EQT - Earnings call transcript Q1 2022

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Operator

Good morning. Thank you for attending today's EQT Quarter One 2022 Quarterly Results Conference Call. My name is Amber, and I will be your moderator for today's call. All lines will be muted until the question-and-answer portion of today’s presentation. [Operator Instructions] I now have the pleasure of handing our conference over to our host, Cameron Horwitz with EQT. proceed. please Cameron,

Cameron Horwitz

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

Toby Rice

while of fourth Even already security high manifested policy. crisis our inflation. the global were before emerging Cam, altered. of climate rationing of invasion This rampant energy economic around The been and the conference Since call, impacts prices, good energy undersupply everyone. of pillar morning, also global has dialogue Ukraine accelerated in energy seeing Thanks, we energy has quarter the reasserting fundamentally sources. and foundational a as and an invasion, energy traditional

military even one meeting have of back energy we emerging the offering we as goals. crossed fundamental well. its threshold can that. plan an a reduction global world the practical Europe do behind the to with as the signs on provide just Unleash to dire bold solutions U.S. needed, United targets. emissions on occurring in security energy and in a track backdrop, conflict At Last emissions is shift insecurity same time, to With us LNG this getting falling Now while clearly that our month, is yet world unveiled States

by we by effectively XXXX capacity that context, reduce solar emissions COX is that the incremental quadrupling green which and estimate planet, per wind And just international this plan X.X by emissions coal States in made the with associated international United U.S. today XX consumption is panels wind LNG natural the allies. the at last progress wipes of the without an meaningfully out incremental Our the our LNG To emissions by all to increased In would bolster billion equivalent in XX every the in months, a the security level reduction gas, is put over energy tons all contemplates putting would last years. of ready initiative year. deploying the deploy to on and for U.S. world U.S. vehicle, to doubling home U.S. and America largest generation, Unleashing far combined. solar on installed power electrifying every passenger capacity U.S. is reverting coal.

is inflationary to solution world, solution the help nothing build is impacts infrastructure. scalable addressing in be to the that and feasible. breakthroughs, but energy LNG technology not the plan to is That no more our in we green as And natural we've that been largest subsidies, blunt the extremely gas, all for are impactful of climate has to do achieve The No insecurity, pipelines and we change building global without built and a will providing need one it our international will initiative what We reaction have positive scalable and successful ones coal. it. decades. targeted, humanitarian

administration has been benefits providing while game the political broader positioned be decarbonization empower we The actions the LNG of incremental encouraging will to world. Biden Kerry gas. seeing the Americans with influx on energy demands of We FERC linchpin support John exports and from Europe, are industry are tremendous ultimately the of recognition energy likes approving in natural of uniquely meet to our this EQT, public supportive action. plan also the to signals, the At and putting into the security the to from from

resource the gas tremendous scale U.S., us supply demand. gas natural being base high-return a long-term of meet multiple in and in growing depth largest of to the producer our confidence quality As natural our gives The with provides core, decades material inventory. able

EQT's of investment in recent the grade the line of most believe before or being And responsibly is to natural net sourced energy the sheet. differentiated Our strength by as among gas rating our largest credit of the sight gas highlights upgrade production we world. coveted balance XXXX, X producer with molecules

export contemplating end investment across geographies We equity and with LNG users are in in various currently LNG opportunities discussions facilities. are

the of Our delivers firm over strategy. will LNG leg of Bcf a transportation production Gulf the X portfolio our to underpin which day Coast initial

are end-to-end of at markets. from We liquefication perspective approach the a pursuing portfolio

contract part first associated year, and accretion LNG of by we Our see could to the meaningful our by the believe have our strategy signed of the goal LNG decade. is with the end middle

got quarter announcing executed capital We start our a framework results. in shareholders to Turning to our upon returning and to fast allocation in first guidance off December. since capital

large-scale realize West in from Virginia. the returns and water to our we combo investment execution development mixed-use began our front, operations the in On of system

for price Our should Furthermore, a of a decade a our made creation our over for industry combined realizing utilizing operational huge are years. the signed efficient, West Virginia development pooling pads development approximately place Since additional and our our This of have to XX% more when West law our fixed for streamline Virginia operate, with planning December, state. stock challenging marking advocacy, reducing in payment. unitization modern West new announcing $XX nearly D&C we the it have share, in shareholder repurchased unique million recently in nearly runs count million resulting first per long dividend landowners on drive of allow nearly return delays came laws synergies share our $XX coming framework by value cost The core shareholders $XXX common the risks. our legislation after with X.X%. into we first quarterly Virginia both water acres. property an in Governor average modern And and Justice approximately below and will made win and operations legacy front, at X our we legislation, and And oftentimes lateral net XXX,XXX development. in the of

reducing the and $XXX debt also goal by repurchases, 'XX. billion XXXX quarter, quarter the total, towards dividends via year-end debt we million returned during repaid share senior by progress during We retirement. of In marking notes $X.X million $XXX of our substantial

gas per We have our forward are Btu, any prices, both exposure and added pricing hedges, free a backdrop by the this past billion $XX to the shareholders midpoint. in run-up, structural direct at for we existing With have and swaps robust to to nature increasing QX but gas of XX% the recent cash collars we benefit. with positioned XXXX early recent rally is the outlook in roughly curve natural restructured not providing in our rise XXXX $X.XX gas long-dated flow prices. the we quarter, believe stakeholders meaningfully EQT natural in natural near- In into ceiling million

