EQT - Earnings call transcript Q2 2022

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Operator

Good morning, ladies and gentlemen. Thank you for attending today's EQT Q2 2022 Quarterly Results Conference Call. My name is Tia, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] I would now like to pass the conference over to your host, Cameron Horwitz, you may proceed.

Cameron Horwitz

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

Toby Rice

call, everyone. Thanks, seen morning, Cam, price and significant good first Since we equity volatility. commodity have and market quarter our

gas not and domestically clean that the its recent for embracing seeing source energy of allies from the by decades systems is and stage low-cost that XXXX. clean, solution. recognition world being climate the natural one supply with to is support address out the overwhelmingly security, turning thing affordable, world One emissions, at energy our to down global growing European gas which solutions the to time positive more the changed vote taxonomy natural drive what Parliament the inflation order option foreign short, goals, that We're is global this to fuel needs under forced for on come. attacking as abroad. in reliable climate example signposts pragmatic is climate-friendly gas can best toward a energy, highlight this and in and achieve natural EU to the as provide both determine coal. when a the source US However, for In play is recognition to a include it the has shift like is largest The key global natural such investment as gas change starting

Here the nationwide and more clear speaking polling data recent at public domestic is home, support US gas shows in development. loud natural of

reasons. of increasing by gas leading a the likely demanding to in gas, natural two-thirds to support voters energy support reliable to XX% support new change gas amount natural addressing American natural voters rank the Nearly pipelines candidate affordable costs similar all will key a gas building on recognizes US voters for by climate and their replacing Specifically, XX-point acts and lines, to energy reducing Put public providing independence data margin. shows across US play development call. gas EQT top unleash US priority are production that is a simply, a world polling strengthening a with need as natural energy natural and and And more majority world, in US that that today. nearly the of and the thrive role also party supports several support foreign running while

the natural the are largest producer high in we return a First, of gas US with inventory. multi-decade

entire ability inventory combination this We natural very us of across location among our view see. our Mcf. eye investor to is for a to depth as upside at we core in shareholder the acreage broader or higher and generating with X,XXX generate more We shows as this of deck, can pricing As XX% core gives believe our a highlight price shown below a of breakeven every strong unrivaled inclusion Marcellus inventory criteria, has and XX peers portfolio note rigid our this far slide our $X quality derisked on inventory our times of count gas of position. than returns and two per significant location return confidence

plan billion credit sheet, capture debt the principal, repurchased tenet have value-creating market of our balance which and strength debt investment-grade reduction as opportunistically our sustainability lean a us discount our the key underscore year-end see ratings billion our we XXXX currently we rating goal $XXX balance $X.X long-term as fortify of million cycles. commodity by approximately allows to of our to we and tactically for to are we $X available. further Second, across to investments business into the Year-to-date,

credentials sector, by up XXXX Third, the ESG best we have entire energy backed in progress released highlighted our report. ESG the across the among which is recently

XX slide our similar by amount deck, in Scope and on just Scope emissions X X an lowered a absolute have methane and our of basis years. our shown As on XX% we intensity reduced GHG by three

of or international before we what a to natural XXXX, path LNG. there support balance both credible natural development. Our and the meet the inventory characteristics domestic confidence sheet our to highlight via needs zero low-cost, we world low net long-term to In and of track us end scale have These spear gas leading at our record users emissions XX growing will we needs; gas gives and the by summary, the in tremendous the get on goal tip position with EQT slide the of of achieving take deck.

in with geographies. users our have discussions call, we LNG across to highlighted continue various As end last

LNG the one to reminder, production our opportunities approximately transportation various Bcf are of Coast. Coast, delivers a the per As to day Gulf portfolio East paths we at along and firm unlock looking

we We times able logistical that slowed as midpoint second of issues guidance the executed results. in down to to on were production frac the ameliorate our quarter QX. Turning

as execution frac combo-development by they here the during teams XX% tighter As even continued face our pumping service our up shown oilfield tip of to wear backdrop. despite enabled strategy deck, in a year-over-year sequentially have on X% efficient a increased our XX environment. slide of challenging hours per and quarter operating the hats We operations were crew significantly of

more executed key We on and evolution in with QX completion the QX successfully make continue to QX. our progress planned several and new of for projects design several

