PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced second quarter 2014 net
income attributable to EQT of $110.9 million, or $0.73 per diluted
share, compared to second quarter 2013 earnings of $86.9 million, or
$0.57 per diluted share. Adjusted earnings for the second quarter 2014,
excluding the impact of a few items including a $37.7 million gain on
the Nora asset exchange, were $88.3 million, or $0.58 per diluted share
– which was 3% higher than the $85.5 million, or $0.56 per diluted share
last year. Adjusted operating cash flow in the quarter was $317.2
million, compared to $319.1 million; and adjusted cash flow per share
was $2.08, compared to $2.11. The Non-GAAP financial measures are
reconciled in the Non-GAAP Disclosures section of this news release.
Second Quarter Highlights 2014 vs. 2013:
-
Production sales volume was 17% higher
-
Midstream transmission operating revenues were 33% higher
-
Midstream gathered volume was 17% higher
-
Reiterates full-year production volume guidance of 465-480 Bcfe
EQT’s second quarter 2014 operating income was $224.8 million. Adjusted
operating income was 16% higher than the prior year, primarily due to
increases in production sales volume, contracted transmission capacity,
and gathered volume, and partially offset by a 10% lower average
realized price. Net operating revenues increased 9% to $474.4 million in
the quarter, while net operating expenses increased only 4% to $287.4
million.
RESULTS BY BUSINESS
EQT PRODUCTION
With its continued focus on the Marcellus Shale, EQT Production achieved
sales volume of 110.1 Bcfe in the second quarter 2014, representing a
17% increase compared to the second quarter 2013. Sales volume from the
Marcellus/Upper Devonian averaged 943.4 MMcfe per day, 25% higher; and
natural gas liquids (NGL) volume totaled 1,326 Mbbls, 15% higher. Sales
volume was approximately 4 Bcf below guidance due to the delay of
turning-in-line 22 wells on 3 multi-well pads; all of which are
currently producing.
Production operating income for the second quarter totaled $144.7
million, an increase of 8% from last year when excluding a pre-tax gain
of $31.0 million related to the Nora asset exchange. As a result of an
increase in sales volume, partially offset by a lower average realized
price, net operating revenue for the quarter was $322.1 million, 5%
higher.
Consistent with the growth in sales volume, EQT Production’s operating
expenses for the quarter were $208.4 million, $7.3 million higher than
the same period last year. Selling, general and administrative (SG&A)
expense was $4.9 million higher excluding a $4.8 million legal reserve.
Also, production taxes were $3.2 million higher; exploration expense was
$1.3 million higher; and lease operating expense (LOE), less production
taxes, was $0.9 million higher, although per unit LOE, excluding
production taxes, decreased 7% to $0.14 per Mcfe. The depreciation,
depletion and amortization (DD&A) expense was $7.8 million lower as the
per unit depletion rate was 19% lower than last year.
The Company drilled (spud) 89 gross wells during the quarter -- 55 wells
targeted the Marcellus with an average length-of-pay of 6,140 feet; 22
wells targeted the Huron with an average length-of-pay of 5,970 feet; 11
wells targeted the Upper Devonian with an average length-of-pay of 6,960
feet; and 1 well targeted the Wolfcamp with a length-of-pay of 7,000
feet.
The Company reiterates its 2014 production sales volume guidance of 465
– 480 Bcfe; and expects liquids volume to be 6,500 – 6,600 Mbbls.
Production sales volume for the third quarter 2014 is projected to be
118 – 122 Bcfe; and liquids volume is expected to be 1,800 – 1,900 Mbbls.
Realized Price
The NYMEX price of natural gas averaged $4.67 per MMBtu in the second
quarter 2014, which was 14% higher than the average of $4.09 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 second quarter, the
Company’s average realized price was $3.85 per Mcfe, 10% lower than the
$4.29 per Mcfe realized last year – with $2.92 per Mcfe allocated to EQT
Production and $0.93 per Mcfe allocated to EQT Midstream. This decrease
in the realized price reflects the impact of regional basis, which is
recorded at the first liquid delivery point, and during the quarter
averaged a negative $0.78 per Mcfe compared to a negative $0.02 in the
second quarter 2013. This decrease in basis more-than-offset the impact
of higher NYMEX pricing net of hedging. Net third-party gathering and
transmission costs per Mcfe were flat quarter-over-quarter.
Based on current market conditions, EQT is forecasting basis to average
negative $1.00 to negative $1.10 per Mcfe, and third-party gathering and
transmission recoveries to average positive $0.60 to positive $0.65 per
Mcfe, for the second half of 2014.
EQT MIDSTREAM
EQT Midstream’s second quarter 2014 operating income was $88.5 million,
13% higher than the second quarter last year when excluding a pre-tax
gain of $6.8 million related to the Nora asset exchange. Net operating
revenue was $152.3 million, 16% higher. Net gathering revenue was $91.2
million, an increase of 5%, which was primarily due to a 17% increase in
gathered volume, partially offset by lower average gathering rates. Net
transmission revenue totaled $51.5 million, a 33% increase over last
year as a result of higher contracted capacity and volumes. Net storage,
marketing and other revenues totaled $9.6 million, which included an
increase of $4.1 million as a result of the storage assets acquired in
the Equitable Gas Company transaction. Operating expenses for the
quarter were $70.6 million, $11.5 million higher than the same period
last year and consistent with the volume growth. Per unit gathering and
compression expense decreased by 6% as gathered volumes continued to
grow faster than expenses.
