EQT - Earnings call transcript Q2 2021

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Operator

Hello, everybody and welcome to the EQT Second Quarter 2021 Quarterly Results Conference Call. My name is Sam and I will be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Andrew Breese, Director of Investor Relations to begin. Andrew, please go ahead.

Andrew Breese

Good morning and thank you everyone for joining today’s conference call. Toby Chief and Financial are and Executive today Khani, David Officer. me Rice, Chief President Officer With A replay evening. for our website today’s call will a period be X-day beginning this for available on present In Toby will up line a the remarks a session. and will open question-and-answer moment, for then the David we prepared an we and investor we during may our website, updated slides discussion. On have today’s have posted presentation referenced certain contain remind you that forward-looking also statements. to may like I’d call today’s of Risk because described Actual our Form from of filings future those with SEC. subsequent second results XXXX in our we in events differ quarter the statements and our materially investor could forward-looking presentation, Factors XXXX factors earnings release, make and in XX-K the section We update not do any duty undertake to forward-looking statements. financial non-GAAP Today’s also measures. call contain may earnings to the comparable our our important Please and for presentation measure. quarter most most reconciliations regarding investor refer such including disclosures to release GAAP financial measures, recent second you. Thank turn to that, over Toby. with it I And will

Toby Rice

everyone. Thanks, Andrew morning, good and

to acquisition, Before on The we recap touch are our of was approved accretive completed which compelling. recently benefits shareholders. timeline this the our by the our bolsters both quarter, acquisition metrics trajectory, flow overwhelmingly per I our our would investment It like reduces profile, reach substantial shareholder on return cash high-margin initiatives. and and accelerates meaningfully deliver adds grade inventory free leverage share to Alta

at holders. deal Now, million to Alta’s $X stepping of XX.X the for issued integration July directly on back and purchase closing closed to cash the We XX price details adjusted of being the the deal equity billion process. and shares approximately an in aggregate

Midstream in high-margin production, X% markets. systems, an largely the a portfolio net freshwater than and attractive approximately receives acquired Marcellus by of FT Bcf stock of acres, XXX-mile premium gathering XXX net no transaction. common a X include to a Alta assets reminder, approximately miles As demand holder our XXX,XXX more system production, equity The held day key of

in and frac going non-operated activity, X forward. to maintenance combination we operated development rig a Alta will assets crew, assets, utilize expect we the the execute with On and our on program

of total sales volumes $XXX expect free expenditures million remainder approximately Alta adjusted in approximately million, the XXX and assets million $XXX XXXX, $XXX the to between to For of $XXX we capital to require $XXX by EBITDA, to contribute Bcfe, million $XXX finally, cash XXX to million add flow. to increase million

is portfolio. the the framework our designed confidence, approximately identified, Alta completed. of over were these to the have practice that actions XX% high into speed as On and transparency, front, our we Of fully XXX actions integration provide already identification best been integrate proven assets integration

We volumes expect program of billion, total approximately free Alta flow of strip to Tcfe; our complete basis, our integration pursuit EBITDA hard instrumental the as of those our $X.X XX% at preliminary expectations sales to generate pricing, improvement intensity approximately capital value capital of realizing billion; expenditures In are our forward approximately approximately and maintenance of in under cash XXXX, step requiring and billion. a current in $X.X total creation. sustainable $X.X members EQT including The generation X their of as work added adjusted moment by want and this effort take to the in Alta the a acquisition I of efforts thank The a team another represents are well crew, full for serving to on operational all end transition year. newly to-date. them

strip flow well long-term $XX at nearly projection now through current or pricing $X above revised per our cash free XXXX Additionally, share. sits billion

our and and sustainable platform and flow ability shareholders. accelerates the result, deleveraging investment returns. for profile necessary cash robust optimized established a metrics strategy provide Alta our enhances to both and accelerated grade The achieve our structure meaningful shareholder returns deal As to financing a free

our and sustainable with our leadership mechanics, working to conjunction shareholder currently our shale in We are rollout framework the fourth simple: era. process earnings. our components maintaining thought in return detailed our the of remains quarter We through but plan focus

passing value will call future. position in Before to in the our which highlight sustainable creation on over excel believe best we long-term, EQT the to Dave, to a multilevel strategy I low-carbon want

have We emissions era shale and free that to new a capital returning entered balance cash generation, sheet of flow values strength, sustainable reduction shareholders.

Our our and should cannot not of assets strengthens the future. this us evolve, who have investor on presentation our by Slide our maximizes explore sets and generation, of flow within our clear, set only XX consolidation and Referencing this benefit potential full accretive evolve in following why full with glide with the is to lowers the mandate element cash get realize to easy-to-understand in this ventures three-pronged the goal assets. potential is our our strategy our July behind, who be path stakeholders strategy balance structure, realizing of and team lower capture here shareholders stakeholders management been a strategy carbon up that to since new today. but the sheet. new our XXXX, starting cost Executing our us free from voted This

consolidation is Second our strategy.

