Earnings call transcript Q1 2023

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Operator

Good morning or good afternoon, and welcome to the EQT Q1 Results Conference Call. My name is Adam, and I'll be your operator for today. [Operator Instructions]. I will now hand the floor over to Cameron Horwitz, Manging Director of IR and Strategy. Cameron, ready when you are.

Cameron Horwitz

you our thank results quarter and call. conference morning, for first joining XXXX Good are President Toby Officer; today me With Rice, Khani, Financial and and Chief Officer. David Executive Chief our today's be call The this replay available for on evening. website will beginning present Toby question-and-answer with follow. will to prepared remarks In a Dave their moment, and a session and been certain reference slides today's discussion. presentation An the Relations will updated has investor portion we Investor to posted of our website, during

events and any statements. remind subsequent Factors factors section filings forward-looking to call statements. investor any that materially We Actual forward-looking of in with in results make these undertake you and future SEC. the earnings described release XX-K the forward-looking like our the we I'd may do statements presentation, and today's update could yesterday's our of to Risk from differ contain not Form duty because in

non-GAAP may to over measures. for most I'll and call to earnings also release contain call turn With such Toby. Today's including measures. regarding certain our to GAAP the Please financial recent most comparable disclosures measures, presentation refer investor that, financial important the reconciliations

Toby Rice

Thanks, Cam, everyone. morning, and good

large, the EQT's price of that taken relative While our disciplined assets to gas has at cost environment a some pullback for our illuminating natural have U.S. corporate producers gas is M&A macro approach headwinds key reinforcing on peers. where strategy pillar A our strategy confidence natural facets of in specifically created and current the structure. differentiation we to lower several EQT's distinction has been acquisitions focused

the greater operational through and allocation enhanced price the benefits corporate for accretive resiliency free durability capital flow cadence. strategy commodity returns gas this allowing the with underscores environment and and current cycle The bottom consistency parts of decisions, cash of

business cash as even expected our our greater resiliency free it Our on to pending drive M&A $X.XX additional in Hill builds to corporate moving breakeven is decline price, flow an acquisition strategy this forward. further Tug providing

itself is strategy. through differentiating EQT where area hedging our is Another evolved

While have longer flow financial bottom the requiring cycle have gas of exposure derisk using hedging, natural sheet, improvements at needs into we given hedgers, evolved to no predominantly prices. maintaining material upside balance to material cash part college we opportunistic free the in our while glide

paying via time with as EQT average any floors is natural an in hedge of the peer of XXXX off books strategy with best This our $X.XX among real gas covered production has strike MMBtu. in XX% per price of

and down free factor MMBtu returns full cost book In peers strategy opportunistic our to reduction distinction breakeven key among pillar approach. our a conjunction of is than cash driving flow $X.XX less M&A driving NYMEX EQT's capital is corporate our XXXX with our third per hedge efforts, year A

framework late to to would we decisions, debt via capital XXXX, of returns belt in year out allocation that approach both our When that our repayment we rolled we of which maximize our repurchases. execution so risen. to premise peer fact equity among look best to tactical par equity at buybacks achieved retired more exemplified underlying have a interest we we than generating under is returning requires the which With a and under debt and believe as rates discounts superior capital amount by material our results, shareholders, to have and the is on a our return the group return approach thoughtful did shareholders and our

gas production products low and are emissions quarter strategic by as the has in building announcements And EQT from fourth forward momentum material our of partnerships X at net We of of highlighted the greenhouse X zero of we comes verifiable steps with goal ahead our fourth offsets. peer-leading differentiation intensity, environmental the A results. operations Scope and schedule pneumatic front advancing taken element of generating completing directed XXXX. natural with carbon development on device material replacement initiative achieving this a of benefit gas upon year our recent carbon

key In upon you sustainable expect short, going for of corporate value the our laying EQT, the we for long-term execution foundation can believe our creation proven continued are tenets and operating strategy forward. differentiated and philosophy

Now XXXX off start board turning to strong EQT. across a to very first the results. quarter at got

third-party As pumping shown achieved that year frac infrastructure solid replicated our XXXX our hours operational pace slowed of as on view. gains in Slide up with moved we the firmly X investor XX% we quarter the crew efficiency in last the first year-over-year presentation, late the into rear constraints

above midpoint first production of CapEx in our quarter expectations. came while guidance, our below These coming in X% midpoint the efficiency our of facilitated X% gains the

Our portfolio NYMEX. average transportation $X.XX differential us advantaged above achieve an of allowed firm to

expenses operating on came of midpoint and in our While the below taxes lower-than-expected G&A. X% LOE production guidance

for the Combined, free highest quarterly I flow year. drove flow of $XXX year. factors hard of flow work execution crew quarter cash toward EQT's as these significant cash the significantly during all have achieving of members this performance their want first for peak facilitating which thank free this personally million derisks our our goal cash is free we generation and strides to made in our

average capital repurchased front, $XX per stock price we of $XXX return of nearly the during the quarter X or first On at share. less shares million million an than

to XXXX. cash with $XXX quarter par. retired of with cost billion of XX% up at $X.X million Even billion year-end at exited principal than we of on greater of returns significant hand, these the the from $X.X also an shareholders, during debt We average quarter

Our the XXXX. end net debt billion of first quarter the approximately with of $X.X compared the was at billion $X.X at end the

EBITDA Our underscoring the past net sheet over stands balance achieved have currently several years. progress the tremendous we to at X.Xx, trailing debt

billion Hill are capital guidance, our $X.X we In excludes pending $X.X budget, full terms to billion reiterating of year Tug which our acquisition.

capital includes XX% our and constraints As assumes associated XXXX service and million nonrecurring oilfield shifted cost with inflation. into of a reminder, TILs XX XX% third-party that of budget roughly $XXX-plus XXXX to year-over-year

which, industry we believe current we a the are is set in if service stage softening second seeing year, latter, some for notable the in provide activity trend manifested, to costs and out flattening to relates would outlook. upside our As the degree of half moderates of the it as of oilfield