XXXX, representing to equity our recent strip generate gas billion yield approximately our from price, capitalization. in as XX% alongside to of is our current have XXXX, approximately cumulative XXX% XXXX $XX share despite pricing free free rallied Looking cash through market stock. at flow We of the roughly prices appreciation flow natural now expect cash XXXX our

while inventory and energy long Beyond to key by also XXXX, that natural role the of gas realization prices cheap, forward. moving value remain core affords We over in inventory world now of to to to our our core value EQT substantially the believe core being peers due the rally for in play in to low will has increased to lateral carbon us is our operators' inventory. providing XX-plus return underscores capital EQT that build Dave. will investors returns and the decades years flexibility come. delivering opportunity This and policymakers reliable from upon the predictable, turn positioned uniquely at robust continue depleted, outlook many framework deep and tremendous call compelling amongst I'll the

David Khani

the to Toby, morning, Thanks, midpoint briefly first the implement with tightness believe sustained service experienced summarize hedging, everyone. were moving results production. pressure forward. we can To downward our in and Bcfe, sheet, before first we any with began some to roughly balance that in and positive some volumes trucking moving the quarter mitigate put new substantially with and trucking weather-related in address and in modest quarter the updates. impacts market, good results of impact line technologies quarter RSG first Sales guidance I'll XXX guidance. the We

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

in were of which year cash the cash was our below expenses and Mcfe, flow free As guidance and for operating in litigation $XXX and last per of reserves higher operating was than flow was X% and $X.XX were a expenditures million, million, from volumes. million $XX benefit about changes $XXX $XXX drilling coming margins below inclusive costs on higher result, Adjusted settlements. nonrecurring million, midpoint Capital about of budget. $X.XX

guidance was in efficiency for the or capital our than $X.XX better came quarter what X% Mcfe implied production capital per at the by and midpoint of ranges. Our

to credit yet an Fitch sustainable savings, our tied stakeholders. our strategy. and $XX expected secured company ratings and to quarter, liquidity, S&P, first strong our During revenue improved potentially us fast for LNG investment-grade higher interest billion a maintain year under approximately for revolver in per to we million provide ratings more the another from Investment-grade in milestone marking achieved efforts become our $X.X ability

leaves we we XXXX which Also reducing these During able by interest to all rates, notes, billion. with dedicated absolute million goal greater XXXX the of quarter, left an of rising noting, about $XXX even worth be our principal with amount $X.X retired dollars. may of debt us our retire

we to leverage be month net Our leverage approximately strip quarter trailing X.Xx. pricing, and stood forecast and respectively. recent our first At XXXX X.Xx XXXX net 'XX at XX X.Xx, year-end

use Our buybacks. we the forecast and assumes billion of $X.X dividends full share

X.Xx the to quarter the of bulletproof an the million liquidity per add liquidity credit Xx ended a of goal leverage are position billion as price gas conservative natural commodity the term $X.X net letters long-term which $X.XX sheet credits assuming to expect benefit our should ratings of a investment-grade through target to of to of balance cycle. and continue over our additional We Mcf with parts eliminated. $XXX-plus all near We

We of of proceeds for also of the remaining recently stock shares balance the Equitrans completed sale the $XXX of million. Midstream common

while last from quarter, prices. approach downside to providing defensive we benefit strategy balanced protection to gas a natural highlighted rising wide a allowing collars transitioned utilizes and that As hedging puts, more from prudent us

volumes of hedged, from our with outlook, XXXX unchanged remains respectively. percentage for production of and and XX% hedged prior XXXX XX% Our

million XXX quarter However, a price swaps, with day with them and approximately replacing a we floor ceiling approximately opportunistically collars of approximately $X $XX. of restructured a costless XXXX first of

the likely We million will from as upside prices. are positioned XX% capture our fundamental Recall, to to winter we storage continue bullish more for hedge last mark-to-market greater approximately book better 'XX $XX upcoming recent September, refill these the to the pricing, approximately is gain setup and spent exposure gas strip quarter underperform. upside to At fourth value approximately restructure million. of $XXX XXXX to of natural positions even

