EQT - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the EQT Corporation, Q3 2019 Quarterly Results Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Andrew Breese, Director of Investor Relations. you. Thank sir. ahead, go Please

Andrew Breese

Blue morning and With Chief today's call. Officer; for Officer; Chief President Commercial Officer. thank today are you and Financial me Chief and Derham, joining Executive Toby Vice Kyle and conference Interim Good Jenkins, Rice, Executive President

replay call confirmation replay the available is with a will The of on a XXXXXXX. for for website for telephone beginning period number today's code X-day this be our evening. The XXXX-XXX-XXXX,

prepared remarks. Toby and Kyle our will In a present moment

Following take morning, a is and Relation we’ll to these Investor available new remarks. the prepared refer of Investor published remarks certain EQT questions. your our slides the Presentation website which this will portion during we on

results year statements, and these Risk events differ to from of and earning materially Form because future to like you filings XX, call remind duty may Actual XX-K December XXXX, I'd could forward-looking forward-looking described today's Form ended sector to of the release with that update the subsequent time in make for factors we Factors not SEC. today's contain We any our statements. undertake forward-looking our do other any the from and statement. XX-Q time

to non-GAAP reconciliations regarding also this may Please comparable important the Today's call morning's GAAP for financial most such measures. Release contain to certain Earnings including refer disclosures measures, financial measures.

I'll that, over the turn Toby. With to call

Toby Rice

a of joining you period accomplish for progress excited in forward. can to made I'm believe thank us. and morning, Good at short moving what we the we've time we share

some before our the third a thoughts brief Kyle on with our XXXX results, XXX-Day call and to and macro. our leverage preliminary provide quick and over I update turning initiatives Equitrans gathering outlook. to will negotiation an the liquidity also to on I’ll agreements Plan gas on the to amend quarter discuss provide improve update our

I cost our and needed saving deliver we us to was start the XXX-Day the As with goal to October achieve for on share discussed you our XX pleased we executed a Plan plan. in kick elements day-XXX to foundational reminder, that our campaign. for am and targets successfully the that our evolution have marked

Slide some goals. the in dozen to milestones quickly a needed performance the practices leading assets fresh and meeting best out proven a July, with record lays are key have are and our added existing offering our to six leaders of Starting EQTs generate off a track to achieved. following annual key we EQT we organization, the operational operating new of of complement team. perspectives These presentation leaders they great start. basin leaders achieving toward Over the

our These XX%. In streamlined and XX led migrating to September changes reducing concurrently the we and by proactive more much organization. a to XX nimble, communication, headcount simplified workforce have enabled departments from by greater organizational structure, accountability approximately

to save overhead. million reduction We and gross, of approximately expense capitalized consisting expect general in administrative a $XX million of in million reduction and $XX $XX XXXX costs in SG&A

increasing progress. down being XXX% As annual initiatives, embraced departmental Silos made fully it platform in relates work are collaboration The transparency and our environment, significant workforce participation since have are our to we technological accelerating. digital inter and knocked our with has the meeting.

business, planning allow within optimize modern critical spotlight efforts workflows XX-most shareholder our business our have our the maximize prioritize for revived to successfully work to management technology monitor employees, our driven needed value. empower and and We workflows inefficiencies These them environment. digital the

months. XXX the in the to working We turned workflows those are currently have through coming and expect online remaining

schedule. initiatives, to our relates have for stable, we scale tracks successfully it laid establishing large operational a the as operation combo by Lastly, development master

to properly of pads XX reminder, simultaneously. spaced, combo develop large to projects a multiple scale XX wells As consists development for

we XXXX XX% of potential low key development. be while delivering position. to combo This XX% our for spud to well costs, the In wells maximizing Turned-in-line of set roughly the undeveloped expect wells of our and consistently is acreage

the quick field. seven speeds Marcellus some the the and up in in XX% quarter wins are of increased drilling we had efficiency the have also third fresh team, technology On speeds We’ve relative This change offering highlighting slide perspectives are the to quarter. in field. is result leveraging in Utica an second experienced the drilling drilling XX%. step in

Rice all the using led being choke Additionally, basin well that designed productivity completed of program are management and our at proven well Energy. leading, wells to

XXXX. base basic future as December As volume targets. by from decline a decrease result December to to required XX% decrease XXXX capital base EQTs the from measured rate to will of in decline expected PDP result, we XX% less achieve This decline to expect our in certain

been massive a summarize, our has in XXX-Day Plan kick evolution. starting success To the

on EQT to faster deliver savings are on We and the in we we it for which promised sets up cost the campaign, doing thought, we XXXX and during track beyond. well than are success