Our ability proven to ESG modern operating model value in accretion. create has meaningful supported our

us this have all per set This and on and scale, accretion third the to approach a component leverage our of assets, to acceleration. and work accretion acquisitions with new set free strategic feeds which seen boxes Consolidation also We strategy checking efforts. to-date Consolidation, share, execution our while the ventures. to of per performance. our ESG recent for larger allows maximizing NAV release strategy: corporate strategy into flow drives cash not reduction skill share emission

that U.S., natural paths sustainable growth. premier to markets ability achieve the open opportunities new new cannot, to peers the This staying covered of largest affords to capital explore smaller us meaningful while return able in the to and As we objectives. our forge all gas are firmly

the pursuit lowering pilot few X approved announced, previously budget venture profitably initiate an next over emissions. capital has in to million $XX explore programs new seed the As opportunities. of initial Scope us to Board our years This allows several of

our second set this found website. be the a quarter updates then will we landscape, corresponding guiding on pass will some recording can it via quarter We More conference the results, to ESG this over our ESG now are believe embrace presentation, the wrap of on our at XXXX discuss macro capitalized on can the clear be in by which available upon call strategy ESG will principles, detail initiatives. report call and and to end and third Dave have in thoughts changing our environment. update guidance on I and covering hedging some which I up regarding

David Khani

results some other strategic our on like Sales with to everyone. Thanks, quarter before moving guidance morning, volumes Toby touch good and quarter Bcfe I’d on the XXX range. updates. second to line for our in briefly second were

quarter million and operating were were per the $X.XX Our adjusted operating costs our per Mcfe. revenues unit $XXX total for

$X.XX, XXXX, During half and by the XXXX, second year XXXX the for quarter rose of full and respectively. of ‘XX second NYMEX $X.XX $X.XX prices

Toby movement free in Although has business and the forward just cash that rapid $X.X of financial positive impact flow the aligns a pricing billion our derivative increase provided. staff on treatment oil EQT loss no this price is on positioning, bullish and/or non-cash resulted This for in operations projections with our accounting sentiment, mark-to-market position. our

and bottom flow. of million million, deployment, below between second efforts cash guidance primarily optimize production $XX free Our the delivery range. capital capital our relationship expenditures quarter approximately to end were operational maximizing and was driven This $XXX the timing by

Our or foot averaging PA with performance below expectations Marcellus exceed year-to-date our continues per cost well to meet $XXX costs target.

or We as at to target. our below our planned confidence foot deliver ability per well in costs are West our West Virginia Virginia executing operations high and have $X.XX

our resulting cash efficiencies, flow $XXX our West and environmental financial adjusted During second operating closing results, and July, spectrum. we up of we of improve development flow wrap financial brings placed This moving The under across million. operating Virginia free expected delivered our section further of accretive XX-mile impacts lease ahead in to our To expenses $XXX mixed-use into transaction of system enhance ultimately a system the water service a is quarter forward. million, budget. reduce Alta of implications schedule cash positive

XXXX earnings step also in resulting the guidance, detailed operating while pro can updated As more cadence the such, third acquisition. change on cost providing quarter structure be we full color from forma production to details guidance These and have Specific we step our the add our be per year XXXX, operating approximately Bcfe XXX third a at Mcfe. a the total in $X.XX cost the filed in expect midpoint, quarter to and volumes in to found drop release sales yesterday. up approximately to total

will our brief activity. to update hedging move Now, I on a on

recovering sharply the risen have several from months storm benefiting prices last demand. NYMEX strong Uri witnessed, gas and from all we As

to NYMEX Alta the rally, than our As order In XXXX. on for assumed XXXX, tenders. XXXX, the an was to we XX% XX% We and XXXX base our of XX% and of balance transaction in XX% the additional returns, Alta for XX% for more total between and transaction. XX% transaction in XXXX. slightly balance Alta our at ensure prices hedged layered approximately to added hedges XXXX hedges we

recent the run-up, average we to price with and the of XX% position our flexible retire raise overall our our our with to and providing our specific, allow adding we approximately just how in protection of debt, floor to and to X.Xx, upside hedge appropriate have hedge a participate leverage XXXX To hedge will keep be collars XXXX $X.XX we During of the while shareholder-friendly and over open strategic in position collars, an closer been a to goals. With to achieve beyond. ceiling $X.XX more floor approximately position will us level us of more XXXX be institute in actions, $X.XX. enabling

