Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. At this time, I would like to welcome everyone to the EQT Q2 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Investor Strategy, Director, your may Managing conference. Horwitz, Relations you and begin Cameron

Cameron Horwitz

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

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

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

the turn to Toby. over I'll call that, With

Toby Rice

Thanks, Cam, and good morning, everyone.

say to second thank years. Before for again three I over a to you and speaking to friend great past the quarter want results, being Dave colleague

had for EQT, your tremendous approach of and continued thank see favorite the you phase and I working combined EQT's a a to are Your of the and thoughtful your your history you alongside of a experience excited to you. time in into to made life. pleasure success want during contribution next we knowledge all who unique heart with

in joined as Officer. new roles also business his Jeremy as confidence the deep Chief reins allocation, want our vision. Dave taking Jeremy capital great creation, Knop, banker. Development EQT management, at as will execution and transaction of that decision-making, the and Blackstone introduce is EVP in extensive in value from of and Jeremy's time sheet investment to our Corporate I strategic experience realization to understanding M&A from he at long-term XXXX Financial value-oriented our strategic investment who instills our of mindset strengthen ensure and drive EQT an previous balance the and has continue

to success. meaningful and dedication him make His group, purpose-driven focus executive on candidate role. in new Jeremy's creation, will EQT toward impact forward look exceptional our contributions ideal track and to value the skills continued record proven him to invaluable asset leadership he his teams steer unwavering we and an undoubtedly make the make and leading to

Now QX turning results. to

we the Our completions. operations and the in drilling achieved both notable first teams upon built quarter on with momentum execution

setting a one-off As execution. XH by Slide on not record team followed Green feet in this investor shown XX,XXX XX new well presentation, XX,XXX record drilling hours world an in County is drilling on up set This our feet our the XX on X recently our same in SGL EQT and just run. of hours by drilling

consistently achieving However, EQT as exercise ran shows results. recently benchmarking we that a is drilling best-in-class

feet put include XX% at materially even Specifically, more faster this rate a less are laterals, penetration per that our nearby than recent XXX,XXX days in EQT horizontal one spud-to-TD with Appalachia point than were roughly we To that EQT's means drilled XX% rig further peers, operators. context, found longer wells can which Southwest average of than lateral right drill greater few maintain which planning, about tools. and just Bcfe A zone rotary production the this contributing two net to targeting, horizontal why all of we running innovative geo-steering average, use year steerable performance greater people, relative three X and can to equipment rigs. best-in-class landing of than per It's execution. diligent factors is peer to our day

Turning solid of up achieved gains own to two half QX, completions crew roughly shows first frac early experienced our pumping QX. with in outdone and Not hours to team line group performance, completions. XXXX. efficiency peak XXXX our in replicated in XX% X in their the by Slide year-over-year levels be our set with drilling records

at XX,XXX an team laterals in one internal miles, the is of our of shale our out development lateral drilled record. history and which and EQT Michael XH the of feet longest completed on nearly completed First, well, four U.S.

I peak also during performance. our with to to plugs peer team cone by drilling prior and XX% the beat the bit, above shout-out give roller record out the big Our set our to was the a record. single frac performance completion quarter achieving both world previously completion it XXX and teams excellent push when drilling for want a comes envelope continuing to which

in TILs, combined relative to quarter even volumes lower-than-expected impacted our ethane face us our forecast. than XX allowed Shell negatively non-operated guidance downtime which by of the second midpoint the This liquids to achieve production and fewer production expected the at of from stellar Bcfe cracker, execution a

After a best-in-class plagued performance environment challenging issues, XXXX our teams driving resumed was performance. have where peak third-party by operations execution

factor Virginia half the $X.XX $X.XX from A we've highlight of that benefits came the several years. just per water, first Mcfe to Another ability which West into our EQT's year. LOE Mcfe past in of system averaged in the building per to at which the contributing capital is to handle the speaks efficiently invested water peer-leading the LOE, and quarter over was

to storage. water system LOE XXX,XXX installed benefit, our of reminder, barrels of continues water water we comprises as percentage Alongside this up in currently a produced XXXX. water climb our recycled XX% XX% of and the from pipe West miles roughly XX target As Virginia year,

cash into Our generation. system of capital have structural to flow free of West Virginia add example projects an our that rates water strong ability and invest into our is risk-adjusted return resiliency

have of associated West million Specifically, system date yield. $XX annualized we have into and implying savings, $XX a highly cost generating free cash million investment is our invested to this realized XX% flow Virginia attractive water

connectivity for projects Pennsylvania will forward. that West between should plans further water facilitate and We are resiliency provide moving Virginia opportunities similar finalizing reduction assets, which currently LOE and our

Lastly, another quarter, towards $XXX material step incremental million retired sheet second we the our taking forward during of balance achieving debt objectives.

enabler We leverage retired investment-grade XXXX, our our of a have achieving now a credit was meaningful in $X.X has framework reduction ratings. a of debt initiating late since driven our billion total returns in shareholder key of and which

of debt and the to sheet can all EQT best exposure ensures will to commodity provide prioritize Moving bulletproof forward, balance natural paydown as maximize we the risk-adjusted a cycle until investors our that creation continue through parts targets to leverage achieving gas. value

