By Anya Litvak / Pittsburgh Post-Gazette / October 23, 2014
EQT Corp., a Downtown-based oil and gas company, reported net income of $98.6 million, or 65 cents per share, for the third quarter. That’s up from $88.3 million, or 58 cents per share, for the same time period last year.
The company began drilling 42 new wells in the Marcellus Shale, 13 in the Upper Devonian shales and 36 in the Huron shale during the past three months.
The exploration-and-production company’s sales price for its oil and gas during the quarter was $2.94 per thousand cubic feet equivalent (Mcfe), about $1.11 lower than the national average, because the Appalachian area continues to struggle with a glut of gas and a lack of pipeline capacity to get that gas to markets.
For the fourth quarter, the company is expecting the situation to get even worse, with a sales price of $1.45/Mcfe below the national trading hub price. EQT expects to be able to recover a large portion of that loss through gathering and transmission.
EQT Midstream Partners LP, a pipeline spinout from EQT Corp. whose results are incorporated in the parent company’s earnings, also reported financials today.
Its income was $56.5 million, or 85 cents per limited partner unit, compared with $44 million, or 60 cents per unit, last year.
EQT’s CEO David Porges said the company’s annual strategic review dictates that EQT will be drilling fewer wells but extending its horizontals longer in the coming years. That will continue the company’s trend of production growth but with fewer actual wells in the ground. EQT has 580,000 acres under lease in the Marcellus, Upper Devonian and Utica shales.
Mr. Porges said the company wants to develop its core Marcellus and Upper Devonian assets as “fast as practically possible” with the main constraint now being takeaway capacity.
That’s an opportunity for the company’s midstream group and for EQT Midstream Partners, which will take on an ever growing share of midstream capital expenditures for the company, EQT said.
To that end, EQT announced today that EQM would be the one developing the previously announced Mountain Valley Pipeline, which will extend gas infrastructure into Southeastern markets under a joint venture with NextEra Energy.
EQT has drilled 38 Upper Devonian wells and only one Utica well so far this year, though it plans to test more in the Utica in the years to come. If those wells prove to be more economical than the Marcellus, Steve Schlotterbeck, president of EQT’s exploration and production unit, said EQT might shift some of its capital resources from the Marcellus to its deeper neighbor.View full site