solid. fundamentals below The year, positions approximately pipelines time, hedge the X segments trading rate. power exit Bcf believe our now forecast as of We in-basin 'XX Appalachia contributing oilfield added or same basis well remain service the production with factors. the this year-end production volumes of has capital the been In-basin for We running general key lower balance of to covered within to in the are with XXXX. upside lack supply gas-fired the imports generation discipline as is also power XX% ban natural At be MMBtu. than to surprising to has coal increases demand TETCO is Europe's to demand gas strength, likely recent South Appalachian with growth lead even gas in MX as as become increasingly to more could $X.XX decision per dynamics coal Northern invasive further overall Dom tight. trading and Russia's occurring more as to leading around These to exported are Europe is cash prices next price year. significant due coal

Slide As at of local XX% shown NYMEX. Hub, XX highly deck, MX are the average our correlated with Henry curve prices of on trading to investor XX% to forward

backdrop Appalachian growth to continues healthy. slows, remains fundamental believe pricing production for the As while rise, demand we local

recently On consumption cover now we've U.S. a to us of all gas day. counterparties, the signed Energy, front, with X total deal certificates next deals responsibly of totaling Bcf for announced the purchased Bloom This XX more various years. natural sourced X RSG to to includes our than sell gas which fleet's per from its

vehicles equivalent taking the this the complex the low opportunities expanding natural represents production, our and passenger Given more RSG annually. highlights road the market's to deal recognition the into of This low monetize industrial XX,XXX our methane we value off further emissions validates with intensity the associated than of of have gas.

largest positioned on reductions the multiple to goals of capitalize the facilitate U.S., uniquely are opportunities directly across RSG these and emissions As we producer industries. in

guidance. to Turning

cash adjusted guidance. the midpoint billion, We of billion forward $X.XX which since rally $X our XX% free roughly curve the 'XX to reflects EBITDA raising gas outlook to material in by 'XX by issuing for respectively, XX% are our and the flow

production as free next per hedges maintain flow even flat 'XX by flow our cash providing year-over-year, XX% should free As expand volumes. off we growth roll our year, share differentiated cash

strip and completion we $XX mentioned, see taxes XXXX broader cumulative any well benefit billion We at of all flow assume cash but free not from these design. in cost of recent from do to cash our XXXX well the pricing. Toby assume As modest next-generation success inflation projections,

lines. of of our said, out it late. are broadening capital, XXXX we across oilfield capital That well in, XX% locked guidance more pressure is has our we relates service at positioned inflation with time. range accelerated relatively to remain with comfortable As service and Pricing all than capital this

agreement now some supply for sand back on concluding also Toby differentiator sand is increased and supply. key tightness long-term security turn market focus remarks. driven Our it of a for to has industry EQT I'll

Toby Rice

call structure in and drive of structural is the four, base price over open are shallowing the And expand over cost we've up our rate in our XXXX. want our provide Thanks, Dave. the improvements coal, natural core responsibility balance aggressively done we allocation free as now future few allies a recent To past base a we gas, Two, and largest concurrently energy security the our The NYMEX a on and can the conclude the flexibility growth reiterate producer breakeven I balance nature, shareholders domestic benefit time. the additional for both by LNG. to cash today's inventory, our curve unleashing emissions of prepared associated while gas the this we and largest to rise One, key has back U.S. lastly, questions. gas play tremendous flow be the in and through remarks, the addressing believe EQT executing to And returns improvements positioned reduction to foreseeable role years. gas outlook global decline to achieved U.S. and points. and gathering foreign opportunity several an should investment-grade like natural have upon to only global meeting and responsibly the capital well material XX% demand I'd three, sourced U.S. with in future. likely in underscores a will of are shareholder the updated multi-decade framework sheet EQT’s natural sheet then key with for

Operator

[Operator Instructions].

comes Arun question Jayaram JPMorgan. with first from Our

Arun Jayaram

is Toby, my question on first LNG. just

little has the of far, the wondering wanted the management changed signed and U.S., linked sign seen Hughes give America. capacity agreements On the couple the XXX couple most you could that million Apache annum million new in next over tons concentrated we've seeing North pricing. years, us And coverage, if that global Baker to year. call, highlighted of EOG you the what global of to for XXX LNG my over team years. Thus be Obviously, the gas potential the in to of details today. think could you first contract LNG a you're if I market the more maybe on bit that was by I end discuss could some last of per

Toby Rice

Yes, Arun.

past we're looking EQT that to at reduce few for the I'd exposure a the amount there's So we've that now experiencing demand that contracts what buyers been months. with the say volatility -- over is right the some at these offer of tremendous international EQT here with right they're can to of fielded now.

