluted share presented in accordance
with GAAP.
The table below reconciles adjusted operating income with operating
income, as derived from the statements of consolidated income to be
included in EQT’s quarterly report on Form 10-Q for the quarter ended
March 31, 2014.
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Reconciliation of Adjusted Operating Income:
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Three Months Ended
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March 31,
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(thousands)
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2014
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2013
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Operating income as reported
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$
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356,791
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$
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144,479
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(Deduct) / add back:
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Loss recognized in operating revenues for hedging ineffectiveness
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22,260
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481
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Adjusted operating income
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$
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379,051
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$
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144,960
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The table below reconciles adjusted net income and adjusted earnings per
diluted share with net income and earnings per diluted share, as derived
from the statements of consolidated income to be included in EQT’s
quarterly report on Form 10-Q for the quarter ended March 31, 2014.
|
Reconciliation of Adjusted Net Income and Adjusted Earnings Per
Diluted Share:
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Three Months Ended
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March 31,
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(thousands)
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2014
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2013
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Net income attributable to EQT, as reported
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$
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192,193
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$
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100,255
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(Deduct) / add back:
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Loss recognized in operating revenues for hedging ineffectiveness
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22,260
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481
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Tax impact
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(7,910
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)
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(153
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)
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Subtotal
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$
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206,543
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$
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100,583
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Loss/(income) from discontinued operations, net of tax
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104
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(35,041
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)
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Adjusted net income attributable to EQT, as reported
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$
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206,647
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$
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65,542
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Diluted weighted average common shares outstanding
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152,759
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150,949
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Diluted EPS, as adjusted
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$
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1.35
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$
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0.43
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Operating Cash Flow
Operating cash flow is a non-GAAP
supplemental financial measure that is presented as an 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. EQT includes this information because management
believes that changes in operating assets and liabilities relate to the
timing of cash receipts and disbursements, and therefore, may not relate
to the period in which the operating activities occurred. Operating cash
flow should not be considered as an alternative to net cash provided by
operating activities presented in accordance with GAAP. The table below
reconciles operating cash flow with net cash provided by operating
activities, as derived from the statements of consolidated cash flows to
be included in the EQT’s quarterly report on Form 10-Q for the quarter
ended March 31, 2014.
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Three Months Ended
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March 31,
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(thousands)
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2014
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2013(a)
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Net income
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$
|
210,935
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$
|
109,281
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Add back (deduct):
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Depreciation, depletion, and amortization
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152,111
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149,116
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Deferred income taxes
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85,878
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34,347
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Loss recognized in operating revenues for hedging ineffectiveness
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22,260
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|
481
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Non-cash incentive compensation
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11,317
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10,334
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Other items, net
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(590
|
)
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2,612
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Operating cash flow
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$
|
481,911
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|
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$
|
306,171
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Add back (deduct):
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Changes in other assets and liabilities
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|
|
$
|
(20,350
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)
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|
$
|
(6,916
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)
|
|
Net cash provided by operating activities
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$
|
461,561
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$
|
299,255
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(a) Includes results of discontinued operations
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|
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|
|
|
|
|
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|
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Adjusted Cash Flow Per Share
Adjusted cash flow per share is
a non-GAAP supplemental financial measure that is presented because it
is a capital efficiency metric used by investors and analysts to
evaluate oil and gas companies. Adjusted cash flow per share should not
be considered as an alternative to net cash provided by operating
activities or net income per share presented in accordance with GAAP, or
as a measure of liquidity.
The table below provides the calculation for adjusted cash flow per
share, as derived from the financial statements to be included in EQT’s
quarterly report on Form 10-Q for the quarter ended March 31, 2014.