various to details basis outage. in pricing experienced as calendar position Appalachian earnings pricing midyear we second date. can exposure hold been our We local be in active MVP for local our start the and release. Basin assuming a of to no to with of in found our XXXX, nearly have remainder XX% the Full mitigated in approximately for Currently, fluctuations exposure exposure pricing at year current XXXX, while hedge also sits hedging the points TECO quarter

metrics, attractive efforts consolidation our risk. us grade So, from hedging accretion pricing free our in sheet, locked our profile achieve and solidified from positioned to flow portfolio near-term protect cash investment our have and balance

that frontline MX averaging fundamental began occurred. XQ the running setup outage the natural $X.XX Cash TETCO of a Uri. strong producers for rationed Mcf weather basis recovery Up The day, Now, outage capital to Bcf demand. per driven a from industrial The TETCO in June starved with gas the power at saw up the contract followed demand X NYMEX much during gas weather of approximately outage, a setting for natural by maintenance TETCO post demand XXX supply day. TETCO pressure mode storm basis outage sub in for also about warmer-than-normal in Coast between till gas by $X.XX being quarter, May, domestic for per the rallied $X.XX in-basin gas. and while Gulf the fell and pricing The million $X. while the by added warmer export was outage, increased April initially June

the with mid-XXs less helped demand back basis, of region even switching outage, to coal end the the and to gas in pulling However, strong quarter. the support the it cooling cash before

remain ways gas who accelerating coal retirements. for and gas product footprint. rising forward, natural pricing with forward expect in are XXXX The to XXXX long-term both seeing upside market end price view, for sector reduce users, curve for gas of source the on domestic significant XXXX the are XXXX further exports, opportunities buyers curve conversations the increasing We differentiation modest this we differentiated we demand power looking nuclear bullish we to Looking see And from see top within their and responsive to our sensitive from carbon and weather. as exists and very to demand international matures.

over to of see technology to into premiums for transparency. improved entered and the now optimize wrap up. RSG a things couple already through we opportunity have the expand Toby I the We standardization pass call RSG of premium framework will contracts pricing. We the as adoption at to

Toby Rice

Dave. Thanks,

As we growing opportunities topic value accretion. RSG with the to creation highlights, see ESG connect

in ESG for value and differentiation. us how provides area creation comprehensive June approach Our published is a report key we sustainable a detailed of review

June, truly in I’d we differentiating highlight which before the close, in emission we the So we believe that like industry. targets announced are to

that targets Scope zero high Scope one net or is or First, achieve have emissions GHG meeting an we This to and exceeding. the and in X important by before confidence established XXXX. we X commitment

to COX plan to reduce tons by by Scope Scope And finally, we segment level segment plan emissions XXX reduce XXXX. a our intensity metric GHG or Second, production X below Bcfe before all production be XX% per X to our below of choice first our before by the X.XX% as or we by methane continue of for operator XX%, are aim to emissions to These steps XXXX. intensity we meaningful push stakeholders. and ourselves will targets we

important investor like a Slide conclude today’s highlights vision short, opportunity X the scale, investment natural we for producer natural correctly, shareholders. gas I’d emissions opportunity. organization gas, purpose. to largest to In chance is unique in you countries because We with and to with providing which investment And Starting of efficiently. the call cost, low not of value-driven more U.S. scale the energy our responsible are differentiated a This that when because with only operate point operates done are our to to United and we States. are but low presentation, affords we other our us the are globally

contractually notably improved have profile, with maintenance flow we a locked shallowing intensity production declining a decline. Second, Equitrans, driven capital most and by in rates robust gathering free cash base

projection XXXX $X billion to MVP RSG credit capacity, gas, come upside movements, ventures, rating will free and upgrades, certain flow through participation new of operational release cash price continued efficiencies. upward premiums from our in for Aside the through plus

a credit investment rating. path Next, regain profile grade a with we to have clear peer-leading our

to shown basis producers. Slide basis our only As peers, on that than points XX grade points while XX comparable investment XXX nearly will wide X, better notes of X-year you trade see

which X slide, On profile, by will strategic turn leverage XXXX. is end the the nearly the fall year taken, see of to end our expected from impact you of side significantly left XXXX the which year reduced to actions hand have

have an peer operating Additionally, leading modern we inventory. in model evolved

lateral, infill role low combo we to tailwinds electrified. energy emissions commodity. execute critical as finally, have is We baseload more here risks I accelerate, inventory. to poverty business the remaining Appalachian States in gas retirements for business. continue a natural to of ESG development and human continuing believe generation coal now in the long plant we And replacing drill natural play mitigate a your climate, for for tailwind world have on Thank improve forward look like being their strategy, that critical the decades open electricity our And questions. as peers our core, you a to leadership on and for core produced providing becomes a call influencing As support. gas global enhancing further, will and United all the long-term comparatively up minimal inventory, positively and tool for demonstrating would a champion interest scale, to flourishing while this the

