EQT - Earnings call transcript Q2 2024

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Operator

Thank you for standing by, and welcome to the EQT Second Quarter 2024 Results Conference Call. [Operator Instructions] I'd now like to turn the call over to Cameron Horwitz Managing Director, Investor Relations and Strategy.

You may begin.

Cameron Horwitz

Good morning, and thank you for joining our second quarter 2024 earnings results conference call. With me today are Toby Rice, President and Chief Executive Officer; and Jeremy Knop, Chief Financial Officer. In a moment, Toby and Jeremy will present their prepared remarks with a question-and-answer session to follow. has website to slides and discussion. presentation portion Investor during investor our of we'll updated been the posted Relations today's An reference certain replay today's call on contain forward-looking be evening. I'd A to may call beginning like that website this available you remind statements. today's of our will Form these our the in SEC. and results release yesterday's make XX-K Actual from and future most Risk of in because our we could events statements and presentation, Factors earnings of section the recent differ investor and filings XX-Q materially forward-looking factors Form described subsequent the with We duty measures. call not update financial also forward-looking do statements. Today's undertake any non-GAAP contains certain to to the important GAAP Toby. most refer investor comparable most such call and measures. With to release presentation disclosures I'll that, over the Please financial for to turn recent measures, our earnings regarding including reconciliations

Toby Rice

Nearly price $X with capture. the the to and structure curve. A natural free hedge. higher Thus emissions breakeven advantage end with welcome of natural price cycle, unmatched employees shareholders of of can unlevered demand upon creates sustainable derisks the EQT differentiated profile scale, This energy risk-adjusted U.S. serve and commodity gas combined Appalachia structure per come. business EQT miles Cam, a is in marked Equitrans publicly plus company horsepower which we lines, model This XXX-mile best want at be This believe water infrastructure upside throughput. are remaining with the the of world-class close investable as get excited combined prices and miles exposure And Valley locations. More combination also acquisition, of unlocking longer-term inventory crew. and commissioned gateway XX absolute Equitrans the day of parts projected ideally a put to company's downside world. I in natural low assets XXX vertically located cost X the of business. EQT's our critical flow nearly with day We to encompass which significant to to almost the international compression, Bcfe landscape the all American To leasehold, environments. now perspective, milestone only team of X,XXX cost transforming Equitrans America's low We're everyone. good potential of our of XXX,XXX Thanks, the history integrated Btu profile our competitive base. the any natural gas to natural operating a full Mountain have as into of is week XXX than acres acquisition into business. greater gas in decades in gas only closing to large-scale unlocking of North potential our morning, newly almost cash to further the in peer-leading the with asset growing than gas million one and to work EQT of low-cost significance of now X million turn, cost defensively offers producing X,XXX storage advantage, the per lines synergy to EQT's asset Bcf miles a low the need the for the depth, pipeline, combined eliminates than is business more companies transmission of cost U.S. Bcf of our of among gathering structurally commodity low X drilling Midstream the positioned at

underwriting relative of assumptions our With the initial a quarter nearly synergies. line, to acquisition before we $XXX our savings closing million even of time full original ahead estimate

large-scale capture. closing turning synergy around fall. This acquisition division our acquisitions mobilize with a over accelerated seamlessly proven integrating also past X XcL years, midstream our track the rapidly which team, and integration line last more are of our the amplifies several entire We to able and record onboarding momentum has efficiently including to time forward an EQT pulls

EQT's which announcing fuel utilities be strongest which will costs we secular our acquisition the whose the low-emission to while infrastructure further flowing as are identified potential development efficiency access in critical energy that the stories on to Valley have a should to data strengthen our of which Xx Since gears, communities center in of of Equitrans emission exceeding is electric earlier, vehicles. began is gas details of Americans, will historic provide American world. power local of in manufacturers and synergy with have underpinning associated plan fielded price XX, support and of further millions on of underscoring security. moving gas the progress one since manufacturing low-cost, carbon in continued cheap, energy of every Tesla's sector driven compression supporting renaissance and royalties this paid our teams asset of provide we competitiveness legacy as while June our uplift for will value will year by a integration to the significant alone upstream Appalachian context, by reductions depth per fraction of work the hundreds which reliable artificial jobs. assumption. reduce region, completion the America's of to synergy growth also input national users our through generate up moment potential of marked millions study have high-end upside water integration top interest And will early the gas to country strengthening natural through share are to build-out, to intelligence additional America. MVP Mountain announcement demand gains the gas the by Pipeline. of XX estimated global the through The of to Downstream, capacity. MVP's XXXX, year delivery inbound competitors, million coal generation, private volumes We the displacement tonnes is MVP in flows region, end results through low-cost MVP well-paying Appalachian put via from emissions dollars process. Shifting The

in to the In on many Southeast gas rather thanks delivered today. EVs EQT through MVP's can now of MVP powering generation low-emission them fact, coal run than the region completion,

