EQT Corporation press release
EQT Reports Fourth Quarter and Full Year 2024 Results and Provides 2025 Guidance
NYSE - New York Stock Exchange · Natural Gas · Natural Gas Liquids · Oil · United States
PR Newswire
PITTSBURGH , Feb. 18, 2025 /PRNewswire/ -- EQT Corporation (NYSE: EQT) today announced financial and operational results for the fourth quarter and full year 2024 as well as financial and operational guidance for 2025.
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Fourth Quarter and Recent Highlights:
Sales volume of 605 Bcfe, at the high-end of guidance driven by continued operational efficiency gains and strong well performance, despite 27 Bcfe of total net curtailments Capital expenditures of $583 million , 7% below the low-end of guidance, benefiting from efficiency gains and lower-than-expected midstream spending Differential $0.13 per Mcf tighter than mid-point of guidance as tactical curtailments maximize value without sacrificing operational efficiencies Total per unit operating costs of $1.07 per Mcfe; at the low-end of guidance driven by production outperformance and lower-than expected LOE and SG&A expense Net cash provided by operating activities of $756 million ; generated $588 million of free cash flow (1) Closed on non-operated asset sale and midstream joint venture transaction, receiving proceeds of ~$4.7 billion , net of certain transaction fees and expenses Exited the quarter with $9.3 billion total debt and $9.1 billion of net debt, (1) inclusive of ~$475 million of working capital usage, which is expected to reverse as pricing stabilizes in 2025 Equitrans integration 90% complete; actions to date have de-risked ~85% of base synergies, while ~35% of upside synergies have been de-risked given faster-than-expected benefits from compression investments Year-end 2024 proved reserves totaled 26.3 Tcfe, flat year-over-year when normalizing for the impact of non-operated asset sales despite SEC price deck dropping toward $2 per MMBtu, underscoring economic resiliency of world-class, low-cost Appalachian reserve base
2025 Outlook Highlights:
Initiated 2025 production guidance of 2,175 – 2,275 Bcfe, 125 Bcfe above prior expectations due to strong well performance and benefits from compression investments Initiated 2025 maintenance capital guidance of $1,950 – $2,120 million and growth capital of $350 – $380 million ; reserve development capital guidance ~$200 million lower year-over-year reflecting continued efficiency gains and benefits from compression investments Planning to drop from 3 to 2 frac crews at the end of first quarter 2025, several months ahead of prior plan due to further completion efficiency gains Projecting ~$2.6 billion and ~$3.3 billion of free cash flow attributable to EQT (1,2) in 2025 and 2026, respectively, at recent strip pricing Expect to exit 2025 with ~$7 billion of net debt (1) at recent strip pricing, well ahead of $7.5 billion debt target
President and CEO Toby Z. Rice stated, "EQT's operations are firing on all cylinders, with material efficiency gains, robust well performance and Equitrans integration momentum driving outperformance across the board. This was on clear display in the fourth quarter, as higher-than-expected production and capital spending well below the low end of guidance resulted in nearly $600 million of free cash flow despite Henry Hub averaging just $2.81 per MMBtu during the quarter."
Rice continued, "This momentum is carrying forward into 2025, with continued efficiency gains and quicker-than-expected benefits from midstream compression investments driving production upside relative to our original outlook, while reserve development capital spending is expected to decline by approximately $200 million year-over-year. Our fourth quarter results and 2025 outlook showcase the power of the integrated, low-cost platform that we have strategically sculpted over the past several years."