Our production are of at X,XXX deteriorate. this natural operationally we year. XXXX get to we should of and per said, quarter cadence by to rate last quarter, the back run prices guidance for scenarios is the middle on guidance our track contemplates the continue X,XXX That our to as production Bcfe Bcfe, unchanged XXX where and we production lower mentioned range year end to gas of slow

of for updated adjusted range game we've presentation, free natural year flow cash operated EBITDA the investor cash an of the cadence And our flow of time outlooks on we progresses. provided and remainder flexibility have XXXX gas to as the decisions make year. Slide the various XX prices On and at our

$X pricing cash At billion factoring roughly flow $X.X the of the first implying and free part approximately this strip recent at a quarter in actuals, bottom and of yield cycle. X% cash free commodity forecast year, EBITDA we adjusted billion of XXXX flow

excluding on and Slide cash durability cash of the and XXXX $XX generation free billion pricing at Tug and X shown free forecast our strip from our flow our presentation, of duration to benefit of internal XXXX Hill. As cumulative greater flow than with projecting has significant

recent proposition market our pricing. significant even and than embedded XXX% after greater EQT the in of to value decline shares underscoring XX% than capitalization in enterprise current of equates strip more value This the

via gives our confidence stock to us billion opportunistically of the being our flow absolute acquisition, to retiring Hill cash billion repurchase target Our free pro able while tremendous for debt able also share outlook continue our authorization. $X.X in to forma achieve Tug being $X

over past multiple to Turning We few the our projects environmental initiatives. weeks. key announced

First, Labs the a natural carbon into to we strategic verified with partnership intensity entered Context low-carbon development offsets. and products gas advance of

certification verification value operational strategic support partnership data, our across energy achieving emissions to full on this to tracking, emissions emissions Through focus work we context of and will targets. plan us scale analysis reduction of emissions natural quantification, and production critical chain. with in gas mitigation the labs With a industry-leading the reporting

data. will certified deployment provide and The EQT's enabled integration another Labs across with carbon of of goal of dimension intensity creation already resulting organization. achieving enterprise-wide will full low add products EQT's robust asset an our digital to footprint intensity Context carbon digitally the

natural of for shareholders, illuminating most aid this emissions as our coveted relative and world. partnership further in profile We our the our in product asset among gas value the ensure molecules and the view a the strategic will remain of EQT's

accurate company Additionally, carbon and in of and the technology Consulting utilize the we public analytics nature-based offsets with generating X,XXX backyard. Smart with Climate carbon offset Teralytics ensure Teralytic projects forest our land than span in We announced EQT's first initiative the probe this will offsets forest These more quantification management of partnered is Environmental projects a goal implement earlier to to Wheeling acres we soil will West a Virginia, and own soil Commission, transparent. month. park of Park

reducing verifiable and emissions EQT company to net EQT of projects this, X first operational and and gas achieve in world. greenhouse accuracy Scope our X has key for the will energy which has already meaningful remaining Nature-based become lowest intensity offset zero to our been some supported that factor of ensures transparency emissions, a gas be and the are gas emissions. in greenhouse cutting-edge scale like the an in industry technology by leader natural enabling world the

the believe the $X.X billion cash approximately equity the been the share midyear. of since around acquisition the shares, which meaningful it the acquisition, roughly and Due the roughly free the July be we million value a to of billion. at As to cash close have XXXX, relates paid and equates date we of on relative effective pending with per deal's $XX added Hill to structure component a we to closing expect and are with Tug value closing deal constructively of interim price $X.X X, track working XX flow to price FTC

Tug as has the fallen for other We and in accretion while consideration mix, hedge than to commodity note served with structure This gas thus stayed have deal leverage have more structure heavy announcement, prices were contrasts since with check. evidenced as recent in as transactions along prices. all deal doubling Hill's levered cost EQT by a more which this cash industry, the

and underscore $X.X amount on peak In summary, an with the performance. generated improved the and quarter results to cash third-party highest position first of of we back are faced cash over material purchased billion our infrastructure debt and in that a leverage is quarter free exited the We strong hand. EQT our we quarterly equity in last rearview flow year challenges

macro our illuminates and corporate advantages opportunistic profile underpinned hedging on large-scale development, successful the cycle. foundation capital record of on assets, And low-cost natural through laid strategy, combo it While risk-adjusted all significant look environment creation to strategy I'll a of to a the on the for execution does corporate has track also gas focus unique commodity of of present stakeholders. value over the This our disciplined M&A EQT's by of current now we Dave. challenges, returns. building the behalf turn parts call forward relative all

David Khani

Thanks, I'll Toby, XXXX or X% our first balance guidance and above quarter everyone. the before sheet, the for Bcfe were and Sales our the guidance briefly summarize macro our landscape, first flow. use of volumes XXX hedging, cash range. of good discussing our free morning, results quarter midpoint

