EQT - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to today's EQT Q1 Quarterly Results Conference Call. [Operator Instructions].

I would I'd like to hand the conference call over to Andrew Breese, Director of Investor Relations. Please go ahead.

Andrew Breese

you today's thank call. and morning, for conference joining Good and Toby Officer; Officer. With are President Chief Financial me today Chief Rice, Executive Khani, and David replay our available period will today's this for beginning a X-day The on evening. for call website be X-XXX-XXX-XXXX for XXXXXXX. code is a confirmation The telephone replay with number the of prepared In a the moment, question-and-answer a David and with Toby session provide will remarks to follow.

in Risk also forward-looking financial to call you that undertake the Investor is Toby Form and from statements. contain website. remind of for measures. XXXX. of such slides portion been results earnings We in for published certain reconciliations including available to our David Actual statements that call morning's which subsequent ended the presentation, in year the and duty forward-looking measures. reference remarks, measures, we any a important events our to today's comparable will prepared factors I'd investor these Relations During of on differ may new materially disclosures do have And certain and forward-looking today's the in SEC. release could GAAP statements. release this December make like to any with XX, may most filings described financial not Factors because section earnings XX-K future Today's refer the regarding update Please contain non-GAAP these

that, to I'll with And turn over it Toby.

Toby Rice

have this details standing improve I Afterwards, will then of Today, the to talk a an the everyone. financial Andrew, the review open Dave I call on and business. give up the of actions the update Q&A. recent and to quarter to for we pass and will morning, good will we about business. Thanks, provide taken quarter the brief it review the of

elected being in campaign deliver to our since our promises. team, unrelenting been quest has management This

have creates we well-planned the and a Our twice. with the and of combined with senior promises million taken operational shareholders notice. and with markets note The technology, our we the in beginning January, equity year, markets deal. that that April leading business in debt the prove $XXX sustainable debt our access business. made capital our thesis our again Since validate convertible our differentiated, to results have $X.XX and offering durable billion Once

strengthened offerings and our flexibility, our met overwhelming strategic Both market derisked were near-term with participation. maturities

position strengthening Additionally, prices. in and both gas improving equity EQT performance of we on natural the liquids production our vast actions. debt is natural of as strategic less significant macro to unique gas, seen production than and supporting and majority to our have is is in deteriorating X% oil these capitalize a the tied our

our acreage Southwestern XX core over so, more Even of in has the Marcellus inventory. years the of sits and

approach proven our to to Our the quarters the this operational this working, last asset well clear several over and have choice. that of is financial developing its and becoming way operator is world-class company results on

in our Moving drive reflected results. will forward, forefront value shareholders. boundaries first be continue to the to quarter and of innovation for and This commitment our create our technological incremental push at efficiencies we is

our our design uptime foot than above foot, well an Our deliver developed acute high performance operational asset and well lateral period. that optimization, faster per of of drove focus lateral capital the the schedule cost accomplishment end a less for target strong to volumes were of per on well our range anticipated. during cost able approaching $XXX Pennsylvania Marcellus $XXX We at reduction, and guidance our is

pandemic. to during we to employees and will down, driving the value safely to down the trending continue are focus costs throughout COVID-XX on continue these its year. hard EQT operational Our and work generate

is and principally a with heart, our of our business of to our environment dedication remote we This XXX-day of as seamlessly coupled during digital result office transition thrive been by exhibited the a has quarter's success to plan teamwork our implemented personnel As this employees. all that our results, work work able we environment.