| (1) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. | | (2) | Assumes PipeBox LLC (Midstream JV) cash distributions of 60% to noncontrolling interest. |
Fourth Quarter 2024 Financial and Operational Performance
| | Three Months Ended
December 31, | | | | | | ($ millions, except average realized price and EPS) | 2024 | | 2023 | | Change | | | | | | | | | Total sales volume (Bcfe) | 605 | | 564 | | 41 | | Average realized price ($/Mcfe) | $ 3.01 | | $ 2.75 | | $ 0.26 | | Net income attributable to EQT | $ 418 | | $ 502 | | $ (84) | | Adjusted net income attributable to EQT (a) | $ 416 | | $ 214 | | $ 202 | | Diluted income per share (EPS) | $ 0.69 | | $ 1.13 | | $ (0.44) | | Adjusted EPS (a) | $ 0.69 | | $ 0.48 | | $ 0.21 | | Net income | $ 427 | | $ 501 | | $ (74) | | Adjusted EBITDA (a) | $ 1,412 | | $ 840 | | $ 572 | | Net cash provided by operating activities | $ 756 | | $ 624 | | $ 132 | | Adjusted operating cash flow (a) | $ 1,231 | | $ 775 | | $ 456 | | Capital expenditures | $ 583 | | $ 539 | | $ 44 | | Capital contributions to equity method investments | $ 60 | | $ 7 | | $ 53 | | Free cash flow (a) | $ 588 | | $ 229 | | $ 359 | | Free cash flow attributable to EQT (a) | $ 580 | | $ 229 | | $ 351 |
| | | | (a) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. |
Full Year 2024 Financial and Operational Performance
| | Years Ended
December 31, | | | | | | ($ millions, except average realized price and EPS) | 2024 | | 2023 | | Change | | | | | | | | | Total sales volume (Bcfe) | 2,228 | | 2,016 | | 212 | | Average realized price ($/Mcfe) | $ 2.74 | | $ 2.79 | | $ (0.05) | | Net income attributable to EQT | $ 231 | | $ 1,735 | | $ (1,504) | | Adjusted net income attributable to EQT (a) | $ 827 | | $ 960 | | $ (133) | | Diluted EPS | $ 0.45 | | $ 4.22 | | $ (3.77) | | Adjusted EPS (a) | $ 1.61 | | $ 2.32 | | $ (0.71) | | Net income | $ 242 | | $ 1,735 | | $ (1,493) | | Adjusted EBITDA (a) | $ 3,729 | | $ 3,016 | | $ 713 | | Net cash provided by operating activities | $ 2,827 | | $ 3,179 | | $ (352) | | Adjusted operating cash flow (a) | $ 3,109 | | $ 2,795 | | $ 314 | | Capital expenditures | $ 2,266 | | $ 1,925 | | $ 341 | | Capital contributions to equity method investments | $ 148 | | $ 12 | | $ 136 | | Free cash flow (a) | $ 695 | | $ 858 | | $ (163) | | Free cash flow attributable to EQT (a) | $ 684 | | $ 860 | | $ (176) |
| | | | (a) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. |
Per Unit Operating Costs The following table presents certain of the Company's consolidated operating costs on a per unit basis. (a)
| | Three Months Ended
December 31, | | Years Ended
December 31, | | | | | | Per Unit ($/Mcfe) | 2024 | | 2023 | | 2024 | | 2023 | | | | | | | | | | | Gathering | $ 0.09 | | $ 0.58 | | $ 0.35 | | $ 0.64 | | Transmission | 0.41 | | 0.30 | | 0.38 | | 0.32 | | Processing | 0.14 | | 0.12 | | 0.13 | | 0.12 | | Lease operating expense (LOE) | 0.09 | | 0.07 | | 0.09 | | 0.07 | | Production taxes | 0.09 | | 0.06 | | 0.08 | | 0.05 | | Operating and maintenance (O&M) | 0.07 | | 0.02 | | 0.05 | | 0.01 | | Selling, general and administrative (SG&A) | 0.18 | | 0.12 | | 0.15 | | 0.12 | | Operating costs | $ 1.07 | | $ 1.27 | | $ 1.23 | | $ 1.33 | | | | | | | | | | | Production depletion | $ 0.90 | | $ 0.87 | | $ 0.90 | | $ 0.84 |
| | | | (a) | References in this release to the "Company" refer to EQT Corporation together with its consolidated subsidiaries. As used throughout this release, per unit operating costs reflect, for each period presented, the consolidated amount of such operating cost for the Company (aggregated irrespective of business segment) divided by total sales volume of natural gas and liquids (Mcfe). |
Gathering expense per Mcfe decreased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to the Company's ownership of the gathering, transmission and storage assets acquired in the Company's acquisition of Equitrans Midstream Corporation (Equitrans) in July 2024 (the Equitrans Midstream Merger) and the Company's acquisition of additional interest in gathering assets located in Northeast Pennsylvania .
Transmission expense per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to capacity charges related to the in service of the Mountain Valley Pipeline (the MVP), which commenced long-term firm capacity obligations on July 1, 2024 .
Processing expense per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to increased volumes of gas requiring processing from wells that the Company turned-in-line in 2024.
LOE per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to increased LOE from the Company's operation and maintenance of its production assets, including water assets acquired in the Equitrans Midstream Merger and water assets internally-developed in the prior year.
Production tax expense per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to increased property tax expense from higher price as well as increased severance tax expense from increased sales volume in West Virginia and higher price.
O&M expense per Mcfe increased for the three months ended December 31, 2024 as a result of the Company's operation of gathering, transmission and storage assets acquired in the Equitrans Midstream Merger.
SG&A expense per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due primarily to higher personnel costs due to increased workforce headcount, including as a result of the Equitrans Midstream Merger, and higher legal and professional services costs.
Production depletion expense per Mcfe increased for the three months ended December 31, 2024 compared to the same period in 2023 due to increased sales volume and higher annual depletion rate.
Liquidity As of December 31, 2024, the Company had $0 .2 billion of borrowings outstanding under EQT's $3.5 billion revolving credit facility. Total liquidity, excluding available capacity under Eureka Midstream, LLC's revolving credit facility, as of December 31, 2024 was $3 .6 billion.
