PITTSBURGH, April 23, 2024 /PRNewswire/ -- EQT Corporation (NYSE:EQT) today announced financial and operational results for the first quarter of 2024. First Quarter 2024 and Recent Highlights: Net cash provided by operating activities of $1,156 million; generated $402 million of free cash flow(1) and exited the quarter with approximately $650 million of cash on the balance sheet Total sales volume of 534 Bcfe, towards the high-end of guidance adjusted for curtailments, reflecting continued operational efficiency gains and strong well performance Lease operating expenses of $0.10 per Mcfe, below the low-end of guidance despite curtailments, driven by water infrastructure investment benefits Total debt and net debt(1) down from $5.8 billion and $5.7 billion at year-end 2023 to $5.5 billion and $4.9 billion, respectively, at quarter-end; $500 million of cash proceeds to be received from the non-operated asset sale to Equinor set to further strengthen balance sheet Signed second non-binding Heads of Agreement with Texas LNG to upsize liquefaction tolling capacity from 0.5 million tonnes per annum to 2 million tonnes per annum beginning in 2028(2) Announced transformative acquisition of Equitrans Midstream Corporation (Equitrans Midstream), which will create a premier vertically integrated natural gas business that is well positioned to be a globally competitive American energy leader Recent MVP in-service filing with FERC significantly de-risks path to Equitrans Midstream deal consummation and EQT's ability to serve growing power generation demand in the Southeast region Announced agreement with Equinor to sell 40% of EQT's non-operated natural gas assets in Northeast Pennsylvania for total value of more than $1.1 billion, inclusive of expected synergies President and CEO Toby Z. Rice stated, "The strong operational momentum we achieved last year has carried over into 2024, with our drilling team continuing to perform at exceptional levels, and our completions team again setting a new company record for pumping hours in the month of March. We also saw LOE come in below our forecast, as the benefits of our strategic water infrastructure investments are becoming increasingly tangible to shareholders. These factors contributed to free cash flow generation coming in above internal expectations and we exited the quarter in a strong financial position with nearly $650 million of cash on the balance sheet." Rice continued, "We also announced the transformational acquisition of Equitrans Midstream during the first quarter. The combination of EQT and Equitrans Midstream will create America's first large-scale integrated natural gas business, with assets uniquely positioned to create a well-to-watt solution that will power growing baseload demand associated with the data center and artificial intelligence booms that are burgeoning at the doorstep of our asset base. The global power market is at a key inflection point as we embark on a transformational journey into the age of artificial intelligence and EQT's clean, reliable and affordable natural gas will be foundational to meeting growing power needs both domestically and abroad." (1) A non-GAAP financial measure. See the Non-GAAP Disclosures section of this news release for the definition of, and other important information regarding, this non-GAAP financial measure. (2) Final terms remain subject to negotiation of a definitive tolling agreement between the parties thereto. Tolling agreement start up subject to change with facility start up timing. First Quarter 2024 Financial and Operational Performance Three Months Ended March 31, ($ millions, except average realized price and EPS) 2024 2023 Change Total sales volume (Bcfe) 534 459 75 Average realized price ($/Mcfe) $               3.22 $               4.11 $             (0.89) Net income attributable to EQT $                103 $             1,219 $            (1,116) Adjusted net income attributable to EQT (a) $                365 $                669 $              (304) Diluted earnings per share (EPS) $               0.23 $               3.10 $             (2.87) Adjusted EPS (a) $               0.82 $               1.70 $             (0.88) Net income $                103 $             1,219 $            (1,116) Adjusted EBITDA (a) $             1,012 $             1,278 $              (266) Net cash provided by operating activities $             1,156 $             1,663 $              (507) Adjusted operating cash flow (a) $                951 $             1,237 $              (286) Capital expenditures, excluding noncontrolling interests $                549 $                464 $                  85 Free cash flow (a) $                402 $                774 $              (372) (a) 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. Per Unit Operating CostsThe following table presents certain of the Company's production-related operating costs on a per unit basis. Three Months Ended March 31, Per Unit ($/Mcfe) 2024 2023 Gathering $                   0.58 $                   0.67 Transmission 0.32 0.34 Processing 0.13 0.12 Lease operating expense (LOE) 0.10 0.06 Production taxes 0.09 0.04 Selling, general and administrative (SG&A) 0.14 0.11 Total per unit operating costs $                   1.36 $                   1.34 Production depletion $                   0.90 $                   0.83 Gathering expense decreased on a per Mcfe basis for the three months ended March 31, 2024 compared to the same period in 2023 due primarily to the lower gathering cost structure that resulted from the Company's ownership