8-KOther Events

EQT Corp 8-K Report, Corporate Update (Mar 5, 2020)

Filed March 5, 2020For Securities:EQT

Summary

EQT Corporation (EQT) has filed an 8-K report detailing significant transactions related to its stake in Equitrans Midstream Corporation (ETRN) completed on March 5, 2020. EQT sold a substantial number of ETRN shares, receiving approximately $46 million in cash for one portion of the sale. Another significant portion of ETRN shares was sold to ETRN in exchange for a promissory note valued at approximately $196 million and an additional $7 million in cash.

Key Highlights

  • 1EQT Corporation completed the sale of 4,769,496 shares of Equitrans Midstream Corporation (ETRN) common stock for approximately $46 million in cash.
  • 2EQT also sold an additional 20,530,256 shares of ETRN common stock to ETRN.
  • 3The second sale of ETRN shares was partially settled via a promissory note (Rate Relief Note) for approximately $196 million.
  • 4EQT received approximately $7 million in cash from the second sale of ETRN shares.
  • 5EQT assigned the $196 million Rate Relief Note to EQM Midstream Partners, LP (EQM).
  • 6The assignment of the Rate Relief Note to EQM was part of an agreement to secure potential reductions in gathering fees under a Gas Gathering and Compression Agreement.
  • 7These transactions effectively reduce EQT's direct equity ownership in ETRN and provide immediate cash and note-based consideration.

Frequently Asked Questions

The primary purpose was to divest a significant portion of EQT's holdings in Equitrans Midstream Corporation (ETRN), generating cash and a promissory note, and subsequently using the note to negotiate favorable terms with EQM Midstream Partners, LP for gathering fees.

EQT received approximately $46 million in cash from the first sale and an additional $7 million in cash from the second sale, totaling approximately $53 million in immediate cash proceeds.

The Rate Relief Note, with a principal amount of approximately $196 million, was received by EQT in exchange for ETRN shares. EQT then assigned this note to EQM as part of a broader agreement to potentially lower gathering fees, which could reduce operating costs for EQT.

EQT is reducing its direct equity stake in ETRN. By assigning the Rate Relief Note to EQM, EQT is leveraging this financial instrument to secure potential cost savings on midstream services provided by EQM, indicating a strategic shift in managing its operational costs.