LNG. to Turning

supply a our X per As guests our signed cubic recently highlighted release, annum LNG with via to per day users the Charles deal in to press feet Lake aligns the XXX day Bcf X.X to directly with and million This globally. a HOA have million-ton we strategy under XX-year agreement. per gives to portion an allocating or FT sell us tolling Gulf the of we of flexibility end our covered international markets to

mitigation. direct the gas. the pursuing connectivity approach our combination that EQT downside of to the strategy we the export years a more spent end the and of last pursuing best studying LNG netback risk have are commonly is provides structures with are to Relative nuances believe integrated of exposure being We users X.X upside opportunities with signed,

in This strategy pursue with global to obtain downside downstream plan creatively one potential us with visibility markets allows and signing interact protection, array wide our international ensure structure to have though prospective price or more outcomes our of deals EQT. and into additional We a customers. buyers best as with approach SPAs we exposure, tolling to remain increase will the measured risk-adjusted opportunities for we

gas have played role States displacement. a security As America's driving to in providing United emissions while critical energy reductions largest via the we natural significant coal producer,

facilitate and Our stage. position attributes and objectives, domestically are scale, environmental reliable global natural unleashing abroad, the emissions begin and to gas to EQT's inventory on we peer-leading excited both these uniquely depth low us

over our recently net material X goal ESG received past Turning X We Scope Scope year of ESG highlighting and zero multiple report. by to our accolades continued XXXX. released toward progress emissions our made leadership and the

X standard, OGMP the peer-leading to and of our MIQ MSCI of intensity, workplaces year. being by grade to top AA of actions from named rating accolades U.S. our the for XX one risk achieve for being methane upstream gold A increasing UN's include Some Energage an rating just third mitigation reflecting these the the ESG X.X receiving companies globally consecutive our in

second our GHG replacement below EQT. half XXXX the metric segment, specifically It's Looking bulk levels year-over-year and over was XXXX just the XXX,XXX was pneumatic taking worth management XX% XX% prior in tons, and Scope emissions production completed to of X our new totaled at that device emissions, of lower XXXX. X noting at which

benefit So XXXX this see initiative. should emissions from further a

to XXXX target and EQT X.XXX% completion planet. intensity upstream is the the our producers We lower XXXX our of this one Future year, ONE in expect on replacement methane which below pneumatics the the X.XX% target of methane further of intensity makes near lowest XXXX XX% our to from

to Between probe pneumatics, preparing current nature-based now absolute increasing we that operational efficiencies under the leverage energy own remaining reduced to zero to as these factor as a is for cutting-edge are to have here, will projects offsets essentially verifiable net accurate From generate be emissions. soil our our projects the Scope X emissions and technologies. our multiple first replacing we emissions and offsets ensure world carbon a technology our low and EQT enabling scale company meaningful X in the of to help These of become offset transparent. quantification will key and possible achieve

that region components. of Mountain chip reform insufficient as for the the the and increasingly to the this while good for Slide in Act, commend our the Americans. Its government climate its Fiscal begins Pipeline and Valley the to by inclusion reform acting bipartisan investor States in critical United not a the Responsibility approval but, presentation. of address all bargaining see recognized We bill shows Senate which instead, MVP addressing the a political of permitting achieve allowing House to electricity is to X permitting unaffordable simultaneously Turning imperative completion necessity goals. included and passing We a Southeastern of

the stay still enter service the some Circuit XXXX. creates timing of While from Fourth Court we half the first MVP expect recent by uncertainty, to

current outages future EQT, certain to room breathing in flow line to limited on near relates impact infrastructure high system moving strip said, pricing. brings pressures to term, the the should the MVP assuming in it forward. can As of needed free the much and our cash parts of That lessen Appalachian capacity that risk lower pipeline field in has our turn

the term, to needed critically the Longer replace catalyze will further region's expansion of meet southern goals. into that Southeast power it gas coal-fired demand multiple bring and is the where should projects completion MVP climate centers generation

realizations Hill price comments coming energy and enhance better our We conclude the with years drive simultaneously Southeast. that will while materially believe in this EQT the acquisition. on to brings consumers pending few Tug for a the value over in turn MVP I'll lowering prices

While modestly transaction the the in the than transaction has anticipated we expect continue taken close, to to complete we FTC work and constructively will with QX. we longer

reminder, breakeven price resiliency providing a in low-risk, As decline existing bring acreage moving drive and $X.XX our business free Tug that our even XcL additional greater offsetting our assets flow high-quality Hill corporate to an forward. Midstream should cash

I'll now the Dave. over call to turn

David Khani

to I on to amazing years on world. in this EQT to and years I'm Thanks, deep over call honored of XXX and half essentially sense and have conference Street time. investment-grade Index. XXXX, be short bittersweet mark corporate three that credit my a Since XX January Wall status and company, in EQT have relatively a we Toby. It's final and of We joined the in left the after on period the feel is my in at I quadrupled. regained added pride accomplished of S&P was stock all

to thrilled I'm the exceptional capabilities for he extremely also believe next a value EQT trajectory person excited and is organization execution Jeremy tremendous for is appointed seen which come, I've I'm confident the a company. see shareholder long-term hand, years in I to Even CFO. right his with first a this to job. this, unique as EQT's on remain is why create I'm that truly will

and closely I aspects transition many continuity worked strategic Jeremy have smooth and hedging, role. financial a will policy, capital together allocation the of the business, on of and including which ensure

all support. I'll over I'd for Jeremy. that, to you stakeholders turn say call now to With thank one to your like And the final our

Jeremy Knop

I as trust Thanks, EQT's meaningful among shareholders. these EQT I'm extremely assets. to the heart, our believe been our teamwork Financial everyone. capabilities Officer. company and depth in in by and Dave reins the and of drive set employees. grateful excited Dave, stage continually energy XXXX, morning, Chief and The I've impressed us joining and the to company's value the and creation from that world-class good take for today's quality flows attributes execution next the EQT's for materially differentiate landscape Since

consistent that we proof always Our capital past to framework ways our an balance high-level execution I'm role. in dialogue structurally us to shareholder several financial look our new more strategy execution in with a with expect and you've years to engaging on will ensuring thoughtfully remain from impactful excited the more investing make over even to come maintain our continued the improve sheet, contribution my with organization focus and return forward a of even bullet the shareholders value-oriented in business.