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Three Months Ended
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March 31,
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(thousands)
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2014
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|
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2013
|
|
Operating cash flow (a non-GAAP measure reconciled above)
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|
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$
|
481,911
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$
|
306,171
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Add back:
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Exploration expense (cash)
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|
1,144
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|
|
750
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Adjusted operating cash flow
|
|
|
$
|
483,055
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$
|
306,921
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|
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|
|
|
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Diluted weighted average common shares outstanding
|
|
|
|
152,759
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|
150,949
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Adjusted cash flow per share
|
|
|
$
|
3.16
|
|
|
$
|
2.03
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|
|
|
|
|
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|
|
Net Operating Revenues and Net Operating Expenses
Net
operating revenues and net operating expenses are non-GAAP supplemental
financial measures that exclude purchased gas costs, but are presented
because they are important analytical measures used by management to
evaluate period-to-period comparisons of revenue and operating expenses.
Purchased gas costs are typically excluded by management in such
analysis because more emphasis is placed on the net price impact to
revenues and expenses. Net operating revenues and net operating expenses
should not be considered as alternatives to operating revenues or total
operating expenses presented in accordance with GAAP. The table below
reconciles net operating revenues to operating revenues and net
operating expenses to total operating expenses as derived from the
statements of consolidated income to be included in EQT’s quarterly
report on Form 10-Q for the quarter ended March 31, 2014.
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
(thousands)
|
|
|
2014
|
|
|
2013
|
|
Net operating revenues
|
|
|
$
|
616,450
|
|
|
$
|
379,152
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|
Plus: purchased gas cost
|
|
|
|
45,175
|
|
|
|
36,731
|
|
Operating revenues
|
|
|
$
|
661,625
|
|
|
$
|
415,883
|
|
|
|
|
|
|
|
|
|
Net operating expenses
|
|
|
$
|
259,659
|
|
|
$
|
234,673
|
|
Plus: purchased gas cost
|
|
|
|
45,175
|
|
|
|
36,731
|
|
Total operating expenses
|
|
|
$
|
304,834
|
|
|
$
|
271,404
|
|
|
|
|
|
|
|
|
|
|
Q1 2014 Webcast Information
The
Company's conference call with securities analysts, which begins at
10:30 a.m. ET today, will be broadcast live via the Company's web site
at http://www.eqt.com,
and on the investor information page of the Company’s web site at http://ir.eqt.com,
with a replay available for seven days following the call.
EQT Midstream Partners, LP (Partnership), for which EQT Corporation is
the general partner and a significant equity owner, will host a
conference call with security analysts today, beginning at 11:30 a.m.
ET. The call will be broadcast live via http://www.eqtmidstreampartners.com,
with a replay available for seven days following the call.
About EQT Corporation:
EQT
Corporation is an integrated energy company with emphasis on Appalachian
area natural gas production, gathering, and transmission. EQT is the
general partner and significant equity owner of EQT Midstream Partners,
LP. With more than 125 years of experience, EQT continues to be a leader
in the use of advanced horizontal drilling technology – designed to
minimize the potential impact of drilling-related activities and reduce
the overall environmental footprint. Through safe and responsible
operations, the Company is committed to meeting the country’s growing
demand for clean-burning energy, while continuing to provide a rewarding
workplace and enrich the communities where its employees live and work.
Company shares are traded on the New York Stock Exchange as EQT.
Visit EQT Corporation at www.EQT.com.
EQT Management speaks to investors from time to time. Slides for these
discussions will be available online via the Company’s investor
relations website at http://ir.eqt.com.
The slides were updated today and may be updated periodically.
Cautionary Statements
The United States Securities and
Exchange Commission (SEC) permits oil and gas companies, in their
filings with the SEC, to disclose only proved, probable and possible
reserves that a company anticipates as of a given date to be
economically and legally producible and deliverable by application of
development projects to known accumulations. We use certain terms, such
as “EUR” (estimated ultimate recovery) and “3P” (proved, probable and
possible) that the SEC’s guidelines prohibit us from including in
filings with the SEC. These measures are by their nature more
speculative than estimates of reserves prepared in accordance with SEC
definitions and guidelines and accordingly are less certain.
Total sales volume per day (or daily production) is an operational
estimate of the daily production or sales volume on a typical day
(excluding curtailments).