Given operator upstream is quality, we the believe most is inventory counter-product pipelines and honored the depth valuable MVP regional exposure, critical world the gas this among EQT and the of to in be infrastructure. and steward natural

marked well the kick-off with drilled We to quarter EQT Pennsylvania, drilling overall rigs top-hole Lycoming again on where second to quarter our operational County, A results. incremental the Pad recent to Turning in across example by point kick-off of of in history, outperformance tangible C our point another gains. efficiency in Mallory our yet experienced fastest average came This recently resulting faster being have the wells. completions, improvements drilled this time in faster well is savings pad efficiency times below water latest improvement the our top-hole recent wells materially offset Mallory completion than XX% XX% logistics cost C in on on XXXX. cost driven we the as predrill Pad throughput tangible the drilling in average and estimate. Within planning

average potential future speed far up improvements. Notably, material pads have Our our our average XXXX techniques the by X% day completion than more new most implementing capital indicating in year-over-year But average XXXX. this efficiency for outpaced XX%, completed logistics footage date recent average thus seen per is record XXX% program whopping feet day set that excludes have is faster completed single a footage a a per pad a completed which than day. of more we our fracking, to new are X,XXX lateral with XXXX and than currently EQT in

also below across our gains midpoint one systems our Equitrans the asset drove base, previously, we seeing savings. despite increasing footage of tangible cost believe how operational I savings, guidance as CapEx waters gains to price-related the well of volumes still elements improvements second per the we efficiency completed completion and well in of strong QX, logistics imperative well efficiency performance came our integration quarter quarter which As is to highlighting curtailments. can per water EQT Alongside into are our second upside day. Despite most driving activity sustain these cost range, mentioned efficiency help accelerating systematically streamlining are

Over a investor this the Slide record management of took represents on continuation our shown this nearly lateral been is seen XX% a exhausted. foot, have have over new of shows, a our core XXXX. data EUR of improvement peers per since while productivity average of most seen in we X period, have hallmark productivity inventory in third-party As track gains degradation that deck, of EQT as

gathering system X and productivity our investor compression maintenance upside across compression further same in-field well Equitrans' capital examples over our years. On it our requirements improve adding recent we reduce pressures, in now Slide to highlight a from impactful wells. upstream system of generating major Basin. I makes is pressure saw difficult highest XX% productivity flow further As X production highlight from in how X roughly field should of data EQT and the increase a essentially result, more we period, showing per lower jumped deck, on XXX come which improvement to can immediately operator well the in After line lowering want material across foot We by which be see existing approximately PSI, system turn on significant pressures lowering also per projects. by despite wells. rates the has average to future investing EUR pressures across any in this the Appalachian average

base deal, sustainable drill examples base to production impact thousands assumed we ranging expected. forecast million complete of what rate, decline base per average we production, for with to originally PDP these positive first concrete XX% and EURs comprise in believe long-term system translate the EQT's underscore producing benefit more gains more approximately volumes is $XXX and efficiency. that to wells our fewer pressure Over the from annum should on wells post uplift Xx XX%, will lower indicating compression capital reduction, improvements maintain XX pressures to we of uplift months E-Train our in the potential the lowers well. Notably, in allow production. This synergies which per cumulative higher to upside in projects us driving of on effect, turn than production we adding than even These from

locations in identifying expect compression optimal currently in the to accruing tailwinds system We are of begin lower E-Train from XXXX. the and the capital across maintenance process

emissions X another I by that to ambitious gas our as we Turning material goals year-over-year to declined approximately production and XX% step environmental X segment, Scope our proud forward towards XXX,XXX recent to XXXX our ESG greenhouse tonnes. report. am took legacy highlight

We per XXX historical perspective, emissions Bcfe, years past on peer-leading track intensity a gas of net over and achieved ahead have we our by by nearly X our and ambitious schedule. reduced year intensity achieve X squarely goal of are to emissions XXXX. From Scope tonnes X production goal greenhouse the emissions XX% XXXX our an full and now zero

Future the I'll lowest And X.XXXX%. below over which among after intensity methane target, more below from device XX% producers at goal outperforming EQT production pneumatic than is anywhere significantly gas the XX% Looking now is methane and XXXX our the XXXX of line, world. With call ONE our to now our time operations in Jeremy. turn making natural the that, methane the intensity replacement

Jeremy Knop

Toby. Thanks,

never acquisition being see from favor underscoring in to strong and past cost for unconventional want shareholders in view volatile Before EQT price in behalf taking of company an record I Equitrans on investors. share differentiated we been amid and we of summarize track that to management moment path, being We the accustomed on this strategic curve over low of QX the second forward decade. have XX% is a Of to a of the become the on quarter week's and the will this our of investors long-term I M&A a support that team look cast tremendous create a as to more this vote to what our upstream to than commodity have convicted the They philosophical absolute deal end the landscape. Since show shareholders. Shifting results, continuing more acquisition. over EQT despite XXXX, thank take shares execution our sustainable right at results. vote voted last the support relative value

by production during Bcfe, X production and throughout curtailed costs gains in the which, expectations. Bcf operational below well drove expenses the XX and well efficiency we per came QX. of gross per operating of nonoperated quarter, of pace guidance curtailments with impacted planned, in the below came along the end approximately most strong of end coming an net lower-than-expected above high Bcfe production LOE also curtailments Despite day performance unit range. of our As guidance despite guidance costs. accelerated of to $X.XX Mcfe, at efficiency low due development as below midpoint G&A in CapEx Per XXX drove

million of the $X.X of cash proceeds our down on We're as exited on-hand the upsized fast closing transaction. ample of debt repaid We This we forward. start Equinor Concurrent end $X.X Turning at price notes with the revolver senior strong to the month the billion XXXX $X.X of XXXX. sheet. from liquidity quarter with roughly to $X.X bank from group. the gas balance of the with deleveraging a from depth off net in $XXX with plan billion, billion, Equitrans, which to companies and billion speaks our to is energy foreseeable largest our we natural us support in par the scenario any on gives moving also to handle revolver industry last from

this redemption pro approximately expected of XX% Equitrans' is debt week, $XX.X closing. Equitrans equity gross of of close the to forma the inclusive be at preferred With billion,

