EQT - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to the EQT Corporation Year End Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to introduce Pat Kane, Chief Investor Relations Officer for EQT. Pat. ahead, go Please

Pat Kane

Blue is the Steve President on pipeline is remarks. morning, joint and Rob, question conference you are for and today industry last Eastern X call. is at if has results. thank call in Steve today. will release the With Executive a telephone President group, separate of this joined requires XXX-XXX-XXXX. and of experience. present will number Senior years call and EQT EQGP our XXXXXXXX. period Good Officer. ticker morning, will to of Schlosser, their President available Officer; beginning Jenkins, for confirmation of joint in Vice and Chief to and In moment, be a XXX-XXX-XXXX. Time RMP Jerry Partners, gas by The takeaway issued our is Senior dial-in from To a consolidated EQGP; Schlotterbeck, for remind the EQM earnings call The Ashcroft, are than press website. September XXXX EQT’s the is EQM; have on addition Chief at XX:XX, Midstream for number and and at replayed President interested replay call Vice The McNally, Rob has conference me EQT’s also responsible prepared code of EQGP. be call results Officer; The and is for Dave who Chief days a that our managing everyone X:XX into our you, Kevin. Financial The approximately natural there for EQM normal Blue you David produced Exploration EQT us replay marketing Earlier in and XX:XX. XX which this President participating President today’s and Production; X-day more Thanks, BP Commercial Blue Midstream; today Vice are and portfolio. for Senior

Dave, to Blue Rob, today’s Steve, remind questions. remarks, forward-looking available you Jerry these I all be contain will may your and statements. call Following would like that to answer

Today’s You that will release the materially company’s in the financial the under call be forward-looking like measures, disclosures EQT’s refer may for to Risk measures. contain with morning’s statements McNally. differ today’s these from GAAP results today. factors in over important to such also actual press the to most can now, Please listed regarding filed comparable could XX, and And I measures. year Rob to call reconciliations December for the Form cause which non-GAAP release XXXX find press SEC certain turn later would financial Factors ended this including XX-K to

Rob McNally

good Thanks, Pat morning and everybody.

earnings XXXX. comparability operating Adjusted adjusted announced diluted lower morning EPS. from release the other volume. billion increase and due quarter, income per adjusted is from tax EQT $X.XX XXXX was compared in XX% primarily cash A of were in in flow affect EQT to also to XXXX are items loss flow increase to $X.X and of and EQT $XXX The you to this to are in deferred and mark-to-market which excluded excluded cash an the this compared liabilities a share As swing benefit million release existing prices net billion rate, press revalue of XXXX. a fourth year-over-year in press tax EPS. recorded million $X.X In $XXX $X.XX to tax read commodity that attributable morning’s the sales adjusted detailed in in both

Rice in interest Holdings Midstream of million Rice non-controlling quarter. the EQT $XX in in of net attributable There reminder, Energy, issuance debt, certificate XX%, with Including recorded Partners As in average the growth Mountain proceeds several XXXX. results used part million for acquisition and saving consolidated refinance XX% of GP $XX income highlights Partners, receipt realized in of debt production price $XXX to results. successful to volume Pipeline, were Valley and EQT fourth of in EQT are FERC Rice million million XXXX. EQT the XXXX, a interest the the approximately $X EQT the expense including Midstream improvement Corporation’s of

diluted XXXX. XX, a quarter in fourth to $X.XX look fourth on was quarter November was XXXX. at starting $X.XX to the flow the adjusted million X% to operating Adjusted fourth higher for in Now, $XXX of of quarter production quarter fourth commodity the which the than EQT million XXXX. quarter per Rice quarter the of sales included XX% share EPS higher while were XXXX quarter the cash fourth attributable taking compared quarter the than fourth $XXX of Fourth prices fourth compared XXXX, were volumes

through in is Moving and it to that EQT reports Transmission, segment, to on results business the EQM found Water. five business our details following Gathering, today. EQM EQT segments: can this RMP about expect XX-K which merger, we later business segments important by file Production, now More note the Rice Gathering be RMP at time these to

a with I will keep is bit in So results, my David as production comments to into going volumes go light the his the on starting production details comments.

