EQT Corporation press release

EQT Reports First Quarter 2025 Results

2025-04-22

NYSE - New York Stock Exchange · Natural Gas · Natural Gas Liquids · Oil · United States

PR Newswire

PITTSBURGH , April 22, 2025 /PRNewswire/ -- EQT Corporation (NYSE: EQT) today announced financial and operational results for the first quarter of 2025.

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First Quarter 2025 and Recent Highlights:

Production: Sales volume of 571 Bcfe, at the high-end of guidance driven by strong well performance and minimal winter weather impact from integrated midstream coordination Capital Expenditures: $497 million , 19% below the mid-point of guidance due to lower-than-expected completions, land and midstream spending Realized Pricing: Differential $0.16 per Mcf tighter than mid-point of guidance due to tactical production response from opening chokes into strong winter pricing Operating Expenses: Total per unit operating costs of $1.05 per Mcfe, 8% below the mid-point of guidance driven by lower-than-expected LOE and gathering expense Cash Flow: Net cash provided by operating activities of $1,741 million ; generated $1,036 million of free cash flow attributable to EQT (1) Balance Sheet: Exited the quarter with $8.4 billion total debt and $8.1 billion of net debt, (1) down approximately $1 billion from year-end 2024 Increasing Annual Guidance: Raising 2025 production guidance by 25 Bcfe and lowering the mid-point of 2025 capital spending by $25 million due to continued efficiency gains, strong well performance and additional synergy capture from the Company's ownership of the gathering, transmission and storage assets acquired from Equitrans Midstream Corporation (Equitrans Midstream) Accretive Bolt-On Acquisition: Announcing agreement to acquire upstream and midstream assets of Olympus Energy for $1.8 billion (2) ; purchase price equates to ~3.4x adjusted EBITDA multiple (3) and ~15% unlevered free cash flow yield (4) ; pro-forma year-end 2025 net debt (1) forecasted to be ~$7 billion at recent strip, comfortably below $7.5 billion target

President and CEO Toby Z. Rice stated, "EQT is off to an exceptional start in 2025, with the first quarter generating the strongest financial results in recent company history. Seamless coordination across our integrated midstream and upstream assets resulted in volumes at the high end of guidance, and our tactical production response opening chokes into peak winter prices drove higher realizations. Along with lower-than-expected capital spending, EQT generated more than $1 billion of free cash flow (1) in the first quarter alone."

Rice continued, "We are raising 2025 production guidance by 25 Bcfe while reducing the mid-point of 2025 capital spending by $25 million due to strong well performance, ongoing efficiency gains and additional Equitrans Midstream synergy capture. This underscores the tremendous momentum we're experiencing at EQT and we see no signs of slowing down as we look ahead."

Rice added, "We are also announcing that we have entered into an agreement for the accretive bolt-on acquisition of the upstream and midstream assets of Olympus Energy, which has a vertically integrated asset base and an unlevered free cash flow breakeven price (5) comparable to EQT's peer leading position at the low end of the cost curve. The purchase price equates to an approximately 15% unlevered free cash flow yield (4) , highlighting attractive value for EQT shareholders. Additionally, the assets are positioned adjacent to several proposed power generation projects, providing potential strategic value upside."

| (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) | Consideration is comprised of $500 million in cash and approximately 26 million shares of EQT common stock representing $1.3 billion, based on the 20-day volume-weighted average price of EQT common stock as of April 21, 2025. | | (3) | EQT expects the assets to be acquired from Olympus Energy (the Olympus Energy assets) to generate average annual adjusted EBITDA over the next three years of approximately $530 million, based on strip pricing as of April 16, 2025. The adjusted EBITDA multiple referred to in this news release is derived by dividing the purchase price (assuming no adjustments thereto at closing) by the Olympus Energy assets' projected 2025 – 2027 average annual adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for important information regarding this non-GAAP financial measure. | | (4) | EQT expects the Olympus Energy assets to generate average annual unlevered free cash flow over the next three years of approximately $270 million, based on strip pricing as of April 16, 2025. The unlevered free cash flow yield referred to in this news release is derived by dividing the Olympus Energy assets' projected 2025-2027 average annual unlevered free cash flow by the purchase price (assuming no adjustments thereto at closing). Unlevered free cash flow is a non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for important information regarding this non-GAAP financial measure. | | (5) | Defined as the average Henry Hub price needed to generate positive unlevered free cash flow in 2025. Unlevered free cash flow is 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. |

