8-KRegulation FDExhibits & Filings

EQT Corp 8-K Report, Regulation FD Disclosure (Sep 15, 2020)

Filed September 15, 2020For Securities:EQT

Summary

This 8-K filing by EQT Corporation (EQT) on September 15, 2020, primarily discloses a contract dispute with Equitrans Midstream Corporation (ETRN) concerning ETRN's Hammerhead pipeline. EQT is disputing ETRN's assertion that the Hammerhead pipeline was placed in-service on August 1, 2020. EQT contends that ETRN cannot provide gathering services, nor can the pipeline's interconnect facilities accept deliveries, due to the continued delay and non-operational status of the Mountain Valley Pipeline, which is a prerequisite for service. This dispute has significant implications for EQT, as the gas gathering agreement with ETRN allows EQT to terminate the contract and potentially repurchase the Hammerhead pipeline if the "In-Service Date" does not occur by October 1, 2020. EQT has rejected ETRN's notice and is reserving its rights, indicating a potential divergence from ETRN and possible financial repercussions or strategic shifts for EQT depending on the outcome.

Key Highlights

  • 1EQT is in a contract dispute with ETRN regarding the Hammerhead pipeline and its related gas gathering agreement.
  • 2EQT disputes ETRN's claim that the Hammerhead pipeline was in-service as of August 1, 2020.
  • 3A key issue is the delay of the Mountain Valley Pipeline, which prevents the Hammerhead pipeline from providing gathering services and receiving deliveries.
  • 4The gas gathering agreement allows EQT to terminate the contract and repurchase the Hammerhead pipeline if the 'In-Service Date' is not met by October 1, 2020.
  • 5EQT has formally rejected ETRN's purported notice of the in-service date.
  • 6EQT is reserving all its rights and remedies under the agreement and applicable law.

Frequently Asked Questions

The core issue is whether ETRN's Hammerhead pipeline is truly "in-service" as defined by their gas gathering agreement. EQT argues it is not, primarily because the Mountain Valley Pipeline, necessary for receiving deliveries, is not operational.

If the 'In-Service Date' does not occur by October 1, 2020, EQT has the option to terminate the gas gathering agreement and repurchase the Hammerhead pipeline from ETRN at a price equal to 88% of ETRN's incurred expenses and obligations.

The Mountain Valley Pipeline's operational status is critical because the definition of the 'In-Service Date' for the Hammerhead pipeline is contingent on both ETRN's ability to provide gathering services and the interconnect facilities connecting to the Mountain Valley Pipeline being able to receive deliveries. Since the Mountain Valley Pipeline is not yet operational, these conditions are not met.

Yes, EQT has formally rejected ETRN's purported notice of the occurrence of the in-service date and is reserving all its rights and remedies under the gas gathering agreement and applicable law.