were line volumes Turning our XXX to Bcfe results. quarter the with of midpoint range. in guidance second Sales

relative downtime us strong the as of as with Shell's slowdown net which ethane in a non-operated quarterly execution to have cracker fully a allowed activity, extremely that to gas-directed saw XX to by team works cracker the better account greater ethane completions our Shell going to our which and TILs and associated drilling forward operational our broader production online. applied we reduced highlighted, the Note it quarter, impact bring issues field-level Bcfe forecast. offset forecast during production at continued negative for Toby risking lower combined As to

of were low operating in of non-controlling Mcfe and end toward our respectively. total at resulting Our revenues operating and per range Adjusted $X.XX, million range. flow line the our negative excluding cash expenditures, and operating the pre guidance million, $XXX adjusted unit an flow guidance in free Capital per with $X.XX costs cash of $X.XX were Mcfe. midpoint million, $XXX per were unit margin operating our $XXX were interests,

$XX cash impact We quarter. free also accounts cash total the of margin flow working negative capital offset declining much benefit postings, million lower driven receivable a which saw by the from during and

to sheet. and opportunities and will shareholders creation philosophy moving balance strong for EQT liquidity provide credit differentiated A the to remain core profile access Turning operating our ample to forward. value

quarter on Our billion with the XX-month trailing billion hand. debt from exited balance and sheet at very the remains ago. with quarter of X.Xx, exiting second year $X.X a down of cash $X.X strong leverage net We net X.Xx

deck, comprised for offer As and second million the Slide investor with upon we shown on XX senior the retiring incremental full track our $XXX redemption X during XXXX the million quarter. XXXX built further of $XXX and This retired of debt of our of X/X% was of record sixth and our tender notes X/X% debt notes. our senior

our framework now excluding X.Xx exiting remain Tug $X.X debt, out in rolling total of forecast environment of shareholder the strip, which this gas to nearly our debt-to-EBITDA leverage over in return we current at XXXX expect well a we've macro Despite with year, eliminated natural expense. interest as billion challenging we ratio retired million annual of has Since XXXX, check acquisition. the net Hill pending $XX

billion $X.XX of pending in availability that comprised loan acquisition. our cash, and facility stood of a credit of liquidity billion billion, $X.X have we the term at the under $X.X of place Hill end for the $X.X At quarter, Tug billion

Moving to hedging.

put realized premiums. highlighted million as cash hedge Second quarter, results of of XXXX of for expect recent NYMEX we of deferred net inclusive million beneficial quarter book $XXX the deferred gains of hedge NYMEX $XXX position full-year put our strip, gains The approximately premiums. hedge cash the we

floor of weighted into our Looking flow hedge production of MMBtu. expected have $X.XX a debt average per MMBtu, to goals. a XXXX, added weighted price of $X.XX cash and average of a we XX% We position per hedged XXXX our de-risk our ceiling portion to opportunistically with currently repayment and free

XXXX, are not see towards weather, intentionally skewed potential when time, prioritizing pricing where and most hedge we price we tilted position market is exposure and we creating our winter protecting the near-term beyond looks should XXXX, flexibility normal is maintain asymmetrically upside, cash believe By repayment to our at first same natural in debt risk mitigating again, the risk. XXXX and upside while maximum the materialize. downside downside the half the late tight, increasingly to of Note, gas strategically free flow goals,

below Appalachian current many NYMEX Eastern of are money to driven than the relates it a As fall, the of solidly levels, the $X.XX storage prior which XX% for for widened current is winter. [MQ] per covered strip strip. future producers. positioned XXXX a MMBtu byproduct basis, as to XXXX, that elevated price costs to EQT The however, relative here, roughly more this hedges implies by have have balance warm cash with level differentials is well basis volumes of balance in we local differential

date with of Court. first based to some by immediate On be price timetable When capacity the offset a free the largely realizations, acknowledge of near combination associated flow from MVP, the impact transmission down service modeled on term. gathering be half expense step should material in EQT's to could rate online, the a recent our negligible Fourth better XXXX our come MVP does in activity the a in cash higher risk to resulting in we there Circuit and

as price However, which volumes This LNG mentioned, capacity see as export opportunity when into significant Gulf completed. in U.S. realizations Southeast production contribute over for will at time. the expansion supply towards the will to our and time further demand, we over projects a more likely satisfying are shift area value move Coast occur Toby better MVP to time

macro playing Fundamentals we gas natural as out largely the are to Turning landscape. expected.

last from Haynesville out of the given play, time. high-cost very mini down reductions rigs which gas anticipated call, prices in peak a in fell played quarter, nearly the U.S. the second across earnings across Activity of amount additional a fall XX% in producers the the we were As have laid short XX cuts well XX activity on U.S. with below our gas-directed discussed breakeven

the at drops slower relative pace gas for months. the rig last to expect of We XXXX, rest a incremental few albeit much

in help levels year-to-date should balance head into for drilling large prices The support the activity of reduction supply XXXX. current XXXX from as we moderate and and

We highs activity and gas natural set now structural late to also blending prices during quarter note XX is last associated support consensus, Further were oil over oil-directed likely underperforming activity and gas relative growth in XXXX. declines the second below laid down additional will result to roughly XXXX XX% oil-directed in year. rigs in

wind higher prices significant of during area power from demand. Bcf natural quarter. has generation natural power gas a Another gas of X spot the weaker-than-expected come second day market gas-fired drove support strong materially approximately and Lower generation

Specifically, a volatility this shortfall wind million-megawatt generation hours. need generation, gas demonstrating and met underperformed expectations XX generation Most inherent the of renewables. natural by to for compensate of by staggering of the reliable value was

LNG and to strong from meet during storage cargoes record-breaking remained quarter Europe the China and in heat performance refill and as May June. realized U.S. listed demand

strength this of major been since this maintenance Pass June, offset Some Sabine but completed. was by in at has

of by significant day a capacity over a Bcf X year-end years. the natural create LNG several nameplate tailwind anticipate next incremental XXXX, should we ahead, for which Looking fundamentals online gas

service inflationary leading see Recent in we in months, benefits the prices rate our and of starting certain XX% relative areas. oilfield has to XX% as of steel to should have to inventory. meaningfully we're deplete see to pricing. pressure beginning QX indicators late the recent we the peak, change suggest of and slowed The over start current several declined past this indications casing softening Turning potential in to

and wellheads total makes of XX% with our associated casing costs. around deal reference, up For well

horizontal running are we currently terms drilling frac rigs and and to of three In two two completions, spreads.