Our Mcfe. were midpoint revenues expectations. per noncontrolling below our $X.XX X% operational Capital margin costs $X.XX our interests operating per were or total adjusted guidance exceeded resulting of per Mcfe range efficiencies in per million $X.XX, excluding as the an were operating and operating unit expenditures, $XXX unit of

flow Adjusted operating $XXX and billion were free respectively. cash million, $X.XX cash flow and

quarter, declining tailwind We and decreasing driven accounts QX. working prices million receivable with also had the in tailwind largely capital further from during expected QX a a $XXX by

shifted per driven better XX% capital Mcfe, the which efficiency the implied was was of by as for our at outperformance both by than spending. pills approximately digits improve quarter complete year, guidance second ranges, should midpoint on efficiency $X.XX the half. first half were relative production and came excess capital Our capital our we the what in to Note by last double that that from

sheet. balance the to Turning

EQT for remain a differentiated core underpinning philosophy Our forward. provide liquidity and operating strong will value and for profile our moving ample opportunities tenet, credit

continued X.Xx, from last down with ago. the net balance and at quarter improving exiting year quarter Our trailing position sheet leverage XX-month X.Xx X.Xx a

we of flexibility. the amended cash to timing the exited billion XXXX, which first inclusive offering. This with $X.X hand, loan week, quarter term and $X.X extended timing $X.XX the We billion billion our of the our of agreement of net notes billion $X with of proceeds the end aligns on from in debt purchase and provides

raised of last The bank any Tug portion proceeds we along bond and with gives independent the confidence term cash that fall. loan, balance, fund to the flexibility us deal of Hill our the cash

As Toby mentioned, our we continue to debt retirement initiatives. progress actively

quarter at which of principal XXX $X.X have first par. via debt million million average of $XX eliminated billion retired notes market unveiling returns Since has of We of capital of open XX% than retired expense. framework, the our we price an purchases annual primarily interest more senior nearly in principal,

Our a rating credit balance the recognized by to being commitment bullet-proof sheet agencies. is

S&P have the acquisition, $X.X with and further our over objective temporarily ratings past gross Fitch we prices reaffirmed several of billion our even execute at additional possible. of investment-grade both credit upgrades Tug are stable pro for forma credit outlooks gas as pending as achieving natural agencies, rating receded debt Hill believe the we weeks

net asset our while was presentation, to base our lowering like of briefly also At 'XX, billion. growing debt. our highlight $X.X our record which shows investor net I'd materially Slide our XX debt track of year-end

our day. to production Chevron the production XXXX, our we proved of organic growth. our and to acquisitions net Tcfe debt and XX All net XX.X forward billion Alta Bcfe -- the the Our end per quarter. X.X day -- $X.X Bcfe proved Tcfe through to while our Fast X.X were and production to decreasing reserves per through first was increased reserves reserve

have reduction more to XX% asset additional over Said post acutely a while Tug record. our simultaneously XX%, debt for by the another by highlight base X way, closing debt lowering and our grown track should plan we Hill the our comparable this acquisition years net percentage

Bcf process increased with winter of combination on Freeport power items gas gas to weather gas-fired this macro The in in Turning to is production XXX left winter. rationing demand. and thoughts market low excess of gas balancing natural outage few roughly of brief this split landscape. a excess the between and the warm storage likely The the be

producer declines activity of the the of below and gas-directed accelerated has pace XXX falling On U.S., the we storage former, to by injections additional breakevens late gas declines with many Bcf. across in directed pricing the coming as months believe well roughly moderate in activity

As to XXXX in generation, it roughly stack is take share retired coal X,XXX and of are from set we the per in over power to X day coal generation power be the relates of tune megawatts this gas Bcf to seeing further U.S. year.

believe shift capacity. coal of cost underinvestment gas coal is this by coal and the in a materially massive natural With XXXX, the average rising XX% increased floor switching structural the has to given or more in we

case drive There demand, are several LNG avenues our above market. a including exports, additional greater given of storage tight upside Canada, potential expectation, market higher sustained and timing that base current Canadian could industrial reduce imports from

expect as and relative overall buffer We natural prices volatility and continued demand. in activity peak to gas moderates is an coal inadequate gas storage

Moving to hedging.

evolved exposure provide book to with hedge to gas philosophy XXXX natural seeks underscores risk-adjusted investors that Our our the best prices. hedging

covered significant downside scenarios weighted We $X.XX upside an with average XX% and per which exposure. production pricing our have while of provides floors MMBtu, XXXX flow price protection maintaining at of cash

price MMBX. and a weighted average $X.XX $X.XX of volumes of per ceiling XX% XX a per We hedged weighted floor average also of at have our MMBtu

natural expectation our position to progresses, XXXX time. gas year opportunistically look of hedge add macro fundamentals as improving to Given we the the at our will appropriate

seeing captured basis, $X.XX it spreads transportation expanded we the in a portfolio. NYMEX reflected during first our from premium which in quarter. firm to As relates was we material favorable a as are quarter benefit differential at to pricing coming our

opportunities firm other position expand transportation to additional as expect We to operators release Appalachian existing continue our FT capacity.

project's MVP, cumulative on our As cash it free presentation Slide EQT's relates illustrates flow. of to investor X the impact

realizations largely NYMEX with While expense. as and our future impact an MVP the are suggest higher higher by has local current price the free on is spread prices, immaterial transportation interlated offset cash the benefit flow cumulative MVP Appalachian between strips of

the broader support to the comments staunch as while will MVP carbon with necessary ensure deliver energy dependable continue We we how Americans coal-fired were the States for to projects phaseout encouraged show of region Home of Secretary grid. the these to said, the of see and this the That for of week supporting while Southeastern security infrastructure project be Grand electric is supporters MVP achieving United on goals generation. via reliability Energy reduction to energy of its the energy notable

XXXX reference, our assumes adjust will the we starts and up of assumptions in and MVP model if For second needed. half

in as success, Importantly, tailwind of declining independent gathering flow $XXX a million begin free margins levels, XXXX. widened to contractually MVP cash XXXX $X.XX further rates approximately pretax by cash current from annual of providing to by flow free adding

Turning to guidance.

provides guidance production moderating natural X continue This of production to to our end to reading gas X.X respond decline. range potential to our of XXXX flexibility We evolving the should outcome of Tcfe. conditions are outlook macro activity with product's significant prices low of

running activity. completion flexibility around rigs and thus but horizontal are management choke program. as our we cadence well rig operating We reducing our X not currently contemplating as have

