10-KPeriod: FY2009

EQT Corp Annual Report, Year Ended Dec 31, 2009

Filed February 18, 2010For Securities:EQT

Summary

EQT Corporation's 2009 10-K filing highlights a strong year for the company, characterized by record operational and financial performance across its segments. The Production segment saw a significant 19% increase in natural gas sales volumes and a 31% rise in proved reserves, driven by successful horizontal drilling in the Huron/Berea and Marcellus plays, with a remarkable 99% well success rate. The Midstream segment achieved record throughput and operating income due to new infrastructure projects coming online. The Distribution segment also reported record operating income, up 32% from the prior year, aided by regulatory rate increases in Pennsylvania. The company demonstrated a commitment to organic growth, focusing on developing its extensive acreage position and technological advancements in drilling. Despite a challenging natural gas price environment, EQT maintained an industry-leading low cost structure, which is a key strength for future development and profitability. The company also managed its capital effectively, investing in infrastructure while maintaining a strong liquidity position.

Financial Highlights

44 data points
Beta

Net Income

$156.93M

EPS (Diluted)

$1.19

Total Assets

$0.00

Cash & Equivalents

$0.00

Free Cash Flow

-$238.17M

Financial Statements
Beta
SG&A Expenses$176.70M
Operating Expenses$954.57M
Operating Income$356.79M
Interest Expense$111.78M
Net Income$156.93M
EPS (Basic)$1.20
EPS (Diluted)$1.19
Shares Outstanding (Basic)130.82M
Shares Outstanding (Diluted)131.48M

Key Highlights

  • 1Record annual sales of produced natural gas at 100.1 Bcfe, a 19% increase over 2008.
  • 2Proved reserves increased by 31% to 4.1 Tcfe, with a 99% well success rate on 702 gross wells drilled in 2009.
  • 3Achieved a 14% decrease in unit lease operating expense (LOE), excluding production taxes, to $0.30 per Mcfe, noted as an industry-leading result.
  • 4Record operating income for both the EQT Midstream and Distribution segments.
  • 5Significant growth in the Marcellus play proved reserves, increasing 1,278% to 1.1 Tcfe.
  • 6Focused on technological leadership in drilling, particularly the use of air in horizontal drilling for cost-effective development.
  • 7Converted 65 Bcfe of proved undeveloped reserves to proved developed reserves and anticipates spending $2.9 billion over the next 5 years to convert remaining proved undeveloped reserves.

Frequently Asked Questions

EQT's strong 2009 performance was driven by increased natural gas sales volumes, a significant rise in proved reserves, record results from its Midstream and Distribution segments, and the successful implementation of advanced horizontal drilling techniques, particularly in the Huron/Berea and Marcellus shale plays.

EQT maintained an industry-leading low cost structure in 2009, notably achieving a 14% reduction in unit lease operating expense (LOE) excluding production taxes. This focus on cost efficiency, coupled with technological innovation in drilling, allowed the company to profitably develop its reserves even amidst fluctuating commodity prices.

EQT's strategy focuses on organic growth through the expansion of production and developed reserves via horizontal drilling in its core Appalachian Basin acreage, particularly in the Huron/Berea and Marcellus plays. The company is also investing in midstream infrastructure expansion, such as the Equitrans Marcellus Expansion Project, to support production growth and enhance market access.

As of December 31, 2009, EQT reported 4.1 Tcfe of proved reserves, with a substantial portion in the Huron/Berea (2.8 Tcfe) and Marcellus (1.1 Tcfe) plays. The company is actively converting proved undeveloped reserves (PUDs) to proved developed reserves and plans significant capital expenditure for this over the next five years, supported by its technological expertise in horizontal drilling.