our dividends long-term strategy, been on market. focus and development frac rates several our consistent spreads Given bulk years our us rigs contracts. our over the strategy lock of have in past consistently below spot paid This has for the under as combo execution the we of

do is the our due We modest quantity opportunity on needed the see lower items. And than higher peers to for some ticket pressure downward much efficiencies. big

translate As on our downward into exploring could pressure we're contracts off, ways improve to roll well efficiencies our that costs. incremental

we predict year-over-year in cost well our preliminarily X% see the potential early up for total to too still XXXX. While precision, to to by decline with

Turning to guidance.

We production X,XXX our XXXX outlook X,XXX of are reiterating to Bcfe.

our $X.X billion differential per budget flow XX capital cash adjusted billion ranges. Hill unit of expense pending cash outlook we deck, $X.X our provide On flow excluding gas of Tug recent flow and XXXX billion, is at operating for to free the acquisition Our EBITDA, in investor free and operating be prices was our roughly to XXXX of natural to various EBITDA acquisition. XXXX. million expected the anticipated $X.X strip pricing, impact remainder to pending adjusted $XXX and At approximately be prior the Slide of XXXX cash

are forward. shareholder we moving allocation, execution continue capital pleased to above to we'll of with framework opportunistic return relates and our the of it date, all construct the with As our

annual grew dividend. to reminder, we more since repurchased XXXX, our share XX% in initiating pay of than a of debt, year $X.XX million have retired billion per As than and an our stock $X.X late which framework more dividend initial $XXX last of we base relative

our As group. XX% is for it a execution, on our to negative superior opportunistic believe our we generated generating versus average suggests price for the return relates X% peer our strategy share current as shareholders weighted buyback average results we of have a

Looking track unpredictable, through of bias debt ahead we with the until while our $X.XX MMBtu price a need years limit the bulletproof gas we downside achieve commodity which cap a at cycle. target leverage will, movement prices, be us the turn, the and minimize balance all what expect expect in to repayment to upside of natural should will will to allowing This we record, and parts consistent investors ahead. Xx towards in ensure to the sheet hedge per our asymmetric maintain defensively

our the West We system Toby that earlier. highlighted will creation returns business rigorously any is that quality business, compounding flow, which improve opportunities assess with Virginia cash the investment to also similar continue of in water foundation while sustainable our strong shareholder of value to risk-adjusted

return cost base pillar risk returns a growth potential our remain tool that in for strategy see shareholder average well dividend generating key reward remains for excess the favorable opportunistic sustainable in moving a we forward. long-term where finally, of buyback our points execution weighted key will Our cycle capital. of of And

Slide cost think believe the summarizes highlighting elegantly presentation, make and We at I EQT. of investment operating the most investment-grade market model, of opportunities inventory by capital significant ESG X the and depth, low proposition investor value data-driven our quality peer-leading one our EQT of today. scale, which compelling in close modern leadership I'll

five-year strong However, free back relative stock performance these a with recently, amongst despite we of of cash trades peers, as generated cumulative percentage could highest enterprise yield characteristics our free flow organically value flow strip more pricing. at EQT cash and the the at meaning buy gas enterprise value

illustrated scenario, this definition. as price on cash of the we simultaneously outperformance. left years to a $X our gas breakeven downside price cash and enterprise focus on by flow $X not, should Interestingly scenario again, side price, is of equity in higher least measured most EQT flow drive Slide Whether XX, and free lowest our the relentless this a the it investors gas the share cumulative believe fully to stock provide the five appreciate when at free our And current by this in flow thanks long-term next shares or propel will relative upside achieving value is value. price realized, further cash among

forward. market This position my and of EQT's identify moving role helping I significant high-quality in signals to strategically assets, value shareholders forward for scratching and the look is to new and capture only advantaged appreciating surface us the

turn now some back call for I'll Toby concluding to remarks. over the

Toby Rice

And one, taking quarter. internal $X.X since our to Number has tolling HOA multiple an framework on strategy, completion drilling initial operational we million continue setting debt step and and capacity with three, of maximum downside our production providing And XXXX strategically our world simultaneously capital To mitigation. the diversify an upside our late EQT's combination our to upside we markets returns retirement best Lake risk more goals a performance remarks, at X year-over-year which beyond. to production our ESG successfully represents debt environmental achievement our yet in accelerated for two, and with our five, emissions, of net to Number portion cumulative point achieve XX% our ensures Jeremy. which execution prepared key prices decline of goal. Scope emissions to a conclude a teams, in XXXX. seeks incremental been XXXX I XXXX to progressing four, toward today's of value-oriented greenhouse zero than realization late Thanks, XXXX XXXX, Number records the retirement shareholders moving exposure with EQT's points. with of implement gas in during another while position reiterate ambitious exposure $XXX report XXXX QX, gas and lastly, billion few the retired international peer-leading hedge Charles segment added recent our the X debt step our underscores into closer number in LNG us in and want

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

Operator

Umang ahead. Instructions] Choudhary is from Goldman Please [Operator first Sachs. Your of question go

Your line is open.