EQT remains committed to our safety culture.

of We have and primary regular all our been of safety have officials conversations local our employees had and and contractors the focus. with state

gone with active the minimum learning contact standards to allowed beyond employees and of sites. after insight intensified partners to that response potential to technology collection on our have data us focus provide have employees enter create and of We safety our exposure contractor individuals surely and to all in of be an This allows us them contractors, that and traces, has the hundreds names cases our monitored. insight contact

an EQT like operators example to contacts missed pandemic of and one technology for just delays, of how managing is response as risk a looking are is potential tracing exposure impact our the this the greatest increased at we The differently. and result of contact

For the our we times. contracted responders, dedication and frontline for partners, thank continued our health employees care and in during these field, our peers the your you

local communities to $XXX,XXX funds. keep which its including our operate, and the safe as to in EQT We possible. recently are as support doing working we passionately community make part community We'll to donating

also demand the by pandemic. COVID-XX oil due result prices disruption has deteriorating a energy to The been industry as impacted of unprecedented

while capital prices at to bankruptcies, EQT only E&Ps challenged. frac budgets not been and has been shut-ins, crews, sit forced and but well oil counts change slashing positive historic are While reductions other lows has production effectuating rig have and resilient of and

at our remainder just our guidance. standing to on the that as expense are we macro improving to X quarter and guidance high our in operating us program we into of the capital presents year, end the strategic low with monitor ability continue setup production A of XXXX we XXXX. decisions While the the end and of the are make trending

our that there as previous upside our our to the believe on and move to throughout maintained well XXXX commentary as plan, year. While have we is more provide we XXXX as update program guidance we intend guidance

and strengthen front, macro demand impacting see beyond. XXXX continue prices and XXXX in a we expect On to in weakness prices to

per LNG exports next and RES arc X months. to Furthermore, has gone consumption. the more X has facing cancellations industrial demand as are declined day Bcf XXXX, and weakened more For negative the to gas com for X power, export between with

we On of estimates up for XXXX year the The impact condensate beyond. prices, X are calendar Bcf fourth supply and impact now shut building range market from reducing liquids quarter associated this and in. the supply a to side, to and associated quickly the being see liquids inventory, X sets beginning bounce strong and gas and can the 'XX declining and resulting gas oil day, output supply and a fairly for in

from under XX declining January in rates back currently today. gas caused In have natural prices addition, to to years last the natural gas of over several XX% decline XXX

of demand natural potential switching. are As recovery anticipate in be peak near-term repaired. supply will challenge trying to balance until or normal gas some will delayed a response new demand the very for the to having certain result, We could spike timing balance to in The result demand. the periods can prices and demand sheets fuel that see be destruction

winter somewhat prices, noticeable We The how and and XXXX the rationed for in XXXX for be is especially the could forward the this and cases XXXX gas XXXX move test are underestimating curve and use. believe is periods highest in the curve. best

approach capital rising natural the despite in country, disciplined free natural EQT flow price on maximizing a versus production focusing is gas environment. part allocation a As the gas cash largest to doing with its producer growth

dig the closely Khani David quarter little a then strategy. discuss it to of into some financial turn balance I'll our over first Now discuss results sheet and to our management accomplishments, more

David Khani

Toby. Thanks,

going billion X Before first we we get of Subsequently, have months into We've have the billion thoughtfully Coming although the paid XXXX, to debt retire our managed quickly of plan XX like position more due year. forward. expect the improve months. results, to adequate, down accomplishments we financial coming and refinanced billion to we our made approximately I'd we liquidity into or through through approximately remaining that next current is detailed maturities $X.X quarterly review the $X.X faced fully the than over XXXX. $X.X and the it

CapEx sale guidance. We we squeezed reiterating accelerated our over same lowered while of and the refunds, at able last, to better volatility are prices our to many time increased us flow our their tax timing our Xx the cash in rising derisking hedge our our XXXX quarter process capture rationalize be And more have free for helps in developed more expenses. guidance, G&A We've XXXX revenues. first while of a the time, which and pulled asset our out forecast out have program. the We've XXX S&P robust

performance a The perspective. I later in In review first the contain be areas. published this Overall, addition today some financial XX-Q that accomplishments, the many earnings we've outperformed highlights. an to operational will also will release details, but of and these and from the quarter all filed we had afternoon great

which organization, exceeded largest quarter, Bcf First, various a outperformance by guidance combination sales volumes XXX midpoint we really production of the Bcfe. which for XX our base the realized This efficiencies achieved of across uptime. improved the was was the of of range