Board preliminary excited December, our we in share The are be formal the by outlook. will but to budget XXXX approved

capital not debt free plan We to absolute net plan in gas debt generation rather flow cash environment, EQT in adjusted and to to price Xx out-spending Our below to flow has allocation delever this we there get through philosophy cash asset EBITDA reducing changed. grow monetizations, than EBITDA. to by

development capital to cash-on-cash call, development of primary the XXXX inefficient drill our maximizing to all the large generating with cash projects existing removed of on generates and flow This discussed ensure efficiency evaluated returns. the we it allocated while was and capital development driver as free philosophy XQ plan budget. we replaced bit combo scale Further EQTs attractive

and development or an of $X.XX. roughly will to to execute as We plan disciplined expected sales flat price XXXX billion X.XX of to strip between XXXX average to $X.X volumes of levels, pricing spend that NYMEX result in billion $X.X program CapEx a

of XXXX. of We expect $X.XX free to generate $XXX cash $X.XX flow million and in billion adjusted to billion million adjusted to $XXX EBITDA

billion million and $XX $XX just of of reserve is Turning of to land, four into of $X other XX, midpoint capital; to we broken capitalized CapEx At over $XXX CapEx main million our plan slide million the down areas. overhead. budget development guidance, spend of

Ohio, further break We Horizontal Utica. Frac our four down to and reserve three two budget to three Marcellus; rigs four three We operate Crews. Pennsylvania, Rigs, Virginia, plan by to our areas: Top-Hole and Marcellus; operating three development to West

our Approximately Ohio the our deployed will capital to due in efficiency worth remaining Plan. to XX% horizontal of and are Virginia. the gains of number XX% rigs It's West used XX% EQT to the half counts realized Pennsylvania, be implementation to XXXX, largely these rig XXX-Day noting during of

we foot XXXX be well Virginia at we XXXX in $XXX will XXXX of and approximately be costs $XXX In in over full spacing. XX% spud foot foot our our Marcellus operations, and per West well expect year PA to per expect

On in XXXX. EQTs all feet, West we and XX,XXX particular. wells operating West turned line is average slide like will is This increasing our in Virginia is to for to operating and area. see XXXX Virginia call increase jump well but feet development length lower links in expected a the XX to to of contribute originally you'll than lower lateral cost feet well faster driving the expected. to in which X,XXX XXXX, per areas, in lateral X,XXX three down breakdown cost highlight foot. plan like out by I'd I'd

larger area term long much master As at coming years. a the look in will our operations West focus we become Virginia schedule

schedule. approximately units maintenance million $XX and million land to is on infill than $XXX of approximately term lower in or development near budget million Our budget. $XXX leasing allocated EQTs This XX% consists the land million leasehold XXXX $XX to allocated

calculations spend bucket $XX Our $X unrelated generally other represents interest. is is from and of CapEx cost million budget foot million therefore basis. our asset This category installations, reserve $XX maintenance to well projects. and maintenance is of CapEx The maintenance of asset excluded development current shown general compliance, per of in tubing site not million other development related capitalized and consists well $XX our repairs and on road to

or have is we capitalize and can $XX consist lower XXXX. budgeted which costs employees our These million of primarily to Lastly, of that XX% than be overhead, development projects. allocated overhead million directly approximately $XX

are context. to of our XX% across costs. as legacy puts XX track controllable for portion costs compared We budget believe a we decrease XXXX EQTs a on large Slide into

we and the be the lower over left XXXX well legacy management decrease with costs year, half trend per of showing expected Well are to are a foot well foot. This $XXX from Pennsylvania per foot. well $XXX estimates. per costs will to decline to expected the course second on down XXXX team’s for XX% the On cost costs average represents

through XQ of some into to well of this cost aren’t stand work inefficiencies good foot, improvement is which guidance. shows at per approximately baked costs progress. the $XXX schedule; we XXXX show all our as CapEx however, prior the much well XQ expected

be from This down which showing the is SG&A XXXX expense XX%. or we expected are In plus is G&A, million $XX to middle capitalize overhead. gross

XX% XXXX and land other $XX showing the reduction. expect we be from which On another down million to are right, CapEx we or

generating told, $XXX incremental development savings growth EQT of our program an million these maintenance extent production is under future, savings To of in execution would resumes per the All this the accordingly. grow year. cost new regime

we expect production to Turning we maintain XXXX XX, be, what volumes. purely CapEx illustrative, XXXX but to and is highlights wanted would slide this if XXXX

transportation in primary CapEx provider profile expect with XX% dictated XXXX costs. ’XX We and $XXX cash influenced activity to term decrease our based ’XX, be in service negotiations but spending Ultimately gathering billion from by decrease would and levels. levels our a long also to the lower drop free our gas prices, the approximately million will and flow on of will be our outcome Equitrans, midstream $X.XX

structure. is a relief and grow gathering Equitrans in straightforward; cash lowering gas volumes simplify this step negotiation and environment. ability enable the flow the cost fee the EQTs to in structure EQT next EQTs price reduce is in generate fees free to meaningful Achieving goal lower to Systems

team add parties. Over of weeks tied in-service that other Valley progress timing would for fee fee relief is projects the over exchange be a have Pipeline, a for the Equitrans Mountain to going service. with relief that be likely EBITDA In Equitrans made including a to date good the million believe project win-win couple will both we we solution upon related expected last of for of gathering of towards in $XXX the

the an of a commitments in extension flow term cash long Equitrans contract volume shareholders. increase offer term and provide can certainty the EQT minimum to substantial Second, for