XXXX reiterating our embeds capital to year-over-year XX% budget $X.X also field excluding Tug billion billion, are of inflation. Hill We $X.X which oil pending the service to XX% acquisition,

relates it starting edge a degree enable prices signaling costs We price and completion some hauling relief a long-haul to of local trends, such flattening is steel softening. and to as water further and we As see sand this of experiencing out on are inflation leading could of efficiencies. logistics logistics believe

to predict precision, net of backdrop EQT by up to price some relief flow and still and outlook believe into later XXXX. set for too XXXX for While our we fall the degree in free could upside this potential cash early with

due anticipated periods. wells budget that forward As a line slipped third-party with future thus carry million XXXX XXXX and our from into of to constraints not into is to associated reminder, $XXX-plus turning in is

independent capital efficiency This improvement of anticipated is field relief. in service with to base decline XXXX XX% dynamic, any oil our our drive to the beyond, and PDP of cost shallowing in along X%

midpoint and driven range basis local $X.XX by unit narrowing per forecast the driven our production the from expense Mcfe firm to and to lower range $X.XX portfolio. We're negative also per of G&A. lower differential the operating by X% taxes transportation benefits our average per lowering at for year is Our Mcfe, negative the

to is and is various investor EBITDA, On free cycle. flow flow billion of strip At X% recent the anticipated implying pricing, be XX flow part XXXX billion approximately a natural cash provide free bottom $X XXXX adjusted to yield of the roughly XXXX. of adjusted cash outlooks $X.X operating at we flow and prices expected of at be EBITDA the cash Slide our deck, free for gas remainder cash

continue expect the remaining our to our taxes, of NOLs to As it relates taxes. to cash federal XXXX we offset bulk

cash Our cumulative of XXXX strip to $XXX the or free operating million pricing, million outlook. increasing flow low captured at in be is X% XXXX X% and our tax rate to would XX% range in approximately which fully current beyond cash to income $XXX

under Turning during our share. per $XX the buyback more at retired million XX almost We to total million X capital shares first and allocation. roughly authorization average of price shares an quarter repurchased of have a than

Our is seek in generated return among buyback maximize group. pleased the we the are have and for opportunistic buyback with we to investors, the our best strategy return we as date to nature execution generated as gas peer

turn highlighting our We've total principal year $XXX average This at has on our commitment retirement of price also down taking past our billion a principal million driven capital to initiating debt our over focus $X.X debt retired to of sheet. a par of bulletproof during an leverage balance the the full net quarter return debt framework. since retired XX%

as acquisition. tremendous financing affords position us Looking to Hill it pending ahead, the Tug relates the portion our of cash flexibility cash

maintain expected hand paydown As approach portion we deal of deal with FTC we a our close. closing, on to work prefund and effectively plan the debt post cash to constructively

value structure XL post light look deal and and to will the opportunities especially that to will buy back We the also accretion bring cost stock assets improvements Hill of EQT. for in Tug close, additional

some pending than fully buyback concluding today's before As remarks. equity billion even over benefits Toby free and Hill from of Toby of to flow plenty turn cash call for mentioned, our $XX and retirement of we I'll strip through Tug see acquisition, XXXX factoring firepower debt to the at achieve with now exceed cumulative us the greater leaving the authorization. our XXXX goal lower back

Toby Rice

differentiated share finally, to even and current M&A low-cost on by I commitment roughly EQT, higher million key exited capital Thanks, $X.X by were nearly environment; $XXX points: via transportation debt development, board a retirement remarks, a as even with a assets, conclude Dave. free strong at to and net potential $XXX our of underpinned lower-than-expected giving we robust portfolio; billion cash upon performance macro opportunistic today's To during three, the sheet our hand; track a million and Advantage opportunistic generation prepared declined gas price returns. quarter, confidence on returns realizations quarter debt want disciplined cash a our natural few and during underscored capital two, QX gas balance across strategy of the is greater the dividend; environment underscoring returns price spending and flow, base lower solid cash of of us corporate quarter record evident our focus facilitated is firm natural One, our repurchases, capital in and from combo our bulletproof results million risk-adjusted operational the four, hedging reiterate with we the in efficiencies large-scale $XXX built first over strategy efficient thoughtful by

I'd call now like to questions. open to the

Operator

Instructions]. [Operator

comes Our Arun from Jayaram JPMorgan. question first from

Arun Jayaram

differential question regards guide. first the My

cash your year You release to full the nearly differential Mcfe, $XXX per guys is about by flow. guide XQ million press tailwind relative $X.XX reduced obviously to which

is wondering was beyond for support differentials? versus we We this help you've have related the you've as up? about the Coast. if hedges some little And more what talk did I taken and could bit lower basis And that the about see takeaway set differential what year or maybe the impact is how differentials longer-term the that us to actions of think about much Gulf Midwest to So a maybe lower that EQT? you you think to FT potential narrower

David Khani

Yes.

question, Arun. great it's So a

$XXX -- over Coast. mostly So capacity exposure us day Gulf months, some the Midwest to the FT realization. million the we've last higher about give I'm These sorry, of definitely a regions Bcf and improve value are to XX that added XXX to

to So expect add we year make -- continue that this and to better. and more

that definitely piece of a was So it.

piece how quarter. certain very strong leave and it strategy certain MX was open. areas for we region of other our this and us a The had areas hedging was

As New a MX facility seeing offline, in in that values up. went as and York nuclear we're higher higher winter shows area up

area. winter is piece our positive down, the like MX So prices is, gas a then third natural NYMEX XX%. very is as correlation And about come the local to basis narrows as XX%

So up. NYMEX goes

widens down basis come has NIM or basis Our narrows.

impacts So I'd be the to the long-lasting, is those And it. what prices last X keep -- and X first we'll are which of to going obviously one the say do. will NYMEX probably subject doing improve