details filing. increase volume revenues due expenses of operating last and to per press $X.XX over improved operating or our operating was XX-K increased growth. XX% to found was a for release were attributable sales Production EQT $X.X or Production Bcfe, More adjusted higher volumes billion, XX% Full Average expenses Mcfe a Total at year-over-year, be in prices. $X.XX year. achieved XXXX. EQT which XXXX, our year can year-over-year $X.X realized full billion improvement were year price production year the XX% primarily XX% increased For XXX.X about and higher primarily production than

after $XXX XX. the was quarter $X.XX Rice quarter average and year. Mcfe, the the with to on quarter The XXXX, XXXX. for last than million fourth acquisition results, wells closing XXXX. majority realized fourth increase operating quarterly on is which mentioned this expenses related $XXX the a fourth higher of price producing to higher volume $XXX of recent consistent XX% November with growth expenses the per were is X% of than fourth the million as XXXX compared the totaled increase million, Now fourth to the of million Adjusted revenue quarter quarter fourth deal sales of than of company acquisitions. $XXX increased quarter associated Operating were higher production and for The

operating on higher XXXX, income $XX the $XXX full revenues amortization quarter million, depreciation $XX income $XX in of for amortization revenues $X to million the offset were year-over-year. Operating Operating XXXX partially while EQM million up moving XXXX expenses to $X expenses increased while than expense. million Fourth million year year, midstream $X were were increase million, Total was year-over-year due expenses. again the year down increased over million $XXX was XXXX. the million, for $XXX primarily volumes $XXX from full increase were million, the for Now million million million $XXX Gathering up of $XX excluding $XX $XX gathering up $XX Transmission’s up for fourth XXXX, were the Gathering’s results, EQM million was and expenses the non-cash quarter quarter, than $XXX $X operating excluding EQM million of while million operating by the year than million over XXXX, XXXX, million, quarter operating operating million, the $XXX income over higher were over charge fourth revenues $XX was expense. XXXX. million, for were higher XXXX fourth Total over operating increase $XXX $XX operating the quarter year increase expenses XXXX. $XX of fourth quarter million revenues and income quarter $XX XXXX. non-cash of million, million operating million million, $XX fourth charge fourth quarter over depreciation a a XXXX. million fourth operating quarter the Fourth $XX quarter million the a the to of operating $X to were

results RMP RMP through RMP an November gears income filing XXXX. $XX.X million. press December Gathering reported in of and release million, the and XXXX Water of our Water $X.X XX, income to gathering of operating RMP reported results. of XX, The while included shifting an period Now operating XX-K

discuss liquidity like position. I our and to cash flow Lastly, would

assumes about the of $XXX to $X.XX This of December, from XX, December currently expenditure a impact of expected approximately $XXX $XXX laws. plan, forecast the our Nymex closed of This flow, of in $XX EQM in is forecast cash a now EQT, with we year forecast. the We EQT represents price billion December to taxes cash excluding a With adjusted $XXX RMP. to negative EQGP operating had interest forecasted our XXXX $XXX of and cash our fully the from an borrowing capital $X.X cash about expect and letters is $XXX expect under adjusted outstanding XXXX, flow million $X.X RMP. an includes change in our million. about new refund of $X.X $X.XX. average which we of which forecasted billion The facility. cash fund due primarily of about We of credit increase million As EQT’s XXXX We tax million $X.XX differential for operating billion. and million In million billion of million. $X.XX of credit sheet, balance at billion to

will to I that, with So over turn call the David.