EQT Lastly, acreage Equitrans. its undedicated position the dedicate Virginia to of can West remainder

West highlighted before, a will of larger have Virginia become going EQT story forward. part we As

costs are the capital. to swaps show in diligently months. in acreage success progress competing and have both area encouraged place laterals, executing well lowering for in recent I'm an Our this made few we and agreement have by next is working the extending sides

I'll With that, turn to Kyle. it over

Kyle Derham

items Toby. on gas the on briefly leverage macro. our I’ll the quarter, XXXX in of and to notable and then initiatives third discuss guidance, touch touch a Thanks improve our couple provide and on updates liquidity,

we at In the Bcfe of end achieved our third range. XXX volumes the quarter net guidance high of sales

$XXX is compared which to is or XXXX. which also million, $XXX the This expectations our the was CapEx million XX% $XX fueled quarter quarter result of to primarily third million Our a coming the quarter, execution. of third better lower compared favorable is into

operating free noting, the the of Adjusted flow cash and be metrics. not cash impacted quarter were by out for negatively that two could items adjusted worth adjusted flow

a First, by This XX%, the changes proxy of well as we in as $XX the organizational during the primarily reduced by streamlining million reorganization recorded was leadership related to workforce transaction September team. quarter. that driven executive and expenses our

translate operational Second, litigation of $XX landowners the we improvements in spend feel an will with and lower reserves and and in that partnering planning, increase million. litigation royalty recorded future. our We the

for been approximately flow have two adjusted consensus flow quarter $XXX operating and the adjusted and well cash these items, free Excluding higher above would million estimates. cash

sales operation quarter implementation of differentials of the X% be Turning our by guidance, This schedule at per negative expected Mcfe. fourth decline Bcfe, the $XXX Average Bcfe is net to a to Choke Program. the we midpoint. to Management driven XXX quarter volumes -$X.XX third and changes to negative expect -$X.XX to XXXX are from

will to which million $XXX CapEx of cash flow adjusted free million. drive expect million $XXX be $XXX We to to $XXX million,

million For full our guidance. by lowering the guidance, year at are we year midpoint, CapEx full production XXXX reiterating $XXX while

expenses, related to cash to is $XX free the flow reserves, further in again an which adjusted to our earnings million which proxy, includes $XX transaction of and expect impact and million, litigation reorganization increase our and royalty be described We release.

and liquidity. leverage to Turning

to a sale As X/XX assuming EQTS retained ratio would and EQTs decrease net to X.Xx. of LTM is stake in debt, EBITDA that Equitrans debt adjusted to of repay used was X.Xx

we prices current see is of due cash due While pricing. gathering in largely levels is until expected million or flow lower XXXX, from strip $XXX to to production and between This million our expected gas EQT $XXX improvement generate adjusted increase leverage prices, fee to until free to show but commodity to commitment grow is not also at relief.

price on out mentioned, manage in rather debt cash EBITDA. the leverage, we to to focused reduction Toby environment increase current flow spending than As commodity are absolute

our have gas price of further. at hedged XXXX XX% will downside floor provide average protection if of $X.XX, We a production gas weighted slip which prices

We amongst remain prices committed to gas lip absolute and service. achieve We the ratings thrive our increase believe it's is we the This by to our a or by stock peers. maintaining strategic think mid-XXXX. the debt billion reducing grade in this, to investment way best at merely not delivering XXX business to price committed To environment. least the are XX% by $X.X differentiator

outlined we leverage the pull. On slide can XX we

stake retain value of represents Equitrans EQTS in prices. at million First, market $XXX current

the that a open for the We go trade on diverting market. options stake have block multiple beyond simple

next nine now long and are term the will the We likely in months. divest stake holders

our fairway up million cubic up per production could of day a have gas bring net feet of of of core of $XXX in we XXX of Second, billion to Marcellus EBITDA million outside and that represent are $X that over to proceeds. assets that number

actively assets are marketing We in discussions are parties. certain with of today and multiple these

Lastly, approximately owns print XX,XXX West an core contribute acres interest XX%. EQT are average our fee mineral net of our evaluating Pennsylvania that our potentially interest. of revenue acreage structures monetize X/X to acres various to and and EQT’s Today Virginia we XX%, in core foot in