Adjusted last flat below sales XXXX operating to year were remained while $XXX realized or $X.XX quarter the down year-over-year. revenues of compared as the first was XX% price million, $X.XX volumes relatively average

reflected unit to low guidance of the below Mcfe, XXXX first than $X.XX $X.XX XXXX quarter per first Our quarter lower and XXXX or a production-related range end operating year our the full per of costs Mcfe. basis $X.XX per $X.XX of

our year $XXX and of $XXX million or last million lower the synergies were than Outlook first than quarter lower expectations.

path Pennsylvania our towards our driving mentioned, our averaged $XXX Marcellus costs for our achieving Toby target well period. foot, outperformance and accelerating per the As costs well

Free positively was $XXX well to accrued $XX tax $XXX the period. XXXX, taxes cash Our our as Act, capital flow in in $XXX to million quarter alternative to quarter minimum from million $XXX federal adjusted accelerate as of the the income refunds million flow operating impacted ability which expenditures compared cash CARES credits. reduced as year million the compared cash by as while flow ago was of free claim million first cash was for our in

the were versus a want to impacted results point few also quarter, I which last out, For other items first year. competitive our there

First, in proceeds. stake as conjunction and with $XX the agreement for previously EQM we exchange gas the of disclosed, relief e-Train XX% rate of of our equity new with gathering of gathering a cash million execution in completed

result a million. the $XXX release this gain we of a recorded of $XXX of transaction, million, of representing asset contract As and value expected the a rate present

expense will contract our amortize our in non-GAAP and and GAAP approximately a This the X but identified be a recorded the excluded years noncash part and be date. period amortization from will flow We expenses at gathering will beginning MVP adjusted EBITDA as reporting over cash separately of free service of asset metrics.

approximately but Second, first transporting the gathering moved expenses outside net gas into in has disclosures XXXX in-basin the also we and our gathering no bucket. $X.XX quarter, costs statement additional to This provide and aims guidance. change Appalachian during our the expense is transmission Basin. our with clarity guidance, transportation to to reclassified to the been certain from financial associated There

Overall, leadership. was the first quarter new another quarter the under successful

Bcfe, During in million, period. better second increased volumes quarter XXX approximately expecting XXX all negative $X.XX XXXX, negative free the an drive between cash to and daylight, sales we activity, average $X.XX which of differentials we per driven of of roughly breakeven uptick Mcf. expect to more expect We're flow also the by weather expenditures capital $XXX to to during

offering my from presentation, related we I'd off financing the management the to started XX talking the Slide of maturing we've After spend strategy. lays sit you a out million about details I'd accomplishments the like our recent plan. now XXXX to our remarks all term proceeds which And loan, thus I with now clearly in to $XXX achieved maturity debt little discussing far prepared applying time refer to XXXX. in our to in debt the convertible analyst XXXX. like by about

expected from in tax sales $XXX value current in over remaining cash $XXX XXXX proceeds When advanced and consideration market expected of in $XXX approximately free refunds flow million and small the million million receivables, the which stages you take additional of e-Train at stake, other the a midpoint, of $XXX has approximately E&P million.

the carryover in be XXXX You funds maturities. against can adequate clear handling of sight maturities to line applied and XXXX have we see the

which million, until remind of Then we you, the isn't $XXX due XXXX. I to XXXX turn maturity of end

approach we setup hundred with support cash several that that our have natural macro us end generation As if debt to managing this choose. and by off ability pay Improving with our to to leaving plan of gas mentioned, in commodity flow stack. down paid significant the of could we debt just XXXX, I million flexibility

pursue also to asset We enhance several selective can have debt we and/or opportunities divestiture supplement accelerate, retirements.