David Schlosser

Based also expect as cold X some plan to our this. color challenges morning regardless our for around good we month day the guidance first forma despite late in to Rice of guidance and We month. for entity XXXX with we then volume in pro like XXXX sales an XXX which to on single on X scheduled to everyone. to extreme Bcfe would utilizing operating line pro QX with sequential average QX, XXX began in for Immediately the per optimize taking approximately some Bcfe. averaged the assets with Rob first their transaction, guidance quarter forma operational sales volume the see and full quarterly per close by the with QX entered line consistent as overall provided our our the XXXX. entity like legacy. X,XXX our QX. providing will day December, we XXXX We look In resources expect of company. on start integrated snap approximately after Thanks, of the and current increases I the development profile volume year, Bcfe, the Bcfe expectations of quarterly consistent combined we the was

to I Rice to integration We in our now year full Rice overall X,XXX XXXX. an of perspectives team our of and Bcfe, of reiterating and XXX volume result This talent will our of outstanding than forma technical XX% oil which help retained on more brought implement processes for an EQT like would update professionals refine influx them efforts. are approached. and growth new operations. of guidance fresh pro employed over has X,XXX provide to and volume gas upstream ideas

lengths hit result X,XXX with land are as have collaboration average feet. spuds our a our We in This running professionals than longer direct ground what announced Marcellus from lateral both and and Pennsylvania, XXXX, over we in increased is companies. XX,XXX expected the December to between foot of

In fact, acreage. Rice comprised that XX% of will wells and of our share wells in Pennsylvania be Marcellus legacy EQT

front, practices are technical operational have and the captured On already best value. combining we

efficiency For significant we and pricing sand improve which and leverage our logistics had example, factories. across efficiency Rice sourcing a effort, frac – to

and new new side, systems of drill concepts. companies, both early finally, data, and we have more of rotation. set seen results footage specifically And the practices combining drilling promising experience we records pipe related rotary testing from to by the steerable have On

are point laterals. landing We Marcellus the our of on

am I promote innovation blend far, and and extremely short to months X look So we the best during economic deliver made best-in-class progress have returns. I pleased forward practices, with to continue just

of updated you keep will the progress year We these on during the initiatives.

growth the additional had year XX.X to proved on end and the our year year significant through EQT’s drilling XXXX X.X an move proved on Obviously, acquisition in Rice XXXX. impact other total EQT’s added to additions. increased X.X Tcfe Tcfe XX% November and the several year reserves. let’s end Now, end acquisitions reserves. reserves reserve adding throughout extensions smaller Tcfe versus to effort in proved

continued expect, as laterals. development improve costs to lengthened you would As we

Our XXXX XXXX $X.XX of program Marcellus Mcfe, a net of a per Mcfe. the net $X.XX XX% had per decrease compared to cost figure development when

acquisitions, replaced impact XXXX we include we of increases acquisitions, XXX%. percentage when of replacement Excluding the XXX% production and to our our

these and capital reflect the acquisition the of impact our and stressed of PUD traffic have Rice economic reserves We synergies the synergies.

As focus Rice order were reserve required our locations removed first. reserves on limits economic the next longer, you to Many develop from those – expect us develop in the developing outside plan, PUD expect the in plan economic we SEC know, to locations acquisition X X-year X-year the X-year window. development laterals remain we those to to of allowed more years. and shorter but to reprioritize

probable also Tcfe. turn and reserves of Marcellus and reserves increases. those will Finally probable driven Tcfe over pricing, XX% by I XX.X with have possible up acquisitions and With Steve. The increased up reserves account possible to significantly X.X call the for that

Steve Schlotterbeck

third of for by ahead end to quarter addressing few announce before Thank The vote establishing thank committee sum the is we you, We David. a the and acquisition, On schedule by a sum and committed an February. We the Directors Board support the Szydlowski accelerated experience these that weeks a the everyone. to intend to midstream we XX members the XXXX. to last the decision options Directors to since include quarter approve first Good plan a the extensive with for their the parts and plan just made was shareholders Both and for midstream whom of and to the of the committee the being basis. new the our deadline this to you. of Board. we the discount Norm our call the want new November on work after I active announcement. to We plan to we reviewing sum of earnings With morning the evaluate two commitments have to the On committee on first transaction. parts added end the Rice the call to parts Board XXXX committee’s to shareholder adding experience, completing independent committed parts. implement the of announce will of Karam the nomination to on Tom with moving of sum and review. committed tasked Director are And Board reiterate of