While to us and we work, give incremental assessing of associated productivity new our the make design, plan implementation uplift are asset we phases in a decision our confidence in to our science various XXXX base. across recent still with broader indications in as

produce this long-term volumes. level reduce As needed a new would same and of of both the capital well implementation reminder, full expected be to annual to design count

to capital Turning returns.

out slide on are we the market shown augmenting originally framework deck, of December. X As we investor laid to last our the

believe from our raised share, of is longer plan exactly per the annually base growing the base reassessing read-throughs recently growth. we to our long-term continue strong to $X.XX for by gas that. which prices. the and and and business dividend a confidence material dividend sign one sustainable $X.XX is our First, at growing annualized natural to have and the in we adjustment best XX% reflects an least of a We We term dividend value see proposition of of this base organization, long-term room sustainability

our by $X.X Second, debt billion target to $X by billion reduction year-end XXXX. we are increasing

this despite accelerate value strengthening our opportunity and ensures interest a and taking created sustainability, beyond underlying our unique of invest to Taking one long-term the declined prices drives planned significant our through equity gives bond XXXX, had have has goal to delevering The fortifying given X.X action are recent long-term unequivocally balance commodity leverage our prices quality. holders we as we us our to to opportunity times, credit retirement rates of incremental amid broader business asset sheet. flexibility robust our While cycles. debt rise

QX the rolled million value our to December, capital repurchases, at noting available we the recall, billion for would opportunities We out compound the best our over shareholders. buyback, return and we we all remain to On share, we repurchasing pristine temporarily we as certain on capital points value is on balance warning $X same firmly per At best doubled to opportunistic deployment highlighting are such, key stock last early keenly enabler aggressively sheet and risk-adjusted with an and will deploying brakes shareholders signs share a on risk-adjusted average some in forms us of the focused of at focused $XX of for more stock quarter. return risk, the recessionary earning cost our a us during of than $XXX tapped deployment. our our saw time. be After authorization time, in for that disciplined on

back with our the As convertible virtually end the shares. toward retiring of stock notes, parity opportunistically in pulled are we which our common started trading QX,

six approximately XXXX $XXX share, million of QX, we we subsequent by notes our cash returns With flexibility sheet. per balance In count $X.X billion share an spent simultaneously effective convertible and framework million leaves the diluted equity and debt eliminating during roughly shareholder to while our shares our at flow recent $XX and year-end allocates towards of $X lowered obligation end of billion simplifying fully the a retained free almost total, strip. price updated approximately repurchasing on by

our see current and With from the XXXX of cumulative flow up we $XX of now dated free approximately gas natural over current quarter shares. the I'll we in to of cap, embedded turn the approximately tremendous equates value highlighted Dave. opportunity at tax prices, the resiliency cash XXXX billion billion call continued XXX% is after from equity $XX prior now market to longer strip. through This last EQT underscoring

David Khani

our discussing I'll sheet, our the XXX second everyone. basis in balance updates. Thanks, volumes with line and Toby, briefly of and Bcfe, Sales hedging, second morning, our guidance. for results before good guidance quarter quarter were the summarize midpoint

mentioned, in address quarter. completion paying first we saw a experienced the during market This sequential off basis. a Toby the tight on implemented in to improvement quarter material As we trucking as efficiency new we technologies the is

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

higher line was price As Capital $XXX $X.XX more were operating per our free end than margin $X.X Mcfe, the and our million was of flow $XXX $X.XX expenditures higher a about $XXX year-to-date free range. year to billion. with total our on flow guidance flow bringing million, in operating or volumes than cash and was cash result, cash million, last XX% high Adjusted realizations.

completion for pressure. quarter the to capital came was per inflationary our Our up continued new at sequentially on due which in and design $X.XX Mcfe, spending associated science with efficiency greater

progress more S&P underscoring stakeholders. the we material investment-grade we to credit this ratings company earlier made and creating Recall, year, the our in sustainable for sheet. from a Turning balance Fitch achieved

balance leverage our reduce we parts target of using mentioned, raising target by $X of a by action gas to gross all our debt $X.X taking This Toby XXXX billion. reduction debt price. are year-end $X.XX through will achieving accelerate cycle our X.Xx to commodity more long-term bull-proof to approximately and even billion As to our billion one the sheet $X