First Quarter 2025 Financial and Operational Performance

| | Three Months Ended

March 31, | | | | | | ($ millions, except average realized price and EPS) | 2025 | | 2024 | | Change | | | | | | | | | Total sales volume (Bcfe) | 571 | | 534 | | 37 | | Average realized price ($/Mcfe) | $ 3.77 | | $ 3.22 | | $ 0.55 | | Net income attributable to EQT | $ 242 | | $ 103 | | $ 139 | | Adjusted net income attributable to EQT (a) | $ 713 | | $ 364 | | $ 349 | | Diluted income per share (EPS) | $ 0.40 | | $ 0.23 | | $ 0.17 | | Adjusted EPS (a) | $ 1.18 | | $ 0.82 | | $ 0.36 | | Net income | $ 315 | | $ 103 | | $ 212 | | Adjusted EBITDA (a) | $ 1,781 | | $ 1,015 | | $ 766 | | Adjusted EBITDA attributable to EQT (a) | $ 1,644 | | $ 1,015 | | $ 629 | | Net cash provided by operating activities | $ 1,741 | | $ 1,156 | | $ 585 | | Adjusted operating cash flow (a) | $ 1,667 | | $ 951 | | $ 716 | | Adjusted operating cash flow attributable to EQT (a) | $ 1,531 | | $ 951 | | $ 580 | | Capital expenditures | $ 497 | | $ 549 | | $ (52) | | Capital contributions to equity method investments | $ 18 | | $ 3 | | $ 15 | | Free cash flow (a) | $ 1,151 | | $ 399 | | $ 752 | | Free cash flow attributable to EQT (a) | $ 1,036 | | $ 399 | | $ 637 |

| | | | (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

March 31, | | | | Per Unit ($/Mcfe) | 2025 | | 2024 | | | | | | | Gathering | $ 0.08 | | $ 0.60 | | Transmission | 0.44 | | 0.32 | | Processing | 0.14 | | 0.11 | | Lease operating expense (LOE) | 0.07 | | 0.08 | | Production taxes | 0.08 | | 0.09 | | Operating and maintenance (O&M) | 0.08 | | 0.02 | | Selling, general and administrative (SG&A) | 0.16 | | 0.14 | | Operating costs | $ 1.05 | | $ 1.36 | | | | | | | Production depletion | $ 0.95 | | $ 0.90 |

| | | | (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 (Mcfe). |

Gathering expense per Mcfe decreased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to the Company's ownership of the gathering, transmission and storage assets acquired in the Company's acquisition of Equitrans Midstream (the Equitrans Midstream Merger) completed in the third quarter of 2024 and the Company's ownership of additional interest in gathering assets located in Northeast Pennsylvania acquired in the second quarter of 2024. In addition, gathering expense per unit decreased due to the Company's divestitures of assets in Northeast Pennsylvania completed during 2024 (the NEPA Non-Operated Asset Divestitures).

Transmission expense per Mcfe increased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to capacity charges on the Mountain Valley Pipeline (the MVP) and additional contracted capacity on the Transco pipeline, partly offset by capacity released in connection with the NEPA Non-Operated Asset Divestitures.

Processing expense per Mcfe increased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to increased production of gas requiring processing from wells turned-in-line since the first quarter of 2024.

O&M expense per Mcfe increased for the three months ended March 31, 2025 compared to the same period in 2024 as a result of the Company's operation of the gathering, transmission and storage assets acquired in the Equitrans Midstream Merger.

SG&A expense per Mcfe increased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to higher personnel costs due to increased workforce headcount, including as a result of the Equitrans Midstream Merger.

Production depletion expense per Mcfe increased for the three months ended March 31, 2025 compared to the same period in 2024 due to increased sales volume and higher annual depletion rate.

Liquidity As of March 31, 2025, the Company had no 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 March 31, 2025 was $3.8 billion .

As of March 31, 2025, total debt and net debt (1) were $8.4 billion and $8.1 billion , respectively, compared to $9.3 billion and $9.1 billion , respectively, as of December 31, 2024.

| (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. |

Accretive Bolt-On Acquisition The Company has entered into a purchase agreement with Olympus Energy Holdings LLC, Hyperion Midstream LLC and Bow & Arrow Land Company LLC (collectively, Olympus Energy), pursuant to which the Company has agreed to acquire the upstream and midstream assets of Olympus Energy (the Olympus Energy Acquisition) for total consideration of $1.8 billion . Consideration is composed of approximately 26 million shares of EQT common stock, representing $1.3 billion based on the 20-day volume-weighted average price as of April 21, 2025 , and $500 million in cash, as adjusted pursuant to customary closing purchase price adjustments. The Company expects to fund the cash consideration with cash on hand and borrowings under EQT's revolving credit facility.