OTHER BUSINESS
Analyst Presentation
Updates were made to EQT’s analyst presentation, which include: the cash
flow forecast and valuation of EQT’s general partner interest in EQT
Midstream Partners, LP; an increase in Marcellus net acreage from
560,000 to 580,000; an increase in initial production rate and estimated
ultimate recovery for Marcellus acreage in southwest Pennsylvania; the
introduction of a new Marcellus development area in the dry gas zone of
northern West Virginia; an initial Upper Devonian type curve; a dry gas
net acreage map of Utica/Point Pleasant; and minor updates throughout.
EQT’s analyst presentation is available on its Investor Relations
website at http://ir.eqt.com.
EQT Midstream Partners, LP
EQT has a 34.4% limited partner interest and a 2% general partner
interest in EQT Midstream Partners, LP, (Partnership) whose results are
consolidated in EQT’s results. For the quarter, EQT Corporation recorded
$27.3 million, or $0.18 of earnings per diluted share, attributable to
non-controlling interests. The Partnership’s results for the second
quarter 2014 were also released today and are available at www.eqtmidstreampartners.com.
On July 22, 2014, the Partnership announced a cash distribution to its
unitholders of $0.52 per unit for the second quarter, from which EQT
will receive $11.1 million on its limited partner units. In addition,
EQT will receive $0.7 million related to its 2% general partner
interest, and $1.9 million for its incentive distribution rights.
Ohio Valley Connector
EQT Midstream Partners, LP announced that it will construct and own the
Ohio Valley Connector (OVC) pipeline, which is expected to be in-service
in the second quarter 2016, subject to Federal Energy Regulatory
Commission (FERC) approval. The OVC will connect its transmission and
storage system in northern West Virginia to Clarington, Ohio. At
Clarington, the OVC will interconnect with the Rockies Express Pipeline
and the Texas Eastern Pipeline.
Jupiter
In May 2014, EQT sold its Jupiter natural gas gathering system to the
Partnership for $1.18 billion; and in conjunction, the Partnership
completed an underwritten public offering of 12,362,500 common units.
Mountain Valley Pipeline
On July 10, 2014, EQT completed a non-binding open season for the
proposed Mountain Valley Pipeline project. The open season resulted in
significant interest from many potential shippers. EQT is working toward
binding precedent agreements with shippers and expects to have an update
on the project within the next several months. EQT currently expects the
330-mile project, which is subject to Board and FERC approval, to extend
from the Partnership’s transmission and storage system in West Virginia
to southern Virginia to provide approximately two billion cubic feet per
day of firm transmission capacity. The pipeline is expected to be
constructed and owned by a joint venture between EQT or the Partnership
and NextEra Energy, Inc. and to be in-service by the end of 2018.
Hedging
The Company’s total natural gas production hedge positions through
December 2016 are:
|
|
|
2014**
|
|
2015
|
|
2016***
|
|
Fixed Price
|
|
|
|
|
|
|
|
Total Volume (Bcf)
|
|
|
114
|
|
|
138
|
|
|
64
|
|
Average Price per Mcf (NYMEX)*
|
|
$
|
4.36
|
|
$
|
4.33
|
|
$
|
4.45
|
|
|
|
|
|
|
|
|
|
Collars
|
|
|
|
|
|
|
|
Total Volume (Bcf)
|
|
|
12
|
|
|
23
|
|
|
–
|
|
Average Floor Price per Mcf (NYMEX)*
|
|
$
|
5.05
|
|
$
|
5.03
|
|
$
|
–
|
|
Average Cap Price per Mcf (NYMEX)*
|
|
$
|
8.85
|
|
$
|
8.97
|
|
$
|
–
|
|
*The average price is based on a conversion rate of 1.05 MMBtu/Mcf
|
|
**July through December
|
|
***The Company also has a natural gas sales agreement for
approximately 35 Bcf that includes a NYMEX ceiling price of $4.88
per Mcf
|
|
|
Stock Buyback
During the quarter, EQT repurchased and retired 300,000 shares of EQT
stock under the current one million share repurchase authorization.
Nora Asset Exchange
In June 2014, the Company announced the completion of the Nora asset
exchange with Range Resources Corporation. EQT received approximately
73,000 net acres and more than 900 producing wells in the Permian Basin
of Texas. Range received approximately 138,000 net acres, approximately
2,000 producing wells, and the remaining interest in a supporting
gathering system in the Nora Field of Virginia, plus $157.3 million
cash, subject to the normal post-closing purchase price adjustments. The
Company recorded a pre-tax, non-cash gain of $37.7 million; with $31.0
million realized at EQT Production with the remainder realized at EQT
Midstream.