asset the divestitures quickly. Touching on selective

continue in still and are whether a time. pursuing deliberate approach we selling We this assets. our measured minerals market selective very the market, taking to are at The being there, on is to decision but particularly this

billion, end reduced the expect that by contemplated by original way $X.X XXXX, than capital. improve of should more have more cost We methodical in of our a that the but we'll debt

gas to reduction This with strategic for should in more macro debt investment-grade EQT. our substantial differentiation improving creating metrics, natural exploit conjunction the a pursuit back

the the drivers down As the hedge disappointed, of $X.XX studying we assure the gas hedging winter $X.XX the about out, February, and to updated strip about informed $X.XX weather pricing to capturing macro making we to We our the latest program are carefully we highly $X.XX. natural between March When are $X.XX commodity continue in fundamental XXXX our to Bcf added market play strategic during created to setting XXX time period, hedges decisions. level. to February

XXXX capture heart pricing while At balancing approach the our ability risk. upside protecting to appropriately the strategic of downside is the

through hedges the year, prices. move favorable look will layer we to at opportunistically on As we

XXXX production years. hedged of additional over substantial expect several will to We hedges our enter next percentage with with the a

pace emergence the price activity the COVID-XX The war of OPEC has slowed hedging of of post reasons. our a full couple and for

current the gas natural as we're XXXX pricing First, for set supply/demand becoming the and environment impact the clear, bullish beyond. more more become and on up of

are forced pressure Secondly, been to borrowing pricing market, abate. protect for layer E&P that hedges creating to wait broader has want to to the to we and on group redeterminations, bases dynamic this in the subject

from per of to weighted price the as will through hedge roughly above and like production that I'd XXXX we decatherm, remind we floor insulate which volatility a us XXXX. have commodity gas price of also has move XX% $X.XX average at our

stemming consists current which Our undrawn, $X.X the ratings downgrades essentially billion posted, of $X.X from $XXX which is by approximately occurred at liquidity unsecured of million billion, sits of this revolver, that year. offset letters earlier credit

E&Ps subject of collateral to reiterate Based the we it the exposure to to maximum that a borrowing variables Appalachian on is I base unsecured through This want equation. redeterminations. revolver and are many peers, as of believe levels, differentiator strategic discussions with not and liquidity our we largely one collateral counterparties is cycle. unlike removes biggest and

above pursue the to Although made continue the to this have progress our sheet, up removing add encouraged to prosper. minimal getting back liquidity. current needs, by improving is liquidity business steps nicely I'm liquidity we balance we our in risk,

value Toby. forward the call positive We the feedback continuing stakeholders. to have for now received taken our look from to steps I'd we've that pass create to and back

Toby Rice

Thanks, Dave. both is for made the This EQT established compelling. track The team and of has execution to record setup promises keeping its shareholders.

maximum to We will and base. our lower from become value continue costs, extract to efficient premiere find ways our asset more

We have improvements have durable external to is created the to able and business top and scalable pressures. withstand that made a from across organization bottom

the to capture flexibility. exposure heavy drive flow cash the will us gas bullish will ample natural setup free will macro strategic to yield strong Our allow horizon create and and on

our back to Our debt sheet, and stakeholders. differentiation a all will viable clear for maturity create path create balance will which an management plan investment-grade

committed is focus the program. ESG an our on to EQT intensifying operating with And lastly, right way

our evolution business. for trust call which like and employees all to Q&A, I turn teamwork, this the of displayed thank who of have heart, EQT I'd the driving are Before the over

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

Operator

[Operator Instructions].

first Silverstein. comes question Your Josh from

Joshua Silverstein

hit after growing the made a there debt target, the $X.X if that? growth why in be headway of debt stop capital you bit given that shareholders reason spending? position? you what of little $X.X even a towards reduction, You've or return Any starting flow lot And by would cash did getting billion free the target. to of billion prioritized would Additional

David Khani

Yes.

we'll billion see, $X.X all and think our is time you'll retirement. -- billion debt done, my the by between $X.X guess I probably be is between of -- we're goal So I think

down get is Our Xx. goal our to leverage below

well. think other, gives are shareholder-friendly I flexibility us be can into get -- once as things buybacks it, really a us. those things. did That for convert So key call those the I as event. could such do deleveraging then that converted further them, thresholds The But we dividends, be obviously to we other think below I and that equity