Arun Jayaram

just little Toby, Great. a bit follow-up And been for year. it's a my is Toby. over

been you've initiative I had, was think some you haven't note at things talk you'd we of wins quickly maybe day developed think But have about so as mean, the week or that projects, Serra Bcf now of unleash you announced you do a have that some which do I the last LNG could your that I we as year. FID-ed. wondering if like. maybe of XX

your for year, after you us going the lot could a if be more a overall on for a of feed some there But I gas just sense, LNG. initiative. to So demand wonder thoughts is give

Toby Rice

about thinking let's where when around at look world energy. Arun, are people's Yes, heads they're at the

on and couple people the the that emissions have people focusing sand, emissions of at. in some these have where their classes sets here some heads that in got fixing going and We've their people We've still solutions to that energy U.S. little solve addressing about. sustainable being have global impact issue they're got thinking energy I truly and that a heads may a have biggest head they They on think up. global proposed, are X are of States proven, somehow that to the to there's their only will the United the biggest pick the bit scalable, that is too clouds will security deploying other the unleash like concerned of lowering is thinking just need are head talking level the more X a have and LNG part world. people we ecosystem, optimistic. impact emissions about What the on that physics be need solutions to providing that

the that above and towards of We've out not has world Now that in moved. Europe only the may moved be is wind. best notice not only I'm play sum approach seen excited about solution. solar be that capable We've energy, away it world may solution, where world a taken strategy from and a that, the has the

if paycheck practical a So energy. XX% meet all to has the poverty, realistic X towards who approach to LNG world best live there. back energy sits. towards unleash the more the want time the moved and of But That's a world ambitions we where live above the in and line towards approach want to want we more U.S. needed of to of approach above need that energy. we move the environmental if billion to the get to we paycheck, If all-of-the-above protect in the an people accelerate to pulling energy around to from Americans approach

letter which And source actions capable best the of think of X needs in the administration clean. what one certainly, energy, clean. Secretary pipelines, isn't the criteria her things And says we've energy at reliable now be those main to as be defining seeing right and world supporting seems Grand while energy that I is and criteria is with been about on that of the that be of we're MVP accepted criteria. And closing universally are graded one reliable last determining the over will the and supporting to -- year paragraph affordable, Home And in the cheap, we're upon. the the successful excited

still lot very are do. to the work a we about of we've So excited made. There's progress left

inevitable. is reform permit think I

ecosystem at into maxed cyber is deal us are not happen, build are to maximum what risk we are of throw event that's writing running opinion, another energy happened England letters back we reasons out. not How be my event. energy will with our can Reform event We -- Our without full. It another It that be winter. to a major in crisis. could industrial Refineries is event. when these And geopolitical energy that it's a when. if Pipelines And the capacity concerned if a with capacity. inevitable. deal extra they so of weather. at we of flexibility, up can to That they're saw the a events that. we they -- And they mild cold why saying take President events Perma We these utilities New experience see need place. believe It's X could Colonial it's Pipeline. in one be that with

I need we're and forward. do, where we think understand and we're people excited conversation the to going helping lead what about at

Operator

comes The from next Sachs. Chaudhry from question Goldman Umang

Umang Choudhary

the first on -- your on My question was plans.

the On around outlook, any you thoughts of color gas outlook. color I was give to any plans. on macro would you can adjust the choke wondering can what And provide look activity? management your appreciate you levels I completion natural terms you if your mean, your in like

Toby Rice

continue price. to we'll So commodity measure the current

commodity operationally see EQT default outlook. given even steady the think we what continue in for pace is plan a the to I

a plan because have keeping fact We steadier the the we of operator. low-cost are that the of luxury

with some capture to able that efficiencies be activity we'll so with along plan. the steady And of come that

going cost volumes. produce, get us production below to as we concerned, us you're far is see then for the see takes local if it As to prices curtail

be to So watch how we'll and that setup and game evolve the operate our decision will accordingly. continues business time a

David Khani

below X% by, add, to just I'd water production already. X% And year, -- our has line due is we'll normally maintenance not it last issue the levels to call Yes.

a say, would contributed, the we've as to reduction bit well. I share in of market gas little So our help the balance actually

Umang Choudhary

then a you. guess, I And Got sense. question. make That for more longer-term

cash to long-term your free around acknowledging revisit to As reduce breakeven hedging we thoughts probably probably you demand it's forward. up leverage on you in even and going and Slide U.S., love volatile have Would grown. going in highlighted in your the capacity XX, has your obviously, that gas levels, are price gas going even forward the also flow going to is given low, optimal around not here built environment be storage as a our

David Khani

lack baseload and replacing going it's great with more nuclear gas to renewables, generation more offline right, coming going forward. and you're because have question it volatility with a Yes, of some as with coal-fired and you're then

One, do as to a a very balance that have how handle And strong sheet. you you so very, have producer,

having So build onetime time, having investment grade, leverage. we'll cash as over well. Maybe up

Xx. So that leverage even below our net might

you The XXXs, down to to down we've the taken have notice, structure, call structure is we'll into $X.XX you from if have our cost over $X.XX time. right? So the low-cost right, it, from second

a be business. a with If to is strategy we're LNG using in important we'll on third producer collar. very our front, with then collars. commodity do do low-cost stuff And So the hedging something we

manage to we'll So volatility. that try

that's is have the demand say end And so And think we'll market fourth product very relative it. I probably a the to basis. I'd will because way very ways also means strong X no emissions stay for to do on low the that your

Operator

of America. Bank from comes Abbott John question next from The

John Abbott

on. sounds Apologies for going like in the here. the It sirens something is background

Our those the first time, potentially Hill update guidance. like to that are Midstream again Tug related midyear. at we'll It close still you're of question to suggesting is some looks have and around sort to It going acquisition. sounds Excel

$XX-plus that, versus in you you see included do upside this where about you of suggested? thinking that? of potential sort the And initially Just remind is point million time, in what had synergies us at that could