As peers be have of these these highly deleveraging. monetization of assets our can shown, types

to could a net can EQTS de-lever larger we this and production significant used development Given proceeds are generate without position, confident significant impact that undeveloped relatively revenue interest, be returns. on higher strategy base acreage

transaction We exploring believe a months. actively effectuated and matter are of be opportunity in could this a

achievable term, and a grade the allow EQT. is Delivering We strategic this in execution believe priority is to of reduction maintain for will the near plan EQT metrics. debt investment

laid have give are plan, to to position. not chase, the liquidity believe we impacts of the execute downgrade downgraded, out our the impact rating XX. extent agencies would will in materially plan have this do we us place and we the While cut on time slide for To liquidity to we the believe change a current a

chart in on a a in to unsecured redeterminations not will semi-annual in which EQT agreement maturity the will has through borrowing the most $X.X the Unlike the at not unsecured on of Focusing revolver of July stay least place, the base subject scenario. and billion facility of our right, peers, XXXX. is credit size be downgrade

relate the rating of $X the notch, option call system. we back EQT believe $XXX counterparties Assuming the one can certain to liquidity We downgraded to billon EQTs approximately would of up have agencies million to commitments. letters of add credit that primarily to midstream

First, Exercising this. credit accordion bank feature approval, in to with lenders require on accordion million the execute our into ability $XXX built a discussions agreement. us does give our has the the revolver confidence but

Next, into we gas agreements believe entering add $XXX we marketers. of liquidity with certain can million by asset management

in fee. arrangements exchange Many of in posting requirements manage some peers discussions these transfer currently the are a to agreements We today. for liquidity utilize utilize counterparties our various these to advanced of with to small

into is specifically believe and MVP. called of new arrangements scenario. revolver. but liquidity the EQT EQT impacts million of as Ultimately the would Equitrans letter posting potential to with liquidity a want than free $XXX that not will credit requirements believe requirements, posting for These up called offset do more we are initiatives $XXX letter an which as downside million variety entering additional exploring, of be potential they of have these credit $XXX assuming on three further shown bilateral of reasons, we a of could million also we the the of exposure, banks

options downside we debt, in have term multiple the has be EQT clear, even and upcoming we both scenario. retire out the bond rating maturities, To to but recognized

highly profile today; have bond our potential plan and our up by free we which only We issuances. on market to to plan access serve on leverage XXXX, terms cash have generate are mid-year future enhance flow, set a development executing improve debt we liquidity and reduction to will focused

on note gas quick the macro. A

beginning rigs current do around decrease hold the outspending encouraged from XX the last at over but been believe needs XX flat, at the the in basin declined flow year have rig to base prices the that. we strip rigs Appalachia We the XX have of rigs to by cash see today. months. count We few to production

regarding from discipline, Given coming Appalachia below a recent the falling in we producers commentary capital most anticipate would rigs maintenance months. levels

Delaware associated these delay the largest Permian gas Morgan's growth. the the jeopardize may projects. takeaway commitments, its rig believe Further demonstrate to capacity. count contributor execution gas approximately Kinder associated Basin, has year-to-date, by the slowdown of the which highway dropped which announced are in producer Permian potentially of in-service expansion pipeline, the to to recently constrained gas which natural rigs check. risk date of gas growth Ultimately is XX XX Permian future keep we in Permian projects, by

begin up We to expect in up to half the us This of demand up-list could prices. combined production to with and XXXX reductions showing back gas these in exit to rig provide declines. count supply LNG expected exit set lead could supplies XXXX substantial growth, the

As view costs gas as focus price allow we lowering outside environment. a to will to thrive further management on that continue an lower and to EQT in cast

turn some closing Toby With remarks. back to that, I'll for it

Toby Rice

cost at is XXXX which success. $XXX by allowing of to cash drive XX% the a positioned to points of Plan maintenance we summarize million today's reduce flow We strip EQT $XXX from prices. believe million XXX-Day call. to million This controllable like program. long $XXX in assuming EQT EQTs key savings, annual generate I'd has will term will development for free XXXX, costs adjusted

entire and deepest focused X gas of position on lowest now EQT negotiating to cost Tier to Basin, the the but the grade and ratings with our metrics. on this plan in are the the inventory investment With and reduction model fees are not We just remain our locations, investment U.S. mid-XXXX Appalachian debt on lower firmly grade focused as maintain operator, committed operating will we by believe executing place, gathering

With Q&A. the it that, for turn operator over to I'll

Operator

Instructions]. [Operator

Morgan. from from Your question of Jayaram comes J.P. first Arun the line

Your open. line is

Arun Jayaram

Yeah, good morning start with gents. Kyle, wanted I to you.

