Second Quarter Sales Volumes Expected to be at High End of Guidance Range
Operational Efficiencies Expected to Drive Incremental $25 Million Reduction in Annual Capital Expenditures
Incremental Savings Bring Total Annual Cost Savings Identified by EQT’s New Management Team since November 2018 to $175 Million
Capital Expenditure Reductions Raise Expected 2019 to 2023 Cumulative Adjusted Free Cash Flow (a non-GAAP measure)(1) to $3.0 Billion
Delivering Continued Positive Operational Results with Improvements in Rig and Frac Crew Efficiencies
PITTSBURGH–(BUSINESS WIRE)–EQT Corporation (NYSE: EQT) today provided preliminary financial and operational results for the second quarter 2019 and announced additional savings under its Target 10% Initiative.
In the second quarter, EQT continued to drive operational efficiencies, building on the Company’s progress in the prior two quarters. Through May 31, 2019, EQT achieved the following operational results:
- Continued improvements in drilling days / 1,000 feet, which decreased 8% compared to the first quarter 2019.
- Additional efficiencies in frac stages / crew, with a 20% efficiency gain compared to the first quarter 2019.
- Continued advancements in frac plug drill-out days, with a 14% increase in plugs drilled per day compared to the first quarter 2019.
- During the second quarter, the Drilling Team will surpass 3,000,000 feet drilled 100% remotely through the Company’s proprietary real-time operations center. EQT was one of the first U.S. land based operators to drill 100% remotely, demonstrating the Company’s innovative and technology-driven vision and approach to industry changing development.
Using fewer resources to deliver the Company’s targeted 2019 activity levels, EQT expects approximately $25 million of additional annual capital expenditure savings under the Target 10% Initiative. With the recently identified incremental savings, EQT’s new management has identified $175 million in annual cost savings to date and now expects adjusted free cash flow(1) of over $3.0 billion through 2023, increasing to $3.4 billion if Target 10% is fully realized.
Based on the Company’s performance to date, EQT also expects the following financial results for the second quarter 2019:
- Sales volumes at the high end of the Company’s guidance of 355-375 Bcfe;
- Capital expenditures in line with expectations; and
- Adjusted free cash flow(1) improvement of $25 million over the previously provided guidance, excluding the impact of litigation reserves and proxy-related costs.
“We have incredible momentum and are firing on all cylinders at EQT. We are on track to deliver strong financial and operational performance, including second quarter production volumes at the high end of guidance and continued improvements in operating efficiencies,” said Rob McNally, President and Chief Executive Officer. “Importantly, the significant operational improvements we drove through the end of May will enable us to achieve the same level of activity with fewer resources, reducing total 2019 capital expenditures by approximately $25 million.”
“We are delivering on the vast potential of EQT’s world-class asset base, and our operational efficiencies are translating into meaningful costs savings and accelerating free cash flow growth,” said Gary Gould, Chief Operating Officer. “EQT is one of the premier natural gas producers in North America, and we are using advanced technologies, real-time analytics and more efficient processes to deliver results with fewer resources and less capital. Each and every day, EQT is moving closer to becoming the most efficient and lowest-cost operator in our industry.”
(1) Adjusted free cash flow is a non-GAAP financial measure. See the Non-GAAP Disclosures section below for definition and pricing assumptions, including reasons why the Company is unable to provide a projection of its 2019 net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP, to projected adjusted free cash flow.
About EQT Corporation:
EQT Corporation is a natural gas production company with emphasis in the Appalachian Basin and operations throughout Pennsylvania, West Virginia and Ohio. With 130 years of experience and a long-standing history of good corporate citizenship, EQT is the largest producer of natural gas in the United States. As a leader in the use of advanced horizontal drilling technology, EQT is committed to minimizing the impact of drilling-related activities and reducing its overall environmental footprint. Through safe and responsible operations, EQT is helping to meet our nation’s demand for clean-burning energy, while continuing to provide a rewarding workplace and support for activities that enrich the communities where its employees live and work. Visit EQT Corporation at www.EQT.com; and to learn more about EQT’s sustainability efforts, please visit https://csr.eqt.com.
EQT Management speaks to investors from time to time and the analyst presentation for these discussions, which is updated periodically, is available via the Company’s investor relationship website at ir.eqt.com.