eqt

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Fraser921
Posts: 2955
Joined: Mon Mar 22, 2021 11:48 am

eqt

Post by Fraser921 »

I just listened to q4 earnings call

If I were to own a gasser it would be EQT.

https://s24.q4cdn.com/922296017/files/d ... tation.pdf

you can listen to the call here

https://seekingalpha.com/article/457918 ... transcript

They hedged the latest acquisition at $ 5 plus. Team Biden is slow rolling approval

exerpts

But I think with the pullback in commodity prices, we do anticipate to see some activity reductions. You're already seeing it from what we consider the marginal producer here in the U.S. and the Haynesville. So I think in the next -- over the next few weeks, we'll have a better view on activity levels and how they're coming down. And ultimately, that should translate to lower service costs in the future, and we'll be monitoring that closely.


On hedges

Our 2023 hedge book underscores our evolving hedge philosophy that seeks to provide investors with the best risk-adjusted exposure to natural gas prices. We currently have 62% of our 2023 gas production covered with 4s, an average weighted price of $3.37 per MMBtu, which provides significant cash flow protection and downside pricing scenarios while maintaining our private exposure. Since our last update, we have also added to our 2024 hedge position with 10% of our 24 volumes now hedged at a weighted average floor price of $4.20 per MMBtu and a weighted average ceiling of $5.40 per MMBtu.


On Tug Hill acquisition

-close mid year Pending Team Biden saying yes
- Purchase price adjustment 50 m per month (positive)

Energy security

if we learned one thing in 2022, looking what happened in Ukraine and Russia, the lesson learned there is energy security matters. And without energy security, you cannot transition. Europe has gone backwards on their emissions targets because of the lack of energy security. And the most important takeaway from all of this is where did Europe turn for energy security. They turn to natural gas. And so we think that the call for this product is only going to strengthen over time because natural gas is the key to providing energy security to Americans in the world.


The macro

Despite spot weakness, the forward curve is about 50% above year-ago levels with former storage, albeit after losing Freeport exports. What do you think is going on?

David Khani

I mean you have basically an oversupplied market heading into ‘23 in and I'll call very modest oversupply in '24. And then you've literally had Freeport and weather not show up, knocking the front end of the curve down and caused the modest oversupply increase. And so it's basically sending a signal to the producers start to cut production because pricing is forcing your activity off-line. So and it's also going to send demand up. And so it's going to create a reaction to try to get to that balanced market, which you're going to see from a combination of supply coming off or supply growth slowing, which will probably end up being about B a day of impact. You'll also see about an incremental B plus of demand being forced back into the system between power from coal going away in the stack and then also industrial demand coming online. So those will be the things that will balance the market and if it doesn't happen sooner, it will happen, it will take longer. That means that the rest of the '23 curve will come down some, and that will cause quicker reaction, the later action.

So it will get there, and that's what the pricing signal always does.
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: eqt

Post by dan_s »

Good stuff.

As I said in my Saturday podcast, the current natural gas surplus in storage is tiny compared to the size of the U.S. natural gas market (now over 100 Bcf per day). We do not have a "glut" of gas. Market forces are already working to re-balance the U.S. gas market.

I forgot to mention in the podcast that La Nina winters often extend into April. In 2018 we had a mild March, but cold weather in April resulted in draws from storage the first 3 weeks of April. That sure would be a nice Easter present for our gassers.
Dan Steffens
Energy Prospectus Group
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