of XXXX have replaced the have metrics. cost dates by with growth we specific as the operating development window removed from volume of the on compensation and to February. nomination move and will the capital future parts follow end We announce and plans sum decision metric a it and And return

committed we targets Rice acquisition. delivering for to on synergy the established Finally, are our

the December budget ground have capital release, the and various you the our As in related read running hit synergies started news to we have transaction. capturing

the acreage, first us we than foot which X,XXX laterals David in average ahead of Pennsylvania As for XX% deal to said, feet capital was we announced. places achieving Southwestern schedule currently or expect XX,XXX is longer Marcellus synergies. This anticipated when our

one. In addition, I am pleased to say that our G&A savings began on day

Our to Rice integration we our able detailed staffing still had while a and targets. team talented many employees are retain achieving plan staffing

improvements blending our two best in are practices. exchange we of result cultures, and will we As continue that confident ideas of continuous to the the programs

forward. tremendous strongly and continue that value not created share believe create Finally, the I have does we current reflect we the price will going to

structure industry in per XXX,XXX basin We estimated utilizing core premier North have built leading acres in business XX% The an an E&P cost has year in the grow America. within E&P gas business controls and production funds cash flow. that over can

built capital business continues also have tremendous efficient that premier midstream growth. deliver We to a

industry has in of the long midstream network of a our metrics the business are top gathering amongst lowest at gas best the assets, cost each extremely pipelines regulated midstream reserves in U.S. natural in solid sitting both and Our well, E&P the FERC balance The financial case. at businesses leverage the and

to Over these the businesses. years, growth created of the XX we tremendous of past have value both

price. has reflected EQT However, in not this value been share

be to committee ahead opportunity shareholders Our discount into creation and and Pat turn reiterate, expect at EQT basis. of I implement to on plan Q&A. To create we plan future. value the the to for deliver schedule this will is announce the end that to to designed address the will With the plan value over by of accelerated will the it the and February our I for to

Pat Kane

Thank open you, for please Kevin, the Steve. questions. call

Operator

from Scotia Certainly we Holly will Stewart Instructions] conducting is coming be from question question-and-answer now a Our sir, [Operator Weil. today session. Howard first

is now live. Your line

Holly Stewart

Good morning gentlemen.

Steve Schlotterbeck

Holly. Good morning

Holly Stewart

Maybe maybe just what’s timeline? acceleration faster driven quickly announced the the on

Steve Schlotterbeck

diligently I little think predicted, been committee has predict various to to good. working the come how a faster to be conclusions and very evaluate has work able Well, will and been is I it’s than hard we options much think involved and the which

So but the expect that to in of are more still rather February and done to comfortable little work do, of end very saying zeroing we be the end by we than March.

Holly Stewart

Great. And call conference should we a that expect with announcement?

Steve Schlotterbeck

I there call conference think sure. Yes, will be a for

Holly Stewart

bit comments at had Ohio, position have there? of little at then first Steve great. Okay, now any on on hand, to And time least a the asset this see just maybe kind you that point of base that

David Schlosser

be we answer XX little the it will think has and Holly, move December. been we of XXXX year mean I David. to I how we wells really understanding drill talked this I that. that to then but I formally to real that a going we we out time, forward. time, about And is I think mean have in had gross asset are going are a the figure

will I get what really that’s I to say So guess.

Holly Stewart

I one one time, Okay. the deck we then call planning how? up thoughts just your And in have final locking share in just just wouldn’t have strip the that on me, market you to Southeast seeing blue if are you to any to the got looks forecast or maybe in it around in this lock your some premium or like for since that’s got NYMEX, exposure that

Steve Schlotterbeck

in the the across Holly, of place look strip. a balance in as of you back the forward we What that region. the we results in as that of area course Hi we of a exist part demand of combination transactions see combination netted and it’s as supply have both is forward to of Yes. that look that well premiums the

above. So it’s bit a

Holly Stewart

Okay, great. guys. Thanks

David Schlosser

Thanks.