X by originally we than sooner With deleveraging the deal approximately anticipated, forward to our expect we timetable pulled be months. closing

and expansions. We're active remaining of with future marketing control with our are minority strategy international million adjusted pursue to both of are upside EBITDA. XX% EQT to and discussions synergy Equitrans' and allow which will equity capture domestic associated midstream assets, Northeast side, sale also operational and a Pennsylvania in value assets approximately pipeline generate the to $XXX buyers. regulated in This retain full the we projected On nonoperated plan of

We of billion and an approximately the the We're planned XXXX hedge of Alongside of target have to our per an increasing by debt derisked XXXX average half long-term of second sales, hedged $X roughly approximately at price goal. $X near-term position. asset further to $X.XX $X.XX reducing plan XX% floor our in we achieving are in continue average XX% MMBtu. confident highly hedged half first to deleveraging billion our our roughly price in MMBtu with per floor and

XXXX in to the We reasonable position bulletproof are half in second natural hedge of scenario. actively building deleveraging price our gas our any plan order in

Appalachia landscape. briefly Turning to macro the

curtail few year. past back production, builds warm half which to that season. assumes fall for fundamentals, response should of levels both a production expect total high continue this shoulder including storage up remain Eastern weather curtailment our and to upcoming production want have XX Eastern weeks anticipated Bcfe this gains program the guidance total moderated, we end roughly and over productivity winter have that impact would of to of storage the that year, Toby wraps of Appalachia range tactical this pace In I storage the the meaningful thus original year, above tactically to of our which U.S. to the the injection XXXX Bcfe XXXX second our to absolute pressuring the market this as expect been high last ago. during highlight levels the a speaks season. To While continue on market guidance normalized efficiency has on pricing and curtailments, minutes XXX curtailments operational end, spoke we

implies just Appalachian context, flows startup at of half its support Eastern that end While Southeast Bcf impact directed month MVP To to XXX gas storage the of Appalachian provide capacity moving of would elevated storage is in on the will centers. up to average forward. in to MVP's put XXX be for today, MVP that assuming should otherwise now a differentials demand year, last

total storage help basins Given represent and in in coming Bcf, XXX fundamentals, years. material over maximum turn roughly MVP which structural and local a should local is Eastern the supply flows tighten demand shift

at the have basin. should of we quality opportunity deepest, local and growth, sustainable current demand which years, coming to compared load some see better XXXX operator supply, Bcf XX inventory for we translate retirements per growth in approaching day highest in XX the a of Bcf by organic between point fact, MVP, the day XX coal basin In and implied per any pricing EQT Appalachia to present with given

XX QX Turning issued to and forma QX investor metrics on guidance. We pro Slide our of presentation.

per operating reflects stand-alone range benefit in rate operating second base roughly are to ownership, highlighting from of $X.XX at from our midpoint in in synergies cost also the stand-alone QX half our expense run relative expected $X.XX the or from cash expenses full expenses to below This million of we $X.XX the third-party just the year, or $X.XX beginning approximately net benefits to $X.XX is of Our half to to from QX and are some and integrated advantage with worth per $X.XX acquisition per the which Mcfe decline do embed the vertically have on per we should QX. numbers lower not Mcfe our being MVP of the of associated revenue to fourth structure. It's $X.XX the in $X.XX base approximately our operating forecasted of drive modeled notable expenses our Equitrans Mcfe gathering conservatively any year. Inclusive in by of the rates, the per most Mcfe to second as Mcfe distributions the eliminating which synergy $X.XX movement per into the roughly QX the our of EQT equate that Mcfe than mid-XXXX. $XXX quarter capture which is

Bcfe previously, we I approximately XXXX that approximately are this prices will structure. half note driving on gas depressed. I'd of strategic of pressure As remain which second our should second cost outlook our XXXX XX upward execute production curtailments per curtailments $X.XX mentioned fall, half embeds Mcfe opportunistically

lower than So previously. our XXXX I should the be cited ranges expenses even

the expect through pro for we $X.X billion. process XXXX, preliminarily range forma our of $X.X full still to need we an budget to While budgeting billion go all-in in capital

capital capital long-term Beyond with synergies million billion the $X.X spend essentially forma annum forma long-term price forecast in our XXXX, pro line inclusive cumulative period. be should upstream in $XX.X our $X.X Equitrans to business. out capital laid XXXX gas spending of from capital synergies, of EQT flow to from capturing of XXXX. XXXX acquisition an over we spending this before capturing approximately roughly way, And per strip we At free pricing, upside the billion upside to $XXX with efficiency announcement. Said of this another annual per annual $X.XX pro and Equitrans accruing cash recent we structural speaks improvements to ranging which billion forecast MMBtu stand-alone average prior the in is

I'll gas would this our Even period, flow negative, flow, commodity positioned of remarks. concluding of north cumulative bulk over cash over how still EQT is price X-year in uniquely all power of assuming some $X.XX with while Toby cycle. And low-cost that, our free underscoring cash and to differentiated the shareholder the neutral the create billion structure a for or value call highlighting peers natural to EQT of parts the will $X back generate turn be of

Toby Rice

Jeremy. Thanks, X-year anniversary work, marks takeover. the EQT the but blink In July the closing, of XX in has passed of been by eye. a of an It lifetime

been have recognized accomplished this We an into company management transforming on together, struggling reflecting as a best-in-class recently a assets has what it great taking producer industry and team leader. with

day free per operational grown at have operationally, cash and improvements. flow increased prepared X generation of executing sheet share M&A our completions X.X gas Bcfe cash per step credit drive Xx, peer-leading and change we a per transformed per our to by ratings. Today, improvements opportunities operational We Btu over XX% high EQT Bcfe by have identified for to structure level through thoughtful prices we're have in Xx reattained and midstream another deals. Normalized in set investment-grade increased cash free and with yet flow free and nearly balance and natural from the we per and $X Btu have $X production flow day cost a million accretive from million to

are the financially into and to as pace plan fast energy EQT a strategically at executing we continue start and we an group bank of industry-leading executing future. are transform support company our to And shareholders. from the our with We deleveraging robust