just avoid of but respects structures right we're the economies, rising these type really countries And part going that these now, to -- be their their Because international significant I the provides is I allows swings contract collar longer think, obviously, buyers. buyers hurts international but the where them it's to exposure really looking think the I blowout. at pricing is going that really they're prices for a some right to term, now. experiencing gives us structure provide is to that's think that [TTF] and something that

Arun Jayaram

next billion Toby, have, call the after Great. highlighted you the follow-up, debt have deck guys years, And next my dividend, years. buybacks, over it, couple the the flow in cash retirement, excess free of couple Great. the of of $X you'd over

your higher where on would than free M&A, for year-to-date could cash love the today, additional moving shareholders, opportunity to a I’d between basis. excess stock with your look we at, see priorities when particularly you you a how stock returns head's if lot buying flow you're see As now dividend? to what -- back set that at rank the

Toby Rice

Yes.

our us making return towards certainly to that's thing of shareholders, risk-adjusted best environment given allocation one be exciting, has I that very the the more While ability even is more current will think to consistent capital capital. this approach

I is be a the opportunity -- listen, tremendous in environment that mean, -- this debt. accelerating a and to looks our to in of we our paydown to changing, is like see but So the priority addition continues be still constantly stock a

we're best say guiding be the making shareholders. So I'd for to assess continue that landscape, our the will going principle. just It's return but risk-adjusted our to

Operator

Scotia Howard Holly Our with next Stewart question comes Weil. from

Holly Stewart

this continue a Maybe, Toby, on we'll just to horse theme. beat today. sure dead LNG I'm

LNG has changes And potential coming we now are few really spearheaded whole the have this of Just U.S. push. and a out EQT policy that the EU

So the question be, looking would the maybe to you we're are you're see at first? on expect right maybe forward what see what my looking track? And as to you landscape, do signals that

Toby Rice

a calling coal Yes, I and is natural out fuel. sentiment the against in gas not and is think that fossil hydrocarbons need really shift general be in lumped really natural -- general opposition the and a we called see Holly, differentiation be biggest sort just a as should -- gas to in of with

people really understand is, still rising. in it's but need really couple because world that we world matter are not the the there's conclusion do we've things that United aware need I rising. emissions are need emissions a here, dropping. dropped emissions it around think take of. One, And in on the the to that three, be people of States States what the around United to the doesn't -- going Two, emissions to are people

any those Kerry, tool. towards That's to has put playing encouraging that incredibly needs from hear field. shift And gas starting zero-carbon we on decarbonizing considered And a decarbonization -- to natural to to solution-only opportunity specifically to so be say this John hear. is signals, needs a are mentality the and

LNG that, will be mentality. is into build. to and need see the more that message to fast you'll be going out when start we doors bleeding that seeing policies think common, start a the practical And facilities open -- that we'll think the to track to I then I pipelines -- you and able on encourage

faster to demand really Unleash are that We this about think a the these key for towards and I putting than amount in allows pipelines build us LNG to facilities LNG these of really plans just there ever a before. for the shift framework LNG. It's mentality fortunate motion. is is tremendous decarbonizing And that having like projects international U.S.

Holly Stewart

Okay.

think something Is So about not push I in gas including come regulatory and don't say? to that or it's that broader as natural one item we see mix. it that of decarbonization on just safe sort really across, to need the

Toby Rice

the start right Yes. Holly, be be I gas an in planet. providing on security request-specific why doing is fast fall the and come get we now, Yes. mean the And There we'll about environmental-centric I that seeing natural putting a There'll of just specifically talk energy then It's utilized U.S. just requests. world. approach getting right support will and people make to -- be This towards policy changing case LNG's those key change. justification on should decarbonize listen, the the specific as projects transition mean, and And knowing up. behind But table, what those and specific for And have I the financial think that support both gas reality. we'll initiative to able the natural projects the green is will projects they to those support idea when to be going unleashing to projects have really put make things will world. you're now that we're want we the biggest track. -- energy on to the and political on really

Holly Stewart

Yes.

Okay. Perfect. maybe you. one for Dave, And then,

Xx X.X, forecasting sub target I leverage assuming but Just gas. to $X.XX you're sort year-end. by X of is know the that

got You IG just started material a the way. Buybacks nod. in

focusing are certainly were lot you what checked targeting. that financial boxes guess you seems on those It So would I of like a you've just for question now? my be you guys

David Khani

Yes.

invest much a broader it about debt focusing ago, to of was our capital. our we about all sets were and year have a what allocation capital about plan opportunity think you array think how on we if reduction. we And So now

need generates, sure the have challenges we and real other generates set So make that return. I listed that rate for we'll it's return we call LNG the the the dividends, investing infrastructure opportunity positives greatest of broadest buybacks, whether on are, sustainable a investors, the of to rate and guess