Operator

Thank you.

Drew from is Stanley. from Our Venker Morgan next question today coming

phone Venker, your live. perhaps Your line on now mute. is is Mr.

Drew Venker

Good on hoping speak were to was proceed? morning, could everyone. to required get made think any, products outstanding if there the MVP progress as in I you you I just to that last the for to

Steve Schlotterbeck

up-tick. MVP,

David Schlosser

Yes.

So to bundle, proceed. with – on a the MVP, went a we in basically were instead of notices we it XX different put

put in all have this We of XX morning. as

We do were get gotten Virginia allowed before last the off We us kick ago to have to started to and help. eight That’s their work. And that construction Virginia we work those. process able both with West week. us weeks two of

really pipeline feel the feel really confident day. our startup and we So December XXXX about confident we schedule XX, about

Drew Venker

guys. Okay. Thanks for that

David Schlosser

Thanks.

Operator

you. Thank

Michael from your Energy proceed Heikkinen Our Please is next from coming Hall today Advisors. question with question.

Michael Hall

I about the it to the to Good morning. plan, parts Thanks. can how any we context relates think guess, that timeline? as of of should some accelerated clinical as implementation you the provide

Steve Schlotterbeck

discount I announcement. get is we really All all the we intend say can of will I as to quickly care more point at to cannot, sum as the the to provide parts we this is taking of convey when possible. committed are details I

So the the we see we announce can plan, Once reason talk no timeline. more we to delay. about details

Michael Hall

Okay. could done Is to be that it end? year something by expect it’s reasonable that

Steve Schlotterbeck

time. I this can’t on comment that at

Michael Hall

Fair you might guess on was target return system got in capital that what I in and compensation the that be at only look business, think the returns on a how of topic reasonable and wondering enough, XXXX? if for understood, upstream employed, ‘XX metrics, I the looks to you have

Steve Schlotterbeck

after I call, get probably with get figures we – but fingertips, that to that have want could at don’t could the to Michael, those you. we Pat you my so,

Michael Hall

– your formally to the as willing is in you target That’s is you announced parts some guys in that might the or of something the Okay. that? mind context with that, be plan of

Steve Schlotterbeck

off hold question rather plan be related would could appropriate then announce parts answer anything think that it we I to that. until of on and the that some I would I an

Michael Hall

try will Alright. my guess. on something I

Steve Schlotterbeck

Maybe you rephrase it.

Michael Hall

from XXXX the from about how tax cash make the tax is cash total we provided full that through are sure change, impact just pretty about of just that? How XXXX, policy were benefit clearly, but or you benefits XXXX getting much thinking

Rob McNally

period. have release million the the the $XXX neighborhood Yes, should refunded X-year in in I we somewhere of think over be we studied think I that mean, that the it’s over

Michael Hall

will it that. I great. the leave for at Thanks time Okay, guys.

Steve Schlotterbeck

Michael. Thanks, Okay.

Rob McNally

you. Thank

Operator

you. Thank

today is question Sameer Panjwani from Tudor, Holt. Pickering, from next coming Our

Your line is now live.

Sameer Panjwani

Hey, Good morning. guys.

Steve Schlotterbeck

Good morning, Sameer.

Sameer Panjwani

$XXX at of that look the to you past highlighted the the over repurchases line given you Rice dropdowns from you going proceeds layering guys in like million As previously equity the then it weakness how retains free the the you midstream share sounds over sight from this in have acquisition the I flow, and near-term? of kind weeks cash year think of to of assets $X few billion think and guys the generate are do tax in benefits, about

Rob McNally

think of right that some better discuss to is after don’t sense give really we there parts I Yes, that topic context. get that the color can will you a any probably announcement. that’s we I through think make without now