Toby Rice

Sure.

our So the synergies, Ohio, West connect $XX from that primarily our we building would Virginia identified asset midstream some Pennsylvania. pipelines in and came million from -- synergies connecting base some that

that's is large systems. synergy Another water our fairly connecting

a synergy So these they're Those risk outlining what in that will out. fact additive those be accretion And we to at in the these practical when I'd we look be say typically the put numbers be we nature. to there infrastructure tried the there. are. things, lower synergies, largely related, really all are that will given

at, of ultimately we upsides the a inherit. that record improving that of the Some track assets have on operations we that look we

there we drilling the performance is uplift performance really that. team. to do opportunity the the Look that in team drilling strong Alta -- repeat for We've us drilling Our example. is acquisition, a we've at we -- a very great got an think on seen

Tog look does transaction million of that be will the Hill that to will by we free at lowering that. that the synergies, some of those And $XX $X.XX to So impact when upsides how compare our the additional top $XX very adding and $X.XX belt this $X.XX on be our of that under flow be the will shows million an our would costs. of cash just impact these you lowering breakevens, in asset impactful

John Abbott

So into combo synergies? factor development just to be does clear, those

Toby Rice

say water will efficiency taking place. the itself logistical Tolko use recycling. to on gains. synergies mover for become our on factor I'd development big the will location -- is impact needle development the that another a into only And frac place the other the present is Combo team activity that's will for dual also assets water recycling take does

rates water is XX% that. recycling team little in more our water how we're and Tuck Hill -- from recycling going our continue XX%, will focus recycle us to water on on to the flexibility to assets a over gone achieve bit give increasing to have Our rates

John Abbott

I earlier Appreciate on differentials. to go want Arun's it. then question And back to

about this as Dave, months. do opportunity sort on going What how set had -- FT What describe you set is $XXX million forward XX FT How coming -- realizations up? over So forward the do improve this said, you opportunity you've of it you to last improve at available the the of is think to there realizations point? about at point? going for sounds you

David Khani

Yes.

that say just go. are other letting producers there in would FT I basin So are the

to we'll I'd because, on just I get pick say But comes and execute specific first the less time we that pick I'd say that that to and less over opportunities there and will in up want it. have off as so available, there continue don't just then talk as inventory obviously, out we'll number. to just we And want too -- those basin, grow about it grow. pieces producers are there And

Operator

question David next from Cowen. comes The from Deckelbaum

David Deckelbaum

Appalachia think if just any into you what you incremental here? give rigs as and us on in made. softening a of back leaving of sense that expectation back couple crews of about perhaps magnitude points could the to you is terms you a and had of But timing half go when color the 'XX on we might getting Perhaps some your already provide wanted expect service side around if I to see

Toby Rice

Sure.

we've set come It's gas. Just XX% a seen, rigs in off. we've focused have reduction seen that on what rigs level were about to XX

away and expect commentary. the completion trend they're activity they we're We and oil. mobilization gas frac some are The the earnings -- Halliburton seeing year a of -- continue signaling of big also crews focus looking be down that towards the to at really that with to Liberty, next from moving from on needs

will that at to year the that something be throughout else . So course reductions. addition we're looking the of rig the in

David Khani

are soften year happen second our sand, we items Yes. probably say put it And steel, that I'd because the obviously half in we're move. falling, didn't just make say those and looking we numbers things we the at but -- probably . like to Yes. that that to I'd before logistics -- see need into of

David Deckelbaum

the like get curtailing your field with hedge year I a gas still of for up, here on now if profile? ongoing displaced breakeven a corporate basis? is think, that of curtailment . this book. of think benefit brought a level coal you are area things $X.XX managing and a highlight short-term some calculated retirements level about headwinds you You or to level? bad obviously, of this the at looking Or LNG comes about egress there. are individual cash do sort free Do at in there the lot think you at before corporate How And a an we some the a --

David Khani

moments Yes. we field We we time, at really talk look a could tell both, it don't in at say, about things, at much. it but at it level. -- look We and I'd

a we look moving here, the, into the when So a want -- rates there there producing at are broader, to of we might be we make can curve. today. larger, we'll overall We'll future about -- by forward value a then at keeping but create weekend the can return. look And like it we to as decision do gas opposed

in of in production know you 'XX about. nature. -- Those we've that shorter also we production in a much couple So times, in but are we talk didn't shut shut really term XXXX in

So it both do we'll and corporate. field

David Deckelbaum

little a just just if of hedge on curve 'XX question could I 'XX. I book. the The appreciate And ask kind more around around had area you for guys where out that, hedged bit in and earlier David. Umang's is for sitting the

if more less of a you just You point? now. I that volumes how have guess given profile taking into is dynamic in that realizations look a on hedged might reflection volatile that this ultimately this or Or a hitting attractive sort deleveraging XX spike about confidence requiring that 'XX commentary out year your the see a what this do much at could hedge don't of your year? and fact you hedge Is for the curve? and goals more think in next of pretty 'XX be wait

David Khani

collars, we to -- we like when okay, and Well, we hedge the do in that. we use see SKU when

lock in XXXX collars times have gas. do some best we an add we and swaps, when picture. If upper so wanted the to some could in of you the And of and is which movement do protect to this

on seeing some here, catalyst. on a side. also the heading Pass. is of side, into we're to we're is starting seeing gas quarter And the also in months on and the what slow summer Golden which seeing activity next coal We're the slowing seeing come But LNG first we're year activity incremental we're with

the getting So about don't there. worries or Tcf I levels storage to we going X get TCF. it's think One, think to X.X

days you short need the to of I business, that's the you storage, X which think demand come peak then even commodity XX in any buffer to really at think provide Tcf, a you're days understand you going second And I is, see XX cover you if of if it in about know period. really do, basically that.

to Bcf support if XXX need incremental see we you 'XX. get to in winter, in coming able XXXX storage gas be normal of So you online about that's and see really could in you that spike incremental LNG

here. think So setup a positive I seeing very we're

show The summer big and that's up. we risks. if those we do show manage negative doesn't to up is like on And could to hedge be why

see But to we're to negative a how those positive a moving the So it. we and going timing right to jump in hedges parts, from we we lot and and try derisk sure and try of out time to hedge that perspective and trying both make to add right. get figure

Operator

The [indiscernible]. next question from comes

Please open. is line Your go ahead.