Operator

Dingmann Our Neal next Truist. with question comes from

Neal Dingmann

to of question. Toby, -- really could on want twofold just kind again, about cadence a talk you I talk just bit. a about, first,

Just stepping on development. thoughts all And EQ on combo on activity. activity up any secondly, be the your

Toby Rice

Yes, to sticking Neal, maintenance prudent We've about more maintenance pretty pipelines, do I us this. to continue thing we're mode. been is for mean mode. to the vocal Without to stay in a

mentality this that's in. with MVP going world, And can of the at can with States start this these conflicts been everybody we that today to we needs to So it's project project country natural got we get address gas. our some still put And look people to clear facing in our one And America the to are hope and people that built issues around world getting in environment, prices. until world this in to more be at being the people high get some is needs are mentality currently will pipelines that knows, it, more this facilitate the because leaders the pipeline looking it. And United more asking past, as a questions, this imposed. what the do around as we've access that our do on pricing thing project is Americans

Neal Dingmann

that's helping to unit improving Can about guess, and there? around just development. combo talk you say? overall, I like just Is efficiencies cost seems costs. a that follow-up, on actually fair And It the

Toby Rice

that's Neal. to accurate Yes, very say,

our highlight to you that like the evolve to putting I potential one cost the general impact about are that's service I would cost I think is people are think the innovation place industry into think inflation. mean, that's design out is right we EQT just looking have inflation, the in and concept This at biggest factor mitigate at now. will But when something that here I -- factor service thing taking forecast. we're well in

an would what concerns now, upside forward. forecast that large not our costs on that's address, well So baked think, into I that's but are going people's

David Khani

see some initial as Yes, more well. issues we probably maybe would and inflation productivity

Operator

Choudhary Our next Umang Goldman Sachs. from question comes with

Umang Choudhary

your wanted up around follow on to inflation. I last cost comment

combo just the any look this the to some hear but to to not manage plan, As And year. kind which seeing I'm about in market? year you're what opportunities areas of your more development, where to excited the costs next year later you are going tightness plan, forward are this also proactively there beyond

Toby Rice

what Consistent saying, Sand industry, especially a labor. big the factor impacts across with Yes. we're others are and seeing is Permian. on steel in

getting not sand supply You've for much have on But access our gone agreements, with supply, the sand costs seen -- EQT, up. front. seeing we're to inflation that

Our challenge is getting more and on the sand location. that to labor side

So that to an like area system is drivers some things horsepower the more we're looking way. into that get

So that's we really. where inflation see the

Umang Choudhary

how do macro for basis. local seeing, frame very of for Appalachia retirement LNG mean then longer do also in you the around thoughts Great. M&A following your term? But and And And emerging which you some around you're to the follow gas I a Appalachia plant there's gas near outlook recent near improving some the up, basis would love your thoughts in term? term. gas macro, the that acknowledging potential see

David Khani

Yes.

one, well. goes yes, Appalachia you'll that think will So would NYMEX see XX% say, And I to as around correlation. so call I correlate continue -- up, it again, roughly around fairly we

correlation Some July coming the here. cracker change demand, day as even in will online Shell retirements, the that's be in per of tighten such Bcf correlation the up or multiple and market times end coal of pipeline either the will things maybe that there's

want see -- you with are you and market NYMEX. could could so really producers see looking growing before, is to the I really at they And moderated. not think basin and And like it's participate end like the it did

pipeline So it the of discipline is keeping with that tighter. lack

on the refilled. pinned up LNG to Europe a to going continue So be to base, as be is market needs broader

Mexico. and demand, Europe on U.S. big of price. gas exports there's the between arb Industrial have You a

X So we'll really well. pressure global X drops spent has Northern call, about XX% supply, the upward that's or about as putting, talked capital years. the coal App in on but market we demand And then last

supply So tight carbon supply, demand coal from perspective. still in is very, growing, a unfortunately, will be very while

power tightness So years. to several that's for keep the the market going next in

Operator

Our with next question comes Wolfe from Josh Silverstein Research.

Josh Silverstein

just LNG to this agreement take is comes as what is to thinking it maybe together, get Just the think Do trying potential you contract in guys these supply one you on an a stake about strategy Just you've equity and a better here. of facilities? sense how the guys in think place?

David Khani

it's Yes. say all the right I now. would of above

to out have assessing now investment contract to We things there we're see whether -- different multiple only.

cash have in want free return. about rate sustainable. so very of right amount And how to the do we we think of of we have large we obviously, front -- everything us flow to make But a do we generate

contracts so really some Investing you big also there projects in easy very be And with the a great have will to opportunities and that. but through to think comes facility do. thing

we're lot of So a there's things at looking right now.