Joshua Silverstein

asset your It That's pressing get update to you would and before? priorities a the thoughts a like better to were price changed can relative less need thoughts? straight what great. to just Is pushing thoughts wanted terms then into transaction to to the any in production? just a you you little some So of the of royalty help seemed sell helpful. rising out be there an those on do But has environment. bit there sales get versus And guys just valuations

Toby Rice

sales and going -- of divest Yes. continue we're sort Rosebush going that our trim to to on Josh, think Yes, stay willing properties I Toby. this to to operating asset to our non-core we're are is program, be footprint. the

a of progress asset the made of sale is $XXX think we I representative that mentioned sort million that. noncore on we

those, We the that have on fields it, some of noncore call more would be table.

that assets I assets think on -- in continue price value mind, in are will think and just assets larger we've keep some we're we PDP of commodity the the holding appreciate to weighted, these largely rising of these environment. a to,

of focus we are we making I maximize our to said, view is part sort we to sure and for is catch is before fundamental up creation continue that But sell -- us. macro waiting value these for of assets. this like this larger those to So before the continued a where

flow to We goal have business generating cash for core a shareholders. know where this we've got develop plan. our and and of deleveraging We we want free

a part that. asset of sales, So to continue will play

David Khani

Yes.

billion. everybody, that just to $X remind is Just bucket, well over

the in of there. just finding right It's timing. So there's a lot firepower

Operator

Next from Fitzpatrick SunTrust. come Welles from question will

Welles Fitzpatrick

be to the ability like So really you selective divestitures. million refunds of looks the more $XXX the gives it tax in

get focusing mineral vis-à-vis buys, on in the side for other strategy either the update that on you're have hearing that the guys we But offset if past? on correctly. or own maybe I'm overrides, to about equation, of those overrides the can so an more you your talked book And it

Toby Rice

Sure.

on an front doing remains. budget if capture set be our we land that was of something we've sales offset maybe having in CapEx you'd that were we did. selling able increase without budget to to that any mineral to I that there's that minerals, And was opportunity opportunities pause have Even still that think us I XXXX. set opportunity to at think looking those minerals. in And purchase set we a pushed

of the strategy, ahead minerals that. purchasing to and of So bit for, looking forward executing we're it's our budgeted part and drill is

Welles Fitzpatrick

are Okay. to can moving guys gas And then to peers, great is Make take are a sense. mean, of the little Obviously, advantage you your production gas maybe planning further as you positive percent GOR those on, relative now. I east shifting talk you increase? the pretty see curve? forward? I to rigs Do which gassy guess, right a you to bit of

Toby Rice

going Yes. stay XX% I at gas to of probably sitting mean, is consistent. dry production

mean So for yes, consistently us, we've dry to I allocating gas. capital been

really shift there amount a wet So wasn't of from. big to development

we of gas. So to dry mix continuing production have XX% anticipate a

Welles Fitzpatrick

just plus It have XXXX Okay. that one escalators? XX, part price about? then from went like Or rates reclassification last of little for that one the gathering is bit bit me. Is Perfect. over. Page looks the talked And to under guys $X.XX on for you a little a the

Toby Rice

-- you said? about in talking XX, you Are

David Khani

XXXX.

Welles Fitzpatrick

Yes.

Toby Rice

Yes. the That part was of reclassification.

Operator

question Capital next Markets. Chris come will from from The Dendrinos RBC

Christopher Dendrinos

performance of around share price all kind all's that at projected the light mid-year. of flows? Or Just any timing recent Equitrans Has kind there? to the cash for targeted the going changed in February commentary to impacts sales back free your of

Toby Rice

the EQM, I valued, that seeing another MVP moved And natural there's And now make of looking for trying an all was key been very between you're well coming in-service into I has think stock catalyst. back and now we're kind was fairly of I volatile. I date us, improvement it's always that that think in think, more things, Yes, up. to play Yes. and the e-Train value kind merger e-Train sure e-Train at very gas why fundamentals, of think those

point, going us, we for think year. to the onto we're going before I maximize the us. of not value so At by that for then hold some make and we'll just end sell sure we're it to And