EBITDA is defined as earnings before interest, taxes, depreciation, and
amortization and is not a financial measure calculated in accordance
with GAAP. EBITDA is a non-GAAP supplemental financial measure that the
Company’s management and external users of the Company’s financial
statements, such as industry analysts, investors, lenders and rating
agencies, may use to assess: (i) the Company’s performance versus prior
periods; (ii) the Company’s operating performance as compared to other
companies in its industry; (iii) the ability of the Company’s assets to
generate sufficient cash flow to make distributions to its investors;
(iv) the Company’s ability to incur and service debt and fund capital
expenditures; and (v) the viability of acquisitions and other capital
expenditure projects and the returns on investment of various investment
opportunities.
The Company is unable to provide a reconciliation of projected EBITDA to
projected operating income, the most comparable financial measure
calculated in accordance with GAAP, due to the unknown effect, timing
and potential significance of certain income statement items.
Similarly, the Company 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 news 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 news 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
strategy to develop its Marcellus and other reserves; drilling plans and
programs (including the number, type, feet of pay and location of wells
to be drilled); projected natural gas prices and changes in basis; total
resource potential, reserves, EUR, expected decline curve and reserve
replacement ratio; projected production sales volume and growth rates
(including liquids sales volume and growth rates); projected finding and
development costs, operating costs, unit costs, well costs and gathering
and transmission revenue deductions; projected gathering and
transmission volume and growth rates; projected firm pipeline capacity
and sales; infrastructure programs (including the timing, cost and
capacity of the transmission and gathering expansion projects); the EQT
subsidiary to own and construct the Ohio Valley Connector and/or Ohio
Valley Express projects; technology (including drilling and completion
techniques); projected EQT Midstream and Partnership EBITDA;
monetization transactions, including asset sales (dropdowns) to the
Partnership and other asset sales, joint ventures or other transactions
involving the Company’s assets; uses of capital provided by the
Equitable Gas transaction; the cash flows resulting from, and the value
of, the Company’s general partner and limited partner interests and
incentive distribution rights in the Partnership; internal rate of
return (IRR); projected capital expenditures; liquidity and financing
requirements, including funding sources and availability; projected
operating revenues, cash flows and cash-on-hand; hedging strategy; the
effects of government regulation and litigation; the Company dividend
and Partnership distribution amount and rates; and tax position. These
forward-looking 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,
2013, as updated by any subsequent Form 10-Qs.
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.