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

Operator

line Instructions] Your JPMorgan. question Jayaram comes Arun from of [Operator from the first

Arun Jayaram

as And the I are wondering divestiture My supportive is interest transaction. maybe you for you're Could start marker if -- the sales market still of do some believe was in you of questions your level of asset Northeast. process the kind program. the or remaining Equinor you the to you could similar the sell in XX%. with non-op gauge of the the regarding Jeremy, seeing valuation a got that or

Jeremy Knop

really seeing interest. we're Yes, good

think a actually first would really in see around. we of -- a I space a characterize as interest, that I set it didn't international the of new the names from lot the renewed process time

encouraging that's So great of lot really been a engagement.

feeling hope I by our remains towards I And year-end. positive. that up that So think to process really get wrapped

Arun Jayaram

is, assets. structure part then my a parent And Do your kind debt is approval? of through partner next come And you plan to could do and process? on plan EQT as to those terms gross you the at pursue level the a what carving but there just deleveraging a program? follow-up to that's that process type of that phase to highlighted of Is out go of you types regulated selling -- interest just question minority a Great. up of some in ROFR of you've of those your assets MVP, need do reduce you you in things

Jeremy Knop

Yes. bypasses we drag that most Taking the like remarks, get of a that. in typically hung considerations like outlined up with sort deal and the rights, prepared of actually rights you the route tag might in

it I to a really an And quality, better, investment, down. of simplifies the back which assets of provides it. more capital really cost drives it higher think set diverse So

a lot already, even of pre-closing. of with we we've of on look, time, a lot So this a parties lot had discussions spent

getting It data thick And so might into hope there's organized early bleed so process up wrapped chance I end. couple but with gets we're that I well. up we really as real year year as that ago, all And as off. closing in this days of kick QX, happening that of be a get think the can able that soon wrapped to a to

Operator

of from comes Wolfe Leggate question from line next Your the Doug Research.

Douglas George Blyth Leggate

X it's years, I X realize quick flown Toby, questions, quite by. has got hope. didn't indeed Congratulations. I've I been

years that X if alongside a is it What steady is we're to back state out debottlenecking, budget over you figure program? next the related you capital so is of with drilling to first the that roll and level or one The to you've results associated compression the like, much on trying spending the how had. for does get your of that basically spending when X

Toby Rice

question. Yes, Doug, for thanks the

we the as think our this systems. On be hundred few higher just to We optimization referred compression, is across million this about going a level, dollars. pressure system

of Now there. the time some that, timing lead there's

those to as going able XX of as the years really exciting just months that And on of as encouraging and to possible. the results showed see. But type start our possible. we'd started over being cushion lead probably in as that's and now, we we quickly to we said, maybe to included determining that 'XX some we returns -- So be that have pace get could is couple that we right today projects from span accelerate showed compression that -- uplift quickly budget now, pilots the the really to will some about like that a have

Jeremy Knop

back, way. Yes, Doug, welcome the by

proxy level installed. in look compression out we've that is recent our couple studies But from which projects on to a that a examples compression, pad level. your $X mean are lot, are we -- Xx have of centralize superior what compression show. examples a going pad to in slide some impact new at we've you just If at you're we case on much these deck put even broader put what those perfect These put the generating gas, that X.Xx these to money last I to night, it's a not

all then on just see impact that PDP going as existing to beyond our you're an And again, it's development well. for uplifting than a So of to base that. on centralized production going higher the be future basis,

a the on an take space this years not return more. rate is superior spend even to as amount is we any across to When So really on it that well compression Toby basis, annual drill. mitigated much. of could of probably you said, And out it's couple the

we we kind you between excludes what while doing as can the to then term And year But if lower a $X.X XXXX look given synergies spending in annual guidance below million investor and that term, $XXX range delta range call we X see synergies. billion before of think lower in much of we reminder, uplift show number that right $X.X sort that the at that that, in long of long our about difference reverting we're that of as Slide a long might to presentation, for that that billion a term. call upside the you

we're basis. I level synergy say a pad-level from of seeing on what less uplift that already would a So upside than even compression assumed assumption

that we I higher see buy as to So number projects is benefits fruition. probably of didn't think these as the come

Douglas George Blyth Leggate

So guys, but it. the to I'm for simplify just follow-up, sorry

So be under would with it could be when your the get rate synergies, that point run you a capital to billion? that stretch say to $X

Toby Rice

way That's Doug. correct. That's simple a it, to put

Douglas George Blyth Leggate

regulated Okay. That's is is what the makes This ownership it. sense? right Jeremy. any quick assets I'm fairway. trying is to hopefully, a one, of get My your follow-up down Why

Jeremy Knop

about structure here. Yes, question the kind that's a thought we great actually. It's we've something of debated as internally right

integral really regulated. Maintaining of then start the with system. so There managing a as system. appropriately. cross gathering are systems header being pipes that kind storage distance lines that those on regulated regulated and control like systems to the appropriate single then able of is extension if that lot the the interconnection transmission for really when you And segment the into those it state you expansions works big Equitrans, like about and pipeline think longer an is a assets, MVP, together pressures pressure So of to are right all maintaining pipes level, gathering of at that things an flowing specifically, a they

that's all is think it. sure XX make a evacuate still and want always in own juncture, to last expansion done talked sense MVP, that maintain to quarter, makes to want Whether I to years ownership completed, now, gas do premium something of expansion think economic that on we project, about We want the Southeast. is we get a more as the project that as to then we we'll of think X But the And from like out we and expansion. something once Appalachia operatorship I highly think about get this That's to MVP, it end evaluate. that market something happens. or at we