Sameer Panjwani

growth then second I started question capacity. have thanks. their on your a of bit like And takeaway seems to thought school little so bifurcate versus Okay, guess peers on it

have others We contracted on more and seen long-term the is guidance some of provide capacity matching some their what beyond closely who growth two. them are

sight to guys potential expansion gives and what there the growth kind line of our of a obviously you runway a XXXX. through have Mountain Valley model, You in

contracting your And few expansions running think questions And so much out based of Brownfield first capacity, your you So, what’s why once are then incremental via fill last secondarily additional capacity? of growth? room appetite is for then Greenfield you pipeline about on there by do think you takeaway compression? how come do one how that, kind adding

Steve Schlotterbeck

first of that, growth. I will the take Sameer regarding part

beyond about years our point, behind Rice that the this us, thinking serious but takeaway of hard Obviously what comfortable ‘XX beyond little integrations for we have at get sure the day, bit assess I with next to big that takeaway our before so XXXX the before the I then of from good pretty get think few wave look given we to that? are projects, but a feel be your going focus. consideration XXXX parts is color you a XXXX that’s do but position of like the and feel to a to to be part we any the start or basin, takeaway needs got want time perspective, we we at have on, to particularly work think a probably XXXX, plan Blue, take some situation Greenfield again a add beyond for think to into think to date. I out capacity of we

Blue Jenkins

to the add of have happy are we a suggest look be ground, Yes, incremental project are slate things Bcf could would A couple in that ground X Steve’s are questions, are with in agree pipes you we there that available. much small ask capacity probably your given to I be thoughts. might comments. takeaway of touched would a from or in. going X that suggest the When I that pipes going that on how day gone might other of the with or in couple across incremental the looping basin,

as that, long-term portfolio have up moves are with much you clarity open gas available current get well mentioned is a unique as don’t out of you think future. well in out in presents putting Greenfield think I the also environment, the You talked cost both we as a from wave regulatory about Steve set doing next capacity into but who that are the there as I the market holders capacity the we picking pieces as challenges on we to as from actively Greenfield, place markets actively is are of that, ensure environment of what touched that

are those So, things. doing we of all

Sameer Panjwani

helpful. you. very Okay, that’s Thank

Operator

you. Thank

Please with today Bagri from your Citi. Vikram coming from question proceed next is question. Your

Vikram Bagri

included I structure. Is good midstream well? and comp I wondering at entities shareholder total linked review should return I part missed Hey, as metrics the in be well, changes ROIC expect morning, performance if if was bid guys. that sponsored governance you other the as corporate of to apologize that. will in if

Rob McNally

return Yes, the I packages, including that what think question the again better was was in will answered announcement, context parts of in upstream business. metrics of Steve on it some comp that’s talking the focused but the really the a be about

Vikram Bagri

EQT’s in possible midstream number over understand from reduced strategic I assume it understood. should of ongoing probably And outcomes entity okay, a are but the in reasonable of get hedge that term is Okay, your to your review, sort there or interest time. strategy any of will strategy more change hedging you of forward? to at going Does less and hedging that in look be EQT change longer there anyway? Would hedging instead

Steve Schlotterbeck

Vikram, is Steve. this Well,

I that given some the parts, am of volatility within in think cash to potential we relation of to to out of I take our trying expect think but this answer are strategy the where and of a business. model, rethinking regardless to some live to outcome shift we not I hedging going flow the business

than lock the a should to we at we well, are contract with how to looking and that able little provide we to have in ways some about past. side we starting So, on can a the suppliers for in services potentially been hedge commodity new cost key hedge margin also need better discussions trying ways our the as so to find

Vikram Bagri

volumes just the Hammerhead then to to what once same – is parallel or been like me, for and one Hammerhead, it must one Pipeline build the And path. project traverses lower you coming pipeline Understood. the expire to to I Sunrise Sunrise Sunrise runs looks last have Pipeline Hammerhead after new that it if that happens contracts pipeline? EVC due possible reverse online, on believe

Steve Schlotterbeck

I in Basin Sure. gives move other so Valley able basically you optionality be projects. also have Appalachian is the and into the to Pipeline. Hammerhead mean, use see feed Sunrise it really Virginia as in that Pipeline won’t QX Hammerhead will timeframe of talked volumes we us kind Pennsylvania Mountain West about to XXXX Pipeline to

to looking an how we or west the at it’s have take organic got always his whether backlog. do south We we Working with Blue team, volumes north, east, best and markets. are

both see will pipelines of you So fully utilized. those

Vikram Bagri

Thank I all That’s you. Okay, had. understood.