You of your now to win-win $X.XX your MVP, you highlight go quarter. does think Can for in XXXX. pieces secondly just unit that despite know an through on to fact you this per the it increase some of cost at outcome I kind receive be know characterize successful your guidance anticipating Mcfe that about E-Train XXXX, terms of a moving and the negotiations there in with confidence maybe the looking

Toby Rice

Hi, thanks. take that. This is Toby, I'll

walking through you our gathering This underutilized just be So coming know MVC going costs, is up from unit that we have. is largely $X.XX. to

So all volume MVC’s are production, that systems, across we are areas our at threshold. look we when while our certain covered the gross have under do MVC there

working solved Equitrans. we're this reduce creative the on is the So something be that with some MVCs, solutions underutilized renegotiation can but to with

On little coming up so LOE a line offsets lower then that activity, of key the our side so water cents. expected the transport to LOE led And up a to things. that less and in a cast, to efficient production it’s forward. to management disposal bit think repairs XXXX a can make that's of at be part would little slowdown tear in our bit, some is facilities, a this is we little is side going This produced of are is coming than differentials on bit. these back due of online. with XXXX completion top that the our to basis this It program but choke couple costs things, levels. due the helped this contracts When new decrease water are to of of our going this our look getting up and to be some Also, going all $X.XX scheduling on costs. more up increases wear on We our

E-Train To a renegotiating comp, confidence our win-win solution. for E-Train gatherings your on second with our our and point

give to the that think offer. confidence a things have me I is know You we lot

can got the leasehold is increase can competing MVCs a our forward. E-Trains amount quality going substantially we in that's that increasing of West think commitment. and undedicated Virginia and that capital We lot then increase going we've through that be of also receives to revenues for I our

those great could for couple it I deal set So great with a E-Train. a make things, with think up

Arun Jayaram

have morning, looking slide rating the asset gents, mineral Great! And XX. could that if just been unveiled you a yet with know you my maybe at billion in wanted this the second to highlight know agencies assets you between on program versus monetization highlighted question you that you contact priorities sell and know upstream regarding $X.X you

Toby Rice

sure. Yes,

have been divestiture to Equitrans speaking the the debt about obviously to use be for been Equitrans reduction. week has plan. But in and spoken mid-year by executing them next specific them through of right. with proceeds there reduction and not retains. going to been always the commitment a We plan, it are term, Obviously leading agencies the XXXX. always debt has it up to we've earnings We're our intended of this to candidates targeting with walk do we’re this speaking them and to near

to second respect that of at looking with all evaluating you question, XX all have, on options know we’re these. of we Your the slides priority

and today. are term, all the preference I other, any they or but all being actionable they are think wouldn't actionable evaluated to so I in one the all near give

Arun Jayaram

lot. a Thanks Great!

Operator

question Sachs. next Brian comes from Your from Goldman a line Singer of

open. line Your is

Brian Singer

I’ll start the then slide got on million one other steak. distributions divestiture XX. is XX how wanted cash and on And the include $XXX the to potential in Thank divestiture you. on for candidates. $XXX contracts million your Maybe questions; there you’ve Good renegotiate of couple your follow-up that with timeline if A free overall, from the morning. to I've at provided detail need the to all I company and the of does timeline to first, related Equitrans? the flow slide Equitrans that consider of the to

Toby Rice

part there. that $XX adjusted so Sure. includes And million from remind of your first what question Yes, our free dividend I'll last the start first. with cash was. a XXXX included flow me that’s question, Equitrans, then the in guidance

Brian Singer

same maybe in the then to the the Equitrans want any renegotiating to timeline terms in of your or your the the of considering you Do ownership your that ability of would Equitrans terms completed? helpful of way and other that contracts one see as divestiture other get also steak, is is there you Yeah, around. before renegotiation come

Toby Rice

Sure.

and E-Train know something approaching you that's to renegotiation negotiations. both we this at through for continue stake looking as going we think be we're as we’re to will so the positive I hold get these E-Train companies,

Brian Singer

separately then your And – slide in quarter. XX, up second about in the you in production the relative to Great! talked half the trajectory year by flattish and quarter next of second

your on mentioned the that what comments and grow kind not growth want or here paraphrasing I make might of You you of to and right prepared you a decision whether rate is. set think right you the would XXXX? up are activity for Can the about at essentially into as about And what talk go you flat production that level? you just of end be

Toby Rice

‘XX ’XX. Yes, a in enough number depending budgeted gas earlier. then to out term grow plan as either comes on optionality go growth We've potential got with laid we of Equitrans CapEx the things just flat together. How in renegotiation so in laid development us prices out in and for we've our and for gives ‘XX XXXX longer items that or stay what

Brian Singer

would commodity on level. need you say stay see activity the commodity see further if at to you in worth to Is makes would current stepping cost reduction the or there to Growth to in XXXX sense aggregate for a up prices its want don't change, strip. what that