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 and processing 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:
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Operating income (thousands):
|
|
|
|
|
|
|
|
|
|
EQT Production
|
|
$
|
144,689
|
|
|
$
|
105,056
|
|
|
$
|
421,894
|
|
|
$
|
179,153
|
|
|
EQT Midstream
|
|
|
88,527
|
|
|
|
72,246
|
|
|
|
171,596
|
|
|
|
146,460
|
|
|
Unallocated expenses
|
|
|
(8,445
|
)
|
|
|
(15,322
|
)
|
|
|
(11,928
|
)
|
|
|
(19,154
|
)
|
|
Operating income
|
|
$
|
224,771
|
|
|
$
|
161,980
|
|
|
$
|
581,562
|
|
|
$
|
306,459
|
|
Unallocated expense is primarily due to certain incentive compensation
and administrative costs in excess of budget that are not allocated to
the operating segments.
Marcellus Horizontal Well Status (cumulative since inception)
|
|
|
As of
6/30/14
|
|
As of
3/31/14
|
|
As of
12/31/13
|
|
As of
9/30/13
|
|
As of
6/30/13
|
|
Wells spud
|
|
628
|
|
573
|
|
527
|
|
486
|
|
444
|
|
Wells online
|
|
439
|
|
390
|
|
373
|
|
338
|
|
322
|
|
Wells complete, not online
|
|
44
|
|
42
|
|
32
|
|
20
|
|
11
|
|
Frac stages (spud wells)*
|
|
15,632
|
|
13,512
|
|
11,991
|
|
10,613
|
|
9,754
|
|
Frac stages online
|
|
9,289
|
|
8,012
|
|
7,567
|
|
6,596
|
|
6,297
|
|
Frac stages complete, not online
|
|
1,381
|
|
959
|
|
708
|
|
553
|
|
224
|
*Includes planned stages for spud wells that have not yet been
hydraulically fractured.
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
June 30, 2014.
Reconciliation of Adjusted Operating Income:
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013
|
|
Operating income as reported
|
|
$
|
224,771
|
|
|
$
|
161,980
|
|
|
(Deduct) / add back:
|
|
|
|
|
|
Hedging ineffectiveness (gain) loss
|
|
|
(987
|
)
|
|
|
7,473
|
|
|
Derivative loss (gain), less net cash from settlements
|
|
|
8,990
|
|
|
|
(1,476
|
)
|
|
Non-cash gain on Nora asset exchange
|
|
|
(37,749
|
)
|
|
|
–
|
|
|
Adjusted operating income
|
|
$
|
195,025
|
|
|
$
|
167,977
|
|
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 June 30, 2014.
Reconciliation of Adjusted Net Income and Adjusted Earnings Per
Diluted Share:
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013
|
|
Net income attributable to EQT, as reported
|
|
$
|
110,921
|
|
|
$
|
86,856
|
|
|
(Deduct) / add back:
|
|
|
|
|
|
Hedging ineffectiveness (gain) loss
|
|
|
(987
|
)
|
|
|
7,473
|
|
|
Derivative loss (gain), less net cash from settlements
|
|
|
8,990
|
|
|
|
(1,476
|
)
|
|
Non-cash gain on Nora asset exchange
|
|
|
(37,749
|
)
|
|
|
–
|
|
|
Tax impact
|
|
|
8,992
|
|
|
|
(1,803
|
)
|
|
Subtotal
|
|
$
|
90,167
|
|
|
$
|
91,050
|
|
|
Income from discontinued operations, net of tax
|
|
|
(1,876
|
)
|
|
|
(5,559
|
)
|
|
Adjusted net income attributable to EQT, as reported
|
|
$
|
88,291
|
|
|
$
|
85,491
|
|
|
Diluted weighted average common shares outstanding
|
|
|
152,570
|
|
|
|
151,393
|
|
|
Diluted EPS, as adjusted
|
|
$
|
0.58
|
|
|
$
|
0.56
|
|
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 EQT’s quarterly
report on Form 10-Q for the quarter ended June 30, 2014.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013((a))
|
|
2014
|
|
2013((a))
|
|
Net Income
|
|
$
|
138,264
|
|
|
$
|
94,118
|
|
|
$
|
349,199
|
|
|
$
|
203,399
|
|
|
(Deduct) add back:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
157,219
|
|
|
|
168,577
|
|
|
|
309,330
|
|
|
|
317,693
|
|
|
Deferred income taxes
|
|
|
(31,301
|
)
|
|
|
28,905
|
|
|
|
54,577
|
|
|
|
63,252
|
|
|
Hedging ineffectiveness (gain) loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(987
|
)
|
|
|
7,473
|
|
|
|
21,273
|
|
|
|
7,954
|
|
|
Derivative loss (gain), less net cash from settlements
|
|
|
8,990
|
|
|
|
(1,476
|
)
|
|
|
7,043
|
|
|
|
(878
|
)
|
|
Non-cash incentive compensation
|
|
|
9,493
|
|
|
|
17,146
|
|
|
|
20,810
|
|
|
|
27,480
|
|
|
Non-cash gain on Nora asset exchange
|
|
|
(37,749
|
)
|
|
|
–
|
|
|
|
(37,749
|
)
|
|
|
–
|
|
|
Non-cash gain on disposition
|
|
|
(3,598
|
)
|
|
|
–
|
|
|
|
(3,598
|
)
|
|
|
–
|
|
|
Other items, net
|
|
|
2,898
|
|
|
|
3,326
|
|
|
|
2,308
|
|
|
|
5,938
|
|
|
Operating cash flow:
|
|
$
|
243,229
|
|
|
$
|
318,069
|
|
|
$
|
723,193
|
|
|
$
|
624,838
|
|
|
|
|
|
|
|
|
|
|
|
|
(Deduct) / add back:
|
|
|
|
|
|
|
|
|
|
Changes in other assets and liabilities
|
|
|
42,394
|
|
|
|
(20,364
|
)
|
|
|
71,454
|
|
|
|
(27,878
|
)
|
|
Net cash provided by operating activities
|
|
$
|
285,623
|
|
|
$
|
297,705
|
|
|
$
|
794,647
|
|
|
$
|
596,960
|
|
(a) Includes results of discontinued operations
Adjusted Operating Cash Flow and Adjusted Cash Flow Per Share
Adjusted 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 also