Unidentified Analyst

similar your maybe you talk some on [indiscernible], about touched Coast? that exposure the I You not with if do have your increase year? last financial Gulf comfortable you something you options Slide about or maybe M&A thinking partnerships? are looking And and the at sure midstream you of volumes get able looking to that picked are you to you're Or the -- mix? actual But are to Coast? XX% see then I you specifically there were your how current Or million on Are wasn't to down takeaway up was volumes. to the to XX. that could Gulf $XXX

David Khani

Yes.

Gulf, That's that's down So the all to not physical. volumes financial. the

so time, And there more as you over come more -- will and imagine. to add pieces are episodic, that we time. looking very up is and It's can over

a And areas, think higher-valued to continue to Gulf. to all that see So grow to Coast of role hedging a position in tries and It's the Permian play growth. it's that area. FT important as we have Haynesville the will Gulf you important will the to the tries down look more growth lot to grow as in of I to including note volume

now. of strategy to to a Once up get actually the as there, the that So you have will need down hedging into hedge market, basis LNG too. alleviate Gulf then need Coast and tied you some

of you down there. to lot manage things there's do a So that need to the complexity

Unidentified Analyst

you an helpful. maybe could level buybacks compete to them do call at or do have Or about Got see in on gas demand, And it the kind them a you flow do? if periods. If compare internal significant activity is of your from you. we level? Do how look company? decide Very free LNG future talk then And cash with trade acceleration? on IRR you you prices guys on of independently? an maybe your shares what NAV above, you that's Or below allocation

David Khani

running now, all going to East the we're perspective. Coast, capital in right off a of have be Well, LNG we maintenance until

and little we're on then the -- get with into grow, competing Coast now, If and are to right be more to were it talking access able a probably retirement call several maybe we the we'll a our So rate bit buybacks to compare debt then years which growth at we dividend. with a, East LNG margin in get we'll will view we'll return with can LNG the and we'll it be what of a NAV to our think have and mid-cycle value that the lock of future, it call it against price, exercise, we pricing.

Operator

Barclays. comes from question Matti from next The [ph] Harry

Unidentified Analyst

June it's how Hill, than date to Dave, what a little deal mechanics and closing thinking through that be you're the Tug think bonds so a bit SMR to to back on issued is closer clearly, Circling you year you closing close last linked going XX. And you're I by a contingency those to your track midyear, bit you talk about June. them to by originally last conditions envisioned. appreciate had maybe of some can in you still but

David Khani

Yes.

the bonds extension XX. think the I we lot June we over sitting don't the loan made, the We made a comments with effectively if purposely did. to of we listen if past of any cash we're comment just term you cross we have that need that we into and So

Unidentified Analyst

Got it.

financing even debt would reduction Okay. even and short-term my flow provide given more bank mean, follow-up mix. And your this to more originally I free short-term runway? start you have year, just then debt there preference cash actually is the strong just, envisioned to be prepayable to the

David Khani

more That's a, that. it, maturity exercise. about I'll management of think call We'll

midyear. about So that's get to something as we we'll think closer

Operator

from Diamond is Paul from The next Citi. question

Paul Diamond

and given I opportunities that's for do structural how looking -- a you constraints, back. circle XXXX the in-basin through growth, or kind of quick -- think takeaway mean Just whether about given industrial means? other beyond guys

David Khani

growing talking us you growth? you're talking Or about about Are demand the production?

Paul Diamond

Demand growth in [ph] basin.

David Khani

Yes.

that. of part as retirements coal have you'll So

good years probably the per you know, as several a ballpark well. X to the has sort And X As is I number. over day the say -- come and of maybe Bcf next of would on probably neighborhood Shell in cracker

Paul Diamond

a Understood. XX,XXX-foot And kind of just question. more

in of Hill your you the Or look -- whether think production? 'XX costs? shift, inventory beyond. you those use beyond of of those to focusing of guys goals cash or we term, on any think should a Or beyond kind of will about on and Tug potential it's kind As flow any still how do that guys' M&A any of in front, filling -- [indiscernible] kind . about longer

Toby Rice

value aspect that the for commitment On opportunities new sure competition M&A back basis, the is is our cost an differentiating buying competing same. the accretion But our dynamic making strategy is stock. the will Obviously, own financial lower with will from stay to there. really structure. And the our looking a is the

created to trades, that we'll mean, given a disciplined. where going We be stay that ultimately I lot changes thing it's we've think this So of our committed value and that to out. going strategy we're the with laid stay is but stock

Operator

The from comes Brothers. from next Noel question Parks Tuohy

Noel Parks

in into bit the lot gas that is the Energy sort being a now. been about at to projects. these I an software could just look Bloom the under energy of people integration I you're something of sort underway microgrid whole of yourself that when quickly hearing of picture looking just a come type becomes I'm when just pretty as what can the in issues was -- especially something for that you resiliency of In sort technology thinking of management talk and nat type about wondered, with market, more project I wanted potentially making system in doing a EQT a of is about installations, industrial is management issues. mind we're Is wondering, investment more forth. integration type And software. to umbrella? could expansion that protect I reduces EMS energy of sort see your uses, that that software, grid sort you yourself and your up, of so while evident have focus

Toby Rice

us, For a presents serious is resiliency of supporters going capable present lot you we the extra of Doing handling mentioned, that electrify the they big are are do to world. grids some that of very problems. -- of challenges load the

ban to not a and the also -- electric at they're and big vehicles week California in plug I charge opportunities. with changes think to what ICE later but then where going their big going them. the present to look their tell you going to This engines present some are citizens happened to see some

decentralized been front a a generates can the size grid cells in are our the the power going to off One called price new it's a can and house. cell of that retail is the grid on fuel scale company address made type for exist get solutions power into. the microwave smaller going of ventures your fuel that be to to creating that These that an consumers and investment are investments points the of gas behind generation opportunities company runs going at what will natural strengthen is we've that has but that basically power our

taking that at while looking So that's the sort gas our what into of supporting and theme natural we're falls demand promoting electrification that's place.