for weeks, and several to approximately We repurchasing we deployed $XXX including has increase. past be recently of of lowered bulk our half notes impact which diluted million the our stood renewed as pricing, our turns should approximately a our XX-month $XXX our contemplates while quarter We X.X with at and are not strip note share the quarter, year-end sheet. convertible of notes senior our and net goals XX% by end the prior with negative million of our facility over executing wasting our any of XXXX million reverse at and date fully down to liquidity, of time ended convertible XXXX approximately We of end second quarter. the the balance $X.X recent five-year of $XXX to credit note time accounts maturity. six forecast million working authorization note executing net reflects that which a remainder million approximately $XXX quarter, At capital executed billion also the one principal the approximately of billion times, and and during leverage approximately times, Two buyback premiums. points second key the count year. retirement $X.X respectively, we the the net usage the quarter revolving Note, At in trailing we shares unsecured from X.X debt dividend simplifying X.X leverage here. of the

our First, syndicate. bank two banks new added we to

in while shrunk have approximately strength revolvers underlying the Second, our relationships. credit we both XX%, our to were showcase credit able the most size bank our easily of maintain business of by which and

$XXX a As the of fee our relief. filing portion a near-term from earlier receive month, exercised of lieu million payment this to SEC Midstream noted Equitrans of we in option cash in

We by or XQ expect proceeds to receive XQ. late early

XXXX. of XX cash an $X.XX long-term we does slide our election quarter shown impact from As today's deck, start-up rate this the gathering Mcfe in MVP per levels. fourth investor reduction still not in Also, model

to over hedging. Moving

XXXX. for our the During opportunistically hedge we restructured quarter, book

converted we XQ of into XXXX remaining costless bulk the Specifically, swap our positions collars. XQ through

floors risk-adjusted winter, upside seen were to in $X $X.XX positive with stakeholders The ceilings; summer, floors our and $X signposts we able skew buying with our us the time into market plan to to thought $XX as For approximately tying the and ceilings. global with XXXX. to enabled upside. $X.XX prudent at with of set premiums only would of approximately the we $X be placed provide economic it we add defer strong $X.XX book, Separately, floors puts XXXX to we've that hedge slowdown, to downside,

With actions, with on wide hedged puts. XX% and XXXX are predominantly we these now approximately collars volumes, our

to next MMBtu year to illustration our forward of $X generate the an As would free $X.X retraced a of approximately XXXX, averaged outlook, of or free flow NYMEX approximately natural billion almost to MMBtu in per or expect XX% free level, a resiliency still flow expect nearly $X if cash in cash we would flow per yield. gas billion $X free if of we XXXX cash flow yield. generate XX% Conversely, cash

to turning Now LNG.

we mentioned, our making Toby see increasingly an fundamentals basis. As for are global gas multi-decade bullish natural progress a strategy on setup and on

demand natural XXX base to demand natural growing supply runway which years. inventory the to Bcf America doubling the of incremental the from necessary intensive in per is Bcf day day production gas in abroad significant to We are home the by XXXX. US approximately entire North of outside today means to balance There is low less expect gas from meet to unlikely longest XXX grow both than domestically low This per equivalent carbon to Appalachia, we and that global XX world. is market gas growth production breakeven, a recognition natural this global without

ultimately our in various discussion LNG dictate Bcf Coast. Appalachia. in incremental resource noted capacity one will deck, come from of per Equity need of agreements day currently export that unleash stages growth Gulf XX% to the to As US US approximately quality for LNG supply is and FT covering of longevity

We are production to our which Coast meaningful LNG, long-term. looking East ramifications at ways catalyze to have could Appalachian

Turning over to guidance.

we guidance. We in high XXXX some As such, service quarter lines. to as call, last guidance line of billion with are further our to $X.X broaden midpoint range inflationary our impact which pressures saw first billion, our we pricing $X.X experienced all since end quarter, and CapEx noted across the is the we of raising prior

our a and XX crew supply go-forward slide in highlighted As deck, contracts we most notable provides The strategy significant of is on XXXX to risk our long-term mitigation basis. slide contracting our sand XXXX. frac agreement extended and

XXXX. EBITDA are We that our upper the Note of end. cash free strip July guidance but pricing reiterating flow reflects guidance ranges, towards XXXX our as bias and see

free and Given turn some hedge providing production it XXXX hedge back $XX cash flow taxes remarks. a Again, of pricing, cash year-over-year, to of using for net approximately expected year, see superior expand XXX% I'll approximately concluding with which cash we structurally premiums. Toby through strip by cash over growth free flat flow per our XXXX, position free is billion all differentiated even cumulative share should flow next volumes. now