of the gathering assets acquired in the Company's acquisition of Tug Hill and XcL Midstream (the Tug Hill and XcL Midstream Acquisition). Transmission expense decreased on a per Mcfe basis for the three months ended March 31, 2024 compared to the same period in 2023 due primarily to increased sales volume from the assets acquired in the Tug Hill and XcL Midstream Acquisition. LOE increased on a per Mcfe basis for the three months ended March 31, 2024 compared to the same period in 2023 due primarily to increased LOE from the assets acquired in the Tug Hill and XcL Midstream Acquisition. Production taxes increased on a per Mcfe basis for the three months ended March 31, 2024 compared to the same period in 2023 due to increased West Virginia property tax expense from the assets acquired in the Tug Hill and XcL Midstream Acquisition and higher price as well as increased severance tax expense from increased volumes from the assets acquired in the Tug Hill and XcL Midstream Acquisition. SG&A increased on a per Mcfe basis for the three months ended March 31, 2024 compared to the same period in 2023 due primarily to higher personnel costs due to increased workforce headcount. Pending Equitrans Midstream AcquisitionThe Company previously announced its agreement to acquire Equitrans Midstream via a series of integrated mergers with indirect wholly owned subsidiaries of the Company, which, upon effectiveness, would result in each share of Equitrans Midstream common stock issued and outstanding converting into 0.3504 shares of EQT common stock, with cash issued in lieu of fractional shares (the Equitrans Midstream Acquisition). The Equitrans Midstream Acquisition will create a large-scale, integrated natural gas producer with a low-cost structure that provides investors with the best risk-adjusted exposure to natural gas prices. The closing of the Equitrans Midstream Acquisition remains subject to, among other things, the approval of the transaction by shareholders of each of EQT and Equitrans Midstream, and customary regulatory approvals, including the termination or expiration of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. LiquidityAs of March 31, 2024, the Company had no borrowings and $15 million of letters of credit outstanding under its $2.5 billion revolving credit facility. Total liquidity as of March 31, 2024 was $3.1 billion. As of March 31, 2024, total debt and net debt(1) were $5.5 billion and $4.9 billion, respectively, compared to $5.8 billion and $5.7 billion, respectively, as of December 31, 2023. (1) 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. 2024 OutlookThe Company updated its expectation of 2024 total sales volume to 2,100 – 2,200 Bcfe, which assumes 1 Bcf/d of operated production curtailments through May and embeds future curtailment optionality dependent on market conditions. The Company reiterates its maintenance capital expenditures of $1,950 – $2,050 million in 2024 and strategic growth capital expenditures, which target opportunistic, high-return water, midstream and other infrastructure and land opportunities, are expected to total $200 – $300 million in 2024. During the second quarter of 2024, the Company plans to turn-in-line (TIL) 28 – 42 net wells. Total sales volume in the second quarter of 2024 is expected to be 455 – 505 Bcfe, which assumes 1 Bcf/d of operated production curtailments through May and expected non-operated production curtailments and TIL deferrals. All guidance items exclude the impact of the pending Equitrans Midstream Acquisition and non-operated asset transaction with Equinor. 2024 Guidance(a) Production Q2 2024 Full Year 2024 Total sales volume (Bcfe) 455 – 505 2,100 – 2,200 Liquids sales volume, excluding ethane (Mbbl) 3,250 – 3,550 14,550 – 15,350 Ethane sales volume (Mbbl) 1,250 – 1,400 5,250 – 5,650 Total liquids sales volume (Mbbl) 4,500 – 4,950 19,800 – 21,000 Btu uplift (MMBtu/Mcf) 1.050 – 1.060 1.050 – 1.060 Average differential ($/Mcf) ($0.75) – ($0.65) ($0.70) – ($0.50) Resource Counts Top-hole rigs 1 – 2 1 – 2 Horizontal rigs 2 – 3 2 – 3 Frac crews 3 – 4 3 – 4 Per Unit Operating Costs ($/Mcfe) Gathering $0.51 – $0.53 $0.52 – $0.54 Transmission $0.43 – $0.45 $0.42 – $0.44 Processing $0.12 – $0.14 $0.11 – $0.13 LOE $0.14 – $0.16 $0.11 – $0.13 Production taxes $0.08 – $0.10 $0.07 – $0.09 SG&A $0.15 – $0.17 $0.14 – $0.16 Total per unit operating costs $1.43 – $1.55 $1.37 – $1.49 Capital Expenditures ($ Millions) Maintenance $490 – $540 $1,950 – $2,050 Strategic growth $55 – $80 $200 – $300 Total capital expenditures $545 – $620 $2,150 – $2,350 (a) Assumes Mountain Valley Pipeline in-service date during June 2024. First Quarter 2024 Earnings Webcast InformationThe Company's conference call with securities analysts begins at 10:00 a.m. ET on Wednesday April 24, 2024 and will be broadcast live via webcast. An accompanying presentation is available on the Company's investor relations website, www.ir.eqt.com under "Events & Presentations." To access the live audio webcast, visit the Company's investor relations website at ir.eqt.com. A replay will be archived and available for one year in the same location after the conclusion of the live event. Hedging (as of April 19, 2024)The following table summarizes the approximate volume and prices of the Company's NYMEX hedge positions. The difference between the fixed price and NYMEX price is included in average differential presented in the Company's price reconciliation. Q2 2024 (a) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Hedged Volume (MMDth) 260 242 255 222 224 Hedged Volume (MMDth/d)