Information in this news release regarding the Partnership and its
subsidiaries is derived from publicly available information published by
the Partnership.
|
EQT CORPORATION AND SUBSIDIARIES
|
|
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
|
|
(Thousands, except per share amounts)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
Operating revenues
|
|
|
$
|
661,625
|
|
|
|
$
|
415,883
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Purchased gas costs
|
|
|
|
45,175
|
|
|
|
|
36,731
|
|
Operation and maintenance
|
|
|
|
25,221
|
|
|
|
|
23,233
|
|
Production
|
|
|
|
31,940
|
|
|
|
|
24,889
|
|
Exploration
|
|
|
|
1,419
|
|
|
|
|
3,730
|
|
Selling, general and administrative
|
|
|
|
48,968
|
|
|
|
|
39,785
|
|
Depreciation, depletion and amortization
|
|
|
|
152,111
|
|
|
|
|
143,036
|
|
Total operating expenses
|
|
|
|
304,834
|
|
|
|
|
271,404
|
|
Operating income
|
|
|
|
356,791
|
|
|
|
|
144,479
|
|
Other income
|
|
|
|
2,551
|
|
|
|
|
2,281
|
|
Interest expense
|
|
|
|
31,968
|
|
|
|
|
37,752
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
327,374
|
|
|
|
|
109,008
|
|
Income taxes
|
|
|
|
116,335
|
|
|
|
|
34,768
|
|
Income from continuing operations
|
|
|
|
211,039
|
|
|
|
|
74,240
|
|
(Loss) income from discontinued operations, net of tax
|
|
|
|
(104
|
)
|
|
|
|
35,041
|
|
Net income
|
|
|
$
|
210,935
|
|
|
|
$
|
109,281
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
|
18,742
|
|
|
|
|
9,026
|
|
Net Income attributable to EQT Corporation
|
|
|
$
|
192,193
|
|
|
|
$
|
100,255
|
|
|
|
|
|
|
|
|
|
Amounts attributable to EQT Corporation
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
192,297
|
|
|
|
$
|
65,214
|
|
(Loss) income from discontinued operations
|
|
|
|
(104
|
)
|
|
|
|
35,041
|
|
Net Income
|
|
|
$
|
192,193
|
|
|
|
$
|
100,255
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock attributable to EQT Corporation
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
151,371
|
|
|
|
|
150,327
|
|
Income from continuing operations
|
|
|
$
|
1.27
|
|
|
|
$
|
0.44
|
|
(Loss) income from discontinued operations
|
|
|
|
-
|
|
|
|
|
0.23
|
|
Net income
|
|
|
$
|
1.27
|
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
152,759
|
|
|
|
|
150,949
|
|
Income from continuing operations
|
|
|
$
|
1.26
|
|
|
|
$
|
0.43
|
|
(Loss) income from discontinued operations
|
|
|
|
-
|
|
|
|
|
0.23
|
|
Net income
|
|
|
$
|
1.26
|
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
EQT Corporation
|
|
Price Reconciliation
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
in thousands (unless noted)
|
|
|
2014
|
|
|
2013
|
|
LIQUIDS
|
|
|
|
|
|
|
|
NGLs:
|
|
|
|
|
|
|
|
Sales Volume (MMcfe) (a)
|
|
|
|
7,767
|
|
|
|
|
6,692
|
|
|
Sales Volume (Mbbls)
|
|
|
|
1,295
|
|
|
|
|
1,115
|
|
|
Gross Price ($/Bbl)
|
|
|
$
|
55.71
|
|
|
|
$
|
46.11
|
|
|
Gross NGL Revenue
|
|
|
|
72,114
|
|
|
|
$
|
51,423
|
|
|
Oil:
|
|
|
|
|
|
|
|
Sales Volume (MMcfe) (a)
|
|
|
|
304
|
|
|
|
|
368
|
|
|
Sales Volume (Mbbls)
|
|
|
|
51
|
|
|
|
|
61
|
|
|
Net Price ($/Bbl)
|
|
|
$
|
83.11
|
|
|
|
$
|
81.74
|
|
|
Net Oil Revenue
|
|
|
$
|
4,214
|
|
|
|
$
|
4,986
|
|
|
|
|
|
|
|
|
|
|
Total Liquids Revenue
|
|
|
$
|
76,328
|
|
|
|
$
|
56,409
|
|
|
|
|
|
|
|
|
|
|
GAS
|
|