Toby Rice

for differentiate few I change To energy of are reiterate demand. quality a stand and Dave. plenty upside XXXX. and for questions. a XXXX, One, our of to debt with to natural can a our to tackling call year-end finally, the affordable $X as we earmarked flow more domestic gas, of tag. coal. costs, on producer clear to which outperforming cumulative are I'd have inventory, reducing clear ESG billion billion shows expect at and leading balance credible share $XX in international depth energy free achieved global sheet by room our cash buyback With conclude call EQT dividend, which for commitment points. meet Two, technologies investment Three, with base want peer-leading Thanks, to is long-term increased today's support by be scale, path our and to like XXXX key on to updated open we the returns net-zero now and credentials our capital gas replacing ready America's targets climate and reduction current critical a remarks, increasing given grade a voicing extreme emissions very prepared and generate through our price resounding to shareholders. global natural independence And Americans a framework we reduction, for

Operator

JPMorgan. will the We begin question-and-answer Instructions] question the session. now first Arun Jayaram The with [Operator from of line is

proceed. may You

Arun Jayaram

clarity return, flexibility question incremental on when good do dividend increase. $X Yeah, retained over some morning. shareholder billion incremental of quarters. announced $X.X would company think cash in holds action your updated guide, if My On regarding more free you've provide debt next the Toby, plus the strip around is you reduction, flow the billion the category? the the

and If reduction the debt under $X.X dividend, of just free you billion out cash you back have for unaccounted flow.

that So on -- current your of perhaps authorization? thoughts under given and activity the just some pace buyback

Toby Rice

Sure, Arun morning. good

set So framework, as what flexibility there. go our I we've think have we above do done execute, to out we is that can mentioned, capital you allocation as we to know but authorizations it relates

I important environment decisions sure think the want we're make flexibility the are is allocation we the to matching in. with that that we because

buyback a model, understand volatility there's that's appropriate more put approach given to But to have. debt that a stated. this and that our little of the is in opportunistic, pace on the goals we've see we color think believe bit lot buyback But that the retirement on that current buyback we clarity approach, I tough that's our we world.

worth $XXX X.X that of million million we the at million to back the QX, impact repurchased what shares. In buyback and stock, notes, done convertible shares. in about and has around retiring past. X.X authorization of of we've retiring In over about million taken we've So our advantage of QX, I'd ask you bought $XXX look

two at over over So the we've $XXX million shares retiring of $XX around share. per XX an million average past quarters, shares, retired of price about

pretty providing the a of business, But I more I is is results. appropriate. can more to opportunity pace. what approach us cash think do think stepping good generation to We're, in that continue for we we and this robust some into the opportunity have look the flow phase future, the at and obviously, free do

Arun Jayaram

quarter started for kind the hedge on enough. to model, what David, impact a your in I cash flows impact year. David. of of us the some kind associated the this in if strip EQT fourth the question moves? Can repositioned outlook. give you repositioning sense, repositioning those cash any had Fair was portfolio. this in your from free put Perhaps flow cost Getting know with we activity? that of to there And

David Khani

Yeah.

So no I'll question. so answer Yeah, done and was market, that to Everything cost at us. cost. no

have you if approximately high $X.XX a place, floor and back and give basically right So now, step you hedges with ceiling. levels, we our just have in we $X.XX

so of XX% -- XX% And -- that's about bounds I'm and floors, about XX% ceiling. and sorry, the we're about we're

So $X.X it about or the ceiling the If reached, that $X be reached be were about breached, risk would floors almost would billion. be provides we'd adjusted the benefit. If billion.

So that outcome you range of just gives sense of a there.

that about did I the costless money. of the $X what which create if today, flow. comments, we'll the down. our value into did, we free million ceilings swaps, and the $XXX on basically on hedge okay, prepared the would SKU we was converted -- cash at as $XXX said position up hit look is upside earlier And if And about of of into about With just our that we you it XX% $X collars. that of we million position we about the converted was And repositioning, call

-- it a of we how risk-adjusted about of understand investors the we and upside. think you gives that have we what magnitude to allows So sense did

Arun Jayaram

Thanks it. for that color. Appreciate

David Khani

Welcome.