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. 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 operating cash flow and 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 operating cash flow and 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
June 30, 2014.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Operating cash flow (a non-GAAP measure reconciled above)
|
|
$
|
243,229
|
|
$
|
318,069
|
|
$
|
723,193
|
|
$
|
624,838
|
|
(Deduct) / add back:
|
|
|
|
|
|
|
|
|
|
Exploration expense (cash)
|
|
|
1,208
|
|
|
985
|
|
|
2,352
|
|
|
1,735
|
|
Cash taxes on transactions
|
|
|
72,788
|
|
|
–
|
|
|
72,788
|
|
|
–
|
|
Adjusted operating cash flow
|
|
$
|
317,225
|
|
$
|
319,054
|
|
$
|
798,333
|
|
$
|
626,573
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
152,570
|
|
|
151,393
|
|
|
152,537
|
|
|
151,191
|
|
Adjusted cash flow per share
|
|
$
|
2.08
|
|
$
|
2.11
|
|
$
|
5.23
|
|
$
|
4.14
|
Derivative Gain (Loss), Less Net Cash from Settlements
The Company reports gain (loss) for hedging ineffectiveness and gain
(loss) on derivatives not designated as hedges within operating
revenues. The tables below reconcile derivative gain (loss), less net
cash from settlements, a non-GAAP supplemental financial measure, to
gain (loss) on derivatives not designated as hedges, presented in
accordance with GAAP, as derived from the financial statements to be
included in EQT’s quarterly report on Form 10-Q for the quarter ended
June 30, 2014. Derivative gains (losses), less net cash from settlements
is presented because it is an important measure used by management,
analysts and investors to evaluate period-to-period comparisons of
earnings and cash flow trends. Derivative gains (losses), less net cash
from settlements, should not be considered as an alternative to gains
(losses) on derivatives not designated as hedges presented in accordance
with GAAP.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Operating revenues, excluding hedging ineffectiveness and derivative
gain (loss)
|
|
$
|
533,706
|
|
|
$
|
479,054
|
|
|
$
|
1,226,945
|
|
|
$
|
895,680
|
|
|
Gain (loss) for hedging ineffectiveness (a)
|
|
|
987
|
|
|
|
(7,473
|
)
|
|
|
(21,273
|
)
|
|
|
(7,954
|
)
|
|
(Loss) gain on derivatives not designated as hedges
|
|
|
(8,525
|
)
|
|
|
1,512
|
|
|
|
(17,879
|
)
|
|
|
1,250
|
|
|
Operating revenues, as reported
|
|
$
|
526,168
|
|
|
$
|
473,093
|
|
|
$
|
1,187,793
|
|
|
$
|
888,976
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on derivatives not designated as hedges
|
|
$
|
(8,525
|
)
|
|
$
|
1,512
|
|
|
$
|
(17,879
|
)
|
|
$
|
1,250
|
|
|
Net cash settlements (received) paid on derivative instruments not
designated as hedges
|
|
|
(465
|
)
|
|
|
(36
|
)
|
|
|
10,836
|
|
|
|
(372
|
)
|
|
Derivative (loss) gain, less net cash from settlements
|
|
$
|
(8,990
|
)
|
|
$
|
1,476
|
|
|
$
|
(7,043
|
)
|
|
$
|
878
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT Production derivative gain (loss), less net cash from settlements
|
|
$
|
(9,510
|
)
|
|
$
|
–
|
|
|
$
|
(4,933
|
)
|
|
$
|
132
|
|
|
EQT Midstream derivative gain (loss), less net cash from settlements
|
|
|
520
|
|
|
|
1,476
|
|
|
|
(2,110
|
)
|
|
|
746
|
|
|
Derivative (loss) gain, less net cash from settlements
|
|
$
|
(8,990
|
)
|
|
$
|
1,476
|
|
|
$
|
(7,043
|
)
|
|
$
|
878
|
|
(a) Relates to EQT Production
Net Operating Revenues and Net Operating Expenses
Net operating revenues and net operating expenses are non-GAAP
supplemental financial measures that exclude transportation and
processing costs, but are presented because they are important
analytical measures used by management to evaluate period-to-period
comparisons of revenue and operating expenses. Transportation and
processing 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 June 30, 2014.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Net operating revenues
|
|
$
|
474,445
|
|
$
|
437,227
|
|
$
|
1,090,895
|
|
$
|
816,379
|
|
Plus: transportation and processing
|
|
|
51,723
|
|
|
35,866
|
|
|
96,898
|
|
|
72,597
|
|
Operating revenues
|
|
$
|
526,168
|
|
$
|
473,093
|
|
$
|
1,187,793
|
|
$
|
888,976
|
|
|
|
|
|
|
|
|
|
|
|
Net operating expenses
|
|
$
|
287,423
|
|
$
|
275,247
|
|
$
|
547,082
|
|
$
|
509,920
|
|
Plus: transportation and processing
|
|
|
51,723
|
|
|
35,866
|
|
|
96,898
|
|
|
72,597
|
|
Total operating expenses
|
|
$
|
339,146
|
|
$
|
311,113
|
|
$
|
643,980
|
|
$
|
582,517
|
Q2 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 and the analyst
presentation for these discussions, which is updated periodically, is
available via the Company’s investor relations website at http://ir.eqt.com.