Umang Choudhary

your year? on I deflation. early first thoughts improvement talked efficiency given question if get efficiency Thank highlighted X% plans XXXX, reduction on and recently drilling update you. completion there's capital And into you breakeven. flow best you gains wanted of Also you the design, in your My and the was around heading well a improving cash touch. around your free which of from about luck, Dave, next-gen – hope to in given any stay to

Toby Rice

Sure.

we see of XX%, that a things couple as to a activity XXXX. that will place take So added that's activity catch-up just bit a in XXXX. result of and We'll in levels the little lower compared

would be that So helpful.

on cost is great focus On side be see. reductions made going there, of we but have that's really to to the the service operational things, see inflation that teams the the that progress efficiency

we're that So digits, conservative teams but low with to being we'll procure single update bids. that continue as the

say as picture, Tug as down And then we've well. structure. the step also, gathering got back, stepping which impactful a will our at Hill, obviously, cost will be every And reminder, rates it bigger quarter, lower in a we

will in our that sense unique has lower cost pretty EQT forward. the items pretty big structure going So that some

definitely that's and think worth unique pointing I out.

the campaign it we are mode we the there. that, have to monitoring MACHX of science for and of execution in the that As impact currently operational relates we run, completed all

design program. well to practices that these for And assessment the make applying we've have market in we up some different parameters incorporated done, have We our best are we and take with controls the our into taken that the conditions. monitoring and tightened sure best that

practice awareness on that. some the implemented, we're we'll been it's So to continue greater monitor turning knobs that and

focus determining past, is going cost mentioned be us, we service where As environment out. to in the factor really biggest shakes the for

on everybody keep front. we'll So that updated

Umang Choudhary

next my you. That's on Got helpful. very LNG strategy. And was question

end You've exposure, and the color HOA the taken customers towards on your strategy they're take first with what collar executing willing looking Any to which price contracts? update any their to by Charles, the on obviously step agreement the signing Lake willingness sign are for?

Toby Rice

Yes.

acquire a looking level, high the they're for are infrastructure. out LNG that which for, comes this at feed infrastructure build seen to only that So looking with tied while security controls supply what seen is on as it's to to index security. long around And you've pricing, cost as But hard see supply you've pricing. to energy customers guardrails customers customers the and that energy receive very world

they're floors price to that give put our was unique. important. controls customers tolling this thought flexibility that we in place, structure We energy the energy that now we the So type this on security and was something it LNG with fixed incredibly is price And collared to and we ceilings thought with that have buying.

we of we these with we agreement can ultimately there'll to sales leading that tremendous really a capacity, be and the conversations think So customers. now dial some up And tolling interest. purchase this have

Umang Choudhary

Thank you.

Operator

go of question Stanley. Devin next Please McDermott ahead. Your from is Morgan

is open. line Your

Devin McDermott

question. taking And Thanks again on morning. retirement. Good congrats Dave, Hey. for my the

dialogue the you ability I Tug on and confidence slight FTC, more the just what XQ? in talk bit just is how was if and little the I'm could one about here high-level first here not Hill sure much say, for close delay a you the you my gives reason with can but this deal to Toby, So wondering the in

Toby Rice

deal the have insight conversations better said constructive months, with tell the that middle have of we I Well, FTC And But can say. today where I have XX over will think you we XX I'd been resolution reach we'd that on that next year, confidence the by this this within the stands. – past days. we

Devin McDermott

on wondering roughly a that pieces helpful. flow you've the just I know elaborate separately, scheduled you if bit some remaining there. it should on relief? disclosure taken MVP, rate I net then And think few Okay. What's the some cash moving years? impact cash And piece on that over neutral pipe Great. is of could about was But payments service. for with that the comes how along the relief of the entering rate upfront we that next being

Jeremy Knop

a of There's that. to Yes. pieces couple

But that the pipeline online about same Hammerhead, we'll rates you markets. it see that gathering when supports on the side. our more the time, you'll triggers associated and a So that access think reduction up comes step rate transportation at capacity like premium and

so the net-net, before, talked And net that impact out. as about should we've really

more X the you start that look like to expansion Station play in market. projects deliver as right that, through and of XX and trade talking of that are decade look at end the that Zone the expectation is Williams we some market think Transco through will are I about you MVP at that now, others to our

that So Cal in if to looks basis market premium trades Station and the X $X a NYMEX. at trades what look about Zone today, markets $X.XX at back XXX better XX you about like

And ahead. year – will of are value that downstream market each be projects of those really we're capacity the I that increase that's to as forward it evolution an what that built to by. in the looking so it's And goes but out, going think years

Devin McDermott

Great. Thank you.

Operator

is question go from Donnes ahead. next Please of Your Bertrand Truist.

Your open. is line

Bertrand Donnes

guys. Hey. Good morning

exports that Just of if pivot easily you want XX% peers go so percentage. to one they to taken contribution I XX% let the that range. maybe above be approach in about just their and want you will LNG of maybe so have your of could keep volumes, U.S. kind have you see that if your does more that to strategy or tolling internal matched agreement the

Jeremy Knop

way day X.X that supply having a into that today. The this market is talked Gulf we've of about historically Bcf Coast

described to around We of any a will sell sort international it. but haven't markets, portion we like you of use that guidance necessarily into range set

we'll the to opportunistic us. facility we'd sense, risk-adjusted it on to framework. increase a the on proper Long depending like makes the but extent be term, what think think provides I market within capacity I depending

Bertrand Donnes

on the on a maybe guys. XX-year that agreements capacity term the two on the Thanks, points. to years? maybe the part to do And with to additional LNG And Does to you. kind your here just just users second you Gulf the your that follow-up same is you match to pace impact is to my Coast want any then Got ability that your increase have smaller then of topic and of did up deals? side, Or want end years duration? XX of five do and there add

Toby Rice

Yes.

side. have I think LNG, pretty for going to customers. to execute be with with would on and given we we more. like On the us. Coast the purchase covered structure Then favorable parity we're the that to that collar pace the just the I and what's pace and returns by to really for we'll exposure what the ample look doing doing attractive And type at is tolling the pricing the And say govern some we continuing sales would the agreement, if in going us fact can pace Gulf locks see

So going we're update be along and way. the that months these pace, next and determine and already the back conversations we'll that we've begun, that come over guys you XX the to having will are

Bertrand Donnes

I appreciate it. good. Sounds

Operator

Arun JPMorgan go from Jayaram question next open. Your is ahead, line your Chase. Please of is