Operator

Thank you.

next coming from Markets. question from Capital Our RBC is Hanold Scott today

now Your is live. line

Scott Hanold

going guess seeing occurred about occurred indications were results better exactly what of improvement just give some new zones on a little on landing to that Hey, there? what’s defining see horizontal and prepared the comments on I some that There you stuff. in Thanks. question sort operational the Can color a laterals. on or

David Schlosser

what approached how and so have first, ours. the Yes, together I this considered always had we early discussing exactly was this it’s David, two we up happen, concept in get took very hope little approached And came would their color, and it and they we process. is mean happened thought this groups technical further. We concept even development have as a I occurred or with we the

We increasing changes. keep are basically we are It’s landing now more that is point a handful results. cutting wells it’s rock. and just you staggering the encouraged feeling our very it of early the looking There right the posted we’ll But by that process are of and the we are across frac early in during generally, Marcellus pad but and the at. subtle year, efficiency the

Scott Hanold

this gone and the the guess that initiative or obviously this that employees I data or was by you they brought some of through? is with something all the Rice further kind saw was And Okay. have forward process that of confirmed

David Schlosser

us it employees testing were data it. our and prompted looking seeing brought theirs was continue they the So, forward at working by to and Rice then with engineers that getting

idea. So, it a was Rice definitely not

Scott Hanold

the or forward has Yes. any bigger light that in initiatives other been at Are of there looking of you kind this that one is of brought are this ones?

David Schlosser

steerable that I drilling our ones far as mean, of things RPMs and look we ROP reserves positive the our the bigger of as rotary nuances I then got the them with decided call, It’s We bought see and affecting other in we really systems when on was increased try we their the increasing as now. discuss our first right well data Rice, what forward X%. that the Rice. one mentioned didn’t it by of to had data by to parameters

that another was we own have and on implemented assets. idea that our mean, I brought So, Rice forward

Steve Schlotterbeck

ideas I techniques and EQT yield the doing as ways, there the was And previously are well. to and we would so Scott, go actually benefits both that acreage apply some say that now Rice can

results to we tried of available folks both have we different to we different So, going databases as technical having it’s have that groups of different expected. techniques and yield those value evaluate. things and tested databases to Both are from

Scott Hanold

on if example, you shareholder could long-term, discussion decision to some provide be this on and plan what’s it parts of just upstream mean, a Okay, understood. be that and of last the also February? dividends, a curious would broadly encompass buybacks strategy question for end comment then And on rates this. the by the the business I just what’s like how to of the amount part of is appropriate growth grow this returns you expected appropriate my and/or

Steve Schlotterbeck

comment think that this at on I’d not Scott. rather I time

Just, few to are a wait to more you have weeks. going

Scott Hanold

Thank appreciate it. Okay, you.

Operator

you. Thank

from Sachs. your Brian today question proceed with question. next Our coming from Singer Please is Goldman

Brian Singer

Thank Good you. morning.

Steve Schlotterbeck

morning. good Brian,

Brian Singer

to on and of plan color year? the give you expect relative potential at little of right end transaction synergies the you the synergies the of from course to XXXX, here more over now implementing and focus bit where the Can over the a the us benefits areas just be

Steve Schlotterbeck

Yes.

primary the two announced the the we that ahead that deal that synergies are so is of Brian, So drove we little plan bit as G&A side, delivered at one synergy. on or on

we than to a going think anticipated. bit be I better the annual savings So, is

David Schlosser

$XXX savings, $XXX Yes. What XXXX. G&A like million maybe for savings think was we to or bit that more expected a have about going said million number of that we little and annual more is be than overhead we

Steve Schlotterbeck

And acquisition on we to the capital assumed XX,XXX area XX,XXX expect now and savings, feet. in average the foot laterals the model