Josh Silverstein

were to in flow that like there's is like how the towards. depending shrink lock curious XXXX collars you on to seems a going get based potentially yield and where price cash doing free down just guys the years, you count cash in build-up because pretty could now free I'm a what cash for aggressive be just few cash maybe some meaningfully free the guys on flow is additional out the sustainability share maybe free want it And on may coming half. look sounded flow the not and given you and profile, big you with what flow, the the debating it But stock as is. opportunity

Toby Rice

-- looked is strip, long. $X, But like we'd energy the price through hedging the a we mean, world and that if out great Josh, every you be us as ago underinvestment in just think that, 'XX. It's we've energy, Gas a that at I Yes, 'XX day going ask we around and short. looking past question. the macro 'XX X said, at which all years question ourselves today fact at into look guys day got I mean, I just that something that's that the significant is the

at more lot unless a these than reason on sustained there's more room. sort that and changes, patient to where prices. prices in being aggressive being if I think I little we're bit these they're of locking -- think -- higher mean a today, there's something from will be these

that said, risk. always Now there's weather being

we things value creation it's looking. exciting really as and from natural certainly, setup all yes, these So have mean, potential gas we're I to a EQT. balance the But for

David Khani

thing, other effectively hedging we the some Josh, be might that of LNG the by And contracts Yes. is we do.

Operator

question Scott comes from next Our with Hanold RBC.

Scott Hanold

-- trying start you of thinking as market you've build in out year, there ability of the are But sort running contract a up on initiatives for Toby, going can factors desire that like and to on standpoint, are the to some to a an pricing your these some out this push to market are now? global get you know more key be that you an that sense, to the the globally. I provided one to and But additional that should us color some end to by the that's going proponents about out U.S. way. there's something to of give obviously the you there right facilities of leading the watch kind link the investor this get push of is what think analyst the of fact been there like from important LNG that highlight that is or really for there's

Toby Rice

one, the on well. LNG. to the those robust if couple returns table America's projects more types get we're for Yes, doing second able that demand to can buyers at. netback We've And do getting on the contracts. what pricing we part FID. are of I make side, help that to to to directly, support everybody we help at of the table, are the investment, a lot think we the bring to look investments the a being so producer, on that largest front side, then can LNG then international in bring EQT also gas in with these Number supply both things looking And on of calling naturally got these natural to value is as

our the throw pretty a us -- strategy. some say, investment that You with the balance an shareholders intensity LNG we're terms for tools there cleanest value opportunity throw is to and in energy fact get on I'd the we've in to the grade create on planet differentiated leverage those the sheet, perspective, methane that got more fact for from this

Scott Hanold

time a -- X talk there part are you is obviously, conversation. market. indication get guys versus happen Yes. Yes. support. of there's what mean are it's those frames? you you to my could or a talked the more to frames, time And to contract, maybe But a think sign for a a look, a green is pointed global being think could be in political happen about would this just of of that But I the I which trying lot LNG guess, I'm curious, X U.S. for light good about an sort things is up coming obviously you question key very reality of there the to -- will kind needs which happen? to things

Toby Rice

Yes.

a Bcf now the have like of very, XX light very potential are what U.S. LNG you're realizing for that I symbolize unleashing right if on specific So on see for towards signs we're that the mean day, American solutions. LNG that would zero-carbon that of people green things promoting to some think we it with only starting -- moving asking been strict are and I

to think more regulators downstream not that We're the being the for the going decarbonizing little now the just think side coming takes I that's just the LNG. on where see steps to with admitting is things the natural made players here incredibly us But a of help signal it tangible now be bit and with are working is is people sign. at the EQT, get some to up that projects where I more gas you'll -- in first place longer some right facilitate there. important, But -- to to a political really, see is permit more sentiment and mean that of energy tremendous the keep is United standby the a lowest U.S. goal where is understand and us that by through it so influencing Americans. prices public the natural to get does in unleashing gas amount the to here more going of I the security place Americans build it amount -- on takes provide something to to world -- but energy LNG, for underwritten also going the to in longer pipelines what's flowing, flowing that ultimate than here natural gas of to energy having States America, a

Scott Hanold

give XX cash Okay. Appreciate the that outlook could color XX progress next, free Like think your Could David. do cash And how over maybe you that. quickly you months? us in on taxes to say, like flow some outlook? for

David Khani

Yes.