Operator

[Operator from line is from was Kumar your Wells Please muted. open. Fargo. Instructions] My comes apologies, with Nitin, I First question. proceed now question Nitin your

Nitin Kumar

Hi. thanks guess increase some bit are more a I doubling a us a your almost up that of you mind. bit of Good still quite little give at bit could is there will but which but with little benefits if you the morning a gentlemen. insight, little everybody’s a prices think And you I about for that I swaps start rate below hedges, bit, on I taking much. hedging talked was strip. my wasn’t question. hedging, mentioned first David, know as floating

to the to you at you little why did you used that? bit instruments levels that a choose the So, did about you and hedge could talk do

Toby Rice

is This Yes. Toby.

it. I and the So, through walk thought can behind hedging process

So, approximately we you Bcf Bcf. swaps. the that inherited, XXX see that you added was of volumes And will take if about we Alta XXX have

allow that So, strategic and what’s to you we able targets way to hedges shareholders. Bcf leverage our balance returning meet our to really the our strengthen be our us goals are XXX best reach that get start sheet, through got capital thinking and about to

closer our view decisions, We take and we when $X. have that make view was we to a these

helpful why question agencies from you why that. with collars. not that But not $X, is, for rating around look improving to a free premium which to price, anywhere would has aligned next at in closer swaps in have underwrite The cash put to of effect from our be the the free place, flow at the the well, was hedges, our period, sheet. puts, really the investment-grade we at cash our solidifies we is, did at And view. very The flow and swaps of those balance to when think NYMEX, do question $X.XX use that I to put looked we that that it the just $X.XX. the which with $X floor, regaining assist us

exposure put made there. that not on hedging. upside, that really the view and to at account a taking weather with a So, events give did was gas and line put in not will that place We the are to the decision $X.XX be we process was That time. behind But for view the you prices the thought $X.XX. in our

Nitin Kumar

and And you shareholder return. just I in helpful, the to prepared guess your Toby. cash That’s alluded remarks follow-up now, really Great. this

you I you So, different Are leaning earnings, compatible the There be fourth how – you dividends, to talked any also Part B be, return, variable that? And that ‘XX scale, I know form well. if goals are ways. address a can as meaningful just but with quarter would and of cash consolidator buybacks? are dividends, about want on said towards thoughts you your to consolidation

Toby Rice

Yes.

are we balanced that to forward with strategy. in flexible capital our looking or the return and a of allocation out fourth And going So, quarter. take I putting am to approach capital

you consolidation in as always footprint. we look been opportunities allocating performing, see any track is with how very at our think and strapping efforts. consolidation One far we our and very consolidation about capital thing our disciplined record, we clear, As have if

good important we But are do accretive nature be per per balance more now. think are sheet sitting is and And basis. us Alta with support we to Chevron share cash NAV our only track with share flow free on really a that even disciplined helpful. place more right obviously a deleveraging it’s The going that. record even for and deals really I the at laid with and

to shareholders the now we ability I the on disciplined front. of importance consolidation think returning when capital So, just start have the to enhances continuing to be

David Khani

that, yes, $X.X have Yes. And just then billion have add of we year. I free will – we flow next cash

out big We shareholders percentage. of But what to do a year. we next will have percentage return figure to ability

Nitin Kumar

Thanks David.

David Khani

You’re welcome.

Operator

Research. Our from Wolfe next your question from go Silverstein is Please Josh, Josh comes line ahead. open.

Josh Silverstein

morning same was on well. Yes. Thanks. to the going go as right guys. topic Good I

limiting return? cash we think $X.X about were and – how balance probably there the you much flow. sheet the well. profile year Do you is as return to of the pay of make there free But other limiting then of billion imagine us? can mentioned million your guys want other the you X.Xx limiting the to what’s $XXX about to You I made maturities back to could you for next factors to kind some to levered what want from or factors return what

David Khani

Yes.

able the this debt will we retire ‘XX So, be to year.

we So, you want how do need to flow retire in a specific we target, can specific set debt, much how to year. any the but look cash incremental really to will And path. think X glide we we get any much free target I can I about want We do. next shareholder-friendly a year do to at think debt don’t and

Josh Silverstein

it. Got

as are was you volumes holding And just the just for longer term to years there roughly just case plans so? or if to years here see that for X next or guys is going X forward. that there, be as maintenance the wanted flat the that and talent clear I then strategy Okay. growth it’s far early going outlined pretty you guys in no