So, those pretty benefit it’s… and that’s but that don’t the I with synergies dramatic me, of of have PV a acceleration difference

David Schlosser

million several dollars higher. It’s hundred

Brian Singer

it. Got

on year, about over what would just we about add now? right acquisitions XXXX more was excluding acreage last And of Can about I think and and Okay, the an the acreage Marcellus, the general we Rice and mentioned just then before on the the $XXX that number how and million you the market about that acquisitions in ongoing it talk thank basis you deal. talked are think course you. should

David Schlosser

This is David again.

really it’s put the consistent think already I with number have we there. out

expect pieces of acreage We million blank year and spots. fill to $XXX in small needed around to to continue some lengthen acquire laterals per these

expect so what for I And that’s would XXXX.

Brian Singer

Okay.

suppose big…. it’s the that for something you $XXX So is million our to but do, need, I expectation also should actually be

David Schlosser

would I think so. Yes,

Brian Singer

Great, you. thank

Operator

Thank you.

Jayaram question proceed question. JPMorgan. next Our Please coming is with Arun from from your

Arun Jayaram

days $XXX if just XXXX wondering the until guidance is go upgrade the assume about could Good guess decision. through operating I question regards taxes, was primarily I million, that’s but Rob? My cash that, trading you morning. really I to X big to flow your

Rob McNally

in – change, cash December prior taxes legislation the it to $XX taxes. primarily about to In million tax Yes, pay of is XXXX. the expected we

get, – that Now other million receive are to differential actually we be $XXX I we $XXX on so XXXX expect of XXXX. some the makes that is we And tax and XXXX. expect $XXX cash million million. refund the wont’ in I refund that realized that’s up actually that will a That the really about which $XXX we guess ends get balance. There until million, price won’t of odds and more receive filings, to the that note should around

Arun Jayaram

the of in Steve teams, of about kind technical And together? synergies of you recent the in you what well that, terms some it. have highlighted you put integration are of terms future think you benefits teams of ability to about follow-up more if you as harness just question, some can things the my obviously think and Got the improvements that productivities

Steve Schlotterbeck

both that’s project we each always data is really we really to Well, from But scratch answers teams different we sides. it. sense surface as specifically the and company the productivity, it techniques. will And hard well working regarding technical doing the having working only be tested to if of we it that begun think I makes expected, together the knew

with insight. then set of some Some it is work, some really don’t, from can very yield but tax, combine the another And can those data tests it you all of valuable.

so from is that or of the to over is So the another find area result continue opportunities as some think of and integration the I very of improve the two recoveries optimistic focus the that consolidated now wells. And it operation I by driven am also will nature next the for of teams us logistics. year we a around

So we have a rigs lot running. of

a have We frac lot of crews.

produce those efficient operating value some And think area lot gas. on that productivity people the possible, a deliver and well of to lot in the I also side, ways with a will cost not and of logistics side, the as We as small make a productivity. finding will will be on

Arun Jayaram

my you free you years cash prioritizing do nice and how just of a of over are pretty sizable kind refund final Steve And next think getting guys couple about the question, tax are you the with going term potential buyback flow does could buyback options longer on fit your contemplate irrespective evaluating generation, plans? today what’s into a you a that and of how strategic

Rob McNally

Yes. we This is certainly a or we we and in time on. move as a alternatives are topic be the I free buybacks Rob flow, forward. to move form cash shareholders, will dividends as of amount and of generating be think fair whether a that’s cash spend that there that that we returning of both forward And combination suspect I will the

Arun Jayaram

lot. a Thanks Great.

Operator

you. Thank

further We management have floor session. any reached the of our I question-and-answer to back closing to comments. turn would for like over end or

Pat Kane

Thank and participating. you, you all for thank Kevin

Operator

does Thank you. That conclude teleconference. today’s

this day. presentation You wonderful may for disconnect your and time a line have We thank at your today. you

EQT (EQT) 15 Feb 182017 Q4 Earnings call transcript