Operator

next Choudhary The from Thank Sachs. Umang is the you. with line question Goldman of

You may proceed.

Umang Choudhary

there? for it slide successful, Any with add next-generation Hi, taking that how the XX? early you is My the of then good that was you morning, much breakeven? change to number be would question. first question sub-XXX read inventory the able from And and if well completions, performance. thank through my any How would on --

Toby Rice

good Umang, morning.

our on science. So it's early

encouraged, are choke still program. are but wells that in say the our I We time in will management flat

So we'll lives. decline once these enter periods get read their towards better of the a wells closer

we're And refraining but why being now. positive -- right so from are that's we leaning

the the For going enhanced economics put to inventory slide of on we obviously couple that well improve XX, there. design. it's the impacts One, the of

shift this those two, shot will But curve, reduce cost That inventory need year extending will you'll impact this down be lowering we which volumes. us of allow if maintain hit, sticks So, the breakevens. a to that more each their wells also the what we would our and this number will non-core the also good. life pull consider that see some have give to of of because drill to

of XX inventory. extend life will that So the our years inventory past core

So that those now. right are at really dynamics are play the two

Umang Choudhary

That's maybe LNG is next helpful. on the question And strategy.

of looking How that the are you are what which customers. mentioned with on? LNG points discussion are are You the lot customers in a progressing? key for the more And clarity discussions

David Khani

Yes.

opportunity So, about just different contracts -- for or probably now, four with have probably lock in I an right would we three say, facilities. to

question on markets accept. give we on with specifically, which is upside. want but duration willing want that so we trying we we us -- we're to a the get collar markets, And for then do. rates ourselves If downside And work end risk-adjusted to protection the allow us the some are toll to where to do we structure what international and

say there's So, great demand a those right are And the things at just now. standpoint. from These supply. need I'd we're gas looking producer facilities a that

option and so right we figure we the who to And use want it to now to through. go gives out want who us

Umang Choudhary

All you. helpful. right. That’s Thank

David Khani

You're welcome.

Operator

the next Thank Dingmann of question Neal Truist. from you. The is line with

proceed. may You

Neal Dingmann

little about going availability a have -- forward. you'll And like talk if of seems just there's you capacity the forward? it bit availability could going Toby, Morning. some

-- is grow? thoughts to your on there if on wanting thoughts Your

Toby Rice

maintenance deck going of in long slide of case, in Production the that to the capacity, put And production mode. of in slide as the finally Appalachia, Appalachia. on reached capacity what's disciplined dynamics shows that's Neil. limit as XX. sort taking Pipeline place our midstream are takeaway a we we've We remain in yes, the capacity

lot we for been said, pipelines. have use Americans. cannot experience to built that is aren't and questions disciplined. and in country we to able say gas. we so have pipeline to -- the blocked, been the opposed that natural always got a country more world, Well, it's energy to going prices We've natural field is this able pipelines well, canceled. we to lower supply. add this of is gas people why help why more the out in One the and biggest and we the low EQT pipeline get we say, during And hit been say, the takeaway They've continue for don't basin because and can And prices. when energy growing well, to Why the times canceled over is XX this reality an opportunity last say, we this last to we've capacity. we've And XX the of pipelines Those had years. well, added blocking recognize now. for years capacity we've infrastructure that? wall were And for have excess LNG that's demand get those that those We've remain would address people

Neal Dingmann

looks to -- a you tight are deals? obviously, guess, again, PDPs or I what -- versus just is on I so, question, gas it ample and either your Is Yeah. you weigh player. no comparison are value comparing it not organic you given then, And it, don't there is, be? And them in returns weigh like do a to there opportunities the -- price that being to prices Are largest or capacity, two-part the know, fantastic. just bolt-ons roll gas is hear. acreage, Then in, to my but however simply have you Dave are, bigger simply of other. maybe question, when were looking sort you It's to want of growth the some thought -- if at deal like great the where what's

Toby Rice

Yeah, Neal.

to think make think, getting you're look you I any at, sure I you quality. So want asset -- anything

compare we ours. asset So definitely quality versus

cost it look I you base structure breakevens Alta $X.XX. lowered company, think at cost structure asset this did, that our our over the lowered of by that

everything But So I do the stock, one It's day, going to decision. be. on consideration. be than the the back more ultimate to our that's of we buying mean, M&A and got end is accretive at that's

Neal Dingmann

Yes.

all it's that. been see Thanks, disciplined quarter. Great very have You Toby. and to great

Toby Rice

Neal. Thanks,

David Khani

Thanks, Neal.

