Third-party gathering, processing and transmission rates included $0.12 per Mcfe for the second quarter 2012, reducing revenues by $7.1 million due to selling unused capacity on the El Paso 300 line that was not under long-term resale agreements, at prices lower than paid by EQT. Hedge impact included $0.14 per Mcfe for the second quarter 2012, which reduced revenues by $8.2 million due to a financial derivative adjustment applicable to prior periods.

Unit Costs

The Company’s unit costs to produce, gather, process, and transport EQT Production’s produced natural gas were:

  Three Months Ended

June 30,
  Six Months Ended

June 30,
2012   2011 2012   2011
Production segment costs: ($ / Mcfe)
LOE $ 0.19 $ 0.22 $ 0.20 $ 0.20
Production taxes

0.17

*
0.20

0.17

*
0.19
SG&A   0.36   0.30   0.37   0.32
$ 0.72 $ 0.72 $ 0.74 $ 0.71
Midstream segment costs: ($ / Mcfe)
Gathering and transmission $ 0.34 $ 0.34 $ 0.35 $ 0.37
SG&A   0.17   0.17   0.18   0.17
$ 0.51 $ 0.51 $ 0.53 $ 0.54
Total ($ / Mcfe) $ 1.23 $ 1.23 $ 1.27 $ 1.25
 

*Excludes the retroactive PA Impact Fee of $0.01 per Mcfe and $0.06 per Mcfe for the three and six months ended June 30, 2012, respectively, for Marcellus wells spud prior to 2012.

Marcellus Horizontal Well Status (cumulatively since inception)
 

As of6/30/12
 

As of3/31/12
 

As of12/31/11
 

As of9/30/11
 

As of6/30/11
Wells spud 318 281 248 230 194
Wells online 214 186 159 137 119
Wells complete, not online 22 3 22 4 5
Frac stages (spud wells)* 5,411 4,747 3,796 3,530 2,809
Frac stages online 3,247 2,749 2,171 1,873 1,578
Frac stages complete, not online 412 51 331 65 74
 

*Includes planned stages for spud wells that have not yet been hydraulically fractured.

NON-GAAP DISCLOSURES

Adjusted Operating Income, Adjusted Net Income and Adjusted Earnings Per Diluted Share

Adjusted operating income, adjusted net income and adjusted earnings per diluted share are presented because they are important measures used by management to evaluate period-to-period comparisons of earnings trends.

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