10-QPeriod: Q2 FY2014

EQT Corp Quarterly Report for Q2 Ended Jun 30, 2014

Filed July 24, 2014For Securities:EQT

Summary

EQT Corporation reported a strong performance for the second quarter and first half of 2014, with significant increases in income from continuing operations attributable to EQT Corporation. This growth was driven by higher production volumes, improved natural gas prices (as evidenced by the NYMEX index), and strategic asset transactions, including a notable gain from the exchange of assets with Range Resources Corporation. The company's operational segments, EQT Production and EQT Midstream, both demonstrated robust growth. EQT Production saw increased sales volumes and prices, while EQT Midstream benefited from higher transmission and gathering revenues, supported by expanded infrastructure and increased production activity in the Marcellus play. The company is actively pursuing growth through significant capital investments in drilling programs and midstream infrastructure, with a focus on developing its natural gas and NGL reserves. Looking ahead, EQT is focused on enhancing shareholder value through asset monetization strategies and strategic investments in high-return development opportunities. The company is also advancing significant midstream projects like the Ohio Valley Connector (OVC) and the Mountain Valley Pipeline (MVP), which are expected to bolster its infrastructure and market access.

Financial Highlights

42 data points
Beta

Net Income

$110.92M

EPS (Diluted)

$0.73

Total Assets

$11.39B

Cash & Equivalents

$1.27B

Free Cash Flow

$289.56M

Financial Statements
Beta
SG&A Expenses$63.28M
Operating Expenses$339.15M
Operating Income$224.77M
Interest Expense$31.87M
Net Income$110.92M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Basic)151.74M
Shares Outstanding (Diluted)152.57M

Key Highlights

  • 1Income from continuing operations attributable to EQT Corporation increased significantly, reaching $109.0 million ($0.72 per diluted share) for Q2 2014 and $301.3 million ($1.98 per diluted share) for the first half of 2014.
  • 2A pre-tax gain of $37.7 million was recognized on the exchange of assets with Range Resources Corporation in the second quarter of 2014.
  • 3Production sales volumes increased by 16.6% for EQT Production in Q2 2014 and 22.7% for the first half of 2014, driven primarily by the Marcellus play.
  • 4EQT Midstream experienced robust growth in net operating revenues, up 16.0% for Q2 and 15.7% for the first half, fueled by increased transmission and gathering activities.
  • 5Capital expenditures were substantial, with $1.04 billion for EQT Production and $0.19 billion for EQT Midstream in the first half of 2014, indicating significant investment in growth.
  • 6The company generated strong net cash provided by operating activities of $794.6 million for the first half of 2014, an increase of $197.6 million year-over-year.
  • 7EQT announced plans for significant midstream infrastructure projects, including the Ohio Valley Connector (OVC) pipeline and involvement in the Mountain Valley Pipeline (MVP).

Frequently Asked Questions

EQT Corporation reported strong financial results for the second quarter and first half of 2014. Income from continuing operations attributable to EQT Corporation increased substantially, reaching $109.0 million ($0.72 per diluted share) for Q2 2014 and $301.3 million ($1.98 per diluted share) for the first half of 2014, driven by higher production volumes, improved natural gas prices, and a gain from asset exchange.

The asset exchange with Range Resources Corporation, which closed on June 16, 2014, resulted in a pre-tax gain of $37.7 million for EQT. This gain included $28.0 million related to the de-designation of certain derivative instruments. The transaction involved EQT acquiring acreage and producing wells in the Permian Basin in exchange for assets in Virginia and cash.

EQT Production's revenue growth was primarily driven by a significant increase in production sales volumes, up 16.6% for Q2 and 22.7% for the first half of 2014, largely from the Marcellus play. This was complemented by an increase in the average effective sales price, influenced by higher NYMEX natural gas prices and improved third-party gathering and transmission recoveries.

EQT is actively investing in midstream infrastructure. The company announced plans to construct the Ohio Valley Connector (OVC) pipeline, expected to be in-service by mid-2016, and is involved in the proposed Mountain Valley Pipeline (MVP) project, targeting an end-of-2018 in-service date. These projects are designed to enhance market access and support production growth.