Arun Jayaram

next I do I to you in original get to contemplate changes your you mean, Hill expectation on Toby, with comments days XX your morning. Good Yes. the the any on close follow-up agreement. deal wanted Tug the that a could

days, sense with expect a XX Hill. Tug wanted terms you do it you just I to is be if signed original with so in the And consistent close

Toby Rice

Yes.

for economics we XX as flexibility preserve of through the process days. that forward. sure we're that within going deal closing guiding one the like strategic signed to the able make principles and that is up preserve going be feel we're this And the of deliver also and us we to to expect We be going to

the long original it's achieve our we're goals. tunnel, but see going a the end of So the been light and to at process, we

Arun Jayaram

Toby, thinking impacts on obviously, talking the next then which follow-up, call started this My and drilling some about be of benefits, the gains gains next capital you the of MACHX that completion side. program, you Great. any underway, service of have year, efficiency year's about program, we efficiency from tailwinds how a morning. is should given excluding lot you the And of kind highlighted just cost efficiency

Toby Rice

puts on of term, to lower. Yes, breakeven you Tug XX benefits gathering the for lower you the down get benefits anticipate really Arun, looking the on CapEx get CapEx the Slide spotlight we us of our to a continue longer efficiency intensity. think be And over rates, corporate when Hill, will there and I time, do tick trend overall

Arun Jayaram

in good with Great. I want working to years. retirement. you And pass also luck over to Great regards on these my Dave,

Toby Rice

you. Thank

Operator

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

John Abbott

Could quickly sort opportunities you XXXX, Thank characterize potential wishes after cost you of we of maybe versus the West in Hey. some is looking should million that? inflation? And the deflation? West talking opportunities? improvements like you BofA want questions. best other of you at do some be infrastructure water how your has there think first you to adventures. see Are PPA. just Toby, of How $XX next just to are the Virginia types our see also here for luck previously, much these go for how about, do that Dave, spent taking mentioned cost on you've about would too, Virginia, you want the been number And we very we Toby, team really between at and question you – like like opportunities

Toby Rice

Well, terrain logistics very West important. the Virginia what's about I and become think is special

And solve constraints, is infrastructure so to logistics solution. the in investing

infrastructure the done Virginia, the also water is Hill freshwater Hill network, system that our in that our expand will Tug going with investment produced continue, seen you've a so And from and West the only the Tug to water we've synergy with system combine delivery. not identified that benefit water we've acquisition but to

excited continuing water we're on the side. So with the about progress

been then knock And but that sand That just demonstrating and up also efficiencies hopefully, we're a some well the to should alleviate that they've just infrastructure it completions at to also to constraint park on just closer down be the teams given really the will looking as and locations not set getting being bottlenecks, there. operating bottleneck. out their enhanced sand of continue removing them, a transloads

Jeremy Knop

John, financial system think add million look to spent savings too, million out, at you that. doing we more just generating year. $XX that's that that we of of about a about if today, perspective I built from a water $XX to And

the something declines, And that – a got cash XX well XX% XX like yield. to not it longevity next it's It's a So durable. think years. free about like flow for that as that's to that it's

also projects acquisition, pipeline basin. looked reinvesting one Hill throughout connectivity like free at compounding announced that can that we mid-XX% the but quality sorts a capital of yield. base cash flow both into business. reinvest other we the think improving we've can the was We're recently, of the which kind of those projects just Tug The we of similar we Some projects the through at of to more returns additional find when and seeing create we value on more highlighted

operational But opportunities that. a examples on. just make those little find around to focused flow trying like reinvest We've tangible. are we're something to it's more mean, to I more teams the got So looking cash it two

John Abbott

on Appreciate it. MVP. And question second the is

about maintain think EQT do that that you want How Would growing you to you maybe you what into at But some think online, about grow can't maybe if comes capacity? can't your on, just over thoughts it capacity of into basin Assuming time? share? necessarily you the stay are to once. coming about you when capacity about sort that think that – all flat? of do want market How

Toby Rice

that storage Bcf a little XXX to where There's the above opportunity and grow is example some it's it. years. really market the – two XXX delivered are where love bit downstream we today, out day, currently that more sits expansion I would market. to storage to in above not some being that think capacity. take online. reallocate certainly, think are balance we demand volumes built, out headroom, more. that at coming per not basin hard infrastructure just in the we into next to today, that create lot But that sit normal. a of froth is Yes, MVP plan We in-basin gate of is day We'll a projects MVP good and sold of being XXXX pull see a If to the completed the the of until one Where of additional about basin of that Bcf

John Abbott

you Thank it. Appreciate very taking much our questions. for

Operator

Your open. of Capital Markets. next from your RBC Hanold is is Please ahead, question line Scott go

Scott Hanold

Toby. Hey, Thanks. Yes.

I and the talk have obviously the the more economics your more that you with Because any sounds specifically beyond Tug within limitations few lot the was about Hill it beyond of that? wanted. you conversations of much further based a the ago a with shareholder generate on value. you in You view confidence Do that to some though, see FTC kind your deal? seeing years consolidation basin Can closing Tug Hill strategy know to do the non-negotiables on

Toby Rice

path updating the Scott, on focused after we FTC, we'll you forward at this. stay on and to deal this time, I just think like we'd to with get the done getting forward guys look through

Scott Hanold

bands in Okay. Can indicated that Understand. that the some things buyers of LNG of U.S.? of the need were you're And think that give just coloring high-level see all pricing? a for And in on when the the getting. the volumes of those agreements have are relative the to way like the you do looking you I you also what structuring the what get kind interested you does the view what benefit to you could terms on tolling on then as agreement, markets, that in reaching do international those mitigate hedge at you you some

Jeremy Knop

Yes.