Noel Parks

of heard I've something Not Great. before.

incredibly I'm and wondering that be -- sort But think at level we this Is And reality conceivable variances. had seasonal by So stab at going we've sort export it then and from sort it's macro Russia, taking headed pressures towards if of you it look another maybe the off that just we're you of to downward time saw is demand, see geopolitical you spurred permanent we're Ukraine are that back intra a the Do that may to a was think there's pricing. mean, year, contain long year sort If only picture. volatile volatility $X over interesting. sort we on looked of the of then anything, if volatility might and X or of haven't I I I swing seemed months weather. past of software sort maybe month this the a move of on the a X bit. LNG like that that mean

Or just by. indeed So to? is the norm yes, aberration new your will year at interested we're I an being to in I the guess used get more -- thoughts out smoothed do going is look on past you as this get that

Toby Rice

Yes.

and what will America. we're global in the where world is natural happens commodity influence in in a becoming here prices world a gas So

could also the and we the have the to introduce prices for but more that world. stable, Americans lower opportunity volatility, volatility So for and provide more reduce

clean energy energy we water export amount energy a potential Our ability production and be in a day a of Stores day. a Saudi commodities, to equivalent world, stage. will that of long-term barrels here force what means XX amount it our to exports surplus of we ultimately going have to will is potential surplus to economics energy world. is country equivalent that think underpinned levels natural to less decarbonizing LNG stay is put fuller million will to the and the to is security in to amount I participating Arabia the Bcf adding world contracts. for with the gas, be this put It's the on people into XX volatility. provide that the be That's and mean the bring think, set and in the

of the and on certainty shored be pricing the the that investments up. So making economics we're will

not We will EQT tremendous it's key do and America need to think We reducing energy a world in the to accept respond volatility. we be volatility. it. So the producers opportunity. can are like The

David Khani

which and do add we we need able you ability the with it to need if to capacity to generation, I'd And Yes. storage baseload pipelines be more kind coal-fired don't is baseload replace taking keep more fuel. and more of offline say just because it

volatility. increase to going You're

Operator

Silverstein from UBS. comes from Josh next The question

Josh Silverstein

year, might that just program more little thoughts next mentioned build guys or Would rigs? just the any reduce You year Can DUCs this bit mean? on for up flexibility SPXXXXXXXXX's a what in and Great. Would you you elaborate some obviously, depending price. you shut-ins. for

as simple as think way about flexing would Josh, to about EQT think far is it Just you guys curious activity. is. . what the

Toby Rice

will continue will be at -- we're by the production to price production our be Going for into receiving capacity the we capacity. levels what Whether product. the that that determined market building deliver

development means at same time frac plans, determined be rigs those we continue something to thing with that roll where crews, the going are decision forward be will that to into where that made. whether we the production put market So will that roll but the --

David Khani

in we're be other lot so production of -- have to. don't Yes. manage I have us. rigs rigs if cutting damaging perspective ways to mean we're not can we of running we We our more would a running in the . X XX XX% put

Josh Silverstein

into had you. closing the targets, so about $X.X well, Tokyo your obviously, to XXXX as transaction. And wasn't Europe debt because you Got delay sure. And in have and question the the reduction extended debt cash But into Yes. I rolled capital $X.X this flow billion of relative left you some out, on buyback allocation. just guys year billion thoughts you then another buyback. in on in left the free reduction,

of there. as both How of how about you're you far do deal, the hit X:X So about pkind targets, and tackle just a of as ratio think those those. the and thinking but obviously, -- allocation on depending wanting the to

David Khani

Yes.

So -- debt we actually is buyback of cash are we free along we're amount further the on the flow generate. that

in stock next that. us back flexibility we could to gives a year. midyear buy well ourselves think getting as That around And see somewhere I target to so

a to have want X/X probably about targets, we still flexibility. more say hit we'll -- ratio be we just cash about change once that, effectively But a we And lot then then right? that So And going think our if of opportunistic, of to, QX only have debt is it, then beyond you allocated really free assuming flow. be we're I'd equity could good ratio. you we much our

deploy out figure think longer my do role how again, the as a properly. how you term to that to capital. in sitting So next capital guy and that And will -- about that seat allocate we be

Toby Rice

put framework hedging going allocation leveraging place, modern that be to And in the strategy the next in put place. capital guy Dave, the you is

in this be there'll strategic made are So the that lot decisions organization. a in of continuity

Operator

remarks. management team concluding So I'll the back to for hand

Toby Rice

Thanks joining our the thanks today. call joining for call for today.

in are struggling global and stronger. lower We that to compromised a never emissions been world is has energy the with security. ambitions It's been

natural emissions coal. a company capability significantly EQT provides global Fortunately, to And of lowering our using has energy the that the gas Americans security and by is replace to world.

set and on you. our keep business. us, Thank heads we're we excited in opportunity executing our So of down front will about the

Operator

today's call. Thank concludes you for This much very attendance. your

You lines. may disconnect your now

EQT (EQT) 27 Apr 232023 Q1 Earnings call transcript