Christopher Dendrinos

Great.

guidance just then asset that? maybe noncore impact And the production Does this guidance, of include the kind asset of current if that Okay. press you the release. associated in sale? what's with on mentioned And not, the sale the

Toby Rice

Yes. amount a It's very small of production.

ahead of running we're now, expectations. right so And

when we will out, our all. strip if impact very minimal it have anything to guidance, at So it

Operator

next question from Scotia Stewart comes Your Howard. Holly from

Holly Stewart

here. Maybe just quick couple a of ones

a First, business, recognizing does for huge that down your volume the but the NGLs not and year. of move guidance for are condensate part

with terms the guess own given be, pricing? you you portfolio right And the of basin what question would in So are first what your now, are doing curtailments? in just I seeing then

Toby Rice

Sure. Yes.

operate. liquids, I that's the just our that exposure basin. to what's to dynamic seeing given important is is you a operators what So the in material very happening But we're any mentioned understand in not to think differences we other way

amount of shut-in from that have If be We rid shut-ins, we've not a to condensate. seen a order XXX because I XXX what feet their of of the people will gas dry having shut-in of what probably of seen of result as to wells get cubic it'd to able quantify day. million gas million in I being these be -- the to had

that continuing natural gas these see. we're would things outlook be that's again, important dynamic so that pretty track. And to to And the we a favorable

Holly Stewart

timing number. That's Dave, your according the And the sub XXXX? interesting. term guess, feasible then, end on you just goal perspective to I Okay. the there That's of just for plan? that thinking about maybe being longer Do a some see leverage, big Xx by

David Khani

Well, to by I our we'll 'XX. debt absolute an from get where debt end or perspective, down to think we want of the better absolute

probably thing the say, environment. really control. in be price I'd And will then commodity our will next the that So be things,

that Xx level, our zone. nice up trigger us get that to that if so gets that's level, will commodity the be that where right And for closer leverage a to through into

about. those think be X variables really are I to so think to And the

Holly Stewart

from this Texas maybe Any impact then And Eastern housekeeping item. just Okay. explosion? a

Toby Rice

Yes.

an event of ago. occurred was that couple a days that So

major impacts result no as have of a that. We

our that incident, XX:XX some that, back working in to p.m. shut e-Train allowing to give with background very X:XX And Just we to were notified by us partner's had helpful but was gas about p.m., we get on found had By markets gas, our that and of day, next X:XX we able gas p.m., team flowing. scheduled the -- were we to for all it and to gas to the sales. commercial back added put our some

there expect So won't pricing the get But in-basin to differences the that TETCO that some we versus able be rather we're be will that to -- on for we'll line. selling on insignificant, now. we that be we're quantify --

Operator

The Jane question from come will Trotsenko from next Stifel.

Yevgeniya Trotsenko

$XXX The convertible instead that debt is April. type first rationale the senior doing on talk can Maybe guys you you question in million vanilla of of this for debt issued notes. in plain about guys

David Khani

This Dave is Khani. Sure.

if convert into look very close debt to -- heading a at So traded doing par. setup you that the our up

second good So dynamic a volatility a creates of sharply equity as a -- really fixed created good a really our that is a combination And rallied from created of convert, option. really and stock income volatility an then of very which component perspective. the debt

so when a dynamic very, created to those put good it a do And together, very X convert. you

call consultant And how able we that. our if very that spread a get a peers were at that executed were was so get versus you that, X.XX%. very we to differential And very we skilled able we hired to low coupon is notice And convert. in did a who

converts what when kind the did. cost million looked So you at other it we helped of between save $XX actually and about differential us

for a really convert. setup a just good it's So

Yevgeniya Trotsenko

Okay.

it. on And then Got wanted high ask Utica. something Okay. I to you

should it's think we Maybe guys this So asset? in outlook well How the when be production can back how currently? costs, of stand have the about kind allocation like it talk and seems you you sale. cut guys you impacted they announced about high March, capital obviously, Utica. thinking And where CapEx for it to maybe