Operator

the Thank is Markets. RBC of Capital line Hanold with you. The from Scott next question

proceed. may You

Scott Hanold

lot. a been And if just on a delve is really little Good you But initiative you more of Gulf not that that some make an potential made Where at more look have free larger potential announcement when into stand looking of you so, the Coast out using into this I a at morning. it, there's as agreement LNG free well sense at would East step the potentially, a flow that you of a gone in for facility. facility? a you Thanks to question point. invest are think -- to and Coast obviously, do that bit cash flow, discussions that more all? to in invest and back cash that's allocated as LNG use some peers have

Toby Rice

Yeah.

sort more really Gulf a segregate ways projects Coast, On needed projects East the an work the ground. with projects about us, that don't and From to Coast. down at get and off think Coast think capital LNG perspective, to for projects. these identify help we ground. us I can looking categories, it's off to two opportunity East the to the the Coast of developers I into commit the there for get I So best our the supply there's Gulf is

being significant East but incredibly I think so that basin. that some what some to a supply be the also Even would of demand LNG the assessments a creating I but not would East basis those have on gas not us, high-level for amount spend work feasibility facilities, mean, apply source in of look sell we're Obviously, to doing volumes to some strengthen EQT able projects to like, impactful we side, LNG. next up So, just thought just impact, to dollars. we and Coast where and could why of Appalachia, we're of those feasibility the would amount an to should on that dollars impact help Coast operate

So reality. and lot of East want a push there's to really just reasons Coast to make idea for great there's a why us reasons LNG get that to

Scott Hanold

the good there lot of my can view Could all great, it benefits is, make And I equity That's outstanding or us like high-level hear. point versus going directly us converts all you talked at converts, guess, that? an is there – I buyback a of – are on think equity to target after follow-up – a your versus give the does question just but the there of indifference that do – sense program. little to is you you targeting, to about you is the then, doing walk to feel somewhat what that, through on –

David Khani

Yeah.

it depends where is. stock So upon really convert and is where the the

the dividends debt is you of call equity. now, now, like But it, bit things is you money, would have premium it's that like effectively, as to strive and way – and the we'll little very for much convert equity. right for So There the it that future a in the so akin a side to for. principle. there is very to percentage But that it much trades account

buyback, basically So $X indirect we that our So it direct have where then really the we captured of the I have way to two retire. right? the and billion we in way, gets have authorized we'll call place, in the think billion principal which $X.X we – just we have debt have know tools

arbitrage. play flexibility And have really try can ways to the we disconnects that there's things, two to we equity. gives where the or that So us attack

Scott Holland

Thanks. Understood.

Toby Rice

You’re welcome.

Operator

The is with Bank the next of you. Thank John man Abbott America. question from

may proceed. You

John Abbott

for the you Good inventory for my thank first Virginia. questions. Toby, It's in and taking on morning, question is West you.

first benefits look had benefits the and the locations, the you had to potential account of When pooling those During quarter that have assess call, you And the the take inventory? time to your Virginia distribution, does law. what utilization the signing are at into in X,XXX mentioned those West benefits? potential you

Toby Rice

Yeah. Great question.

really address, unitization modern Virginia heirs, happens Virginia case West passed lot. West tool operators as more This recently way there have there's we that an up unitize take really backup to available some that legislation this now ability is is far – to roadblocks. to of some place. allows those the landowners helps that view this So But – a majority something if which a the was was of is that of if in unknown in plan is basically signed run that in is as a to we

to there had it's – We nice it's legislation to has have know not this there. and but it – use

place is inventory our of in that going facilitate in we've reflects this put map a will higher way the to the confidence that. that modern sticks just legislation we're because develop, ultimately, that be level we the on So got able to

reform. For the and us, another pipeline infrastructure permitting advocating more read-through, we're policy out for

I I'm pipelines we look these world. in get what that can so the reform can permit pragmatic can leading address energy West sense, think done common currently we on to optimistic, bring I'm that a we legislation so you in facilities at that we've that's place. and Virginia, to level hopeful put built, national going get help in influence LNG the continue on crisis help and