Getting first that. answer step way. multi-step in a So Signing HOA in let place is me the the it deals is process. these this

agreement, based part is what that forward comes place to look a purchase next the following on agreement. steps structure getting comes up purchase as And a into down then and that agreement in HOA we it to those on collar terms. that play sales binding sales and of As with

So that is it's the you're intention. that around right that, a time. our little clarity premature But to too much still give at

Scott Hanold

you. Thank

Operator

Your question go Please next Michael of from ahead. Stephens. Scialla is

is line open. Your

Michael Scialla

you guess, the talked you the and congratulations were Yes. and that Jeremy, to But weighted viewing fair? added half, risk like Is how Thank market I take the off to Jeremy. table. you, winter to hedged during stay David quarter and the XXXX want the XX about there first that to into given the you it are lightly I both half capacity. in some would I sounds hedges the you second incremental guess XXXX. LNG guys see

Jeremy Knop

Yes.

sense there's dynamics for for a get when forward, couple we try a of a So where sense it's at the And going play. predict – to We at market to look price the try get we hard well, SKU exactly. to is.

winter pretty And equal storage so in SKU. this into we of today feel upside, where at when is heading you like first XXXX, there's the look half downside

swaps, And options SKU we it's past. strong because near-term yet into it's so the the in to something we're trying leaning feel really those. good in that's to little But why generally a into cost you've seen though deemphasize more market, about see Unless bit even that us hard in lean like get would options the reflected where or towards is debt into derisk and not we much but to the in and strip. we back future that the asymmetrically XXXX, half goals so repayment is just of market our skewed, so more upside as XXXX

hedging that. to want patient near-term to do and us We remain there allows more

market is ramp and off might today, you the sits not XXXX from be. we're mean where obviously tight trades XXXX, season the for as to going doesn't especially as it think you get it's that ramp getting should we demand about capacity I trade but XXXX you – look, least most nameplate So LNG, market how XXXX, point, really it but that of into think see ahead. in market as where And analysts think hedge see at market the at the some market how participants far

same in I have XXXX change a think and that the demand towards increase so market the unless at step a And XXXX, really starts lot as next at of you time. ramp, looking winter and summer, production you get

and increasingly more summer getting will market way. I that next tight, start and reflected the asymmetric probably think will look probably much a

not where and hedge really is which take in to upside, looking we're to that think of need we position patient time be think and defensively our this be lot market what in I so for I point a the at today. a are And trying in away investors

Michael Scialla

you now. you. two on that Tug looks half And out it Thank if wanted of Would your expect sense. Hill year? ask does I doesn't to they're just into to rigs next that on makes within the properties the close running those to That the two you've maintain end And second think like, fair rigs days, laid legacy assume is change. right XX I your activity

Toby Rice

the for Operational cadence same. EQT assets remain Yes. will

Tug maintain to Our to continue assets plan activity with levels.

wheels in seeing opportunities But I base. plans much and the schedule some optimize maybe think just you summary, motion. the the those, months us take those start then the in us for high-grade months hit would XX similar time for to could start probably first pretty asset XX set seeing

Michael Scialla

you, Thank guys.

Operator

Your next question is from Josh Silverstein of Please UBS. go ahead.

open. is line Your

Josh Silverstein

to Jeremy as and Thanks. David Yes. Good morning. Congrats well.

to on you the speak, think term you're LNG do know have to vertical kind LNG Longer contracts this a to change, starting facility help of leads front, sign there? the kind of some so to potential Just in an I here. stake

Toby Rice

the that it going, world always EQT supply, in Yes, do LNG seems we're to so we've now? need that participating It right does needs world projects at the these Josh, what in looked getting like is facilities front. investing are

growth anything us That's the to exposure opportunities. value East would If on international for real Coast, to exposure really getting price So markets. the can is our here us. do we that give sustainable

we're risk opportunities in now. a us from LNG, in be it make we're sort LNG viewing make to where could could mitigation facility, sense for of looking investment not that's perspective, make right to how there but So investments it small but a

Josh Silverstein

it Got an facility to little you. made, pushes Yes. faster. bit Charles be I if wondering investment through there's Lake the a just was maybe

it So was that referring angle. from

Toby Rice

No.

do when early needed don't we think international looked weren't of to at investment get found if make on, that. we to equity we lot we sure facilities a several after I really discussions, we just pricing an need to that and

Josh Silverstein

flow next to and years five cash the helpful. shareholders. then, over free capital mentioned the ability it. Got start you to the Jeremy, returning And That's

split kind of the it, right Hill strategy before call of getting now. have don't commodity in going commit gone kind of prices do a have place where towards, closed, returns? to a been. formal up curious return sheet has Once and The profile transaction I'm is you on down You hit foresee you buybacks share how based forward? Tug you're a want that? So thinking between formal XX% debt shareholder reduction, Do you kind to level shareholder balance you the about certain the

Jeremy Knop

Yes.

focus our really cash this really but So you're be of right accumulate has closing. has been been that deal opportunistic while ahead tactically, pending, to

buyback. closing the you expect, thing. pursue the dislocations After think see our continue tactically, until that think debt targets, I until And So towards can us closes, when the into really expect in debt meet same we you is market strategy, really acquisition to I happens, same weighted doing then lean which to should we the repayment.

formulaic concept from near-term. programmatic the a just think of a strategy. at I something buyback. It's you'll see shy least away But long-term us It's probably

create macro to like tactical is standpoint in like that, a there'll how always we've approach done We date. especially weather-driven and even value just think for to a from standpoint. we more inherently patients think I continued be industry we that cyclical, both to opportunities an be in outsized

Josh Silverstein

guys. Thanks, Great.

