PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced that EQT Midstream Partners,
LP (NYSE: EQM) (Partnership) has agreed to acquire EQT’s Jupiter natural
gas gathering system (Jupiter) for $1.18 billion. EQT will receive $1.12
billion of cash and $59 million of common and general partner units. In
addition, the Partnership will fund $182 million of expansion projects
related to Jupiter. Two additional announcements include the execution
of an agreement to exchange assets with Range Resources Corporation
(NYSE: RRC) (Range); and EQT share repurchase authorization.
Jupiter Sale
The Jupiter system gathers EQT’s Marcellus production in portions of
Greene and Washington Counties, Pennsylvania, and consists of
approximately 35 miles of natural gas gathering pipeline and
approximately 21,300 horsepower of compression. Jupiter has a total of
970 MMcf per day of pipeline capacity and six interconnects with the
Partnership’s transmission and storage systems.
The Partnership has agreed to complete several expansion projects
related to Jupiter during 2014 and 2015. The 2014 expansions will add
approximately 350 MMcf per day of compression capacity, with an
in-service date anticipated for the fourth quarter 2014. The 2015
expansion will add approximately 200 MMcf per day of compression
capacity, with an in-service date anticipated for the fourth quarter
2015. In addition, the Partnership plans to install approximately 20
miles of pipeline during this time. In total, the compression and
gathering expansion projects have an estimated cost of approximately
$182 million.
The Jupiter assets are supported by a gathering agreement with EQT that
includes 10-year firm capacity reservation commitments. The contracted
capacity is initially 225 MMcf per day and will grow to 775 MMcf per day
by the end of 2015. EQT will also pay a per-unit fee for volume above
the contracted capacity; and expects full-year 2014 firm reservation
charges and usage fees to be approximately $130 million. Operating
expenses, excluding depreciation and amortization, are forecast to be
approximately $20 million in 2014.
EQT currently holds approximately 48,000 net acres surrounding Jupiter,
including approximately 31,000 undeveloped net acres. As of March 31,
2014, a total of 206 Marcellus and 9 Upper Devonian wells were drilled
in the Jupiter service area. Jupiter’s average daily gathered volume for
the first quarter 2014 was approximately 595 MMcf per day.
Asset Exchange Agreement with Range Resources
EQT will receive approximately 73,000 net acres in the Permian Basin,
most of which is held by production, along with approximately 900
producing wells in Glasscock and Sterling Counties, Texas. This Permian
Basin acreage has multiple horizontal, stacked pay drilling
opportunities in the Upper Wolfcamp, Lower Wolfcamp, and Cline horizons.
During 2014, EQT expects to drill two horizontal wells on the newly
acquired acreage, with tentative plans to drill 20 – 30 horizontal wells
in 2015. The existing wells, most of which are vertical, are currently
producing approximately 28 MMcfe (4,800 BOE) per day, with 62% being
liquids. Additional development is expected to reach 75% liquids.
In exchange, Range will receive EQT’s interest in 138,000 net acres and
the supporting gathering system in the Nora Field of Virginia, giving
Range 100% ownership of Nora. In addition, Range will receive $145
million cash. The Nora Field properties, primarily coalbed methane, are
currently producing approximately 41 MMcfe per day.
The exchange is subject to satisfaction of customary closing conditions,
final due diligence and post-closing purchase price adjustments. The
transaction is anticipated to close in the second quarter of 2014.
Additional information on the Permian assets can be found in EQT’s
updated analyst presentation, which is available at www.eqt.com.
EQT Share Repurchase Authorization
EQT’s Board of Directors has approved a share repurchase authorization
of up to 1 million shares. Under the authorization, EQT may repurchase
shares of its outstanding common stock in the open market or in
privately negotiated transactions, and may do so over a period of time
and in a series of transactions. The Company has not established a
target number of shares to repurchase and will not forecast the amount
or timing of share repurchases, if any.
EQT Quarterly Dividend
EQT’s Board of Directors has declared a quarterly cash dividend of $0.03
per share, payable June 1, 2014, to shareholders of record at the close
of business on May 16, 2014.
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.
About EQT Midstream Partners:
EQT Midstream Partners, LP is a growth-oriented limited partnership
formed by EQT Corporation to own, operate, acquire, and develop
midstream assets in the Appalachian basin. The Partnership provides
midstream services to EQT Corporation and third-party companies through
its strategically located transmission and storage system, and gathering
system. The Partnership owns 700 miles and operates an additional 200
miles of FERC-regulated interstate pipelines, and also owns more than
1,600 miles of FERC-regulated, low-pressure gathering lines.
Visit EQT Midstream Partners, LP at www.eqtmidstreampartners.com
About Range Resources:
RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading independent oil and
natural gas producer with operations focused in Appalachia and the
Midcontinent region of the United States. The Company pursues an organic
growth strategy targeting high return, low-cost projects within its
large inventory of low risk, development drilling opportunities. The
Company is headquartered in Fort Worth, Texas. More information about
Range can be found at http://www.rangeresources.com/
and http://www.myrangeresources.com/.
Cautionary Statements
EQT has no obligation to repurchase any amount of its common stock. EQT
intends to make all repurchases and to administer the plan in accordance
with applicable laws and regulatory guidelines, including Rule 10b-18 of
the Securities Exchange Act of 1934, as amended.
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 reserves; drilling plans and programs (including
the number and type of wells to be drilled); projected liquids content;
projected firm reservation charges and usage fees; projected operating
expenses; infrastructure programs (including the timing, cost, capacity
and sources of funding with respect to such programs); projected
compression capacity; monetization and other transactions, including the
Company’s ability to complete the sale of the Jupiter natural gas
gathering system (Jupiter) to the Partnership and the asset exchange
with Range; uses of capital provided by the Jupiter transaction;
projected capital expenditures; liquidity and financing requirements,
including funding sources for the asset exchange with Range; and the
amount and timing of any share repurchases under the Company’s share
repurchase authorization. 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 Jupiter and Range transactions,
these risks and uncertainties include, among others, disruption to the
Company’s business, including customer, employee and supplier
relationships resulting from the transactions and risks that the
conditions to closing may not be satisfied. 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 risks discussed in the Company’s most recent Annual Report on
Form 10-K, Quarterly Report on Form 10-Q and other filings with the
Securities and Exchange Commission. 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.