Toby Rice

what that’s a And today. get to got that’s us, with the be there X opportunity than if a probably $X. if X it have question, even the to the years still price that’s of the off just less it the for And taking opportunity, that presents would a low zero, the see to said, EQT is past situation at years require Consistent very have single-digit when little strip growth, itself, north would bit. we consistently modest, take it team length we seen would we operations did taking it what some X%. still Yes. that to really gas throttle and run out or to And brakes for grow, we in

would it couple – very be a be wouldn’t a natural percent increase. it So, of

at incremental situation that maybe interesting now. look that people And an will to you see a of we people is we choose can $X, in at get gas the north are short-term have the do activity – price industry the at valued disciplined, adding best a levels maximize lot think it’s in return shareholders right encouraging, get can to while compared a because and to think from the I which or activity looking signal, And others you that assets. also compare short-term creation the price recognize the value think signals. think out a amount little we better our chase you to dollars. versus error our term you small bit an think I accelerated to plays remain that alternative. on how of gains getting I the and or encouraged I people the see alternative, that’s assets you price that they value opportunity of And we and when compare in And industry shorter are is return of the capital know long-term that been return when to what’s way

Josh Silverstein

guys. Thanks

Toby Rice

Thank you.

Operator

Our open. comes now Neal, from Neal Please your next question line Truist is ahead. Dingmann go Security. from

Andrew Breese

you Neal, are there?

Neal Dingmann

about guys. that, Sorry

with know of you what’s about Toby, have focus? what’s this your you thought? either the there have for putting are given going question, on a year have, just some more in early And maybe NGL ton I pads areas, a you not year tie massive that bit bit on First the or could and little thought – you, NGLs? footprint a but next

Toby Rice

dry gas you things. we the us the that not Chevron asset Yes. our opportunity side it have does some percentage It’s activity just wet going really hit be are to steer think the to program. side our give – Neal, to from move scale But able to of given we the upfront. in basis, needle an of a I

Neal Dingmann

Dave. ahead, Go

David Khani

going year just was I No, next say it’s than… to for probably more

Neal Dingmann

different that plan a on you mean there. to in past. a steady, to I just part maintenance But still much you given would of to of have meaning control, bit deal, slow, seen M&A, kind not about at alluded M&A, the I about Could have your now you kind M&A acreage on as just acquire anything others to the deal, sort – be on I any said, continued of, that the guess you of has just something on at of continue Toby, will doing but this, than continue not rigs huge very thought Alta just, your acquire, the look didn’t the acquire that Chevron the talk would but than certainly when to then to add of only you strategy your potentially sort kind And opportunities, we more do? other you the Okay. only just is the been continue would continuing be look this thought – earlier. on

Toby Rice

past, Yes. solidify In cash are increase cash where now But we the way have start share now we where it’s doing through beginning in capital today. to and that’s Neal, free coming with free returning sheet where tool the our per it’s balance having great whether for the share the and to we share. was ability per balance deleverage a can here a grow to in share, sheet flow our I was us mean free get business strategy our flow cash the per to consolidation grow also to fix now sheet to flow EQT, balance at and at position that buybacks. another shareholders,

way in mix that this have to free and the are out we per weigh the we new can going tool that we certainly share. finding grow our flow best cash So,

Neal Dingmann

questions like if that do are hedges program. rolling what on it now? Dave, lot think time. that. there, It one know just off? a I the I has if the Dave, the understand not like fully talked expand could one one you getting just have are hedge feels still understanding am collars or don’t And Alta the today, I reaction of was Maybe off? could between you hedge Agree. on you people you fully on the Alta but what rolling you that is investors sneak in. folks about sort last for the seems of on put It some Toby, you, just I last just think and in with

David Khani

Right.

inherited and added basically hedges collars. about X% I ‘XX, am will X.XX another, ‘XX to ‘XX our to protect hedge call about returns call They then X.XX. a to all at were and a of hedges average we of then transaction X%. between incremental place. an it there Alta XXXX at piece call added at And going that XX% we that of it. in ‘XX Toby We about hedges will had between hedges So, of We the we in between wedge it, price. were that XXXX. number I a talked in added of And $X that and a on about which that X.XX had was

and a were piece in we incremental pieces inherited transaction – portion to view go added for the which protection price and the Alta of the piece, piece, helps. So, that of $X is was of that our that the if the collars, it towards

Neal Dingmann

guys. Thank helpful. you, Very

Toby Rice

You’re welcome.