Toby Rice

on we're would going that I reductions future you Toby. is side this unit the the of more are say for so in looking the things. coming Yes, to be that know cost cost

achieve – reduction flow, deal relief us of mean with goal is fee and to in we’re us our free price what this grow that looking So approach allows relief would and environment gas is that's renegotiation generate change for to at to this fee gathering going that so achieve try forward. XXX seeing the a I meaningful and cash

Brian Singer

you. Thank

Operator

of Your Wolfe comes next from question Research. Silverstein the Josh from line

open. Your line is

Josh Silverstein

morning Yeah, guys. thanks. Good

cash of to this million $XXX free flow the at outlined year. $XXX million You

was you that think given some that highlighted and spending hedge I have you a you XXXX. reduction E-Train from well? number maintenance benefits and of is roll distributions. Is don't off. cash sustainable that Once some it How as of before the good E-Train the into level is that to the XXXX going the for tax benefits divest

Toby Rice

given Equitrans will expenditures we guided flow, have we’ll Then of certainly that renegotiation. Yeah, there. full on fee add we're know and be you year cost as flow the lose if but by well a the if Equitrans hopeful free obviously dividends cash made well CapEx up benefits, haven't reductions we cash tax expect baked. some lower gathering the we’re successful ‘XX We’ll

Josh Silverstein

Got it. if that I were And then was any candidates assets producing flow there non-cash well. divestiture as also curious be might

been are well going the price obviously rewarded know stock of the path necessarily your You cash same yet. peers down some hasn’t as of divesting flow in it and

any were there. there if other see assets to wanted out just I So

Toby Rice

deals non-cash the we'd someone be would assets. some one generate where would pay know implicit value that an side example to you so proceeds how undeveloped are Not something you There's some I and get flowing of mineral yeah, for that credit be for really things. some from and meaningful those structured, think able interest – of

Josh Silverstein

might Is to program your going if in divest And going to I these with assets. debt, what to you fully more know a and you're EBITDA losing it agencies, yet disclosed important. go be in down. sense as be billion a trying get debt because I'm haven't absolute just view more you leverage than the rating but important this reduction is $X.X in the ratio

Toby Rice

and upcoming. the flow right. manage maturities the our generation profile in metrics. free when of Also going our addition leverage that's it but which us at to cash net-net benefit is are we grade Yeah, to numbers, Both reduction important, added the be investment maintain look able lower to are help executing in has bringing this program proceeds that debt we'll

Josh Silverstein

guys. Thanks Great!

Operator

comes the question next from Your Heikkinen line of Energy. Hall Michael from

Your line is open.

Michael Hall

key what in per Thanks, material think drivers this Kind compete of you curious that Virginia cost a you the bit capital good of for of been XXX over helping Virginia you've do kind the the little know and learned was like what and asset improvements those in morning. be last I how on is have West for made more West know goals at then, point you might things. the foot of that cost if progress could well days. you you dated long what side discuss given

Toby Rice

to turn Sure. Michael, I'd you ask to XX. slide

know and in from to of on charts big right activity, ordered the Spud us we cost be going lateral Virginia West Turned-in-line you performance of bar is lengths. our the drivers shown there You our to sort one we've and from can top these increasing Marcellus see

from sort wells the almost have foot in are – and that we’re of going the feet in We're to been laterals. to XX,XXX that turning-in-line Virginia are are in almost going going be spuding be new and West are that XXXX progress wells – X,XXX

going drivers largest that's you cost savings Virginia So to of of the be in know our the Marcellus. one West

we're continue laterals The is to able focused on know other schedule. long allow on you the some us to that doing to be put thing we're to acreage trades

Michael Hall

get right. to to are down quarter Virginia you or I foot I – and is do to? a I think $XXX said if that mean, for think you you got trying Okay, down can West you I get what that what that what guess mean I this last

Toby Rice

that that you consistent could know more Yeah to down had we XX,XXX less come to That Michael, we as around and $XXX has foot. get than come closer to continue foot a expect so schedule down a foot that in we laterals. a XXXX $XXX

Michael Hall

that us. I think – might that's Any rails guard And sort helpful. provide, relief what sense any Okay, I this of around impact quantifying it's sort you then of on worth for rate putting guess mean asking.

Toby Rice

while negotiations guidance on not we’re that. Michael, No to going provide in we're

Michael Hall

It progress. it the I appreciate Yeah, Congrats I on sounds guys. figured. good.

Operator

comes of question next Your line Stewart Scotia from from Howard a Holly Weil.