Toby Rice

Sure.

this So a I'll sort at level. higher just take of

Just into efficiency and that. looking our program of Utica how capital at fits the the

and mean, efficiency capital at I efficiency capital at entire capital of allocation well program, the lower entire specific a that I capital down of think the levels. our EQT, decision I things activity allow maintenance of it continue in to X cost. our we're at that looking with program happening, we the to execution us at costs. break going mentality are of to categories, stay that mode. having there's sort of When our starting couple the first, efficiency look efficiency of We're

production. adding And so or not activity any new

other the of comes the think allocation capital developing. aspect to that types wells actually we're of I

ship -- activity our You'll north our from $XXX at, start foot. execute development. the and to us Marcellus call more wells Marcellus Utica, see versus That foot us $X,XXX it, will a into give to Ohio wells first shift Pennsylvania away Utica ability that's of Ohio a

So it of will application be our dollars more there. efficient

little in so Pennsylvania activity you think asset may that we see but as Ohio I And maintain a future, decline production, may bit the shift into the Marcellus.

Yevgeniya Trotsenko

cash costs. That's very helpful. may, The last I on question, if

curious were costs sustain can guys if through something on one-off of this you like items obviously, cash that remainder in XQ just or So some And the there 'XX. strong year? is the if outperformance

David Khani

about that Yes. We what the if we in that I'd say, we wait maintain think our created But sit we've think -- tuned, going and stay and I with guidance. bias with upside our do to have a we're you plan.

Operator

Panjwani Tudor, Pickering, will from from Our next Holt. question come Sameer

Sameer Panjwani

well You've done great unexpected getting down, a in of service the provided seem job of an costs and costs have environment. current the would benefit somewhat it

do into you per X foot maybe XXXX, potential get with As handle? target line about you of a that see heading $XXX to think even lower sight

Toby Rice

sure. Yes,

a say was our floor. but our always foot this $XXX it target, would is Toby. not So was I

we at the at when execution. well future, we so now look look the in the we're things of of quality And that doing the that some into present sustainability our of day and

parts. X be to percentage of rising our be part largely going really have the development development. I for going of development. set there's activity we think of That's future, that's driven in operation percentage by One a combo is combo is what And to schedule.

putting but some to we're services will the our the to that's to to up which know and from procure need standardized the expect -- us strengthen So designs. key cost -- to they lower for -- going schedule, allow be is our are simple perspective, that able service same a sure ground teams the with well design aspect schedule. going really oilfield set us well generating tweaks, another driver, costs. with We that side, make that of that a in design stable From activity another

on I and right sustainable been we're have future. is And now costs service benefiting teams to that well from making into it down, focused cost while think has targets. accelerate allowed think come true, largely that hitting us really our have the I The the costs

been spend so Services, I been sign at We've U.S. Well X of to another X our long-term with specifically, services able equipment. frac And just agreements, looking execute long-term to contracts. we've on into biggest the able X both pricing some our to the into the leads that next really fourth us an efficiencies. take efficiencies operational that technology level. us with operational -- take aspect allows really some about of our Evolution, sustainability, cost great to talking And really mean,

And really crews design, with and good service with high-quality we're contracts, good equipment. combos right the with -- getting well

with that as we've drilling we We will performance. get continue efficiencies improve in to drilled showed We holes. of legacy we that lot gains short that the had improve. our continue wells to a That top show slides were operational will our Our fact continue our through wellbores to inherited. in

of bit with back our the So sort flushed little the year. of we've horizontal at more section this system will be vertical drilling rigs. had half Those to a towards spend time

So performance section. the we on see horizontal improvements

as the day On for execution, access to a new we this continued see from team's opportunity perspective getting and us side an of operational there things, efficiency technology to per well. the stages increase the completion

great the I to all the setting foot, costs into come hitting together say, So performance $XXX things table in lead us all confidence our future have to for and and a forward. going extending mean that these they lower