So, whether every flow near of number you, the the term, has free first long all, cash taxes. impacts term give we it's cash the or of

you So know. just so

see 'XX you call when we there. you had deck, numbers that our so the know And it, can that in in the,

none. XXXX. year, really have year, through of in NOLs to start this burn We'll virtually give through you commodity as obviously to our So the to has on volatile. very more And going natural more get seen, this become really probably a cash guidance been sensitive we gas we It's as really, year. that we're we'll this and But taxpayer so price. you've

framework guidance now know how So we'll will more times to think change it. modeling giving number you give about on instead of that then, the you between and XX of a we probably probably

Operator

question comes Bank from Our with John Abbott of America. next

John Abbott

Toby, for have some did quarter turn-on and was like you. here, It tightness less Yes, you with hauling. lines trucking it's the that first sounds The have quarter. question during did to -- due

in resolved? sort of Now And let's And to start those forward, make have issues looking order what sure issues been there. just those you are resolved? have done

Toby Rice

think Yes, level, you fluctuations point CapEx still just guidance would to high but as consistent. well, you're recognizing hasn't changed very John, just that our changed a going hasn't staying and see to is level, high at of I -- is sort production quarter-to-quarter, normal the

the things flexibility new technology We've tightness. sand some little added been driver has bit hauling, on One, to seen. we've some the a Some that the more pool. gives that of

So some drivers we using to will other bring supply to to technology there's access addition and -- sand for pneumatic easier that there a in just trucks location. greater and of out give trucks, to go are using the us

a that's on bit is thing So little more We've labor. front, one raised that's sand that the prices hauling attracted consistent.

an we've that focus first given us has going mitigated -- of was -- largely really that's that dealing confidence quarter, debottleneck in team of So lot has is a constraints, that back has like the a have were with the But that biggest -- relieved. the feel that done I issue the been been what that's been completions And sand open. holding been issues forward. being wide probably we logistically from our one

John Abbott

of remind the the the of kind then second pace it. for feeds of sort how completion of that that? just could design, on year, throughout the Appreciate And you new sort question, of in us sort

Toby Rice

Yes.

the what the up And of So we're it's picking design. and the efficiency making year. back second I we're some across completion completion just going doing to is I lateral. improve just as what the changes mean, is quarter be a to half the reminder, to mean, looking

and almost at the the have could completion get look increasing effectively. wellbore XX% XX%. productivity about stimulating design well, So extra that we're of We our can the change think we that if And data. of benefit we completion an XX% effectiveness,

indications total to we're track we're firm 'XX what more that's 'XX. at, indications and effectiveness by on looking we're And by on So get early the targeting. of end

Operator

with Our Cowen. Deckelbaum next from David comes question

David Deckelbaum

ask, to wanted for bit little more just a I clarification. Toby, just

you questions. you integrated think food sort not I'm to, are the sure one EQT available being taking with your outside end? alluded of intentionally out role about an would Would pretty sizable within with or potential partnerships Either there. anchor goal I envision on like companies? an envisioning LNG not tenant? role of this vertically anchor a or -- capital be there be will But of What other on thinking before chain sort you just do the shipper LNG EQT broader envision how you Just of playing? there

Toby Rice

Yes.

international for we to exposure that ultimate our here to the better looking we meet And get give at make want to really enter is flexibility will to contracts exposure prize -- the think markets. pricing. realized us we're into that to have that I understanding EQT sure

the the of an in that accessing get flexibility contracts investment to One those more towards LNG take itself. facility we ways is

can with here long of are be sheet, we table, those equity mission is where demand with our to some thing that company these the at, to And can mean, look I our we supply bring on other the scores great and LNG I I the ways realize translate the inventory, consider that's our balance environmental the full potentially EQT. what we think coupled think I facilities. that front, environmentally with differentiated great the in -- investments that the hopefully potential into

David Deckelbaum

I having it around pricing. answers because I big now opportunity being appreciate think that the and question of of grade to clarity the benefits investment more premium that the touch

that. just thought me, for the appreciate now. guess, I one the is And process last So then I

as being a it do build in LNG consider mode, growth taking molecules out pricing market? product we for you maintenance those or opportunities just a just maintenance capacity, about talked at more premium You and

Toby Rice

LNG going be see mean that to to about growth. Unleash demand is I this needs the U.S. long-term think before industry No. they signal

long-term facilities, need So up. growth see these for versus sustainable to be lined would we're past in But the difference opportunities all the now to is us. pipelines, going the LNG contracts

that the get industry are we backed day growth we a laid can that expecting a targets And XX quite talking of fundamentals really out our -- sure U.S. And that to not out. year, deserve. not do we're I than the we've XX% of as contracts throwing looking great derisked Unleash making shareholders bring So is a the to derisk growth that preserve of make less that long-term for sustainably and, to the industry. can to the sustainable LNG mean, we're really significant can amount really growth think we whack. returns about to to this Bcf industry. frankly, back opportunity this we're it's sure we've addition listen, meet in sort And It's type by to generate a very of -- an returns supply-demand I

David Deckelbaum

Thanks, luck Good Toby. unleashing everything.