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 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 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; the Company’s access to, and timing of, capacity on
third-party pipelines; infrastructure programs (including the timing,
cost and capacity of the transmission and gathering expansion projects);
the timing, cost and capacity of the Ohio Valley Connector (OVC) and
Mountain Valley Pipeline (MVP) projects; the expected terms and
structure of the proposed joint venture related to the MVP project,
including the EQT affiliate(s) to own and/or operate MVP; 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; the projected cash
flows resulting from, and the value of, the Company’s general partner
and limited partner interests and incentive distribution rights in the
Partnership, including the assumptions used in making such projections;
internal rate of return (IRR) and returns per well; projected capital
expenditures; the amount and timing of any repurchases under the
Company’s share repurchase authorization; 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.
With respect to the proposed OVC and MVP projects, these risks and
uncertainties include, among others, the ability to obtain regulatory
permits and approvals, the ability to secure customer contracts, the
availability of skilled labor, equipment and materials, and, with
respect to the MVP, the risk that the parties may not consummate the
joint venture. Additional 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)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(Thousands, except per share amounts)
|
|
Operating revenues
|
|
$
|
526,168
|
|
$
|
473,093
|
|
$
|
1,187,793
|
|
$
|
888,976
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Transportation and processing
|
|
|
51,723
|
|
|
35,866
|
|
|
96,898
|
|
|
72,597
|
|
Operation and maintenance
|
|
|
27,587
|
|
|
24,067
|
|
|
52,808
|
|
|
47,300
|
|
Production
|
|
|
31,882
|
|
|
27,747
|
|
|
63,822
|
|
|
52,636
|
|
Exploration
|
|
|
7,452
|
|
|
6,138
|
|
|
8,871
|
|
|
9,868
|
|
Selling, general and administrative
|
|
|
63,283
|
|
|
54,822
|
|
|
112,251
|
|
|
94,607
|
|
Depreciation, depletion and amortization
|
|
|
157,219
|
|
|
162,473
|
|
|
309,330
|
|
|
305,509
|
|
Total operating expenses
|
|
|
339,146
|
|
|
311,113
|
|
|
643,980
|
|
|
582,517
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gain on Nora asset exchange
|
|
|
37,749
|
|
|
−
|
|
|
37,749
|
|
|
−
|
|
Operating income
|
|
|
224,771
|
|
|
161,980
|
|
|
581,562
|
|
|
306,459
|
|
Other income
|
|
|
2,579
|
|
|
2,041
|
|
|
5,130
|
|
|
4,322
|
|
Interest expense
|
|
|
31,873
|
|
|
37,384
|
|
|
63,841
|
|
|
75,136
|
|
Income before income taxes
|
|
|
195,477
|
|
|
126,637
|
|
|
522,851
|
|
|
235,645
|
|
Income taxes
|
|
|
59,089
|
|
|
38,078
|
|
|
175,424
|
|
|
72,846
|
|
Income from continuing operations
|
|
|
136,388
|
|
|
88,559
|
|
|
347,427
|
|
|
162,799
|
|
Income from discontinued operations, net of tax
|
|
|
1,876
|
|
|
5,559
|
|
|
1,772
|
|
|
40,600
|
|
Net income
|
|
|
138,264
|
|
|
94,118
|
|
|
349,199
|
|
|
203,399
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
27,343
|
|
|
7,262
|
|
|
46,085
|
|
|
16,288
|
|
Net income attributable to EQT Corporation
|
|
$
|
110,921
|
|
$
|
86,856
|
|
$
|
303,114
|
|
$
|
187,111