Sameer Panjwani

Yes. That's I appreciate then really great color. wanted And clarify of comments. your to earlier just some that.

mutually also somewhat on mentioned think towards flow addressing heading into XXXX, you be cash I some could there's exclusive. Those free debt. optionality but focus

looking just So for there. clarity some

Toby Rice

Yes.

at, XXXX, which talk is That is and other the in gas frankly. something production some EQT. much that we're natural all Appalachian seen production and environment. price in XXXX that's producers, you've of So looking that a gas into front defer opportunity higher push at about To producers peers some opportunity

that of to a capture production we've going ahead is be flexibility opportunity. us standpoint. efficiency Our that be allowed to has And that us to from operational give to uptime had able schedule the

us So into bit not shift decisions cause But a guidance. you little change to would the that production XXXX. of our we see may make would us

Sameer Panjwani

Okay.

curtail, So the it guidance something? still be would or the you range, maybe lower to towards even were just end if within

Toby Rice

to towards the midpoint high. more Probably Yes. midpoint,

Operator

And question your Campbell from Jeffrey Tuohy Brothers. come from next will

Jeffrey Campbell

is costs asset more acreage At Thinking about level an produce per a candidate $XXX Utica your foot Ohio for eventual than high that time sale? to over remarks.

Toby Rice

return mean, now. I Yes. of And about Pennsylvania development combo most sure we make to now, I our right think -- right think is the highest we dollars efficient use assets. the spending we're want Marcellus development,

West Pennsylvania so when And rate that, schedule falls to prioritize And sort Ohio projects. look Virginia we've shifted assets. Marcellus our the best of at behind and return our we our operation of Marcellus type of the Utica

Jeffrey Campbell

add color a better this macro of happening any Could you budget. anything wondering now was like because the year there's in on land hoping conditions we're versus year just I unique if XXXX for Great. the XXXX? Okay.

Toby Rice

Yes.

Our for our holes. X/X leasehold driven of maintenance about another towards in was land maintenance, leases a by set -- $XXX and $XX million renewing largely budget filling budget million was the was

our things those partners sort of to spread over costs some some we've with done working landowner of time. So

us in the forward So that $XXX the is for lighter an from things. budget land looking million side there budgeted years, for take that walk that there's and of XXXX the something comment is to bit opportunity we dollars opportunity a going lower. an have to future to then little down amount land And of on us forward,

confidence definitely work And really competition one lot part there's outlook foothold you here. say EQT can of of with I XXXX a points, and just royalties, gas, EQT. referenced your prize. that that. landowners through about a landowners And in a the X thinking operator big the they're any And get wellbore drilled educated willing which give are understand only seen and to play, -- that would into that And such just impacted I a this and aspect I'm with think along for with stronger really competition. basin, haven't to of we has reading has, mature with the of is dominant get of that land?

dynamics of So right now. land of that's sort the

Jeffrey Campbell

wondering rig operators of most are Slide high-spec one, lot the if to appreciate that that. hybrid a I And kind the answer. using? become standard off great the find kind ask what questions superior the features a was I X, what's getting do of last of drilling you just rig that could of That on of just show you was one script here. I

Toby Rice

powers I a a Yes, diesel in we it normalize rig is and generate the mean, sort These sure. I battery generate of power load mind, think of I electricity really really mean, burn manner. we're more electricity power. -- lot to just that diesel and just the doing the rigs. using packs in I efficient these rigs, keep it mean, burning

It's efficient So taking just energy. a of use what's that's there. more really place

Operator

over the further Toby no have to turn queue. I closing questions call remarks. in back for I Rice

Toby Rice

team EQT's management look you and workforce, behalf that and our And in the results to on us momentum you. for of your our thank continuing deserve. the Thank On in working shareholders EQT. deliver of hard forward and directors, this all interest the support

Operator

today's for conference will Thank call. This joining. everyone, conclude you,

now You may disconnect.

EQT (EQT) 7 May 202020 Q1 Earnings call transcript