EQT Reports Third Quarter 2012 Earnings

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.

Additional Highlights:
  • Increased 2012 production sales volume guidance to 257 Bcfe; and
  • Initiated 2013 production sales volume guidance of 335 Bcfe, a 30% increase over 2012

RESULTS BY BUSINESS

EQT Production

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.

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