The assets comprise a vertically integrated, contiguous 90,000 net acre position offsetting the Company's existing core acreage in Southwest Pennsylvania with net production of approximately 500 MMcf/d. The Company expects the assets to generate average annual adjusted EBITDA (1) and unlevered free cash flow (1) over the next three years of approximately $530 million and $270 million , respectively, at April 16, 2025 strip pricing, implying an attractive ~3.4x adjusted EBITDA multiple (3) and ~15% unlevered free cash flow yield. (4) Olympus Energy has over 10 years of high-quality Marcellus inventory at maintenance activity levels, with an additional 7 years of upside from the Utica . Olympus Energy's integrated platform and high-quality inventory drives an unlevered free cash flow breakeven price (5) comparable to the Company's peer-leading cost structure.

The transaction is expected to close early in the third quarter of 2025, subject to regulatory approval and the satisfaction of customary closing conditions. The transaction was unanimously approved by the Company's Board of Directors.

Moelis & Company served as lead financial advisor and Greenhill, a Mizuho affiliate, served as financial advisor to EQT, and Vinson & Elkins LLP is serving as EQT's legal counsel on the transaction. Jefferies LLC served as financial advisor to Olympus Energy, and Kirkland & Ellis LLP is serving as legal counsel to Olympus Energy.

2025 Outlook In 2025, the Company expects total sales volume of 2,200 – 2,300 Bcfe, an increase of 25 Bcfe from its prior outlook. The Company expects to spend $1,950 – $2,070 million on maintenance capital expenditures in 2025, which is $25 million below its prior guidance. Expected maintenance capital expenditures spend includes $205 – $225 million of corporate and capitalized costs. The Company reaffirms its plans to spend $350 – $380 million on strategic growth capital expenditures in 2025, 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 32 – 50 net wells in the second quarter of 2025. Total sales volume in the second quarter of 2025 is expected to be 520 – 570 Bcfe.

All guidance items exclude the impact of the pending Olympus Energy Acquisition.

2025 Guidance

| Production | | Q2 2025 | | Full Year 2025 | | Total sales volume (Bcfe) | | 520 – 570 | | 2,200 – 2,300 | | Liquids sales volume, excluding ethane (Mbbl) | | 3,900 – 4,200 | | 15,700 – 16,500 | | Ethane sales volume (Mbbl) | | 1,550 – 1,700 | | 6,600 – 7,000 | | Total liquids sales volume (Mbbl) | | 5,450 – 5,900 | | 22,300 – 23,500 | | | | | | | | Btu uplift (MMBtu/Mcf) | | 1.050 – 1.060 | | 1.055 – 1.065 | | | | | | | | Average differential ($/Mcf) | | ($0.80) – ($0.70) | | ($0.70) – ($0.50) | | | | | | | | Resource Counts | | | | | | Top-hole rigs | | 1 – 2 | | 1 – 2 | | Horizontal rigs | | 2 – 3 | | 2 – 3 | | Frac crews | | 2 – 3 | | 2 – 3 | | | | | | | | Third-party Midstream Revenue ($ Millions) | | $120 – $145 | | $550 – $650 | | | | | | | | Per Unit Operating Costs ($/Mcfe) | | | | | | Gathering | | $0.08 – $0.10 | | $0.08 – $0.10 | | Transmission | | $0.44 – $0.46 | | $0.43 – $0.45 | | Processing | | $0.14 – $0.16 | | $0.13 – $0.15 | | LOE | | $0.11 – $0.13 | | $0.10 – $0.12 | | Production taxes | | $0.07 – $0.09 | | $0.09 – $0.11 | | O&M | | $0.09 – $0.11 | | $0.09 – $0.11 | | SG&A | | $0.17 – $0.19 | | $0.17 – $0.19 | | Operating costs | | $1.10 – $1.24 | | $1.09 – $1.23 | | | | | | | | Equity Method Investments and Midstream JV Noncontrolling Interest ($ Millions) | | | | | | Distributions from Mountain Valley Pipeline, LLC (the MVP Joint Venture) and Laurel Mountain Midstream LLC (LMM) | | $60 – $70 | | $210 – $235 | | Distributions to Pipebox LLC (the Midstream JV) Noncontrolling Interest (a) | | $95 - $110 | | $290 – $330 | | | | | | | | Capital Expenditures and Capital Contributions ($ Millions) | | | | | | Upstream maintenance | | $385 – $435 | | $1,465 – $1,545 | | Midstream maintenance | | $85 – $100 | | $280 – $300 | | Corporate & capitalized costs | | $50 – $60 | | $205 – $225 | | Total maintenance capital expenditures | | $520 – $595 | | $1,950 – $2,070 | | Strategic growth capital expenditures | | $80 – $105 | | $350 – $380 | | Total capital expenditures | | $600 – $700 | | $2,300 – $2,450 | | | | | | | | Capital contributions to equity method investments (b) | | $20 – $30 | | $50 – $60 |