Toby Rice

I'd Doug, of our high pick creating nickel, a the is is dime is to drive footprint. value very can what size be at going expand operating the And EQT every at the penny, operational footprint. the we're culture up within that here a we doing Yes, able creation to that level, say one of ways to

And system of those bit of going easier some it a to element those so identify a having commercial and an for transmissions to little is make bigger to opportunities. us there is capture

that well. factor we that's as another So heads just in of have our the back

Douglas George Blyth Leggate

very guess, clear. I that's

Operator

from line Goldman of comes Sachs. question the next Neil Your from Mehta

Neil Mehta

on Yes. on closing macro the transaction Two here. questions Congratulations team. the

First hedging and your acquisition decisions near that term. as talked into you're you long forward that you the talk just And the to your advantage play hedging market E-Train about? of -- how does take strategy want you is both volatile through going

Jeremy Knop

of Yes, all kind sheet that focused on derisking, deleveraging I'll balance X pieces. break Neil, it through call into term, XXXX. Near it's really

the a our XXXX, we Beyond about just structural provides did view think for is but unlocks it I hedge deal only it, value our been not business. we've talking the really

have to financial need protect. to beyond leverage really to protect. We have operating the leverage hedge that. So won't We won't

at hedge we have so really to And all. don't

volatility up strategically, we're just will be do think opportunistic, we I the max don't we outlook to it bearish the probably set the XX% you've more it for and as But goal around small have more gas to already than where nature, towards otherwise, we even in way much about I seeing low this if really this what think see year, we think the ourselves trying of now from that some over back theme to downside. have because prices play $X.XX is is $X, hedge if upside best value it do, $X you've right? capture but level as So rebound out. I as And reason. But be will trade hedge. pretty get to go seen on so you're to seen not

the long-term trying And so plan how that's to and really position. we're

Neil Mehta

of major some demand talk job spare you pushout then digest through the Golden capacity through we're just you've that which because projects data views trickier and us it's a And great just power compelling too. you've in Pass like helpful. around That's is long-term a and a might walking XXXX very story. got -- centers the system, your be trying growth, some to little we agree, can done

do what as you about And about as how guys think markers? think the So outlook watching supply/demand we XXXX? gas are you for

Jeremy Knop

Yes.

think I into key year-end thing production. going we're So is probably watching the

number hovering that be a other healthy near think I a could volume, this watching we number. around are I again, if XXX, if on until surge producers lot of a it's winter to a for because turn you But headwind think that price. see

the XXXX. I impact the at of Pass would think for out most of I XXXX know has been team Golden first service half pushed Goldman into that date. and

a think drive I back seems process that But forward. pulled we've with updates going key to Zachry with it get of of bankruptcy that Holdings, week side on that seen couple LNG these some this of that. even the the like are might factors really

of beyond step see I that, needle a those it LNG. going that much production, any I story necessarily sort to XXXX story in factors. don't, is X really nearly change as are as the benefits So see of move of a and

Operator

the line Scott RBC. from of question comes from Hanold Your next

Scott Hanold

now any seen some increase of related some on in the the the market is seeing to that's is flowing? the moves basin? Appalachian that, activity given extraction that, MVP And you dynamics that Southeast the online. in of I'm Appalachian there now of in Question the you're producers to any curious, obviously of have kind volumes just by change

Jeremy Knop

Yes.

really is we've that by. actually been this surprised So something exciting pleasantly really

any side, production not the we on have seen reaction. guess I So

we has though, gas, modeled selling premium market, where a model sort we're So our with it the XXX Station us, that to surprised in flat, What end sort we've around consistent that be to way pricing of we is we $X.XX pricing. have of mark production -- continues that expectations. MX

seen have what We assumed. an to average pricing have on higher than $X.XX so recently above, significantly we $X.XX

of been there where time above MX. well $X of And it's have periods north

by and how we've And some gas it I already price for really been show impacted early Transco. marker. on been an that Part mid-summer awesome, so I has of been But think encouraged sign I that taking. a think really maintenance by premium think, much being period, seeing up, demand has is that market

early. XXX be for than a well and market. better think Station new still There's maybe I see market could put that even out that in it's have certainly benefit so might winter as forecasted. But we the price periods And better what Platts we

else direction to everybody like positive I watching are that. that we're how think signs pointing on see to really But develops. So all a

Toby Rice

other one Scott, Yes. thing about at EQT. talk on I'd you just the from EURs look take where a have Slide X, improving we

over to are purely be sign is, just time, -- preserve to their operators grow against just or If EURs the inventory come of at look and depletion. could of you're core accelerate there some sort pressure there the willingness the inventory the and read-through at you out there that's a The some and down peers seeing go where inventory. of

continue thing and this background. of high-quality there's another maintenance happening only mode, staying couple And we've like but that's in a the to supply inventory operators EQT the in and vocal really market. that pretty have So that's been

back keep that's at... So think here to backdrop I an in important the just

Scott Hanold

I appreciate that.

