10-KPeriod: FY2008

EQT Corp Annual Report, Year Ended Dec 31, 2008

Filed February 20, 2009For Securities:EQT

Summary

EQT Corporation's 2008 10-K filing highlights a company with substantial proved reserves in the Appalachian Basin, focusing on natural gas exploration and production. The company reported strong reserve growth over the past five years, driven by its drilling program and technological advancements like horizontal air drilling. EQT operates through three segments: EQT Production (exploration and production), EQT Midstream (gathering, processing, transmission, and storage), and Equitable Distribution (regulated natural gas distribution). The company emphasizes its low-cost structure, extensive midstream infrastructure, and a history of paying dividends as key strengths. Despite a volatile natural gas market, particularly in the latter half of 2008, EQT maintained its focus on developing its acreage and expanding its infrastructure to support production growth.

Financial Highlights

43 data points
Beta

Net Income

$255.60M

EPS (Diluted)

$2.00

Total Assets

$5.33B

Cash & Equivalents

$0.00

Free Cash Flow

-$834.84M

Financial Statements
Beta
SG&A Expenses$111.10M
Operating Expenses$1.11B
Operating Income$464.81M
Interest Expense$58.39M
Net Income$255.60M
EPS (Basic)$2.01
EPS (Diluted)$2.00
Shares Outstanding (Basic)127.23M
Shares Outstanding (Diluted)128.11M

Key Highlights

  • 1EQT Corporation held over three trillion cubic feet (Tcfe) of proved natural gas reserves at the end of 2008, marking a 16% increase from 2007 and a 47% increase over the past five years.
  • 2The company's strategy centers on profitably developing its Appalachian Basin acreage using a low-cost structure and technological innovation, notably horizontal air drilling.
  • 3EQT Midstream made significant infrastructure investments in 2008, including the Big Sandy Pipeline and upgrades to the Kentucky Hydrocarbon processing plant, to support production growth and third-party services.
  • 4Equitable Distribution, the regulated utility segment, maintained stable customer service and is awaiting regulatory approval for a rate case settlement that would provide the first delivery rate increase in over a decade.
  • 5The company's financial results in 2008 were impacted by lower natural gas prices in the latter half of the year, a significant gain on asset sales in 2007, and an other-than-temporary impairment loss on securities.
  • 6Capital expenditures in 2008 totaled $1.34 billion, with a significant portion allocated to well development and midstream infrastructure, and the 2009 capital plan was reduced to $1 billion in anticipation of capital market conditions.
  • 7EQT has a long history of dividend payments, with 58 years of consistent dividend payments to shareholders.

Frequently Asked Questions

EQT Corporation's primary business is the exploration, development, and production of natural gas and a limited amount of crude oil. Its operations are concentrated in the Appalachian Basin, covering areas in Kentucky, Pennsylvania, Virginia, and West Virginia.

EQT reported a significant increase in its proved reserves, reaching over three trillion cubic feet (Tcfe) at the end of 2008, up 16% from the previous year. This growth was attributed to the company's drilling program and technological advancements.

The natural gas market experienced volatility in 2008, with high prices in the first half followed by sharp decreases. While EQT's production volumes and well-head sales prices increased, the lower prices in the latter half of the year, coupled with an other-than-temporary impairment on securities and the absence of a large gain on asset sales from 2007, impacted overall profitability compared to the prior year.

EQT significantly reduced its capital expenditure forecast for 2009 to $1 billion from $1.34 billion in 2008. This reduction was made in consideration of current capital market conditions, and the company anticipated that this plan would not require accessing capital markets through the end of 2010, funded by operating cash flow and its revolving credit facility.