PITTSBURGH, July 22,
2024 /PRNewswire/ -- EQT Corporation (NYSE: EQT)
today announced it has closed its acquisition of Equitrans
Midstream Corporation (Equitrans).
The merger of EQT and Equitrans creates America's only
large-scale, vertically integrated natural gas business. The
combined company is projected to have an unlevered NYMEX free cash
flow breakeven1 price of approximately $2.00 per MMBtu, which is at the low end of the
North American cost curve and ensures robust free cash flow
generation through all parts of the commodity cycle.
EQT has identified more than $425
million of annual synergies associated with the combination,
which upon realization could drive even further downside to EQT's
long-term free cash flow breakeven price.
The integration of Equitrans' midstream assets immediately
improves the economics of EQT's approximately 4,000 drilling
locations, unlocking unrivaled terminal value at a time when demand
for natural gas is inflecting both domestically and abroad.
Toby Z. Rice, President and CEO
of EQT, said, "We are excited to complete this highly strategic
transaction significantly ahead of our original timeline, and
welcome both Equitrans employees and shareholders to EQT. The early
close resulted in nearly $150 million
of savings relative to our original forecast and brings forward our
de-leveraging and synergy capture timetables."
Rice continued, "We are wasting no time unleashing our
integration team, which has a successful track record of rapidly
integrating three large-scale acquisitions over the past several
years, to efficiently combine these organizations. This combination
leaves EQT in a tremendously advantaged position to compete and win
as we enter the global era of natural gas."
In conjunction with the closing, and as previously announced
under the terms of the merger agreement, three former Equitrans
directors, Vicky A. Bailey,
Thomas F. Karam, and Robert F. Vagt, have joined the EQT Board of
Directors, effective immediately.
Advisors
Guggenheim Securities, LLC acted as lead
financial advisor and RBC Capital Markets, LLC acted as a financial
advisor to EQT. Kirkland & Ellis LLP served as EQT's legal
counsel on the transaction. Barclays and Citi served as financial
advisors to Equitrans, and Latham & Watkins LLP served as legal
counsel to Equitrans.
Investor Contact:
Cameron
Horwitz
Managing Director, Investor Relations & Strategy
412.395.2555
Cameron.Horwitz@eqt.com
Media Contact:
Kelly
Kimberly
FGS Global
713.822.7538
EQT@fgsglobal.com
About EQT Corporation
EQT Corporation is a leading
independent natural gas production company with operations focused
in the Appalachian Basin. We are dedicated to responsibly
developing our world-class asset base and being the operator of
choice for our stakeholders. By leveraging a culture that
prioritizes operational efficiency, technology and sustainability,
we seek to continuously improve the way we produce environmentally
responsible, reliable and low-cost energy. We have a longstanding
commitment to the safety of our employees, contractors, and
communities, and to the reduction of our overall environmental
footprint. Our values are evident in the way we operate and in how
we interact each day – trust, teamwork, heart, and evolution are at
the center of all we do. To learn more, visit eqt.com.
Cautionary Statements Regarding Forward-Looking
Statements
This news release contains certain
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. Statements that do not relate
strictly to historical or current facts are forward-looking.
Without limiting the generality of the foregoing, forward-looking
statements contained in this news release specifically include the
expectations of plans, strategies, objectives and growth and
anticipated financial and operational performance of EQT
Corporation and its subsidiaries (collectively, the Company),
including the Company's ability to achieve the intended
operational, financial and strategic benefits from its acquisition
of Equitrans, the Company's ability to integrate the operations of
Equitrans in a successful manner and in the expected time period,
the combined company's projected unlevered NYMEX free cash flow
breakeven price and projected synergies.