John Abbott

cumulative cash question Appreciate on be David. to next And It's going you it. free on there, cash and tax. the flow your outlook is for

it or to as XX% calibration the are of long you you a cash of cash baked some tax then the of six-year of provide in – second, or And does an more I later is XXXX outlook, out payer more point already? taxpayer just more cash a during on For for XX% that recognize curious, would more tax, that term? inflation assume this does XXXX have cash sort year. color you But a at question, assumption tax look

David Khani

Yes.

announced -- I consume And in a towards as numbers, should trend aware taxes our as But Pennsylvania obviously, far about just far the in in reduction taxes, we you whether as as it other our NOLs yes, one they're be XX%, there. XXXX or So inflation we will cash say it's term, I over as up think longer just by time. cash XX% corporate X%. and just as of, would XX%. that factor

And so with taxes the on some cash that should future. help margin the in

John Abbott

taking questions. you very you and much. color much the Thank Thank very our for for

David Khani

Welcome.

Toby Rice

Thanks.

Operator

from The with line the next Vin Mizuho. Lovaglio of you. question Thank is

You may proceed.

Vin Lovaglio

Yes, thanks on getting for me guys.

wondering to in projects So in longer play if see I'm there's side. growth, especially you and industrial that if say on tend yourselves demand be you as a as stimulating stream. end, appreciate the LNG said, on is I Appalachia, vision really lead and the role off-take could having you to regional anything that opportunities around Thanks. on

Toby Rice

type increase new talking transformed in that of blue natural with think, I gas I locally. I be anything a about has the There's Yes. energy solution can hydrogen. LNG, don't mean technology. demand we're scale but there's opportunity like low-carbon think gas, to an

sustainability mature that's with for new there there's the into which what the consumed, confidence of of and the right there that do the can carbon energy lot that, to a electricity. of hydrogen set in what on out hydrogen. blue product There's also converted help out focused before it doing of So the now sustainability the technology that work is decarbonizing instead the ventures what is is is hydrogen, we that also table technologies while gets happened will capture we're

perspective? energy a we're there's now, key providers to that lot a What at. options. us as it? actual right cost? there, -- the What's scale do new And full these could the actual understanding of low-carbon the from those is is sort this of of solutions. are what What these emissions, things lot the big out the profitability? thinking we're a thing be is then we're that And associated emissions cycle true how solutions is with about for So the So looking technologies understand sustainability though, of

David Khani

call, as contracts now just I'll gone space. I'd for, of longer-term firm we've And approached grade, to add, Yes. investment some the to back being sales industrial we're

tuned just that I'd So stay progress. say on

Vin Lovaglio

low I it flipping us for type that compared year'. been planning, Thanks. more of to guess if affected really has supply if Got pricing. has a a how And -- your Great. One out it. Wondering thing like Seems tubular XXXX, that's inventories over cost chain the to stuck issue. bottleneck, side. 'normal at all, for

Toby Rice

Yeah.

pricing in steel going chains more we that war strain put rebound in here and comes we between was the Unfortunately, at we're Ukraine today, get when did able end the changed bit supply that just set when in be back XXXX, of exercise this So year some but the half relief quarter. we a steel for to to at up see assumption What's did the to we planning it for the you little has and inflation, the on was I steel. account of year. budget where think take this our

today into so the those of anticipated we into seeing plan well. And as prices seeing that's XXXX we're -- end that not the baked we're our And and also lower year. towards what's

David Khani

Yeah. And add. I'd just

tubulars, at So down a into but in look $XXX the prices there's, intricacies the ore sector iron metallurgical and hard. feedstock then steel $XXX is into steel, come steel pretty have down down of you the the dropped obviously, come change coal, from has ton then materially, general, and if pretty which has

the to its through So processing you down come steel going the just side. in way to and makings of work to It's have tubulars have price.

Vin Lovaglio

Makes sense. guys. Thanks

Operator

is from Brothers. the Thank line Parks you. Tuohy The question with of Noel next

You may proceed.

Noel Parks

morning. Hi, good

Toby Rice

Good morning.