|
|
|
|
|
|
Sales Volume – Natural Gas (MMBtu)
|
|
|
|
98,052
|
|
|
|
|
74,654
|
|
|
Sales Volume – Ethane sold as natural gas (MMBtu)
|
|
|
|
6,931
|
|
|
|
|
6,417
|
|
|
Sales Volume (MMBtu)
|
|
|
|
104,983
|
|
|
|
|
81,071
|
|
|
NYMEX Price ($/MMBtu) (b)
|
|
|
$
|
4.92
|
|
|
|
$
|
3.34
|
|
|
Gas Revenue
|
|
|
$
|
516,636
|
|
|
|
$
|
270,427
|
|
|
Basis
|
|
|
|
(23,669
|
)
|
|
|
|
(193
|
)
|
|
Gross Gas Revenue (unhedged)
|
|
|
$
|
492,967
|
|
|
|
$
|
270,234
|
|
|
Sales Volume (MMcf)
|
|
|
|
98,052
|
|
|
|
|
74,654
|
|
|
Gas Price ($/Mcf) (unhedged)
|
|
|
$
|
5.03
|
|
|
|
$
|
3.62
|
|
|
|
|
|
|
|
|
|
|
Total Gross Gas & Liquids Revenue (unhedged)
|
|
|
$
|
569,295
|
|
|
|
$
|
326,643
|
|
|
Hedge impact (c)
|
|
|
|
(59,220
|
)
|
|
|
|
43,498
|
|
|
Total Gross Gas & Liquid Revenue
|
|
|
$
|
510,075
|
|
|
|
$
|
370,141
|
|
|
Total Sales Volume (MMcfe)
|
|
|
|
106,123
|
|
|
|
|
81,714
|
|
|
Average hedge adjusted price ($/Mcfe)
|
|
|
$
|
4.81
|
|
|
|
$
|
4.53
|
|
|
|
|
|
|
|
|
|
|
Midstream Revenue Deductions ($ / Mcfe)
|
|
|
|
|
|
|
|
Gathering to EQT Midstream
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
(0.88
|
)
|
|
Transmission to EQT Midstream
|
|
|
|
(0.21
|
)
|
|
|
|
(0.23
|
)
|
|
Net third-party gathering and transmission
|
|
|
|
0.64
|
|
|
|
|
(0.26
|
)
|
|
Third-party processing
|
|
|
|
(0.11
|
)
|
|
|
|
(0.11
|
)
|
|
Total midstream revenue deductions
|
|
|
$
|
(0.41
|
)
|
|
|
$
|
(1.48
|
)
|
|
Average effective sales price to EQT Production
|
|
|
$
|
4.40
|
|
|
|
$
|
3.05
|
|
|
|
|
|
|
|
|
|
|
EQT Revenue ($/ Mcfe)
|
|
|
|
|
|
|
|
Revenues to EQT Midstream
|
|
|
$
|
0.94
|
|
|
|
$
|
1.11
|
|
|
Revenues to EQT Production
|
|
|
|
4.40
|
|
|
|
|
3.05
|
|
|
Average effective sales price to EQT Corporation
|
|
|
$
|
5.34
|
|
|
|
$
|
4.16
|
|
(a) NGLs and crude oil were converted to Mcfe at the rate of six Mcfe
per barrel for all periods. Information for the three months ended March
31, 2013 has been recast to reflect this conversion rate.
(b) The
Company’s volume weighted NYMEX natural gas price (actual average NYMEX
natural gas price ($/MMBtu) was $4.94 and $3.34 for the three months
ended March 31, 2014 and 2013, respectively).
(c) Includes gains or
losses related to the sale of fixed price natural gas. The hedge impact
also included a loss for hedging ineffectiveness of $22.4 million, $0.21
per Mcfe, and $0.5 million, $0.01 per Mcfe, for the three months ended
March 31, 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
UNIT COSTS
|
|
|
March 31,
|
|
|
|
|
2014
|
|
|
2013 (a)
|
|
Production segment costs: ($ / Mcfe)
|
|
|
|
|
|
|
|
LOE
|
|
|
$
|
0.14
|
|
|
$
|
0.16
|
|
|
Production taxes
|
|
|
|
0.16
|
|
|
|
0.15
|
|
|
SG&A
|
|
|
|
0.24
|
|
|
|
0.28
|
|
|
|
|
|
$
|
0.54
|
|
|
$
|
0.59
|
|
|
Midstream segment costs: ($ / Mcfe)
|
|
|
|
|
|
|
|
Gathering and transmission
|
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
SG&A
|
|
|
|
0.14
|
|
|
|
0.15
|
|
|
|
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
Total ($ / Mcfe)
|
|
|
$
|
0.88
|
|
|
$
|
0.98
|
|
(a) NGLs and crude oil were converted to Mcfe at the rate of six Mcfe
per barrel for all periods. Information for the three months ended March
31, 2013, has been recast to reflect this conversion rate.