The forward-looking statements included in this news release
involve risks and uncertainties that could cause actual results to
differ materially from projected results. Accordingly, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. The Company has based these
forward-looking statements on current expectations and assumptions
about future events, taking into account all information currently
known by the Company. While the Company considers these
expectations and assumptions to be reasonable, they are inherently
subject to significant business, economic, competitive, regulatory
and other risks and uncertainties, many of which are difficult to
predict and beyond the Company's control. These risks and
uncertainties include, but are not limited to, volatility of
commodity prices; the costs and results of drilling and operations;
uncertainties about estimates of reserves, identification of
drilling locations and the ability to add proved reserves in the
future; the assumptions underlying production forecasts; the
quality of technical data; the Company's ability to appropriately
allocate capital and other resources among its strategic
opportunities; access to and cost of capital, including as a result
of rising interest rates, inflation and other economic
uncertainties; the Company's hedging and other financial contracts;
inherent hazards and risks normally incidental to drilling for,
producing, transporting and storing natural gas, NGLs and oil;
cybersecurity risks and acts of sabotage; availability and cost of
drilling rigs, completion services, equipment, supplies, personnel,
oilfield services and sand and water required to execute the
Company's exploration and development plans, including as a result
of supply chain and inflationary pressures; risks associated with
operating primarily in the Appalachian Basin and obtaining a
substantial amount of the Company's midstream services from a
single provider; the ability to obtain environmental and other
permits and the timing thereof; government regulation or action,
including regulations pertaining to methane and other greenhouse
gas emissions; negative public perception of the fossil fuels
industry; increased consumer demand for alternatives to natural
gas; environmental and weather risks, including the possible
impacts of climate change; the Company's ability to integrate the
Equitrans' operations and assets in a successful manner and in the
expected time period and the possibility that any of the
anticipated benefits and projected synergies of such acquisition
will not be realized or will not be realized within the expected
time period; and disruptions to the Company's business due to
acquisitions, divestitures and other strategic transactions. These
and other risks are described under the "Risk Factors" section in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2023, the "Risk Factors"
section included in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31,
2024, and other documents the Company files from time to
time with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on
which such statement is made, and, except as required by law, the
Company does not intend to correct or update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Non-GAAP Disclosures
Adjusted Operating Cash Flow, Free Cash Flow and Unlevered Free
Cash Flow
Adjusted operating cash flow is defined as net cash provided by
operating activities less changes in other assets and liabilities.
Free cash flow is defined as adjusted operating cash flow less
accrual-based capital expenditures, excluding capital expenditures
attributable to noncontrolling interests. Unlevered free cash flow
is defined as free cash flow, less interest expense. Adjusted
operating cash flow, free cash flow and unlevered free cash flow
are non-GAAP supplemental financial measures the Company's
management believes provide useful information to investors
regarding the Company's liquidity, including the Company's ability
to generate cash flow in excess of its capital requirements and
return cash to shareholders.
The Company has not provided projected net cash provided by
operating activities or reconciliations of projected adjusted
operating cash flow, free cash flow and unlevered free cash flow to
projected net cash provided by operating activities, the most
comparable financial measure calculated in accordance with GAAP.
The Company is unable to project net cash provided by operating
activities for any future period because this metric includes
the impact of changes in operating assets and liabilities
related to the timing of cash receipts and disbursements that may
not relate to the period in which the operating activities
occurred. The Company is unable to project these timing differences
with any reasonable degree of accuracy without unreasonable efforts
such as predicting the timing of its payments and its customers'
payments, with accuracy to a specific day, months in advance.
Furthermore, the Company
does not provide guidance with respect to its average realized
price, among other items, that impact reconciling items between net
cash provided by operating activities and adjusted operating cash
flow and free cash flow, as applicable. Natural gas prices are
volatile and out of the Company's control, and the timing of
transactions and the income tax effects of future transactions and
other items are difficult to accurately predict. Therefore, the
Company is unable to provide projected net cash provided by
operating activities, or the related reconciliations of projected
adjusted operating cash flow free cash flow and unlevered free cash
flow to projected net cash provided by operating activities,
without unreasonable effort.
1Unlevered NYMEX free cash flow breakeven is defined
as the average Henry Hub price needed to generate positive
unlevered free cash flow, a non-GAAP financial measure. See the
Non-GAAP Disclosures section of this news release for the
definition of, and other important information regarding, this
non-GAAP financial measure.
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SOURCE EQT Corporation (EQT-IR)