Your is open. line

Holly Stewart

gentleman. for other on morning EBITDA highlighting are follow that? would slide your the impact Good Maybe potential just one in divestitures What you know since guidance, is XXXX, that assumed you quick since XX. up highlighting

Kyle Derham

Kyle. Yeah, good question Holly, its

announce can get business to we’ll updates there does the capable wanted today, to ways sales. $X.X multiple as guidance XXXX our We On So and monetization slide XX across status the show assume we guidance that of we to what provide billion are them. asset Board quo. was not of

will decrease savings free from debt. general repaying interest be from that'll In expense, offset but cash with after selling decreases assets, flow by

think potentially execution big our free but of upcoming end lower us. grade focus So it reduction the flow, for guidance allows ahead and it us us maturities gets below towards our the program range, investment that’s on net-net a in liquidity brings I obviously of cash of metrics, maintain full debt to

Holly Stewart

reading agencies the to follow sense have see maybe that have and to you’ve – Yeah, business that what to the do rating. you’ll and Do just as Kyle want the on that. reviewed accomplished you have of you the

Kyle Derham

plan that's Yeah, think assets they to this it's really grade want see they free generating metrics I cash us investment and that, maintain to to divesting specifically what and do is for see. us flow so want

Holly Stewart

with highlighted the usually Toby conversation? Is we that water conversation E-Train. Executing didn't part on then one with any Okay, part a me. and the and it? just that form the, maybe are fee conversations guess one still mention of gathering the final you of with adjustments I

Toby Rice

which been to be us, follow-on biggest focus needle on for the certainly for gathering, natural mover Yeah, water know the on discussion is you us have. would but the has a

Holly Stewart

guys. thanks Alright, Okay.

Operator

from comes next Panjwani question Company. Pickering, Sameer line & Tudor, Your Holt the from of

open. Your line is

Sameer Panjwani

Hey guys, good morning.

you’ve on early with know we've you’ve peer has weeks? counterparties transactions what the this, potential And low how that about minerals to past as but in So see to changed monetization I maybe drastically thought holding XX% the then you from to few as to highlighted given benchmark if your up that NRI you candidate, of any or valuation implications as take seen on willing had on the conversations kind average. wanted from recently are

Toby Rice

the valuation in a have specific today massive core Yeah, target pretty NRI we mind wide universe the and the have investment to Actually into in gotten That largest as having of we a the a undeveloped today. think Marcellus. our offering of is investors. discussions that what we're acreage position, don't base across of compelling production country said,

minerals. we’d So do deal able around are we these to excited structure pretty with what about be the

Sameer Panjwani

helpful. I make understood with start-up wanted thank concurrent MVP. the of And timing gathering renegotiation, of the then correctly. I that's would things to rates you mentioned the a be lower Okay, on the I sure few

you for And to MVC's, increase delayed, continues get EQT. a highlighted project lower fees. rates but the if think potential they right more then would to that gathering the also also So are delay I note, now on shortfall nuance

missing am what I So there?

Toby Rice

Yes, timing. so that's correct on the

that looking areas trying get area. MVCs having away the associate balance of one we be different sort of things a each XX to in know to we’ll capacity within You the establish to do is area, from that global so

that able you development and us and of that step-up our commitments increase, would think greater available development would you flexibility for focus to be So, deliver – an MVC's. individual give makes the be with MVC It our paired combo elimination volumes and where to these the Equitrans. all know is be to us meet I a would in know on areas,

Sameer Panjwani

Okay, guys. great. Thanks

Operator

Ross Your from next question Wells of line comes Payne Fargo. from a

is open. line Your

Ross Payne

of bit How include you just rates guys? committed budget little still half selling savings of midyear? your does second second there? if of For your the all, of in XXXX you to doing clarification, is because the MVP are a Equitrans delayed And restructuring again, some

Kyle Derham

assume don’t the months, MVP in divesting the in of timing. we Equitrans our and numbers any any regardless committed we're Yeah, of nine fee to guidance next release

Ross Payne

thanks Okay, much. so

Operator

line a from of Fitzpatrick comes SunTrust. Welles question from next Your

Your line is open.

Welles Fitzpatrick

good Hey, morning.

the for to declines that that or that said Just Was Kyle, clarification a I you your a exit-to-exit whole? quick was me lower for end see could the as of one we for specifically XX Marcellus statement. start. the think at

Kyle Derham

for that’s XX, just out starting that rig where think a who count are see are on I four frankly analysts the And over possible going our the supply based view, that’s to next Both scenario couple industry lower of see could three and we playing could where look out. months. at shake not to

Welles Fitzpatrick

follow-up No, able metric production to these might price some that, on back some recent comps? with that And along the hear. to then a using we of fee you might go so a give Yes. Can of be good into XX,XXX core sort acres.