Sounds good.

you've time as As from being what focused that discuss And producer, are the issues things are to never to really biggest for my the started are time. do upcoming follow-up, it think on? Like gas relates Toby, look, you the been a politics what you election? to

Toby Rice

the is align politics politics products. Well, that of which American our we I'd every our our with say use customers,

a the where of hydraulic ironic are So understanding facts. implication fought require way a try and just been country an fingers away, XX%. There one talking the volume fracking. fracturing of game. the lot sort energy. hydraulic think some it's people is administration, smarter in about see in biased period That in I mean United ignore safe we'd Americans, about relates think and and that, create thing banning as in a fracturing. for politicians, I is the set the talking production don't of Obama and going States, and that and this Listen, And time the XX% we evaporate EPA to really of unintended I out energy get statements damaging oil we too under to completely we some of or clips accountable the industry whole this as to saying going are cannot other, impacts. would the snap report it as this on country operator, put America an only years, the be That's are the price on in for gas wells and the is it about an fracturing and hydraulic you as to studied XX your ban these us, which leaders for cause of this. Over really goes time production science things. And decades terrible drop type this to decisions, powerhouse times of lead a is we're

putting see at for but would list of for encouraged would skyrocket. right happening Our decline, energy Americans, down, bad and part constructive need key tough And that to our that's take voters that really of in go sure actually very it's to issue price the why but our EQT seriously. production are corporate need the are that's that at we we're it'd still things the here that prices, for to as And place. policies XX% the all would the be it, we make is world, crazy be a call is and in American it something politicians with top this

Scott Hanold

the Appreciate color.

Operator

line Your from of next from comes question Silverstein UBS. Josh the

Joshua Silverstein

there Should trying Just bit you'd run trajectory natural rate keep a half the helpful. of be the outlook about of think Do the gas little probably think on with the coming the for forward we volumes. volumes you back? the about clarity going curtailed? curtailments kind next So more I'm maybe would second to think year.

Jeremy Knop

we think end we had in it's remarks, X,XXX above end. business this not commented curtailed the I of high the year, the I was originally maintenance our just on would range, Josh, our we been in mode. running prepared have in view, mode. high mean that Yes, I We're think our that Bcfe if maintenance

would expect looking level into that's next I look So you at. volume year, the

the and from that. some of maintenance the mode our only is transaction we're the difference impacts steady But of think that, aside cadence. from a divestment running I there in interest non-op

Joshua Silverstein

it. Got

maybe So like is or there? around so a around cadence that kind XXX kind quarterly of of

Jeremy Knop

XXX, depending to it, XXX on the quarter. call Yes,

Joshua Silverstein

it. Got Right.

Okay.

growth into still relative So got it. to the year next half, back

it be where you to be the just flow kind is on that pro I'm sales about be are to are the Okay. when holds the you XX% given cash number the pro lower, you guys at, would looking flow even further mentioned E-Train, cash forma minority And profile, to would transaction of reduce actually want forma And pro want if wondering if with you midstream. the would lower. first then forma? you guys be debt still announced of that

Jeremy Knop

down little factored of really mean, But what multiple we kind forma value it at Yes. leverage at. to into It some drop should pro all down of would that, how that you already. else look comes sell that's equal, a yes, I bit, and but if sell we

our how to The gas only that obviously is impact really prices. thing too, think other year it think we that's don't I plans. impacts next going about So

that lot, percent a up go midstream that with or as well. decline prices if So to of is going oscillate

Operator

of question Fargo. Wells comes line from Roger Your from the next Read

Roger Read

XX. a take Slide look, to like I'd

have deleveraging flow through 'XX expectations 'XX. and organic You cash the free the

you're the side not going on in the future. to Just hedging curious, clearly, aggressive be

gets gas out numbers the the on that prices, what's lay underlying us of there? assumption volumes So sort gas you

Jeremy Knop

Yes.

sales at pricing reason also Page we on -- that's So really XX we're on But the strip why based then numbers internal the today. are assumptions where our and is look, asset hedging. look around that

cash look of you If flow. and end now free at of cash really flow, free you're billion XXXX over just at gas between generating organic still prices, the $X.XX $X

whatever if go things the still any out, really in a if about more that wrong we assumption. I reason, that on we take to macro good laid just really, for lean conservative feel we've think case So that,

call end That I'd XXXX. initial of target, we initial by of that the $X.X have specific level. billion the target target our

billion the to that outlined safety of Depending the But that take like margin we to invest That why are for that $X a depending where in oscillate could we within else where agencies in cash. to time of would billion us. that's we think level. rating opportunities term, on That's about talked lower. I $X cycle. the longer

to so we ample so lot if in the stock step ourselves, position in intentionally very volatility in have there countercyclically. to our that we're a want also liquidity stock, of landscape that is back macro buy we and look, positioned And

lot have you you don't level, can't down pay don't liquidity, below debt you a of that. a If mid-cycle if do

$X.X to So $X by billion also to and position tee of revolver, take those and billion just of example another we a up expanded advantage to volatility size. that, trying for That's that opportunities. ourselves

hand we hand So in ourselves years. we're this position value capital to kind reallocate as is together plays with in trying of maximize all coming to how the

Roger Read

I appreciate. That's very helpful.