Operator

David, line ahead. your is go from from Cowen. Our David Please now open. next question Deckelbaum comes

Toby Rice

you are there? David,

Operator

disregard think, I have question. just may his David,

is go Holly, will open. we So, ahead. now your with Stewart. Holly Please go line

Holly Stewart

I start are and getting contact the close Good impacts integration morning with you, will and you very about presume gentlemen. Maybe, thinking in I that the investment-grade are how rating the that you rating. close. Dave, agencies with just acquisition

capital there? then return just conversation? maybe my the that, on of timing strategy that So, how thoughts what changed you how how second into And on just has do your the sort are question that maybe around – is of question first incorporate the

David Khani

Yes.

the the timing. the events I just impacted two is the would So, other that acquisition, day. say upgrades has got the and – probably there we been One

notch now we are away. sitting at So, one

it, accelerate six call acquisition to back helped maybe months the transition let’s so. investment-grade So, by, or probably the to

really and taking be. event should I second kind are commodity So, through move it’s agencies up. what think of moved price the the rating is on how the and commodity price the And now

impact have well. And so big that obviously will on a timing as

think about investment-grade event, or whether as can we So, I the a the middle. it’s beginning think XXXX probably

Holly Stewart

rating then how thinking return on the second capital that? of agencies about part and the And are

David Khani

Yes.

So, the down agencies would pay like us to debt. to continue

that’s I think important.

strategy. that I so return capital we on into think our will integrate

I fact the that a view. think now with we multi-year have

cash returns. We then cash investment $X a of we billion. We $X.X balance flow, as will provide as call to approaching that well returning a well retires and and year both a strategy billion having can over strong it create debt accomplish sheet shareholder over also can having grade, shareholders. time free And

Holly Stewart

remarks mentioned the Okay, acceleration your ‘XX I great. in as within mean you all fleet kind second playing no How then do off? see are terms And in currently think quarter. you then, element? that here release, the the Toby, you real about I in of I you and of seeing, prepared know guess, cost what in

Toby Rice

Yes.

we steel, obviously costs things the got are lot service on into is teams forecast of a up view making diesel. the seeing obviously, So, with we the inflation most thinking makes have like things accurate time our baked that and sure well CapEx like Where future. we spent about costs that for our

advance. team to program one of the is procurement of We can that a we we have acquire done running benefits the materials some need leverage in – our large-scale dependable

tool that’s a us. So, for been very helpful

I result that. from large of have seen equipment, benefits, as to consume diesel. million we XX in thing reliance takes diesel being ESG that move frac not to like mean gallons a reducing just of That’s it other consumers. on have needed us diesel our things to not the is over we The addition away electrified

inflation cost So, play operational efficiencies reducing well. into as service

I high longer stay So, today. the two to there are to grade continue efficiencies, expect are increases do these historically, operational costs at all teams we the cost And level face ground things to I future. the have the in even And will what been the in that baked into our the of our of then of the of those we costs service with are. and benefit beat that to of lot sort schedule continuing got will that But laterals. a have continue at numbers see

Holly Stewart

you, Thank That’s great. guys.

Toby Rice

You’re welcome.

Operator

now comes ahead. JPMorgan open. from go question next Jayaram line Please Our Arun your Arun, is Chase. from

Arun Jayaram

talk your assuming mid-year about basis to outlook first, for XXXX differentials. a startup Good know for date morning. I wanted I MVP. you to, are

could was guide differentials to if wanting for post-MVP free I of expect do the embedded billion talk first $X.X in to basis cash about move a And you in XXXX is differential flow? what world? your see basis So you how

David Khani

Yes.

XXXX. we narrowing basis about year-over-year XXXX from are So by to differentials $X.XX –

And so big we in see nice improvement, and a of that. we locked chunk

basin. And I’ll it, also call of benefit so And material endpoint a base, gas drops in what where a conservative MVP off. online, benefit view we’re assuming assuming, MVP when the – and we’re in not a not comes very

there not be probably – probably there’ll better, help assuming will but helps. that make numbers we’re those get that that, some So that movement if

Arun Jayaram

it. Got

So XXXX in it about to you’re Is sounds fair? improvement actuals. a that basis relative like, assuming $X.XX Dave, year-over-year

David Khani

Right.

Arun Jayaram

Toby, the is for Great. fair. elaborate on Okay, how kind market wondering responsibly I developing. was maybe you sourced could gas if of

You talked some of marketing where about a pricing. maybe premium getting couple agreements you’re

maybe wondering $XX to a plan venture So that maybe could make the million? line and time new and some you that you maybe investments upon that elaborate if for touch of

Toby Rice

Yes.

product. So RSG, demand. first, starts lot a out have this A is interest market lot for the to There customers of us of about reached there. it on with

digits So that that’s exactly allow what that real very going low getting really price, product what looking establish to solidify that market single we’re emissions a in part the will buying. the that constructive people the But quantify that now. realistic is will help you’re Two framework that’s customers. lend the apply based in price carbon that say, really are encouraging. in to for And a to itself us is, pricing certification that more for do and on I’d of to data. reduction to by to think translate price will right gas that will premium responsibly if that, certified more I actually intensity, our some type going really help is the you’re And the define getting to

the OGMP help So on-site technology is we part to it. do will that the X.X that we’ve joined creating that that be in designed specifically in of to monitoring, the And use assist also framework.