Kyle Derham

not to flow of execute. cash the flow. I some mistaken, I'm really It's able multiple believe been more on if Yeah, cash to basis, the in transactions XXx XXx range has a has been

Welles Fitzpatrick

any on that you can And us incline flow fee core cash as the acres? XX,XXX to give

Kyle Derham

carve part I we include it of mean want kind Yeah, it. we and these out whatever side can on fee the – as of be royalty acres would

mineral design structure we we want. of So can kind whatever

Welles Fitzpatrick

great. Okay,

So it's [ph]; makes almost get Thanks that a X.X the to sense. plug That’s have. all guys. I

Operator

the question Morgan Venker from of line Stanley. Your Drew next comes from

open. line Your is

Drew Venker

Good morning for guys. XXXX. on color all Thanks the

the any you You helpful. said of identified? Marcellus but color I that Fairway, Regarding on detail the outside give more be the assets us you can any sales, asset E&P believe more would

Toby Rice

of noncore to pruning our Yes is Drew, and be is on of happen things to is I development going just that our of outside there's of fairway, outside say you – some this fairway these would focus everything the of that just one setting know our are focus going the in and be to needs some and well. reduce by that as help expenses the that assets operating some could so

Kyle Derham

Southern specifically PA, those that West so on Yes, are are assets Ohio, Central table. the Virginia,

Drew Venker

the entire including Okay, Utica? Ohio and

Kyle Derham

Utica, yes. The Ohio,

Drew Venker

'XX financing one to just launching guess I a refinancing and maturities. offering be 'XX solution maturities? addressing today Would and the just other one on okay. Right, one the bond

Kyle Derham

absolutely. Yes,

market two the pretty have XX announcement. our weeks, access last after We've rally today. significantly in notes especially seen morning's this We

we terms these will have monetizations only executing access on to drive help today but a we yes, of So bond also potential some know offering.

evaluate So we'll market. the continue to opportunistically

Drew Venker

Thanks.

Operator

the Trotsenko from comes from question line Jane next of Your Stifel.

open. is line Your

Jane Trotsenko

questions. morning, thanks and Good Thanks. taking for my

can cost at been well key outperformance the talk driving maybe the longer apart the for nine, about has laterals maybe what year-to-date? drivers and Looking from slide lower you

Toby Rice

looking these was our original Well, slide when on Sure. at nine, expectation savings. achieve cost we could it

that a of has two, price are I much environment, shorter than service accelerates we to in and been able a certainly think one a put a us to we've schedule this to some be of allowing think of do softer I we things anticipated. than the together thought, that; period faster time little higher-quality bit originally

Jane Trotsenko

have a follow-up question. I Okay,

any In maybe like of you that well longer laterals. proppant to spacing? you mentioned terms changes making do you Do designs, lodgings changes or are other

Toby Rice

mean that our economics XX the or minus identified parameters by wells Yes. I impact we've of different that to ability there's X%. have plus

proppant So of made would yes, ones loadings, bigger clusters of be we've the per number – to clusters, changes water stage, some loading.

adding new some and So technology we've now. – testing out yes, we're and we're that

So we're to design evolving proven that we adapt we're also but we're well have the that that putting in, in. a environment design to well

Jane Trotsenko

proppant like you Can it maybe loadings see. guys spacing I in or directionally? talk terms higher wider is of

Kyle Derham

curve Energy at published design, well and to just on well that executed feet, similar the type same to actually so led and XXXX the out It's well basin this Rice Yes. same, that very that design we we leading morning it spacing our productivity we're website.

Bcf an We expect per of generate around X.X EUR that to XXXX.

Jane Trotsenko

impact is question impact if related helpful. royalty and flow Got curious very day. litigation and I G&A reserve. to that And expense it. included my This I'm is last it's cash to you going the saw of just one

Toby Rice

Yes.

probably accrued we of know So we for is today. that loss we've everything a feel which

minimize of the forward. it the I way right doing us of will issues one of benefits think forward, organization is connected a going having and Going things the type impact these of

Jane Trotsenko

shouldn't that in saw impact then we we the in on to you had – I expect just as of in XQ a be it expecting happen happened XQ XQ. that G&A kind but see, I do well? one-off and

Toby Rice

business that expenses know for the our predict in we've to right unexpected we tough everything but way it's for be Yes. doing I the today against mean us to and things litigation accrued of of the safeguard is out sustainable future. building future, a in going

Jane Trotsenko

Thank you got Okay, so it. much.

Operator

There at time. Rice, to further questions call no over Mr. you. are this I back the Toby turn

Toby Rice

participating for everyone call today. Thanks on our

first thanking like dedication. of executing their on close out quarter forward work to Thank done forward. by we're know for our full look to proud hard our our work far employees so we've and the you. plans I'd and going You

Operator

and you Ladies today's participating. for conference gentlemen, this call. concludes Thank

disconnect. now You may

EQT (EQT) 31 Oct 192019 Q3 Earnings call transcript