10-KPeriod: FY2018

EQT Corp Annual Report, Year Ended Dec 31, 2018

Filed February 14, 2019For Securities:EQT

Summary

EQT Corporation, a leading natural gas producer, reported its 2018 financial and operational results, highlighting a significant transformation driven by strategic divestitures and the separation of its midstream business. The company's core strategy focuses on cost reduction, capital efficiency, and returning value to shareholders, positioning itself as a premier producer of low-cost, environmentally friendly natural gas. Despite a substantial loss from continuing operations in 2018, largely due to impairments and asset sales totaling $3.5 billion, EQT generated significant operating revenues from its core Appalachian Basin assets. The company completed the separation of its midstream business into Equitrans Midstream Corporation and a significant divestiture of non-core assets in the Permian Basin and Huron play. Looking ahead, EQT anticipates continued production growth and substantial free cash flow generation, funded by operational cash flow, with a 2019 capital expenditure budget of approximately $1.8 billion focused on reserve development and land acquisitions.

Financial Highlights

53 data points
Beta

Revenue

$4.71B

64.0% Gross Margin

Net Income

-$2.24B

-47.7% Net Margin

EPS (Diluted)

$-8.60

Total Assets

$20.72B

Cash & Equivalents

$3.49M

Free Cash Flow

-$22.78M

Financial Statements
Beta
Revenue$4.71B
Cost of Revenue$1.70B
Gross Profit$3.01B
SG&A Expenses$232.54M
Operating Expenses$7.34B
Operating Income-$2.78B
Interest Expense$228.96M
Net Income-$2.24B
EPS (Basic)$-8.60
EPS (Diluted)$-8.60
Shares Outstanding (Basic)260.93M
Shares Outstanding (Diluted)260.93M

Key Highlights

  • 1EQT Corporation is the largest natural gas producer in the United States, with extensive acreage in the Appalachian Basin.
  • 2The company completed the separation of its midstream business into Equitrans Midstream Corporation and divested non-core Permian Basin and Huron play assets, streamlining operations.
  • 3Total operating revenues increased to $4.56 billion in 2018 from $3.09 billion in 2017, driven by higher sales volumes.
  • 4A significant loss from continuing operations of $2.38 billion in 2018 was primarily due to $3.5 billion in impairments and losses on asset sales.
  • 5Proved reserves stood at 21.8 Tcfe as of December 31, 2018, with 87% concentrated in the Marcellus play.
  • 6The company maintained investment grade credit ratings from Moody's, S&P, and Fitch at year-end 2018.
  • 7EQT expects 2019 capital expenditures of approximately $1.8 billion, primarily for reserve development and land acquisitions.

Frequently Asked Questions

In 2018, EQT Corporation completed the separation of its midstream business into Equitrans Midstream Corporation and divested its non-core Permian Basin and Huron play assets. These actions were aimed at streamlining the company's focus on its core natural gas production business in the Appalachian Basin.

Total operating revenues increased to $4.56 billion in 2018 from $3.09 billion in 2017, primarily due to a 68% increase in sales volumes. However, EQT reported a significant loss from continuing operations of $2.38 billion in 2018, compared to income from continuing operations of $1.39 billion in 2017. This was largely due to $3.5 billion in impairments and losses on the sale of long-lived assets, including those related to the 2018 divestitures.

EQT's strategy focuses on being a premier producer of environmentally friendly, reliable, low-cost natural gas. Key priorities include reducing costs, improving operational and capital efficiency, consistently delivering production volumes, and prioritizing the return of capital to shareholders while strengthening its balance sheet. The company aims for mid-single-digit year-over-year production growth and substantial free cash flow.

As of December 31, 2018, EQT held 21.8 Tcfe of proved natural gas, NGLs, and crude oil reserves. The vast majority, approximately 87% by volume, or 19.1 Tcfe, were concentrated in the Marcellus play, highlighting the company's significant position in this resource-rich area.