doing is to That’s replace As going efforts by our will in which to our we our of a one to facilitate of new emissions ESG allowing things concerned, initiative, our of that we’re ventures that pneumatic RSG them million there in far cut $XX the as one devices. impact emissions is is is going and that our have our quality that and produce the us gas half, better, which the to more peer-leading only intensity of already to – will what credit that’s we take rating get that for make the customers. investing

position to that and And the benefit what market. ourselves view RSG doing so promote and that’s on holistic of sort to we’re

Arun Jayaram

lot. a Great. Thanks

Operator

you. Thank

John Please now America. Bank line your open. question next ahead. of from is comes Our from John, go Abbott

John Abbott

Good our morning and taking you for thank questions.

David. the working good is question the a during draw mainly is for you, quarter capital first Did non-cash. job Our explaining

how capital? sticking of we Just to XQ, working the think trajectory should about

David Khani

Yes.

hedges. our margins really then think So those margins go prices on margins working And up, go capital away. tied time those as go as you issues credit are as our increase if can the what’s the margins And left. about those to for rolls, away, with improves,

think by the are that about. I’ll to the moving effectively away. the call all go But of just will those that end it So I targets I margin year, know think

to think so standpoint hedges. biggest is because next the X could really that a of over tied margin you And trend that impact from effectively, go XXXX will margin just the part away about months,

John Abbott

NGLs provide Alright. second have your needle in curve have of second already And don’t do And the NGL a But the uplift position. much, in on you lot on but that question, for of towards an sort and the NGL you not, discussed. hedging year. we the of disclosure move also the half it’s which been really of the if on really don’t for hedging, NGLs topic

contracts, to of of you you on continue hedge relatively and just whether specifics hedging you but not the discuss, So give maybe the sort can XXXX – of on or percentage NGLs? speaking, may amount NGLs on while into

David Khani

Yes.

hedged So XX% we’re on XXXX.

XXXX. acquisition, we didn’t But place. we we NGLs We’re portion ‘XX. added in hedged with in of we our have those Alta, added plays to for A add or hedges are hedges just ‘XX We like did that our Chevron X% tied on only XXXX hedges.

have it’s of call revenue. ‘XX X% NGL. open X% production. of our we or and X% it, virtually for probably It’s wide ‘XX about Again, our for about, So

John Abbott

thoughts cash sneak could move pay about what upward And in taxes? mean the – gas one if latest just David, the I are in given more, I are might when you strip, possibly what your

David Khani

It have will taxes. again, be NOLs. we a And years cash pay – before we billion that several $X.X is be – function will of

will taxes. years will pay have out really prices before that we function now, what of be so we right cash call do. And – several we commodity But a

John Abbott

taking Thank our much for you questions. very

David Khani

You welcome. are

Operator

Our from Partners. comes David go next now David, open. from Heikkinen question is ahead. lien Pickering Energy your Please

David Heikkinen

everybody. morning Good

how the hedges have on the or we not Just deal, the so Can just the thinking you the it into tied for can economics. look-back rest our to I portfolio? to providing about in of was was the differentials about roll differential guidance your that of Alta appreciate it Alta much do you similar splits or they increase assets talk

David Khani

David, than has are about than they – differentials. our No, it base in basin wider – $X.XX our different

did And a piece so add that. it of

that down. of the was because say would half it wider half of the was acquisition, And because probably about so being occurred I from TETCO and from of and differentials – basin within

David Heikkinen

thought. on look-backs That’s own little and you to that a helpful paid we what our in purely bit. in dial just what It’s Yes.

the hedge into of a purchase in put helpful. the we kind adjustment. cost awesome. will and wider That’s So That’s little differential

David Khani

Okay, great.

Operator

open. line comes from next question David Our Please from go now ahead. Deckelbaum Cowen. your is David,

David Deckelbaum

hear me? you Can guys. Thanks

Toby Rice

Yes.

David Deckelbaum

Hello. Yes, alright. Perfect.

this that deal, rig XXXX, wanted apples-to-apples you the incremental two just purchase to thoughts? line original or than is deal things, one the for that Are I accelerating on that capital that think, those you into running just assets. longer I higher outlook term one with with the two, you one, acquired revisit DUCs – on guided curious think that to is is CapEx Just And original know Alta guidance? the I the on today should of we

Toby Rice

feet just It’s around is around to in to you, that least what CapEx. hundred in couple term. And guidance. transaction we require Alta out mode year, with horizontal line the for maintenance And deal asset the cost, put original run remind thousand to going horizontal to a a that declining XXX,XXX we underwrite of feet per the at deal translate apply longer well to

David Deckelbaum

or looking through production at just the least Toby. the Thanks, year, much as – end curtailments that were lower. I managing issues we’re experiencing summer? were TETCO. right heading into several only your not second much cash more terms MX shut-ins Last of moving near-term of of are of sort just MX we’re And off But presume of would here or some is with with the at basis, volumes prices or then that in my because of in question now the well things you the situation where all peers obviously dire

David Khani

Yes.