Noel Parks

just might technologies be when of of a on think give any also blue hydrogen there. pick sense on sort a about short or like able you scale. research frame whether curious technologies of, players you're you achieve to wide just general to list? have or wanted set you And just your and to thoughts and at, I'm a Just of might the of more mature time if up some comment looking

Toby Rice

the view expensive, right it's million for I high blue that look blue But seem a is BTU if And the level? doesn't today. to to in natural think of cost majority hydro, carbon. The now, the gas hydrogen. we pay make That to for the in can of specifically, buy capture Yeah. hydrogen of of hydrogen you get My looking per as make anybody for of to paying isn't the The that the blue cost blue would sustainable would you hydrogen that natural year lower the hydrogen include of we per when in the BTU. of carbon at remember transformation ago pricing come $XX of compared what $XX Well, takes when hydrogen a majority how capturing we infrastructure at why the can that hydrogen $XX costs and move majority and saying, do to too cost million actual it that? wow, Europe well. gas

we how highlighting what and here down. interesting Now the is what's cost really we're can bring infrastructure

can plan at the by-products by one is hydrogen the will for a from foreign pipeline, secure sure end-use production to transform the the natural may feedstock and States basically initiative, just here campaign it And Bcf it in that gas' approximately that, day to being the make day have United United And XX we of when being slated ready. opportunity blue table a an ability if are we Bcf build And we've States. an LNG in XX to economy have this replace We of natural ways US coal. incremental hydrogen. the the when of would they do gas future, rebuild we execute for we're of unleash but increase Our that we role that exports to a do product pipeline that we infrastructure. to that, the then hydrogen so looking set build for

that. at So we're looking

that's hydrogen The I'd other really what capture logistics comes actually we natural solid That's goes eye out say technology there do for on and in, comes to in keep that is out to -- out an opposed actually hydrogen that is obviously as to the going the hydrogen. gaseous gas technology to lower COX. carbon

years a out, three That out. out options. these probably some So, is that's five to time figuring but that's within new we're frame as well technology different

Noel Parks

the think of whether about side the you first guess unlock it's seem sort of Great. of I roads there. the start really, you really And was has projects? of greater nice do does addressed. to to explanation it pipeline budge, get like be roads What the view Any sort talking when or of maybe access financing of might course, how you the pipeline reliance what on to think ideas catalyst That gas. to in the the to lead greater state of situation -- as And on there, Appalachian to be what side? many kind waterfront -- out on see the you're of or do all general, new initiative might that or or party puzzle piece

Toby Rice

a think I shift in gas sentiment world. Yes, in important how a shift this starts and plays natural it by in understanding

with is gas, high is without undersupplied We crisis the emissions in the are declaring used that result recognized. seeing still coal are today, seeing energy to prices, around and, we're rising world energy unnecessarily by that And That, hydrocarbons. starting I see people in world. the green. way, think, customers to the that a reality being natural you're because ramped is using And the before. facing are world gas they've with of natural The than policies. EU war as shift shift I think ever this more sentiment We're the inflation, around Ukraine a translated

infrastructure Act on could way. LNG accelerated built about in line is we an to together and Anti-Inflation to a here. that's pragmatic talk the precursor so in that seeing starting -- You're has domestically, necessary get the reform more here another infrastructure that you're That -- time put that reform to Mancin that permitting that pipeline see include pipeline

we gas. look just all Americans, So, -- Americans you more get XX% and polling then need of Over it. at that, on saying top the of natural

we're this now make a easier the to energy world. bring showing And right there's the this their for need Americans The to seeing for make -- world is to So, it now. us you're clearly it. the But this adjust into support governments seeing signs policies

Noel Parks

then follow financial consequence. anticipate sort of to follow, you or through, follows a will of then then sort financing And the

David Khani

Yes. Yes.

banks Yes, Dave. this is the Yes, be will So, absolutely. there.

to obviously be with done think has kind a to profile. no got really emissions with low a I everything of

missions manner. up being are things kitty people financing not the unless are very, so -- and here And call on not we'll a to responsible open done it going is

So, -- then see done, if -- that's you'll be financing there. absolutely it's and the I think

Noel Parks

Thanks lot. a Terrific.

Toby Rice

you. Thank Thanks.

Operator

you. Thank

Operator

at There back I Toby for time. pass are remarks. additional closing you. to this questions it Thank any no will

Toby Rice

to we look create All right, our time and value stakeholders. hard everybody. this Thanks forward morning, for to you. for continue Thank your to working

Operator

That concludes call. conference Thank today's you.

your disconnect now You may lines.

EQT (EQT) 28 Jul 222022 Q2 Earnings call transcript