| | | | (a) | Assumes Midstream JV cash distributions of 60% to third-party noncontrolling interest. | | (b) | Includes capital contributions to the MVP Joint Venture (including the MVP mainline, MVP Southgate and MVP Expansion) and LMM. |

First Quarter 2025 Earnings Webcast Information The Company's conference call with securities analysts begins at 10:00 a.m. ET on Wednesday April 23, 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.

Hedging (as of April 16, 2025) The following table summarizes the approximate volume and prices of the Company's NYMEX hedge positions. The difference between the fixed price and NYMEX price is included in average differential presented in the Company's price reconciliation.

| | Q2 2025 (a) | | Q3 2025 | | Q4 2025 | | Hedged Volume (MMDth) | 336 | | 281 | | 281 | | Hedged Volume (MMDth/d) | 3.7 | | 3.1 | | 3.1 | | Swaps – Short | | | | | | | Volume (MMDth) | 290 | | 281 | | 95 | | Avg. Price ($/Dth) | $ 3.11 | | $ 3.26 | | $ 3.27 | | Calls – Short | | | | | | | Volume (MMDth) | 46 | | — | | 137 | | Avg. Strike ($/Dth) | $ 3.48 | | $ — | | $ 5.49 | | Puts – Long | | | | | | | Volume (MMDth) | 46 | | — | | 186 | | Avg. Strike ($/Dth) | $ 2.83 | | $ — | | $ 3.30 | | Option Premiums | | | | | | | Cash Settlement of Deferred Premiums (millions) | $ — | | $ — | | $ (45) |

| | | | (a) | April 1 through June 30. |

The Company has also entered into transactions to hedge basis. The Company may use other contractual agreements from time to time to implement its commodity hedging strategy.

Non-GAAP Disclosures This news release includes the non-GAAP financial measures described below. These non-GAAP measures are intended to provide additional information only and should not be considered as alternatives to, or more meaningful than, net income attributable to EQT Corporation, diluted EPS, net income, net cash provided by operating activities, total Production operating revenues, total debt, or any other measure calculated in accordance with GAAP. Certain items excluded from these non-GAAP measures are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital, tax structure, and historic costs of depreciable assets.

Adjusted Net Income Attributable to EQT and Adjusted EPS Adjusted net income attributable to EQT is defined as net income attributable to EQT Corporation, excluding loss on sale/exchange of long-lived assets, impairments, the revenue impact of changes in the fair value of derivative instruments prior to settlement and certain other items that the Company's management believes do not reflect the Company's core operating performance. Adjusted EPS is defined as adjusted net income attributable to EQT divided by diluted weighted average common shares outstanding.

As a result of the Class B Unitholder's noncontrolling equity interest ownership in the Midstream JV that commenced on December 30, 2024 , the Company has adjusted its non-GAAP measure of adjusted net income attributable to EQT. Beginning in the first quarter of 2025, adjusted net income attributable to EQT and the related non-GAAP financial measure of adjusted EPS are no longer adjusted for income from investments, distributions received from equity method investments or non-cash interest expense (amortization). Adjusted net income attributable to EQT and adjusted EPS presented in this news release for the comparative period have also been calculated based on the updated definition.

The Company's management believes adjusted net income attributable to EQT and adjusted EPS provide useful information to investors regarding the Company's financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods by excluding the impact of items that, in their opinion, do not reflect the Company's core operating performance. For example, adjusted net income attributable to EQT and adjusted EPS reflect only the impact of settled derivative contracts; thus, the measures exclude the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement.