EQT - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the EQT Third Quarter 2020 Quarterly Results Conference Call. At this time, all participants are in listen-only mode. After 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

replay remarks of morning results, important to period code GAAP and call most turn I'll is Toby. will regarding duty morning's the XXXXXXX. please With Chief In for and SEC. a certain refer today's statements recent such described call different forward-looking Toby follow. call. number for materially we over future moment to to David replay earnings most with of may for I'd Officer. to for the prepared measures, Investor available measures, Form reconciliations statements, could Relations also Officer presentation XX-K available confirmation the earnings a today's will not present comparable portion release on for year-end section our website, in this of thank statements. today any may and update disclosures any non-GAAP because Risk undertake An their of release are and our the evening. today's XX, with you forward-looking certain subsequent website The and reference actual presentation Financial me filings it like Chief Today's of investor this this contain and seven David do in contain a may Factors slides including events also make XXXX with joining the forward-looking We financial the the December investor discussion, today's measures, session financial and Toby that, call and remind question-and-answer to be these for factors day our conference a our Khani, Good X-XXX-XXX-XXXX that for beginning with Rice, updated Executive telephone we during is which on President you The

Toby Rice

was the business update during right the the quarter. has financially. the sales company which curtailed continued was and of with progressed first that quarter, in strategically into guidance transformation of both and first of XX of to line our which beginning morning positive original providing and look managing But the how and experienced Bcf strategic third XXX jump on through we Today everyone. of impressive volumes forward I to good we initiatives. We the operationally quarter third of we've September another the that in range, delivered with our quarter. results Andrew, Thanks, at the despite an like this year remainder Bcfe, momentum The I'd

well cost the per front, performance improvements On Pennsylvania $XXX foot realize to our of delivering Marcellus operational asset. on we well cost in continue

were lower one per than ago. results. gives future plan foot and continued Third performance ways that development much just quarter increase increasing progression us $XX well This lower than and last compelling, XX% quarter, continue costs enhance to target to and as XX% we lower find than confidence year our more makes

reductions. the these are see efficiencies XX% inflation, substantiate $XXX sustainable cost million, year We improvements the than CapEx to period service that less, million million completions is CapEx our same year-to-date both of to below The which With that quarter. and in quarter drilling and to apparent continue last third attributable with less spend $XXX in $XX more last we continue being the of below truly is improvements. cost do and cost

schedule. a year-over-year, quarter-over-quarter the application we've improvement drilling accomplished guided the stable of which crews roughly the same practices drilling continued through XX% was Horizontal XX% side, best and in On executed seen by roughly operation speeds by

stride fleet really quarter-over-quarter. month per by stages respectively side, electric improving the our pumping approximately XX% and frac completion hitting On their hours

usable to ways of accomplishments, and safety fleet of outperformance frac to efficiency XX to utilizing to that in systems, and taking reduced find These our expenditures efforts million. for and reliability, our at were Put certain data guidance while will considering even this represents This the drive a full-year we widening streamline a guidance previously decrease XXXX operating increased of million an resulted that improved was including of positive better XXXX in midpoint, improvement and XX% or capital total million performance easily of In expected of electric addition operations technologies Bcfe improve budget, all data accessible stone volumes, the accounting we fourth employing continued automating to this curtailments. turning cash increase are slight manual our business. capital After teams for performance. to making revisions new differentials, of an in-expected strategic operations. our our decision ways $XX drive to $XX and siloed has one the processes simply, original the include free flow. unturned continued fragmented have and for in leaving $XXX centralized into delivering more time, a production no have to The find

operational company, leader As all on corporate transparency. and We becoming and to with of revamped clear we financial our stakeholders on vision report enhanced the for implementation operational responsibility focused the the strategy launched ESG gas recently operator leadership and directives so of all evolution as commitment choice our mission, values, industry. we in transformation, ESG and natural do our continue at our our and our aimed a focus the a heightened

future. mix into the get spend a of important gas highlights the to the it's little report, criticality the I Before on of time natural of energy of

presentation nearly You of E&P the during investor domestic surveyed operations companies will intensity XX emissions of period. second-lowest and our have see global the Slide EQTs on XX

similar perform Appalachia Our peers at in levels.

gas, the as producers unquestionable, and XX the Appalachian emissions gas Looking natural of fossil XX, start What people this XX% and specifically at Appalachian it intensity. with of is in look the gas as about excites gas to gas slide players particular environmental think gas and fuels benefits. Natural XX% and more natural reliability, on availability The see at pertains decoupling producers, a you'll that be Gas. US there produce cost natural of data will differentiation we me approximately top from are data, to natural benefits socioeconomic other of lower

Turning on to detailed strategy. we have on provided how pieces you that our see are report, will we a ESG our in how execute about corporate framework the all and operational aligned business to ESG a cohesive think

$XXX in has are to long until that corporate forced website. the set will was term year. sustainable the the drilled of like reporting, how supply believe economically the to of be and ESG the environmental the a work US to our operating nuclear and benefits US regions digital demand principally In the total things ESG be growing $X emissions, our macrodynamics our as well to demand XX% fixing medium setup I rigs in and curve about into to compelling up on continued bullish report, production. In while into in than on fallen the anticipate significant debt and numbers we the be an producers and XXXs. mitigate are completion Relations The X an we the other thesis. can I which higher global our rather lastly, natural coal beginning macro rigs. EQT positions taking impacts forward and that greenhouse keep approximately Haynesville several strategy, increase gas analysis steps sponsorships, million Investor storage our Our by industry, countries. 'XX collection up. demand, environment encourage global can term, in to since outperform level developing communities our to grants, over X in strategies $XX due Core by environment, operating the The In development capitalize we there form on multiyear financial compared flat focus data to within combo XX% and materially made driven and in renewable and you have in long-term gas the manner. in of protect drilled balance XXXX. standards scholarships will will things, the utilizing to at economic long-term about decreased found talk output only purpose continue optimally In Appalachia, operational there peers. moved of be by tighten need our for are Tier investments driven the of of up, offset supported there We improvements, production favorable informed, gears, the builds the execution more as now improves now including demand call and has local by our counts reduce gassy will within of commitment the US contributions highlight XX% and review sheets we about is safely among increase more the that drive inventory and are infrastructure overhang. would driven Natural of highest to long-term side report, are which and continuing Shifting curve on rig and XXXX, their our In There 'XX main integrating be near-term partially Gas. and on XX% and from overcomes approximately crews low to leaving development point acreage and have that to returns Tier weather which retirements, as strip, the billion the impacts

the important this will backwardated. Although add and to still in is EQT cause not low XXXX, too as growth indicators, curve

efficient for of per price important running our valued a not We shareholders is growth. believe at asset by that efficiency that value an gains drivers share driven of increasing now discuss as and financial most on at long-term to and a at discipline the one getting are business to achieve Dave XXX, deck strip, to focused call I'd aimed more other closer some creation We EQT our is plan our the pass is of the there and strategic all and for over operators this. looking like from need to further highlights. to $X to opposed clearly NAV

David Khani

Toby. Thanks,

returned remained curtailment to providing phased and month. the to some during all for and I'd The has by We approach beyond. we the Xst, and began to Winter entire was sales. September driver pricing implemented that the bringing The a and beginning like quarter. color arbitrage price production the the between briefly October at program for shut-ins on was First on start a XXXX curtailment volumes September production initiated material these of online back curtailment

we able volumes those to price future a to extra be attractive continue to environment. defer monetized more operationally, in As much outperform we're

third our in impact IRR. In XX pricing near while curtailment triple-digit were which a to this the that favorable hedge came out the our to Additionally, of and was we all, provides the midpoint range. volumes production quarter, lock economics, deliver attractive the of we able guidance of still Bcf

value the will forward, This curtailment itself. presents opportunity continue nicely to that activity Going we hedging we capture use recently when to incremental completed. segues the into strategically

the higher quarter, just During increased the store strip third but XXXX above currently sitting ultimately moved $X. volatility,

during adding to we value two opportunistically risk; As and in rising, were goals XXXX prices in were downside hedges mind. protect the with period key lock

off strong remaining to ability we've free goals. and XXXX with debt key metrics. strip With these achieved XXXX pay in rising investment equity the believe ETRN we First, XXXX cash million $XXX and position hedge our a and this milestone our and secondly flow lock stake, and of grade XXXX

protection is natural set our in As sense capturing broad producer the while largest upside. of a downside hedge gas, to provide program a

than While to prices. warmer to from longer away from take lasting upside prudent it impact the COVID, it associated XXX% us is normal from for expected be risk a prices, than better higher winter, with rising oil and would capture

upside dekatherms winter dekatherms hedged forward XX, in time. summer initiating approximately we and $X.XX with approach at leaving targeting $XXX we periods, $X.XX months June more million million at higher while a more have hedges, XXXX the risk the in Since seasonal $XXX a healing. over floor be of $X.XX and dekatherms the swaps collars months, of to added a XXXX While resulting take protection aimed surgical risk volatile in

now maintenance production from level approximately the of production our second As XX% assuming the have expected end quarter. hedge a XX% result, we XXXX of at up the

widening and the During volatility local also quarter, price bases. we experienced regional some of

basis $X.XX put fundamental in XXXX TETCO and out Hub. blew MX dollar strong for of Dominion for a and position coming we Henry team saw South of insulated hedge a that as much Ultimately over XX result, this the Our to for negative and of robust negative back spread approximately at we exposure. fall a were on May differentials to

towards differentials quick during quarter warning the significant financial third third weaker coming a in $X.XX our basis a per push This results. a the me period Mcf. to protected, overview of heavily did takes at end Although quarter our guidance of negative

As be Bcfe for both negative to mentioned per before, and differentials range average guidance at XXX respectively. we sales within are able our Mcf a volumes $X.XX and

adjusted the Mcfe for million were Our curtailments. the the unit revenues third total $XXX Mcfe. our strategic $X.XX per quarter operating were per cost and quarter during operating per by negatively were volume impacted cost Operating

third to in in as Mcfe the XXXX compared impact personnel workforce. exceeded changes quarter the our favorable SG&A which expense reduction same incentive compensation of per increased for from addition, from In the period XXXX of the due [indiscernible] in the to higher resulting value of adjusting costs

outperformance. rate came capital we our expenditures earlier, on million at mentioned Toby As below to the on expectations operational tax $XXX due in continued internal

debt made used a in the a free quarter $XXX for million, of gears, In the received $XXX refund, front. like our I'd progress flow was XXXX. flow senior to cash which that update Shifting to million positive we million. $XX led we million repurchase cash X-eights operating to everyone adjusted interest on including Our approximately July, have on notes due X $XXX tax approximately and of the we

our XX, asset for and quarter. which roughly our reported billion, debt margin exchange-traded is million with deposits by roughly higher revolver on million associated are than current increase gas borrowings driven $XXX deposits of a September $X.X was was sheet. These derivatives our the the second $XXX of contracts. over-the-counter as in As balance net This

and quarter-over-quarter for this with natural truly gas significantly net a movements EBITDA our add competition of prices. to a a X.XX our over-the-counter respect adjusting the and in approximately facility, leverage impacting ratio. more our months postings, our debt one strength net requirements rating posting we debt one to seen will with our view of increased which XX position, these we ratings. implying is year credit leverage. successful liquidity When appeal increase, are the $XXX its Importantly, our responsible naturally tax certain with as to commitment price margin expect to pursuing to aggressively a as have liquidity plan Further receive in approximately these Accordingly, bank to to do $XX allocation. million enhancing our prior derivatives, by decreased quarter debt we improve deposits our paid. credit with federal in adjusting just fourth our temporary a to a rising commodity we than decrease refunds $X.XX change last another capital which matter the item financial related more, reduction taxes participate a million We margin aside to To rather of testament billion, margin and

XXXX debt This our million plus stake The $X.X credit $XXX million Additionally, goal Fourth about in improving refunds. $X.X quarter. billion current total we strip of $XX fourth to flow, of cash all question high cash ability in are free year-end quarter forecasting level to by remaining an give tax new ETRN to us a material our free flow free flow the the cash achieve begs confidence ratings. our billion XXXX. and

agencies the We with discussions we sit using provides through curve, believe those and recent us grade positive. currently incentive forward rating with to hedging. investment metrics prices lock Our which the were

and the to more are execution grade. pay those factors grade To thesis. shows presentation, discussed and positive non-investment further the various to along We do macro to rating our XX firmly trading EQT's our two performance you important the point in over hedge things We need actions against Toby XX this XX lay to will next I'd indices. down months. continue over investment investment for reach we with debt time, which as groundwork debt that to investor to continued Slide believe like support

investors As is our Constructive MVP all touching continue take debt transportation plan improve. on to also our that as in line drive I'd important which by conversations to EQT see signaling an of in firm trades a is you continues investment feel catalyst regarding material today place rationalize grade flow. investment portfolio. with our capacity. or upon some do remarks any can company. by think to that offloading MVP in very grade peers like transaction margins of of We service free executing This deal to being of financial viability cash believe the striking the company, will for a dependent not our one improvements and a and conclude

at we Our something on year. of continue have to team to the in very this end is opportunity, place and focused the strive

Now, I to wrap will things to it up. turn over Toby

Toby Rice

demonstrate country. true bring is EQT energy the will this mix Dave. to gas Thanks, future and positioned the the can value natural to uniquely of

As realize we financial only be our operational the of potential how full focus EQT's but we the will deliver, results. journey we on to premier assets, those continue shale achieve this transformational results on not and

the the people executing operate. the the strategic approach around impact centered which Our communities we the is technology the create, on plan in environment culture ultimate we and have we and we utilize,

stakeholders a gas with All we ESG cohesive foundational processes EQT creating from peers, in these executed that in and separates guide elements put natural daily elements a operational corporate our leader have choice operator strategy of place These our and and create Q&A. I'll be what clear will interest today for being of focus purpose. ensuring vision and creation. turn our all that, I'd for over the dedication and for operator one thank like value EQT, sustainable call to work and the to support of the their employees their long-term of and to and continued all every continued hard attendance with

Operator

of question Research. Josh from Silverstein comes first Your Instructions] [Operator Wolfe

Your open. line is

Joshua Silverstein

good guys. thanks, morning Hi,

the you but for guys would the be current try last like it have continuing pull it's there had position to some makes MVP. potentially rid there get David thought the this capacity that that the that on the of on types now, at the differentials, the sense Is get in of we of there rid given any all as the thought whole Marcellus, the certainly Just keeping is still basin basis out or it. supply to of it point? in Right

David Khani

think we're normal, we and wider Yes. Hi, remember had then and I blew that little let's COVID, studying about little keep and one bit I to a think this Yes, than that, sales know with pipe out can whether we're also that, decide thing really had a as opposed that warmer want just I to. of I is degree Josh. agreement we than and remind, Dave, careful to some also bit winter, we're the that a sitting to unusual basis just so be with normal were but we think to circumstances, replicate probably but we all trying we the studying to owning some

things we're here. multiple is there So thinking through

Joshua Silverstein

it here. two thanks the for on side And that. That's M&A things then

not any with built provide you is thought footprint to guys part is then rumored strategies You and reference have debt helpful. asset be in detail to share then there asset continue that reduction the able any acreage been there as discussions If sales of the and obviously be be Chevron can production or you around would there much the of base you might the to there. guys

Toby Rice

Josh. Sure,

biggest value by pretty largely I the non-strategic bid-ask been the mean, we've to the there. for consistent was us driven asset gap the sales, used prices On assets. commodity messaging on spread,

we're said today, of spread closer close is that which assets. to materialized on sort where we've a view, the So, bid-ask at those -- it non-strategic our to is strip materializes

value anything cash strategic those going offers in. be deals, any to as continue they potential at free good come at specific we look would accretive a that not evaluate yes, would believe flow on the Then per we're fit on speak So front. about and share the have but we'll basis. ever M&A that a and to on to continue right to

Joshua Silverstein

you. thank Great,

Operator

Jayaram from comes JPMorgan question Next Chase. of Arun

Your line open. is

Arun Jayaram

maybe and update call and the thoughts start option dispute? agreement Yes exercised ETRN some wondering I stand the Toby and if think purchase on a the system, discount, you've us Dave. with with XX% if you for just maybe where on give this to on Hammerhead was we could an I system your

David Khani

to not we're Yes going on. one, think much comment I

in the day we today. XX-Q our think might end of the comment I at put out some

take is we've at very to future. our some can you So I resolution just work goal we're ETRN in the think more but of it, a come this be the past sort and disputes had know always to and I that partner to and look silent in think with our going we'll on

say So of tuned. I stay sort just

Arun Jayaram

fair enough. Yes,

how guide some Just I there's wondering I the my was base taxes? the cash tax maybe pieces a but us flow unpack, you of us free follow XXX it's be, would between if help business that can free cash organic much bit. up could called unpack from proceeds, you flow, free notable organic generation moving kind little versus cash flow of know and the help

David Khani

Sure.

here the is XXX that is you going remind for about down just and we've of have if refunds take more everybody, we'll So million of been $XXX are it of million baked midpoint roughly, that. roughly $XX it shut refund we top there, so tax million call tax then organic use $XX XXX there year, to so another [ph] about in or about, would $XXX and cash of of get free this to and million on probably in flow,

able sense plus to use free down debt. that you total to were a tax give refunds, that cash So flow pay the of

Arun Jayaram

you sneak did from a if the upgrade, one-notch postings, us collateral could get could just I you or the that. more you the If improvement one maybe Okay. mentioned in this David, you about liquidity think in, help magnitude get quarter,

David Khani

different bit little also the two-thirds. say so, moving then level, have there banks would that with number the you of things should exchanges, use different about probably we there. parts the have about the so rough we think and different levels and number, move a improvement it credit banks I of Yes, some and in unlimited post so around some banks, two-thirds We about and it's of credit is collateral

Arun Jayaram

lot a thanks helpful, That's guys.

David Khani

You're welcome.

Operator

next Capital Your comes question RBC from of Markets. Scott Hanold

open. is line Your

Scott Hanold

are me, bit -- counterparties complex is a but key I it the up can and the of down But kind some of discussion points? kind comments of what your these and and are really guess status of a it and on holding just very also forth what are Appreciate back the negotiations. for between can guess, you out from what right getting new those help and me little thanks. you negotiations, now of MVP I points Yes, does some if the decision end understand

David Khani

Yes. we say so we we're just hard to negotiating get needs. to, I'd get but we is just understand parties -- they have won't a say into long-term it's of right in make because or contract, to -- want I'll five And lot everybody things, this just understand are a we negotiations, with wants like their four sure now.

ACP And the the were some system. some parties a some cases -- that shock who was cases of to in so, in of part a of kind and

what long-term understanding just again they're are. their needs So,

we to from views think make just parties we just and I last is sure much keep want all standpoint, so think into just to winning piece contract the we long-term understand I So, it it's time, the so in, plays multiple and multiple that our it that and timing. want takes some and then how

Scott Hanold

end Okay. think some? the think [indiscernible] 'XX still where good a And for, have time year is you but of you still

David Khani

Yes.

Scott Hanold

where you think seen gas like and the just, players, lot happen asset comments mean, oilier has something quickly give the market from do Toby been and of of in goes Okay. obviously with to going on here, the of from a view of you've consolidation. a Appalachian gas could maybe but similar that give some there just a your I is in sales you And like how evolves? that players the can you this my terms flurry you think high-level if consolidation space, is follow-up in market, us you

Toby Rice

Sure.

can an done investors scale, because we've to for be there companies the we which access just taking real think, real certainly created, EQT, at our you we wells is I advantage sake larger and value not of improve execute, simply to operate of creating whether also a think to really look in, appetite stable that get have a have fleets cutting-edge The a large you you things is us large from having gives system that sheet schedule. scale of well. access technology on having that side the like which lot grade can but put operation only gathering more then something scale, the operating more an us, benefits frac rating to gives scale, reps a of a investment going get that us to at a balance to ETRN electric differentiator I footprint there that being that's have more for at if operational and we're that and credit means provides performance from as value our is able markets you opportunities what be

take scale look a theme to So for and right investors are like that going companies forward. that should having larger and of be be the think I can desire and that it's for EQT advantage companies think scale create value shareholders, I

Scott Hanold

you. Thank

Operator

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

Your open. line is

Holly Stewart

letter you Maybe quick a questions of us Dave, of morning, just are Good previous for some follow-ups you. of -- project? MVP, Thank remind to on couple Josh's question can gentlemen. that your on postings credit the what

David Khani

I we -- just. credit of don't we have of break and by pipeline. project. place, it give Yes it by in million basically again, $XXX Holly, we don't, out don't we

Holly Stewart

Would it that come materially optimize whole? down if you

David Khani

It would you it come on down. define Yes, I guess depends material. as what

that's I the our between it improve more I think the driver the come bigger probably will down bigger credit as two. I'd -- importantly and ratings think call

Holly Stewart

Okay.

at moving your remark ultimately of market of how I look Appalachia an here? then the starts some through mindset in the producers, Okay, highlighted you Do ESG to stacks the of prepared Toby that's as follow-up perspective. questions. helpful. that type of kind And mean, on a M&A this we up oil maybe M&A you think

Toby Rice

in get your could thing business the benefit of I the private improve a just a on you another metrics employees with smaller be some that and large barrier across mean EQT, certainly organization another that to status, number it's focus these to certainly performance bolt the specialists and then from to all is ESG at just steel scale. and to companies future I need on the you think that of we have

to the is going think care I we think a certainly and performance, companies resources be a to the the key are, improving benefits is that believe we So of differentiator dedicate for and ESG going needed be performance creation about investors a shareholders. to something value larger strong to ESG long-term have performance ESG and

Holly Stewart

for great. me. and then one maybe Okay, one final

Can You've your now update cost is you row well think cost coming? full obviously targets in quarters to potential you well average that. talk your your well below target see come in, below and now then sort trends any and two of those I year about that a just

Toby Rice

Sure.

XX looking through just to right Slides the that lowering our is story. drive results cost. tell think we're at we now continue I well sort value Where to actually at by X produce

We got innovative the now and the got the fix at of what EQT that business are towards when to in in sledge, approach phase you're but at it's the starting large see have to sort starting is earlier we EQT. we

just operational and drilling to technology really Slide on operational we've you on the is in say drive in we've to our and driving performance So lock well driving that that able we've side and continued of services the pretty well really see the of that some highlighted the that our service that. new been still technology we locked on efficiencies some what's completion have leveraging made and our is strides take to about cost of XX% big locked-in, and that's drive application XX, to efficiencies, I'd the demonstrate. On provide pricing in to which side, costs. top spend able of are which sustainability been the it some is

and to can have ability innovate. performance see I'm encouraged that has and to continue organization drive we'll So innovate we much the how the to and evolve an more

Holly Stewart

guys. thanks Great,

David Khani

you. Thank

Operator

Morgan next of [ph] comes Stanley. from Your question Mark

Your line is open.

Unidentified Analyst

taking question Hi guys, Holly's thanks I capital to for XXXX. build the just wanted about question. on on thinking sustaining

So I it a of think ago billion you number. a kind gave was year $X.X preliminary

or or that that curious, realize much sort thoughts sort Just of early of on how of any you prior target? into the savings built spending

Toby Rice

maintenance to -- and XXXX. we what at starting our for program planning So, I to with XXXX and is say CapEx good continue for walk to be going we CapEx with start would maintenance XXXX numbers a just say down our XXXX would probably and going that we're to CapEx our going for continue we're that we're point

Unidentified Analyst

piece, -- the Okay. you scenarios comment service And costs on the of are come I the cost remaining Can that do follow-up you guess, long it's these a that, of just for up sort that XX% have the just how would back then structure. into what sustainable. locked on savings cost

Toby Rice

you start Yes. will Once be.

all the sustainability, the as we're the operation length out I far lateral combo, that are there, those putting we schedule the of As percentage things increasing. have that mean

to that to really is very the sets drive going operational that's cost. sustainable. which operational teams That's really So up drives what certainly efficiencies,

we've putting So that's going to continue place in been here. We're the designed. with that well designs is well

So I don't see any changes there.

comments we've mean to wells. have what what wells and that got we say these there it the from from service that with The costs. on idea is our service is, I fact So my a price takes sustainability design actually thing locked is perspective, in of spend I'd XX% execute good have over these the we the of well a other part

frac moving for bigger the to those are needle like things that are sensitive fleet items more moving. So,

have anticipate rise don't pretty we because bit a from level you expect activity levels, the with anemic materially to pricing which activity an running levels If under XXX will rigs country. in We materially. rise activity standpoint work service again it rise in to don't

to we like position in make good So cost feel a really from sustainable. these we're a perspective

Unidentified Analyst

so Great, guys. thanks much

Operator

comes Sachs. Brian question next from Your of Goldman Singer

open. is line Your

Brian Singer

morning. good and you Thank

Toby Rice

Brian. Good morning

Brian Singer

question on last more from there, to Want up but production a bit a follow perspective. the activity really

maintenance producing see more we versus [ph] $X type we Is quarter the up that. should you of more capital would mentioned implication assume you price if to doing more prices in are at or have to level so around and increased confidence expectations would activity be futures at XX then long-term the dated fourth in X or ramp that's want when gas a going three, to activity. longer the expect You

Toby Rice

our levels is CapEx the say, looking on look to level yearly we're us production probably would I Bcfe that would be. Yes, for quarterly level at maintenance opposed as we at production what a is

we see can a going to as, occasionally if of one think which stay 'XX. And would want we're balance at there Bcfe couple Number things about we sheet advantage far consistent track to that when want is, With that on we as leverage your with our our get to first. we arbitrage. of doing prior messaging, we buying is So some targets, want to XXXX to which is in year. to well at take on Bcfe by in maybe shut-ins the we're take growth. for answer just XXXX question there to

probably we'll point. surveying thing than have to probably the part like X%, maybe we Brian, us will be to when think need strip old sustainable modest we going XX% more for do then very months other I I the growth grow. but to you the that's landscape out, that as at of if third it think so it's look is and days be XX%, be a the X% get XX next growth so is to just we And the not

Brian Singer

would back and my then to talked And follow-up about here M&A per that and mentioned flow last you. again cash have the call share you you free confidence goes today. the thank M&A Great, need that topic accretion in to you of

but earlier are bit as call? per You opportunities also achieve NAV for as are to contribute realize need mentioned can't would both goals those I you the whether on you that you deleveraging broadly characterize those M&A think to you also to talk I a share business, in the the well available I mentioned could wonder and any market that specifically, if the

Toby Rice

Yes, sure.

those comes assets market, price. So metrics is we getting the buyer's that that's think about market we're I we in, down it to said at so historically that we talked mean, a that the all right it's still

be an mean achieve type being to So, going I metrics. ultimate able I determination of think to on that's those is

Brian Singer

the the apart, guess it use about goal or maybe to when on can to that. contribute the to I And but would guess that talk get if as and would is deleveraging comment that we question philosophically be like you seem of equity, I

David Khani

Yes.

Dave. this is So,

to we that could of were everybody a the to think need two is just delever. thing times a at when our about acquisition effectively back conference we from one So actually is equity curve when we ability weeks so balance see I probably in of a few ago few sheet mentioned weeks ago to less an or kind to fund ourselves think get an and leverage already lower,

has of investor I a think just kind strip already fact that risen we lot our up about. call why metrics the the talked grade has ourselves really in put that's

think do equity So views and for we but we're the point just I it need I'd dropped I M&A, we doesn't we'd think first but equity again these buy I to talk that needed. their then ever point there that's equity, wouldn't I it spot right, written that mean if has that think metrics good us say sitting puts grade it, where and that have investment a do the out to more one, number if fact we significantly lot really and in the is less already another think do were

Brian Singer

Thank you.

David Khani

You're welcome.

