Monday, February 24, 2025, 5:19PM |  47°
MENU
Advertisement
Toby Rice, CEO of EQT, during an interview at the Post-Gazette office on the North Shore, Jun 12, 2019.
1
MORE

EQT slashes capital budget, announces menu of asset sales

Pam Panchak/Post-Gazette

EQT slashes capital budget, announces menu of asset sales

EQT Corp. is looking to raise about $1.5 billion by selling assets outside of southwestern Pennsylvania, cashing in its stake in a spun-off pipeline business and selling mineral interests. The money will be used to pay off debt that matures over the next three years.

This will be done against a backdrop of stubbornly low natural gas prices that are forcing players across the oil and gas industry to pull back on spending and production.

Although a final budget won’t be available until a board vote in December, EQT expects it will spend between $1.3 billion and $1.4 billion next year. That’s $525 million less than this year’s budget. At the same time, the company plans to produce almost the same volume of gas in 2020.

Advertisement

On Thursday, the Downtown-based company reported its first financial results since Toby Rice succeeded in ousting previous management, overturning the board of directors and taking control of the natural gas producer, the largest in the country.

Toby Rice, President and CEO of EQT, at the EQT booth at the Shale Insight Conference.
Anya Litvak
EQT's Toby Rice says the industry needs to spread good news, and gas, abroad

He said the 100-day plan that promised to “kickstart our evolution” has been a success in reducing costs and better connecting the organization.

For the past three months, EQT posted a net loss of $361 million, or $1.41 per share, compared to a loss of $40 million, or 15 cents per share, during the same quarter last year.

Sales revenue was down 26%. Even though EQT sold slightly more gas during the past quarter than a year ago, the price it was able to fetch was 11% lower.

Advertisement

A large chunk of current loss was the diminished value of EQT’s stake in Equitrans Midstream Partners, a pipeline operator. EQT said Thursday that it plans to sell that stake — valued at $750 million at the end of last month — by mid-2020.

EQT is Equitrans’ largest customer and is in the process of renegotiating gas gathering agreements with the company, Mr. Rice said. This is EQT’s “biggest needle mover” as it looks to future cost-reduction targets.

Transporting gas is by far the largest chunk of EQT’s operating costs.

One of Mr. Rice’s signature promises during the proxy battle was to bring EQT’s costs down to $735 per foot. For an average well being drilled next year in southwestern Pennsylvania, at 13,000 feet long, that would translate to $9,555,000. He said EQT will be below that level by the second half of next year in this area. Its West Virginia and Ohio programs have higher cost and shorter laterals.

Toby Rice arrives at EQT’s annual meeting this morning. Rice is set to take control of EQT after a 9-month campaign to replace the oil and gas company's leadership.
Anya Litvak
Toby Rice wins control of EQT after proxy battle

But while company leaders told analysts on Thursday that “West Virginia will become a larger part of EQT’s story going forward,” the Ohio assets that Mr. Rice personally negotiated at a critical point in his former firm Rice Energy’s trajectory may be headed for a sale.

To pay off debt, EQT is also considering selling off holdings in central Pennsylvania and southern West Virginia.

It is also looking at selling a stake in its mineral interests, as has become more common in the industry with players like Range Resources. A deal on royalty interests could come in “a matter of months,” EQT’s leaders said and might involve a cut of current and/or future production.

Anya Litvak: alitvak@post-gazette.com or 412-263-1455.

This story has been corrected to show the average well cost would translate to $9,555,000.

Go to section

First Published: October 31, 2019, 7:14 p.m.

RELATED
SHOW COMMENTS (0)  
Join the Conversation
Commenting policy | How to Report Abuse
If you would like your comment to be considered for a published letter to the editor, please send it to letters@post-gazette.com. Letters must be under 250 words and may be edited for length and clarity.
Partners
Advertisement
President Donald Trump speaks at the Governors Working Session in the State Dining Room of the White House in Washington, Feb. 21, 2025.
1
opinion
Bruce Ledewitz: The Supreme Court will step up and Trump will back down
Texas wide receiver Matthew Golden catches a pass against Ohio State during the second half of the Cotton Bowl College Football Playoff semifinal game, Friday, Jan. 10, 2025, in Arlington, Texas.
2
sports
Which positions are strong and weak at NFL combine? And how will Steelers approach this draft?
La Grassa Pizza is now offering four-cut, late-night pies at The Vandal on Saturday nights.
3
life
Pittsburgh pizza news: La Grassa’s late-night pies and a big win for Mercurio’s
Pittsburgh Steelers cornerback Cory Trice Jr. (27) intercepts a pass during a failed two-point conversion by the Kansas City Chiefs at Acrisure Stadium on Wednesday, Dec. 25, 2024, in the North Shore. The Kansas City Chiefs won 29-10.
4
sports
Brian Batko's Steelers chat: 02.24.25
Two adults and a child were killed in a fire in Kittanning on Monday, Feb. 24, 2025.
5
local
2 adults, child killed in Kittanning fire
Toby Rice, CEO of EQT, during an interview at the Post-Gazette office on the North Shore, Jun 12, 2019.  (Pam Panchak/Post-Gazette)
Pam Panchak/Post-Gazette
Advertisement
LATEST business
Advertisement
TOP
Email a Story