10-KPeriod: FY2011

EQT Corp Annual Report, Year Ended Dec 31, 2011

Filed February 16, 2012For Securities:EQT

Summary

EQT Corporation's 2011 Form 10-K highlights a year of strong operational performance, with record production sales volumes and significant growth in Marcellus proved reserves. The company strategically shifted its capital allocation towards the higher-return Marcellus play, suspending development in the Huron and CBM plays. This focus on the Marcellus, coupled with technological advancements in horizontal drilling and extended laterals, drove a 44% increase in production sales volumes. The company also demonstrated a commitment to expanding its midstream infrastructure to support production growth, investing in gathering and transmission capacity. Financially, EQT reported robust net income, bolstered by significant gains from the sale of the Big Sandy Pipeline and the Langley gas processing facility. Despite lower natural gas prices at the close of 2011 and early 2012, EQT maintained an industry-leading cost structure and projected continued production growth for 2012, funded by operational cash flow and existing cash reserves.

Financial Highlights

44 data points
Beta

Net Income

$479.77M

EPS (Diluted)

$3.19

Total Assets

$8.77B

Cash & Equivalents

$831.25M

Free Cash Flow

-$359.02M

Financial Statements
Beta
SG&A Expenses$153.62M
Operating Expenses$765.59M
Operating Income$761.17M
Interest Expense$136.33M
Net Income$479.77M
EPS (Basic)$3.21
EPS (Diluted)$3.19
Shares Outstanding (Basic)149.39M
Shares Outstanding (Diluted)150.21M

Key Highlights

  • 1Record annual production sales volumes of 194.4 Bcfe, a 44% increase from 2010.
  • 2Marcellus proved reserves increased by 19% to 3.4 Tcfe, reflecting a strategic focus on this play.
  • 3Suspended development of Huron and CBM plays to prioritize capital investment in the Marcellus.
  • 4Achieved record EQT Midstream throughput and operating income, supported by infrastructure investments.
  • 5Recorded significant after-tax gains of $128.3 million from the sale of the Big Sandy Pipeline and Langley gas processing facility.
  • 6Reduced unit lease operating expense (LOE) by 17% to $0.20 per Mcfe, showcasing an improved cost structure.
  • 7Projected a 30% production sales volume growth for 2012, with capital expenditures funded by cash flow.

Frequently Asked Questions

EQT's primary strategic focus in 2011 was to maximize shareholder value by profitably developing its undeveloped Marcellus reserves. This led to a decision to suspend development in the Huron and CBM plays to allocate more capital and resources to the Marcellus.

EQT Midstream demonstrated strong performance with record throughput and operating income. The company invested in expanding its gathering and transmission infrastructure to support EQT Production's growth, particularly in the Marcellus play.

EQT completed the sale of the Big Sandy Pipeline for $390 million and the Langley natural gas processing facility for $230 million. These dispositions generated significant pre-tax gains, contributing to the company's robust net income for the year.

EQT employed a hedging strategy primarily using natural gas futures contracts, swap agreements, and collar agreements to protect its cash flow from commodity price volatility. This strategy aimed to mitigate exposure to fluctuations in natural gas prices.