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to EQT Corporation:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
109,045
|
|
$
|
81,297
|
|
$
|
301,342
|
|
$
|
146,511
|
|
Income from discontinued operations
|
|
|
1,876
|
|
|
5,559
|
|
|
1,772
|
|
|
40,600
|
|
Net income
|
|
$
|
110,921
|
|
$
|
86,856
|
|
$
|
303,114
|
|
$
|
187,111
|
|
|
|
Earnings per share of common stock attributable to EQT Corporation:
|
|
Basic:
|
|
Weighted average common stock outstanding
|
|
|
151,744
|
|
|
150,525
|
|
|
151,522
|
|
|
150,425
|
|
Income from continuing operations
|
|
$
|
0.72
|
|
$
|
0.54
|
|
$
|
1.99
|
|
$
|
0.97
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
0.04
|
|
|
0.01
|
|
|
0.27
|
|
Net income
|
|
$
|
0.73
|
|
$
|
0.58
|
|
$
|
2.00
|
|
$
|
1.24
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
152,570
|
|
|
151,393
|
|
|
152,537
|
|
|
151,191
|
|
Income from continuing operations
|
|
$
|
0.72
|
|
$
|
0.54
|
|
$
|
1.98
|
|
$
|
0.97
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
0.03
|
|
|
0.01
|
|
|
0.27
|
|
Net income
|
|
$
|
0.73
|
|
$
|
0.57
|
|
$
|
1.99
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT Corporation
|
|
Price Reconciliation
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
in thousands (unless noted)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
LIQUIDS
|
|
|
|
|
|
|
|
|
|
Natural Gas Liquids (NGLs):
|
|
|
|
|
|
|
|
|
|
Sales Volume (MMcfe) (a)
|
|
|
7,954
|
|
|
|
6,931
|
|
|
|
15,721
|
|
|
|
13,623
|
|
|
Sales Volume (Mbbls)
|
|
|
1,326
|
|
|
|
1,155
|
|
|
|
2,620
|
|
|
|
2,270
|
|
|
Gross Price ($/Bbl)
|
|
$
|
43.78
|
|
|
$
|
42.65
|
|
|
$
|
49.67
|
|
|
$
|
44.35
|
|
|
Gross NGL Revenue
|
|
$
|
58,034
|
|
|
$
|
49,260
|
|
|
$
|
130,148
|
|
|
$
|
100,683
|
|
|
Oil:
|
|
|
|
|
|
|
|
|
|
Sales Volume (MMcfe) (a)
|
|
|
395
|
|
|
|
327
|
|
|
|
699
|
|
|
|
695
|
|
|
Sales Volume (Mbbls)
|
|
|
66
|
|
|
|
54
|
|
|
|
116
|
|
|
|
116
|
|
|
Net Price ($/Bbl)
|
|
$
|
89.75
|
|
|
$
|
83.95
|
|
|
$
|
86.85
|
|
|
$
|
82.55
|
|
|
Net Oil Revenue
|
|
$
|
5,903
|
|
|
$
|
4,575
|
|
|
$
|
10,117
|
|
|
$
|
9,561
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liquids Revenue
|
|
|
63,937
|
|
|
|
53,835
|
|
|
|
140,265
|
|
|
|
110,244
|
|
|
GAS
|
|
|
|
|
|
|
|
|
|
Sales Volume - Natural Gas (MMBtu)
|
|
$
|
101,788
|
|
|
$
|
87,226
|
|
|
$
|
199,839
|
|
|
$
|
161,880
|
|
|
Sales Volume – Ethane sold as natural gas
(MMBtu)
|
|
|
8,234
|
|
|
|
6,962
|
|
|
|
15,165
|
|
|
|
13,379
|
|
|
Sales Volume (MMBtu)
|
|
|
110,022
|
|
|
|
94,188
|
|
|
|
215,004
|
|
|
|
175,259
|
|
|
NYMEX Price ($/MMBtu) (b)
|
|
$
|
4.67
|
|
|
$
|
4.09
|
|
|
$
|
4.79
|
|
|
$
|
3.74
|
|
|
Gas Revenue
|
|
$
|
513,359
|
|
|
$
|
385,417
|
|
|
$
|
1,029,995
|
|
|
$
|
655,843
|
|
|
Basis
|
|
|
(85,701
|
)
|
|
|
(1,576
|
)
|
|
|
(109,370
|
)
|
|
|
(3,118
|
)
|
|
Gross Gas Revenue (unhedged)
|
|
$
|
427,658
|
|
|
$
|
383,841
|
|
|
$
|
920,625
|
|
|
$
|
652,725
|
|
|
Sales Volume (MMcf)
|
|
|
101,788
|
|
|
|
87,226
|
|
|
|
199,839
|
|
|
|
161,880
|
|
|
Gas Price ($/Mcf) (unhedged)
|
|
$
|
4.20
|
|
|
$
|
4.40
|
|
|
$
|
4.61
|
|
|
$
|
4.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross Gas & Liquids Revenue (unhedged)
|
|
$
|
491,595
|
|
|
$
|
437,676
|
|
|
$
|
1,060,890
|
|
|
$
|
762,969
|
|
|
Hedge impact
|
|
|
(14,838
|
)
|
|
|
9,728
|
|
|
|
(67,101
|
)
|
|
|
53,226
|
|
|
Total Gross Gas & Liquids Revenue
|