|
|
|
EQT PRODUCTION
|
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
Sales volume detail (MMcfe):
|
|
|
|
|
|
|
|
Horizontal Marcellus Play (a)
|
|
|
|
83,126
|
|
|
|
55,452
|
|
Horizontal Huron Play
|
|
|
|
7,119
|
|
|
|
9,413
|
|
CBM Play
|
|
|
|
2,914
|
|
|
|
3,116
|
|
Other
|
|
|
|
12,964
|
|
|
|
13,733
|
|
Total production sales volume (b)
|
|
|
|
106,123
|
|
|
|
81,714
|
|
|
|
|
|
|
|
|
|
Average daily sales volume (MMcfe/d)
|
|
|
|
1,179
|
|
|
|
908
|
|
|
|
|
|
|
|
|
|
Average effective sales price to EQT Production ($/Mcfe)
|
|
|
$
|
4.40
|
|
|
$
|
3.05
|
|
|
|
|
|
|
|
|
|
Lease operating expenses (LOE), excluding production taxes ($/Mcfe)
|
|
|
$
|
0.14
|
|
|
$
|
0.16
|
|
Production taxes ($/Mcfe)
|
|
|
$
|
0.16
|
|
|
$
|
0.15
|
|
Production depletion ($/Mcfe)
|
|
|
$
|
1.21
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
DD&A (thousands):
|
|
|
|
|
|
|
|
Production depletion
|
|
|
$
|
128,557
|
|
|
$
|
122,491
|
|
Other DD&A
|
|
|
|
2,682
|
|
|
|
2,418
|
|
Total DD&A (thousands)
|
|
|
$
|
131,239
|
|
|
$
|
124,909
|
|
|
|
|
|
|
|
|
|
Capital expenditures (thousands)
|
|
|
$
|
408,331
|
|
|
$
|
243,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenues
|
|
|
$
|
467,745
|
|
|
$
|
250,511
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
LOE, excluding production taxes
|
|
|
|
14,847
|
|
|
|
13,039
|
|
Production taxes
|
|
|
|
17,093
|
|
|
|
11,851
|
|
Exploration expense
|
|
|
|
1,412
|
|
|
|
3,730
|
|
SG&A
|
|
|
|
25,949
|
|
|
|
22,885
|
|
DD&A
|
|
|
|
131,239
|
|
|
|
124,909
|
|
Total operating expenses
|
|
|
$
|
190,540
|
|
|
$
|
176,414
|
|
Operating income
|
|
|
$
|
277,205
|
|
|
$
|
74,097
|
(a) Includes Upper Devonian wells.
(b) NGLs and crude oil were
converted to Mcfe at the rate of six Mcfe per barrel for all periods.
Information for the three months ended March 31, 2013 has been recast to
reflect this conversion rate.
|
|
|
EQT MIDSTREAM
|
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
Gathered volume (BBtu)
|
|
|
|
126,164
|
|
|
|
101,231
|
|
Average gathering fee ($/MMBtu)
|
|
|
$
|
0.71
|
|
|
$
|
0.81
|
|
Gathering and compression expense ($/MMBtu)
|
|
|
$
|
0.16
|
|
|
$
|
0.19
|
|
Transmission pipeline throughput (BBtu)
|
|
|
|
144,362
|
|
|
|
80,971
|
|
Net operating revenues (thousands):
|
|
|
|
|
|
|
|
Gathering
|
|
|
$
|
89,376
|
|
|
$
|
81,814
|
|
Transmission
|
|
|
|
52,109
|
|
|
|
37,307
|
|
Storage, marketing and other
|
|
|
|
7,220
|
|
|
|
9,759
|
|
Total net operating revenues
|
|
|
$
|
148,705
|
|
|
$
|
128,880
|
|
|
|
|
|
|
|
|
|
Capital expenditures (thousands)
|
|
|
$
|
83,213
|
|
|
$
|
49,144
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
$
|
166,226
|
|
|
$
|
146,688
|
|
Purchased gas costs
|
|
|
|
17,521
|
|
|
|
17,808
|
|
Total net operating revenues
|
|
|
|
148,705
|
|
|
|
128,880
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
25,154
|
|
|
|
22,673
|
|
SG&A
|
|
|
|
19,473
|
|
|
|
13,774
|
|
DD&A
|
|
|
|
21,009
|
|
|
|
18,219
|
|
Total operating expenses
|
|
|
|
65,636
|
|
|
|
54,666
|
|
Operating income
|
|
|
$
|
83,069
|
|
|
$
|
74,214
|