So and impact last high outages. looked David, little had day if you you a then call you lack you year, had what you of or COVID winter, will more happened type per at – Bcf bit had storage, it, we X.X and of so of had,

day had you then Bcf October. X – of about had so also September, as October And into online – per headed you and shut-ins in you that came

and all in that had had back November storage, will time producers call the in October, had you come high then hitting online So out pipes you you we period.

recipe basis really widening And so for the sharply. that created

is normal as it, inside call basin year less about XXX If here. the storage start you look you this the winter year-over-year, and XXXBs XXX,

So pulse much in storage on. less production better we’re produced. of shut-in There really going position is a lot

So outage, have more out which about it TECO you’re full call third XXX, of what time. about we running kind half And to at do you will so of of was capacity. about the was

time where in September, probably will if is winter I shut setup the normal not period. So weather into much the better the have you position any October you see think in a producers

probably much I So it’s think setup. different a

David Deckelbaum

Indeed.

David. Just want that. to confirm Thanks,

David Khani

You welcome. are

Operator

question Tuohy Brothers question. Noel Investment your next comes proceed Please is from with Research. open. Noel, from now Our Park line your

Noel Park

morning. good Hi,

Toby Rice

Good morning.

David Khani

morning. Good

Noel Park

of a couple couple portfolio? gas it, a more you months wondering now familiar now of wondering, closed any opportunities you’re thoughts is sort in-basin have did with even on was combined I and updated your with that was Alta I

Toby Rice

Well, I picked opportunities that transaction. before the known think the up we were even Alta

opportunities So has horizon. I changed coming any view the say our wouldn’t on on new

that discipline do And consolidation the a our is changed think, one we the at M&A sheet there. the that is has reason I had, desire to balance I situation strengthened. of or any think here really improve leverage thing less to EQT, has

our So to per that the cash also per as have way which of growing free our it best focus to share ourselves get flow that’s NAV to the we us that grow capital been well, really our now accelerated to – we’ve return comes do ability what’s back to with ability on point. and for our share strategy

It’s of looking So our is every that make to M&A opportunity, look at part job sure on only be at. is we’re our discipline mentality we to that but something strengthened. that going still is

Noel Park

And a volatility has about on the good markets it. might The see of months upside. seen holiday, we gas we’ve and going what forward. been few lot discussion had Thanks. all on the Got last

quite the to future sort how of curve, frame about, supply do And a – rebound the assuming it’s go going to put into you in guess there out more so when price into talked of as delayed just a considerably think you as to back that the sense look you that do back you ahead weigh premiums think Xs, quotation being just as talk demand I’m that that there of is high. on scenarios into sure is I view significant is we trying XXXX, in rig there far the on or the likely? ease I’m plateau is at sort you is going this, wondering do but not some think about is but side? in you the expense count be market of and So course, the sort of there curve, your the which

Toby Rice

Yes.

– opportunities sustainable a pricing realize to you’re to strip. And it’s pricing. to start before, over for that of looking people strip a to the long-term, be And and understand another supply this up easy period are proposition – these break to that mean think discipline is going a stay for like think But that’s I us important in said end to you’ve real to short-term price. more sustainability think value you and going gas It’s some ultimately view be to are going will I you at I that create right This and take the disciplined have got watch more $X adding here value. $X.XX people how $X, I is strip. production. to a under I because bring really when

a months think this reflect So discipline And strip is next we watch more what the important think I will constructive industry think I start X after show to help the and that be the see I gas has. you’ll think to price that, long-term.

Noel Park

lot. Great. Thanks a

Operator

to like There further now the are back hand would closing Toby Rice line. no questions for to I on any remarks.

Toby Rice

Yes. Thanks, today. participating everybody, for

we’ve to reward like the today, and We’ve shareholders future. situation flow stepping just their a a realizing our company imbalances got deliver commodity. headwinds does in strong. very And with us think $X it’s And really free gas any bright you. back is cash and market to been that present the stronger and and our EQT on correct strong really short-term really that we’re that’s really balance profile Thank a that The that some the sheet. a to to strategy. give hedge robust in today. while for got going in we’ve I commodity, And in is is tools $X gas the needed And think markets excited the a patience. we’re a continue book, fact realize are I more we that

Operator

Thank call. joining. This concludes you today’s for

now may disconnect lines. your You

EQT (EQT) 29 Jul 212021 Q2 Earnings call transcript