As of December 31, 2024, total debt and net debt (1) were $9.3 billion and $9.1 billion , respectively, compared to $5.8 billion and $5.7 billion , respectively, as of December 31, 2023 .
| (1) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. |
Proved Reserves The Company reported 2024 total proved reserves of 26.3 Tcfe, a decrease of 1,332 Bcfe, or 5%, compared to 2023 largely due to the Company's sales of its interests in non-operated natural gas assets located in Northeast Pennsylvania to Equinor USA Onshore Properties Inc. and its affiliates during 2024 (the NEPA Non-Operated Asset Divestitures) and the Company's production, partly offset by extensions, discoveries and other additions as well as acquisitions of new assets received as consideration in the NEPA Non-Operated Asset Divestitures. Proved undeveloped reserves decreased by 579 Bcfe, or 7%, compared to 2023, largely driven by changes to the Company's development schedule, which shifted proved undeveloped reserves outside of the Securities and Exchange Commission (SEC) five-year development window. Notably, 2024 proved reserves do not include any positive impact from the Company's compression investments, which if realized could drive future upside to proved reserves.
90% of the Company's total proved developed reserves, 98% of the Company's total proved undeveloped reserves and 92% of the Company's total proved reserves are located in the Marcellus Shale.
The following table presents the Company's reserves, standardized measure of discounted future net cash flow (the Standardized Measure) and PV-10 as compared to five-year strip pricing sensitivity. Of note, these values include ~3 years of the more than 30 years of the Company's future inventory and exclude the value associated with the Company's third-party midstream revenue, the MVP and Hammerhead pipelines and the Company's 1.2 Bcf per day of premium firm sales deals with major utilities in the Southeast region, which are tied to the future in-service of the Transco Southeast Expansion, the timing of which was not known with reasonable certainty as of December 31, 2024 .
| | Year Ended December 31, 2024 | | | | | | | Proved Developed | | Proved Undeveloped | | Total | | | (Millions) | | | | | | | | | | | | | SEC pricing (a): | | | | | | | Reserves (Bcfe) | 18,805 | | 7,460 | | 26,265 | | Standardized Measure | $ 7,662 | | $ 337 | | $ 7,999 | | PV-10 (b) | $ 9,113 | | $ 731 | | $ 9,844 | | | | | | | | | Five-year strip pricing sensitivity (c): | | | | | | | Reserves (Bcfe) | 19,279 | | 7,463 | | 26,742 | | Standardized Measure | $ 17,671 | | $ 4,349 | | $ 22,020 | | PV-10 (b) | $ 21,005 | | $ 5,707 | | $ 26,712 |
| | | | (a) | Reserves as of December 31, 2024 were based on a natural gas price (NYMEX) of $2.130 per MMBtu. Pricing was determined in accordance with the SEC requirement using average first-day-of-the-month closing prices for the prior twelve months less regional adjustments. The average adjusted product prices including regional adjustments weighted by production over the remaining lives of the properties were $1.468 per Mcf of gas, $29.28 per barrel of natural gas liquids (NGLs) and $59.45 per barrel of oil. | | | | | (b) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. | | | | | (c) | Pricing used in the five-year strip pricing sensitivity reflects five-year strip pricing as of December 31, 2024 and held constant thereafter using (i) the NYMEX five-year strip adjusted for regional differentials using Texas Eastern Transmission Corp. M-2, Transcontinental Gas Pipe Line, Leidy Line, and Tennessee Gas Pipeline Co., Zone 4-300 Leg for gas and (ii) the NYMEX West Texas Intermediate five-year strip for oil, adjusted for regional differentials consistent with those used in the SEC pricing, and holding all other assumptions constant. The average realized product prices weighted by production over the remaining lives of the properties would be $3.016 per Mcf of gas, $24.49 per barrel of NGLs and $47.54 per barrel of oil. | | | | | | The NYMEX strip price for proved reserves and related metrics are intended to illustrate reserve sensitivities to market expectations of commodity prices and should not be confused with SEC pricing for proved reserves and do not comply with SEC pricing assumptions. The Company's management believes that the presentation of reserve volume and related metrics using NYMEX forward strip prices provides investors with additional useful information about the Company's reserves because the forward prices are based on the market's forward-looking expectations of oil and gas prices as of a certain date. The price at which the Company can sell its production in the future is the major determinant of the likely economic producibility of the Company's reserves. The Company hedges certain amounts of future production based on futures prices. In addition, the Company uses such forward-looking market-based data in developing its drilling plans, assessing its capital expenditure needs and projecting future cash flows. While NYMEX strip prices represent a consensus estimate of future pricing, such prices are only an estimate and are not necessarily an accurate projection of future oil and gas prices. Actual future prices may vary significantly from NYMEX prices; therefore, actual revenue and value generated may be more or less than the amounts disclosed. Investors should be careful to consider forward prices in addition to, and not as a substitute for, SEC pricing, when considering the Company's reserves. |
Netherland, Sewell & Associates, Inc. an independent consulting firm hired by management, reviewed 100% of the total net natural gas, NGLs and oil proved reserves attributable to EQT as of December 31, 2024.