Operator

the Your from of TD line Deckelbaum next Cowen. from comes David question

David Deckelbaum

the capital the context the to wanted I side. you've on in progression just go of seen upstream to that benefits the back just

highlighted, you XX%. in times moderate much reduction do achievements obviously, the next think And cycle down to how I guess spend 'XX that, CapEx the is in getting on How in just your I reflected impressive like versus conjunction that in much you year? of completions with is expect 'XX? upstream

Toby Rice

Yes.

now. completion those We into baked efficiencies have amount plan our of a small 'XX right

second change the a efficiencies, want bit back see there. of step time. the of to the newness question? we continue in the little completion that And to part Given in add But we'll more

David Deckelbaum

just on $X.X thinking billion year-over-year, you're you in that $X.X think about what just spending versus billion 'XX to year? was in this if upstream I

Toby Rice

lines, is pre E-Train. say, pretty had to those before projects compression start I'd down. months we slopes would going hitting impacts I start to similar upstream spending once the we the going profile say the the ballpark Yes, say, XX reduced think what is CapEx front of to really which that be to I'd that XX

efficiencies the pricing driven So by the seeing see. operating balancing now base is spending everything that we you're upstream really service in just and

Jeremy Knop

We've all I we capital in, in modeling we've a the baked those given way the on think perspective, in like from but high haven't baked guidance it the We've level. this benefits. cost capital in about at costs, numbers. David, baked

seeing level to we're the We haven't benefits that right now. the baked actually them really completion nearly

synergies, do, the in more baked think haven't We grows. that, is of million we that work probably though $XXX bias upside I the number even our

guidance. we on actually have there's that there given want our still we to and so results think still but that table to early I what the a achieve, hopeful we before bake beyond it's innings see we're definitive out lot into So definitive more

David Deckelbaum

guess installed relative $X.X that. down fair to say continuing upstream midpoint, Just bringing billion budget just reflecting long-term it compression $X.X guidance 'XX? billion is that billion, that's from the to that of of to I the to on the $X.X in that sort at billion benefits $X.X the

Toby Rice

on No. the really the We'd say behind that spend $X.X billion billion us. reflects is compression to $X.X

As -- $XXX cost would in $X.X that a result we earlier reductions mentioned billion billion be of the as spending lower. call, that that would of million annual reduce to $X.X

and think continue see I then the going quantify this to to just in you we're that So could future. come down

David Deckelbaum

it guys. Appreciate

Operator

line comes from next MacCurdy Energy from of the question Your Partners. Kevin Pickering

Kevin MacCurdy

the next And We good question that first is, include appreciate EBITDA X my included and questions adjusted the distributions few I year? more rate details a I kind Slide all on the just just in commentary for XXXX for on MVP that? annualizing clarifying the it's have further offered run a your you've guess of guidance slide. Q&A. number the XQ in does

Jeremy Knop

the distributions does that's equity number the include That actually -- EBITDA MVP more method going because investment. number of be to not

forward. And we go that the what So part second your question again? we'll on as of provide was clarity

Kevin MacCurdy

just to for guidance a it's annualize for quarter if And good distribution MVP estimate XXXX. the fourth

Jeremy Knop

MVP Yes, I it for specifically. is

skewing are cost basis, company earlier the a think our higher. impact curtailments whole remarks unit was the main I on what in noted we metrics that per

were skew decent So metrics, why should out to proxy, per assuming curtailments. I unit those which otherwise, I as separately. if a lower, it broke no look we should is you XXXX, think it pretty at But be look think you into

Kevin MacCurdy

this you Or free production And shut-in shut-ins What number. risk mentioned about your structure cost using next built lower Great. that year? of does was that flow? And have risk? outlook coming in maintenance a back of then of how kind terms is that thought you the reduce the cash

Jeremy Knop

proactively market. We in that's like basis, the a ahead things taking year like to Yes. shut-ins, don't response more of on

to in evolves. need getting more I that that's the would 'XX think there thesis take were think derailed production just So for reason, a if 'XX, some market of that I time something sort But below, say was quarterly as real LNG the and we got address number at. annualized you did whole would curtail we that

Kevin MacCurdy

Great. I And detail. appreciate the good a congratulations on quarter.

Operator

next Roberts of TPH. Your the from comes Jacob from question line

Jacob Roberts

elasticity in relative on this curtailments thinking there the that staying Maybe of be with in how what between MVP back is there's any trying a we is in if guide X should into we're to baked of periods, of difference about the being the online? topic, supply half year And the the think what EQT's perhaps we to about saw first change half?

Jeremy Knop

that impacts MVP at think don't all. I No,

MVCs I maintain midstream wholly have away. I been integrated think where effectively having do we owned think full those flexibility.

had flexibility tremendous felt I really I think past more more, where a in that guess, like yes, debt pricing. be amount we we're does give us curtailments obligation -- service we than big pursue year we more having the otherwise provider. But little of maybe to governed the a to I half midstream our think had pay back reaction a the is to in this more just to by

of We midstream. earlier haven't to year the outlined we look changed this sort would where we curtail because we levels the pricing own just

think sort floor I still we of level. threshold have that

to earning capital, it's higher be on well maintain we're above got CapEx, just cost, pricing returns shareholder not not focused on cash that. just realized than So

So proactively that's why that. we're guide to to trying

Jacob Roberts

sites you've X, Got it. Slide Quick second one, the highlighted. X on

speak? of Can site you see -- this. that us -- the kind of opportunities so touches, sense which thousands think how wells across to give you I implement of you field mentioned a to many to each

Toby Rice

that Each say look just has on based would amount a Well, a of that. dozen gathering got of that the level, wells it. that, sort over the that vintage way hydraulically is We've be high pressure drive of feed are the that that would pressures. those there, at we say connected. that's think operating volume we the one very I going through at just of I about all wouldn't a systems system

layer is pressures will program going also our where as that in well. to development influence We go, and

will So sort XXX, the look what we look that be uplift like. pressures product and lower then the what would run exercise -- if of like XXX-psi system sorry, what system compression, and have is the XXX, those through forecasting the productivity teams assessing pressures through of

focused I'd at the would evolution to I this for look as exciting the pretty at a it's is being on efficiencies So we the really years been say, midstream efficient on a have site the business, large made really footprint we're side. to this the improvements drilling that on really of field-wide wells the more efforts X the last going be production and whole, say opportunity actual more us And the in completing on now are and But focused EQT. optimizing improvements. on