Operator

ahead. go next Your Citi. from question of Please Diamond is Paul

Your open. line is

Paul Diamond

for you. everyone. morning, Good the taking Thanks call. Thank

first something quick like that of think the how in had guess more yourselves you breaking far from of the place? Just can drilling is substantially. do efficiency a bone strong away catching as pretty see more should you some up you, performance much on XX% kind like It's gap in really you that the you others is also that like future as And and or one a is completion think about incremental? late also Is keep as talking is the to year-on-year, of maintain. Or the as part peers. step there? I we change a question running

Toby Rice

happen bar. the move potential what records to for Yes. the teams could performance to goal and goal These the have peak us average The up operating show and is to is performance. that raise the we for

playing the we're any achieving along game that the way. that to we're and that's removing So peak bottlenecks performance

ways the look is to keep raising us peers the And bar. ability up keeps with attitude the to continuing Our is us. fire this continue for to and that have that evolve

better. So we're we're I'd really we're evolve our ability get proud the of that's but of characteristics defining culture continually always of drive the looking just And – our our one at, where to business. and to say is

Paul Diamond

Understood. Thanks.

Operator

of Your from Please TPH. next Lambujon question ahead. is go Jeoffrey

line open. Your is

Jeoffrey Lambujon

Dave. Good appreciate I morning, taking everyone, My first and to commentary mentioned. congrats that you the all one questions. follow-up and is to water Jeremy my just you both a infrastructure

was the that that with opportunities of from wanted sense you but be breakeven synergies that the highlighted incremental part past. here savings get $X.XX all would think just a for in I the the that highlighted to you have of if any deal, to improvement these

Jeremy Knop

Yes.

the associated just We thumb. to all of synergies deal. of So about and like rule that guidance. that talked base with That's our as a This include $X.XX pre-synergies. we kind don't

talking of we when synergies. were think $XX a about So Tug announced we Hill, year million total

But just just system even and Virginia West water that we've process. $X.XX upside built. of incremental the that's all about return rate refine we to guidance this able been FTC gun existing jumping haven't laws to already some due that that to that we on We that talked around given,

Jeoffrey Lambujon

marketing and you developed? that on impacts I standpoint. about your can or we get particular back in how downstream. to great projects a that But share and to from Okay. Great. thoughts potential you're just infrastructure thinking mix that regional those pricing to be any get going show the the potential MVP And there as maybe D&E important on slide be will relatively imagine then

Jeremy Knop

most Yes. We than push. pull more demand of see as those back rather supply projects

contracted those capacity, but for XXX market. long-term of just we are that to out station anticipate So needing don't important take development the

Jeoffrey Lambujon

Thank you all.

Operator

from Tuohy is Brothers. question Noel go of ahead. next Please Your Parks

line Your open. is

Noel Parks

go the of Hi. as the of looking the to sense I overall give Good back wondered, just back? just sort project to you And could I a out scale to what that swapping pneumatics. was morning. wanted us cost

Toby Rice

a achieve less than per $XX about And is dollar when you about think normalize the ton on $XX to it's It emissions reductions. per million. ton, it,

Noel Parks

is of apologize I a that Tug And on little with factor the in thing, the one longer? doing already. I is Hill been transaction, just But a the that infrastructure Great. unrelated? guess has that this if FTC is made overall purchase, on review, has you're that touched sort review process also Or the fact and go the

Toby Rice

are elements out. any think that that unique there's don't stand I here

if just is was just think on part fear request what back over this to there the I to think I everybody issued I in mean, you gas the was a gas process like, and lot was just was review gas, a deal shortages. of concerns the natural and Europe second November. what remind concept. And happening the market remember I'd when with who of us their FTC peak

days. getting I that that think the next the to close in in the So a and took we look, happy this we're confident in closer where opportunity are take XX that's a process we're within through we're place going and

Noel Parks

a Thanks Great. lot.

Operator

Daniel ahead. John is question Please Daniel of from next go Partners. Your Energy

open. is line Your

John Daniel

me. Hi, Thank And including guys. you Dave, congrats. for

bored, get internal performance. an noted you drivers the a how improvement me the much process drilling is from that call. versus to you service of providers? If one But third-party the due Toby, improved of some technology give of of

Toby Rice

teams Well, that. and park. at and other be got that that to the doing do combo up teams, internal setup And replicate teams I internal long the bases. I mean, look think go we there considered to the with certainly asset the But are sets it you execute be to knock to out going of to is out we're an would you got improved definitely that thing on the to mean hard the I large-scale, lateral development side, delivering operations

with close We providers. our service have relationships very

this run on of been our lot there's a with the on think here, improvements design worked that teams providers. service I bit have

and the success spectrum. close is front partners and drilling going our the on across the on our partnerships, great of really and really So based some we've be success operational relationship to got

half have with our is So I'd we great working relationship probably half providers. the internal, it and service other say of the is

John Daniel

seeing are is And I success in it copied count just second a me a this for you. of achieved. Are data a efficiencies propose drilling rig mean, you've look ourselves other you that basins reality… the when you the going and we Thank when one look the future analysts then Okay. be rising these portion such into and myself, to render at years? – assuming see we fooling we at as when efficiencies of lot can

Toby Rice

and factors what are laterals logistics operation, and things just on And are when water ultimately past going do to land you look have situation the specifically efficiencies. and to the ready we a mean really success the sort that influencing I step site sort like? at past – sand. that grind long operation, and I on external of in back like defining be it's operational the the mean I what's of gotten that step doing we we've factors It's on at the side, of drill. of really What's more pushed we're Yes. look completion the the change slow

their that as the the it actual and much individual So to system defining going as of to going inventory, laterals the on long how creating characteristics they we're think, already think recognize of quality I and that be that as it's the have much forward. efficiency has key made move I industry performance. are is And the is

John Daniel

enough. me. like better step to Fair seems a you change what it But reported,

but paying impressive. maybe Thank that's you So I including me the attention, for haven't call. pretty on been

Operator

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

Toby Rice

you. look Thanks, continuing you forward our we'll energy Thank and updated today. progress. we your reliable the everybody, our strategy cheaper, time forward look keeping to to more for cleaner We produce on and to make

Operator

for conference today's you Thank concludes participation. call. your This

now may disconnect. You

EQT (EQT) 26 Jul 232023 Q2 Earnings call transcript