2025 Outlook In 2025, the Company expects total sales volume of 2,175 – 2,275 Bcfe. The Company expects maintenance capital expenditures to total $1,950 – $2,120 million in 2025, inclusive of $205 - $225 of corporate and capitalized costs. The Company also plans to spend $350 – $380 million on strategic growth capital expenditures, which targets the Company's pressure reduction program in addition to opportunistic, high-return water infrastructure and land opportunities. During 2025, the Company plans to turn-in-line (TIL) 95 – 120 net wells, including 12 – 18 net wells expected to TIL in the first quarter of 2025. Total sales volume in the first quarter of 2025 is expected to be 525 – 575 Bcfe. Inclusive of the Company's hedge position, the Company estimates a 2025 NYMEX Henry Hub free cash flow breakeven price (1,2) of < $0.90 per MMBtu.
| (1) | A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. | | (2) | Defined as the average Henry Hub price needed to generate positive free cash flow in 2025, inclusive of the impact of 2025 hedges. |
2025 Guidance
| Production | | Q1 2025 | | Full Year 2025 | | Total sales volume (Bcfe) | | 525 – 575 | | 2,175 – 2,275 | | Liquids sales volume, excluding ethane (Mbbl) | | 3,900 – 4,200 | | 15,700 – 16,500 | | Ethane sales volume (Mbbl) | | 1,500 – 1,700 | | 6,300 – 6,700 | | Total liquids sales volume (Mbbl) | | 5,400 – 5,900 | | 22,000 – 23,200 | | | | | | | | Btu uplift (MMBtu/Mcf) | | 1.055 – 1.065 | | 1.055 – 1.065 | | | | | | | | Average differential ($/Mcf) | | ($0.30) – ($0.20) | | ($0.70) – ($0.50) | | | | | | | | Resource Counts | | | | | | Top-hole rigs | | 1 – 2 | | 1 – 2 | | Horizontal rigs | | 2 – 3 | | 2 – 3 | | Frac crews | | 2 – 3 | | 2 – 3 | | | | | | | | Midstream Revenue ($ Millions) | | | | | | Third-party revenue | | $135 – $160 | | $500 – $600 | | | | | | | | Per Unit Operating Costs ($/Mcfe) | | | | | | Gathering | | $0.09 – $0.11 | | $0.09 – $0.11 | | Transmission | | $0.43 – $0.45 | | $0.43 – $0.45 | | Processing | | $0.13 – $0.15 | | $0.13 – $0.15 | | LOE | | $0.09 – $0.11 | | $0.10 – $0.12 | | Production taxes | | $0.09 – $0.11 | | $0.09 – $0.11 | | O&M | | $0.09 – $0.11 | | $0.09 – $0.11 | | SG&A | | $0.15 – $0.17 | | $0.17 – $0.19 | | Operating costs | | $1.07 – $1.21 | | $1.10 – $1.24 | | | | | | | | Equity Method Investments and Midstream JV Noncontrolling Interest ($ Millions) | | | | | | Distributions from MVP, Laurel Mountain Midstream (LMM) | | $45 – $55 | | $170 – $195 | | Distributions to Midstream JV Noncontrolling Interest (a) | | | | $290 – $330 | | | | | | | | Capital Expenditures and Capital Contributions ($ Millions) | | | | | | Upstream maintenance | | $360 – $410 | | $1,465 – $1,585 | | Midstream maintenance | | $80 – $95 | | $280 – $310 | | Corporate & capitalized costs | | $50 – $60 | | $205 – $225 | | Total maintenance capital expenditures | | $490 – $565 | | $1,950 – $2,120 | | Strategic growth capital expenditures | | $75 – $100 | | $350 – $380 | | Total capital expenditures | | $565 – $665 | | $2,300 – $2,500 | | | | | | | | Strategic growth capital contributions to MVP Expansion, MVP Southgate, LMM | | $0 – $10 | | $10 – $20 |
| | | | (a) | Assumes Midstream JV cash distributions of 60% to noncontrolling interest. |
Fourth Quarter and Full Year 2024 Earnings Webcast Information The Company's conference call with securities analysts begins at 10:00 a.m. ET on Wednesday February 19, 2025 and will be broadcast live via webcast. An accompanying presentation is available on the Company's investor relations website, www.ir.eqt.com under "Events & Presentations." To access the live audio webcast, visit the Company's investor relations website at ir.eqt.com. A replay will be archived and available for one year in the same location after the conclusion of the live event.