EQT Corporation (NYSE:EQT) today announced third quarter 2012 earnings of $31.9 million, or $0.21 per diluted share; compared to third quarter 2011 earnings of $67.6 million, or $0.45 per diluted share, excluding a gain on the sale of the Big Sandy pipeline. Third quarter 2012 earnings were negatively impacted by $0.03 in earnings per diluted share (EPS), from the resale of unused transmission capacity at prices below the contracted price. For the first time, the Company recorded a $4.8 million reduction in net income, or $0.03 in EPS, attributable to non-controlling interests in EQT Midstream Partners, LP. Operating cash flow was $176.2 million in the third quarter 2012, compared to $191.1 million for the third quarter of 2011. Cash flow per share was $1.18 in the third quarter 2012, compared to $1.28 in the third quarter 2011.
EQT’s third quarter 2012 operating income was $85.8 million, compared to third quarter 2011 operating income of $134.8 million, excluding the Big Sandy gain. During the quarter, revenue from production and midstream sales volume growth was more than offset by a $44.3 million increase in depreciation, depletion and amortization expenses; as well as a 23% reduction in average wellhead sales prices to EQT Corporation. The 2011 results excluding the Big Sandy gain are non-GAAP financial measures and are reconciled in the Non-GAAP Disclosures section of this press release.
Highlights for the third quarter 2012 vs. third quarter 2011; and quarter-over-quarter 2012:
- Production sales volumes were 33% higher, and 12.5% sequentially;
- Marcellus production sales volumes were 85% higher, and 27% sequentially;
- Midstream gathered volumes were 30% higher, and 12% sequentially; and
- EQT average wellhead sales price was 23% lower.
RESULTS BY BUSINESS
- Increased 2012 production sales volume guidance to 257 Bcfe; and
- Initiated 2013 production sales volume guidance of 335 Bcfe, a 30% increase over 2012
Driven by drilling in the Marcellus Shale, EQT Production achieved sales volumes of 68.2 Bcfe in the third quarter 2012, which was 33% higher than the third quarter 2011 and 12.5% higher quarter-over-quarter 2012. Sales volumes from the Marcellus averaged 451 MMcfe per day for the third quarter 2012, up from 243 MMcfe per day in the third quarter 2011, an 85% increase. The Company is increasing its full-year 2012 sales volume guidance to 257 Bcfe, 32% higher than 2011, and is initiating preliminary 2013 volume guidance of at least 335 Bcfe, 30% higher than 2012 forecasted volumes. The Company will provide more detailed guidance with the announcement of its 2013 capital budget in December.