|
$
|
476,757
|
|
|
$
|
447,404
|
|
|
$
|
993,789
|
|
|
$
|
816,195
|
|
|
Total Sales Volume (MMcfe)
|
|
|
110,136
|
|
|
|
94,483
|
|
|
|
216,259
|
|
|
|
176,198
|
|
|
Average hedge adjusted price ($/Mcfe)
|
|
$
|
4.33
|
|
|
$
|
4.74
|
|
|
$
|
4.60
|
|
|
$
|
4.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream Revenue Deductions ($/Mcfe)
|
|
|
|
|
|
|
|
|
|
Gathering to EQT Midstream
|
|
$
|
(0.74
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.84
|
)
|
|
Transmission to EQT Midstream
|
|
|
(0.19
|
)
|
|
|
(0.24
|
)
|
|
|
(0.20
|
)
|
|
|
(0.23
|
)
|
|
Third-party gathering and transmission
|
|
|
(0.54
|
)
|
|
|
(0.59
|
)
|
|
|
(0.54
|
)
|
|
|
(0.61
|
)
|
|
Third-party gathering and transmission recoveries, net
|
|
|
0.20
|
|
|
|
0.25
|
|
|
|
0.66
|
|
|
|
0.32
|
|
|
Third-party processing
|
|
|
(0.14
|
)
|
|
|
(0.11
|
)
|
|
|
(0.13
|
)
|
|
|
(0.11
|
)
|
|
Total midstream revenue deductions
|
|
|
(1.41
|
)
|
|
|
(1.50
|
)
|
|
|
(0.95
|
)
|
|
|
(1.47
|
)
|
|
Average effective sales price to EQT Production (c)
|
|
$
|
2.92
|
|
|
$
|
3.24
|
|
|
$
|
3.65
|
|
|
$
|
3.16
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT Revenue ($/Mcfe)
|
|
|
|
|
|
|
|
|
|
Revenues to EQT Midstream
|
|
$
|
0.93
|
|
|
$
|
1.05
|
|
|
$
|
0.94
|
|
|
$
|
1.07
|
|
|
Revenues to EQT Production
|
|
|
2.92
|
|
|
|
3.24
|
|
|
|
3.65
|
|
|
|
3.16
|
|
|
Average effective sales price to EQT Corporation (c)
|
|
$
|
3.85
|
|
|
$
|
4.29
|
|
|
$
|
4.59
|
|
|
$
|
4.23
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
NGLs and crude oil were converted to Mcfe at the rate of six Mcfe
per barrel for all periods. Information for the three and six months
ended June 30, 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 $4.67 and $4.09 for
the three months ended June 30, 2014 and 2013, respectively, and
$4.80 and $3.71 for the six months ended June 30, 2014 and 2013,
respectively).
|
|
(c)
|
|
The average effective sales price to EQT Production and EQT
Corporation included the unfavorable impact of hedging
ineffectiveness and derivative losses, less net cash from
settlements of $0.08 per Mcfe and $0.12 per Mcfe for the three and
six months ended June 30, 2014, respectively and $0.08 per Mcfe and
$0.04 per Mcfe for the three and six months ended June 30, 2013,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
UNIT COSTS
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2014
|
|
2013 (a)
|
|
2014
|
|
2013 (a)
|
|
Production segment costs: ($/Mcfe)
|
|
|
|
|
|
|
|
|
|
LOE
|
|
$
|
0.14
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
$
|
0.16
|
|
|
Production taxes
|
|
|
0.15
|
|
|
0.14
|
|
|
|
0.15
|
|
|
0.14
|
|
|
SG&A
|
|
|
0.30
|
|
|
0.24
|
|
|
|
0.27
|
|
|
0.26
|
|
|
|
|
$
|
0.59
|
|
$
|
0.53
|
|
|
$
|
0.56
|
|
$
|
0.56
|
|
|
Midstream segment costs: ($/Mcfe)
|
|
|
|
|
|
|
|
|
|
Gathering and transmission
|
|
$
|
0.21
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
$
|
0.23
|
|
|
SG&A
|
|
|
0.16
|
|
|
0.15
|
|
|
|
0.15
|
|
|
0.15
|
|
|
|
|
$
|
0.37
|
|
$
|
0.37
|
|
|
$
|
0.35
|
|
$
|
0.38
|
|
|
Total ($/Mcfe)
|
|
$
|
0.96
|
|
$
|
0.90
|
|
|
$
|
0.91
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
NGLs and crude oil were converted to Mcfe at the rate of six Mcfe
per barrel for all periods. Information for the three and six
months ended June 30, 2013, has been recast to reflect this
conversion rate.