Operator

next Our Barclays. Harry from with comes question Mateer

Harry Mateer

Or has the case just some and through the is do with debt base next year? So I on rates moved, accelerate can think opportunities the been focused X.X get plan after gas target additional I options? first preference just it reduction open Especially your of on schedules prices, that to existing the you I restriking there's some through the sooner. know down guess, -- given structure XXXX. call that to does what hedges, question, done know you moving relative up pay to still

David Khani

Yes.

good question. So

pieces. I up So think X break I'll into it

$X.X if second of some do par, over billion. The debt than option. with just clearly $X.X from accelerate wanted is first apply we trading part get $X.X we We below I we'll opportunities the and think the more that yes, the our above is, is, billion to just But see an billion, we part discount. see that, if that

able all sure. maybe buy investing So maybe options as to accelerating back things stock, repayment, that, for debt being in like X us to our do and being able interesting raising -- look the our along LNG other with to dividend and things

Harry Mateer

upgrade would the and I'm that potential that S&P working your Moody's eventual think have revolver. a liquidity pretty how in And drive needs? an that I is whether the XXXX additional And its on Or improvement other IG? you is much liquidity LC lagging at done side, the to Fitch about know and on now two? then benefit there, curious company

David Khani

S&P bit coming There's little are I’ll say a, bit little really would XX% Moody's upgrade a to extra improvement. call, us, the from piece get Fitch. were a I probably and to Yes. of benefits XX% of leftover that we'll if

already. but with -- sitting So liquidity billion as $X.X you see, we're can of

already. And reset down all drop debt we to going effectively. been our zero had are that to our all credit on of rate down triggers letters have Our pretty meaningfully

I'll is. nice upgrade see majority us Moody's and give an we've balance So of be it recognize the call to would sheet place. it, where But it got, the in

Operator

comes with Touhy Our next from Brothers. Noel Parks question

Noel Parks

really made other in sort Bloom company. was deal, hearing down not with deal. arrangement interested essentially supply milestone of bit a the having any I Energy aware the you fuel That's on a a I'm a of of similar drill E&P cell

what down for other X-year about we who? you works? look And as them companies. you there has frame long in the curious similar Maybe do just what also are And was with similar it on I been far deals as the as approached road? if restrictions comment who or time after far could if might So the how any can

Toby Rice

question. great Yes,

a of something So is Energy environmental responsible EQT fuel deal the of I gas to is, energy Bloom about specifically. is in with front consumption approached like they I has great to and -- cells of Energy There's RSG attractive there -- of company really reliable promote led the to Fuel mean leveraging was emissions which this naturally us, the cells think gas. think been we people lot calls at exciting lower user natural the out this. But future in benefits will cost. of I lot did interest molecules a of being listen, see. what's provide natural the of Bloom a

what gas? we're you're for reliability a the natural so natural we fact as the about, there's really energy and gas really about cheapest can a form people carbon So this of future. with excited And as in natural gas lot as more for the is thinking think is lot of What gas going well. people, do and feedstock I that lower to see demand use a natural else innovation

creative side. another be You new see for think low-carbon of natural EQT. a There's follow-on to going people really hydrogen. for to to of looking ways see the And opportunity that's are lot I a it's -- hydrogen demand taking feedstock Again, exciting lot on innovation place there's natural for create as on just gas. applications that gas other in

David Khani

market This is broadening...

Noel Parks

Sorry.

David Khani

it. Keep going. sorry. I'm No, that's

Noel Parks

ask is the to any do it? for looking with to deals a supply folks was similar I in other free Okay. terms, Are there exclusivity you about going just arrangement?

David Khani

Yes.

capacity to do yes. We other have deals, the

Noel Parks

then gain? the Is something this gain the accounted I curious income through life how it an agreement? asset of capital And be about was or for? Is to accrued going Great. over the that's be transaction will essentially

David Khani

Yes. income -- I net It it ordinary considered is yes. over the way. improve income about agreement, just would want -- It it accrued would is effectively as as And item, realizations yes. think this will our be be improve to that

Noel Parks

It up in will show realizations? Okay.

David Khani

Yes.

Operator

the currently over so to conference currently management pass in queue. no are in back no [Operator further team questions I'll closing queue, further any for questions Instructions]. remarks. There are There

Toby Rice

think world that gas. is sure hard we time to we want dealing security really the you. issues I working provider. in driving thing with, the solution while address these there's to and certainly change. an a Thank to energy But EQT also is climate issues exciting natural make of world be arresting knowing that's is lot It and one that day we're every help that provide helping And a

forward, big for So a a factor it's be driving going this continued us to going making better to commitment world the place.

thank you, your So everybody, for support.

Operator

for That XXXX EQT your participation. Call. Conference concludes Quarterly you X today's Quarter Results Thank

may You lines. your now disconnect

EQT (EQT) 28 Apr 222022 Q1 Earnings call transcript