Operator

comes Your of Fargo. next from question Wells Nitin Kumar

open. Your line is

Nitin Kumar

you are you today, flow some legs are long-term and of the for think return free mentioned shareholders? bit it? about to Thanks returning start X%. cash How for factors with, it's X% I'll to I gating my about investment cash question. the What you the growth this case to little talked to thinking start a [Indiscernible] taking the strategy. you've extra

Toby Rice

is Yes, by leverage so hitting our 'XX. targets

that going the I think give is to us ability make decision. to

returning as early could XXXX. be So capital shareholders we to that as

our like we're to sheet things to most equal, all we'd shareholders going capital shareholders. where to it, returning be being it's to likely or that the think going place is I growth when return balance when where capital

Nitin Kumar

and because want follow-up My the touch is right there investing particularly back being bonds very it. this see provide do alluded response. are under now, what end [ph] of of supply to on comment Appalachian you've incentivized to I what Got of your reticent mean and seeing just kind industry Slide kind you that activity? be to is Does seems you to I'm people you I and you're around the XX, Board that actually a just to moving in not incentivized supply. think curious were very, bring of around

Toby Rice

production, time price history Yes, you you and growth, a by we that just I see back get production signal think and here decline any think the industry any you increased commodity in is offset -- at I price. has a see, look rates grown

is 'XX and activity. while you and look out, you look and come is increase about to look would the for fact is one EBITDA, deleverage as of in on think that an balance adding think things not the progress you're see, I is absolute in opportunity right keeping and thing realize sheet there think great really which operators making you up, up 'XX looking disciplined is strip the people come their So organically more industry to anybody level think that that gets sort 'XX are any a further growth, think that now of to at by the at that strip that I I I and certainly commodity still to other to prices reducing debt the opposed before

Nitin Kumar

Great, thank you.

Toby Rice

And then, and come employed long-term return use investors invest is that for I just metric to want on back say return space. jump in in want and really capital you you to a if that can this

employed. generate capital years next really on industry gas XXX the needs know over really that You to return X the

Nitin Kumar

I was That's what looking.

Operator

Your Tuohy Jeffrey next of Brothers. question from Campbell comes

open. line Your is

Jeffrey Campbell

Good morning. be much benefit drilling M&A. is more that would Toby on My attractive with significant question having like is portion of since Appalachian what up that a acreage really Tier lots a resource? you've first up, said of of you think the scale X

Toby Rice

Sure.

I upscale. earlier made down think the it points benefits of just to the comes I about

of sheet asset take a be little certainly lower more being across being to other increase is to to supply. having going biggest technology a key to would shareholders be to being something we certainly discipline over achieving I and going robust value well commodity the remarks third, is like our for more more a as base and So a then to costs scale one, investment gathering another the also of approach, advantage closer begin able think scripted well, price that impact and just able value stabilize bit the to a is leverage strategically towards thing help $X network leverage at that access control our thing say larger, to to leverage I larger is is that and a XXX being more said the the the value that. would at industry able another and to our able is being asset balance going higher to the be the in in markets disciplined going grade With as the I'd of helps mean

Jeffrey Campbell

your higher following would like think of commodity last couple next keep of years, desire oil out market, required the and gas to the Thanks sort and regarding do is control to volumes your on I point of which guess allow associated What EQT's you turn the for natural that. Okay. of to assumption. in price sufficient say? to better over [indiscernible] do debt so pricing

Toby Rice

I say would $XX.

Jeffrey Campbell

Okay, you. perfect. Thank

Operator

There further for at questions time. closing turn I are Toby this Rice call no to will the over remarks.

Toby Rice

report talking go a esg.eqt.com. and about spent at time this results past of everybody produce, would for over minute urge organization your Thanks lot able to our to We I a year, has that today. take been everybody time but the the to CSR

putting it's how that about don't of we it how results we results, on everybody we check can and of done report great think the generate put hope up example proud team out. those a and great the on the just I care work has

thank everybody, you. thanks So

Operator

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

disconnect. now may You

EQT (EQT) 22 Oct 202020 Q3 Earnings call transcript