|
|
|
|
|
|
|
|
EQT PRODUCTION
|
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
Sales volume detail (MMcfe):
|
|
|
|
|
|
|
|
|
|
Horizontal Marcellus Play (a)
|
|
|
85,848
|
|
|
68,882
|
|
|
168,974
|
|
|
124,334
|
|
Horizontal Huron Play
|
|
|
7,859
|
|
|
8,743
|
|
|
14,978
|
|
|
18,156
|
|
CBM Play
|
|
|
2,592
|
|
|
3,116
|
|
|
5,506
|
|
|
6,232
|
|
Other
|
|
|
13,837
|
|
|
13,743
|
|
|
26,801
|
|
|
27,476
|
|
Total production sales volumes (b)
|
|
|
110,136
|
|
|
94,484
|
|
|
216,259
|
|
|
176,198
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales volumes (MMcfe/d)
|
|
|
1,210
|
|
|
1,038
|
|
|
1,195
|
|
|
973
|
|
|
|
|
|
|
|
|
|
|
|
Average effective sales price to EQT
Production ($/Mcfe)
|
|
$
|
2.92
|
|
$
|
3.24
|
|
$
|
3.65
|
|
$
|
3.16
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses (LOE), excluding
production taxes ($/Mcfe)
|
|
$
|
0.14
|
|
$
|
0.15
|
|
$
|
0.14
|
|
$
|
0.16
|
|
Production taxes ($/Mcfe)
|
|
$
|
0.15
|
|
$
|
0.14
|
|
$
|
0.15
|
|
$
|
0.14
|
|
Production depletion ($/Mcfe)
|
|
$
|
1.21
|
|
$
|
1.50
|
|
$
|
1.21
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
DD&A (thousands):
|
|
|
|
|
|
|
|
|
|
Production depletion
|
|
$
|
133,661
|
|
$
|
141,661
|
|
$
|
262,218
|
|
$
|
264,152
|
|
Other DD&A
|
|
|
2,590
|
|
|
2,412
|
|
|
5,272
|
|
|
4,830
|
|
Total DD&A (thousands)
|
|
$
|
136,251
|
|
$
|
144,073
|
|
$
|
267,490
|
|
$
|
268,982
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (thousands) (c)
|
|
$
|
930,228
|
|
$
|
394,391
|
|
$
|
1,338,559
|
|
$
|
637,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenues
|
|
$
|
322,100
|
|
$
|
306,132
|
|
$
|
789,845
|
|
$
|
556,643
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
LOE, excluding production taxes
|
|
|
15,513
|
|
|
14,612
|
|
|
30,360
|
|
|
27,651
|
|
Production taxes
|
|
|
16,369
|
|
|
13,134
|
|
|
33,462
|
|
|
24,985
|
|
Exploration expense
|
|
|
7,439
|
|
|
6,138
|
|
|
8,851
|
|
|
9,868
|
|
SG&A
|
|
|
32,825
|
|
|
23,119
|
|
|
58,774
|
|
|
46,004
|
|
DD&A
|
|
|
136,251
|
|
|
144,073
|
|
|
267,490
|
|
|
268,982
|
|
Total operating expenses
|
|
|
208,397
|
|
|
201,076
|
|
|
398,937
|
|
|
377,490
|
|
Gain on sale / exchange of assets
|
|
|
30,986
|
|
|
−
|
|
|
30,986
|
|
|
−
|
|
Operating income
|
|
$
|
144,689
|
|
$
|
105,056
|
|
$
|
421,894
|
|
$
|
179,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and six months
ended June 30, 2013 has been recast to reflect this conversion rate.
|
|
(c)
|
|
Includes $157.3 million of cash capital expenditures and $353.0
million of non-cash capital expenditures for the exchange of assets
with Range during the three and six months ended June 30, 2014, and
$112.5 million of capital expenditures for the purchase of acreage
and Marcellus wells from Chesapeake Energy Corporation and its
partners during the three and six months ended June 30, 2013.
|
|
|
|
|
|
|
|
EQT MIDSTREAM
|
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
Gathered volume (BBtu)
|
|
|
135,794
|
|
|
116,132
|
|
|
261,958
|
|
|
217,363
|
|
Average gathering fee ($/MMBtu)
|
|
$
|
0.67
|
|
$
|
0.75
|
|
$
|
0.69
|
|
$
|
0.78
|
|
Gathering and compression expense ($/MMBtu)
|
|
$
|
0.16
|
|
$
|
0.17
|
|
$
|
0.16
|
|
$
|
0.18
|
|
Transmission pipeline throughput (BBtu)
|
|
|
152,519
|
|
|
104,846
|
|
|
296,881
|
|
|
185,817
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenues (thousands):
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
$
|
91,204
|
|
$
|
86,992
|
|
$
|
180,580
|
|
$
|
168,806
|
|
Transmission
|
|
|
51,520
|
|
|
38,836
|
|
|
103,629
|
|
|
76,143
|
|
Storage, marketing and other
|
|
|
9,620
|
|
|
5,502
|
|
|
16,840
|
|
|
15,261
|
|
Total net operating revenues
|
|
$
|
152,344
|
|
$
|
131,330
|
|
$
|
301,049
|
|
$
|
260,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (thousands)
|
|
$
|
110,913
|
|
$
|
89,060
|
|
$
|
194,126
|
|
$
|
138,204
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (thousands)
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
$
|
162,345
|
|
$
|
150,366
|
|
$
|
328,571
|
|
$
|
297,054
|
|
Purchased gas costs
|
|
|
10,001
|
|
|
19,036
|
|
|
27,522
|
|
|
36,844
|
|
Total net operating revenues
|
|
|
152,344
|
|
|
131,330
|
|
|
301,049
|
|
|
260,210
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
27,444
|
|
|
23,936
|
|
|
52,598
|
|
|
46,609
|
|
SG&A
|
|
|
22,006
|
|
|
16,696
|
|
|
41,479
|
|
|
30,470
|
|
DD&A
|
|
|
21,130
|
|
|
18,452
|
|
|
42,139
|
|
|
36,671
|
|
Total operating expenses
|
|
|
70,580
|
|
|
59,084
|
|
|
136,216
|
|
|
113,750
|
|
Gain on sale / exchange of assets
|
|
|
6,763
|
|
|
−
|
|
|
6,763
|
|
|
−
|
|
Operating income
|
|
$
|
88,527
|
|
$
|
72,246
|
|
$
|
171,596
|
|
$
|
146,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