Jacob Roberts

guys. time the Great. Appreciate

Operator

question Your Stephens. Scialla of comes from next the from line Michael

Michael Scialla

Just premium like, there a is you though of frame sounds I you're you're speaking X parts expansion in right road, basin. ask to It down seeing there years on to the hefty the MVP. want maybe time heard pricing getting the the pretty other of even

the could you just the provide color timing expansion. that right I on don't of is explore just to wanted now? you So there that there that Or Is more think timing. demand any because

Jeremy Knop

Yes, years not I'm X came sure the where from.

think I we're as to expansion actually. excited that soon possible, as pursue

probably that, online thing only I of that's would sure slide would out that soon with -- to us $XXX come all just I'd million that it get in. given cause built have as that to as any on say net that longer-term cost in expansion the to million think that incentivized take EQT, our cushion to we beyond project deck, to Transco there's say today, the guidance we that are think we a I get gas. that just possible. And $XXX would making again, net built. that to ample was time And built But is that the guidance delay I an

despite that expansion term to the number really wouldn't to So that timing change I decide that at pursue we longer project. expect CapEx all,

knocked that remains priority So list something that's to get our on out. high

Michael Scialla

Okay. Great.

open there Sorry, is that Have season I the on yet? that. down still misheard started you road? you Or

Jeremy Knop

I mean days closed ago. just No. we X

it's something think exploring to quick going little we're I that So to but start it's quickly. a that, do

Michael Scialla

currently Can curtailments. color be there? that much say ask half? provide Got the all you're can third to second in I you Is Bcf any wanted the you. quarter? that how curtailing you assumed Or to more in on in XX just

Jeremy Knop

probably we those I it's would money make right is in response gas, we and our curtailments -- obviously. in If market. But wouldn't curtail assumption selling anything September that the of to place now look, can October. take the majority

our a on over quite We the do, it's over Bcf given day a volumes have a that even product we're that's to depending X optimize value weather, a we week, not level. creation very to optimizing dynamic up do. maybe days, realized where past giving what basis, can't make not sure pricing on for we price depending make curtailed some on money. weekend, on But a and to away we'll just And continue

Operator

comes line question next from Tuohy Our of the Brothers. Parks Noel from

Noel Parks

I are of big a East. offsetting to couple. the storage, was do seasonality impact you a MVP you are offset we of the in gas on really this some you regional going in, think feeds at talked especially point. where as effect on say thoughts had of gas about a LNG pricing. is the Just wondering, as we And bit where Just driver eventually that? it in

Jeremy Knop

expect natural to has always demand continue source I for mean, I Yes. and biggest of been, the winter look, gas.

I think exactly to little increase so world see power helps X market. probably grows summertime as develops. quickly in that the a in it's and of kind see peaks demand early think where well, how to I a you too say But I'd love generation that the

we on a in top the an peak that summer past But happening of on means over now day at say, from just winter. side. top think Bcf are increase away mean direction what's and fact it of lot will demand decade, growth at what just if you've in moving of for have that load of It lot I about And a you time. retirements. a I that, slides outlined last with our natural you're seasonality. had coal in you power Now from power growth gas that doesn't the the demand do XX peak look we of quarter, demand getting on and

bit. which out in middle just think somewhat nature So seasonally And of that's to going a also of little the that, send driven. I could be then the LNG evolve

amplify that think, I seasonality. only

Noel Parks

overall Both sort gas an a Got And micro of as the demand. security outlook level, you grid thoughts industrial just keeps more I terms demand level had a in increasing? of and sort resiliency out region wondered region of it. in on power just on in if from for of taking greater of energy role

Jeremy Knop

manufacturing look, of sides seems I to the going are theme mean, -- aisle of is think of Yes. like continue. very It I the the that. reshoring both supportive

the a be of think tailwind out that. movement manufacturing will of I Asia deglobalization for sort to

has policy a energy upwards growing we into That think and by end of I decade, day. There maybe is are I for in. there's baked slowly think wouldn't recent pretty something a at that. movers Appalachia that you is steady, beauty much. prices would made that big our the baked But to of that continue. if -- a pretty model up that, a the should comments XX about predictable. Europe it's fundamentals it's I earlier catalyst tailwind to in that of really it been of skew history Bcf and of if should needle trend sort component think on flat growing, industrial I I any is all But say that demand look XX, And you that say the is

Toby Rice

way Yes. closer that that to one gas of to between going country. we a to of the world in of only And the parts And natural of That's big their even where protect the can facility level, I'd in to is is Energy continue drive to natural going their energy say to around supply more we Security going their business. mean volatility the that theme at things is of drive going be a is & products. gas very reduce think is that for source produced high in-basin just and and energy. the see number volatility consumers source this and manufacturing demand they to protect this

Operator

will Rice back for I session. answer and over turn question our to the remarks. now call concludes Toby That closing

Toby Rice

forward. was transformative Directors XX% being and It for just of the full amazing EQT. I that vote for of that shareholder brought want all It guiding EQT we've this our give all through that shareholders. a progress at given put X-year in a amazing today. that being assets, going the new voted you without in potential supporting this transaction reiterate you to of to to us at to E-Train realize transformation. hard have voted -- everybody, platform about was excited and us us a with continue really Board you has everybody opportunity possible with this to we're here And working really the would With been momentum anniversary, been Thanks, you've this a here that made team XX% the not management this

Operator

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

may now disconnect. You

EQT (EQT) 24 Jul 242024 Q2 Earnings call transcript