EQT closed today at $34.38.
I have updated my forecast/valuation model for Q2 actual results and their updated guidance.
My valuation of EQT is reduced by $5 to $43 per share, primarily due to lower than expected Q2 results and lower forecast realized natural gas prices in 2H 2024 and 2025. I have increased my forecast for higher NGL prices. < EQT is a Strong Buy at the current share price.
EQT's Q3 production mix is approximately 94% natural gas, 5.6% NGLs and 0.4% crude oil. It is a large-cap "Gasser" with over 5.8 Bcfpd of current production. If U.S. natural gas prices do go over $3.50/mcf, EQT has a lot of upside for shareholders.
With more pipeline access, EQT should ramp up production to over 6.4 Bcfepd in 2025.
EQT is a solid company that I believe is a good investment for those of you that want more exposure to U.S. natural gas prices. It is just going to take time for the U.S. natural gas market to tighten up.
TipRanks: "In the last 3 months, 15 ranked analysts set 12-month price targets for EQT. The average price target among the analysts is $44.47. The 15 price targets range from $32 to $55 per share."
The U.S. currently has a surplus of natural gas, but it is definitely not a "glut". As I have posted here numerous times, several more large LNG export facilities will be coming on line soon that should tighten up U.S. natural gas supply/demand.
EQT closed the merger with Equitran Midstream (ETRN) mid-July, which should significantly increase their operating cash flow in 2H 2024.
EQT Corp. (EQT) Valuation Update - July 25
EQT Corp. (EQT) Valuation Update - July 25
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
EQT...first vertically integrated US natural gas producer
EQT signed 2 strategically important deals the end of July which may give it a long term advantages.
EQT with its massive natural gas reserves and low costs has been"landlocked" until its deal to purchase Equitrans and its Mountain Valley pipeline.
"EQT President and CEO Toby Z. Rice stated, "Equitrans is the most strategic and transformational transaction EQT has ever pursued, and we see this as a once in a lifetime opportunity to vertically integrate one of the highest quality natural gas resource bases anywhere in the world. As we enter the global era of natural gas, it is imperative for U.S. natural gas companies to evolve their business models to compete on the global stage against vertically integrated rivals. We have identified multiple, high confidence near-term synergies, with significant upside from future infrastructure optimization projects that we believe will drive material value creation for shareholders over time." "Thomas F. Karam, Executive Chairman, Equitrans Midstream... "Combining with EQT creates a premier vertically integrated natural gas business that is a game changer for the natural gas industry and Appalachian Basin. The transaction delivers... an opportunity to participate in future value growth as EQT executes on its strategy."
https://media.eqt.com/investor-relations/news/news-release-details/2024/EQT-Announces-Transformative-Acquisition-of-Equitrans-Midstream/default.aspx
The strategy as mentioned above includes delivering EQT natural gas to the Texas LNG for processing per a tolling agreement which allows EQT, "direct connectivity to end users".
"Toby Z. Rice, President and CEO, said, "This HOA with Texas LNG highlights continued momentum behind EQT's differentiated LNG strategy, which is focused on achieving the best combination of upside exposure and downside risk mitigation. Our tolling capacity gives us direct connectivity to end users of natural gas globally, allowing for end-market structuring flexibility and superior downside protection."
Rice continued, "EQT's low-cost structure, peer-leading core inventory depth and environmental attributes uniquely position us to compete and win in the global energy arena and we believe the international market will increasingly covet our molecules as a long-duration secure supply source that can drive meaningful emissions reductions via coal displacement."
Texas LNG projects operations to begin in 2028.
ttps://www.rigzone.com/news/texas_lng_secures_20year_lng_agreement_with_eqt-24-jul-2024-177510-article/
Farrell
EQT with its massive natural gas reserves and low costs has been"landlocked" until its deal to purchase Equitrans and its Mountain Valley pipeline.
"EQT President and CEO Toby Z. Rice stated, "Equitrans is the most strategic and transformational transaction EQT has ever pursued, and we see this as a once in a lifetime opportunity to vertically integrate one of the highest quality natural gas resource bases anywhere in the world. As we enter the global era of natural gas, it is imperative for U.S. natural gas companies to evolve their business models to compete on the global stage against vertically integrated rivals. We have identified multiple, high confidence near-term synergies, with significant upside from future infrastructure optimization projects that we believe will drive material value creation for shareholders over time." "Thomas F. Karam, Executive Chairman, Equitrans Midstream... "Combining with EQT creates a premier vertically integrated natural gas business that is a game changer for the natural gas industry and Appalachian Basin. The transaction delivers... an opportunity to participate in future value growth as EQT executes on its strategy."
https://media.eqt.com/investor-relations/news/news-release-details/2024/EQT-Announces-Transformative-Acquisition-of-Equitrans-Midstream/default.aspx
The strategy as mentioned above includes delivering EQT natural gas to the Texas LNG for processing per a tolling agreement which allows EQT, "direct connectivity to end users".
"Toby Z. Rice, President and CEO, said, "This HOA with Texas LNG highlights continued momentum behind EQT's differentiated LNG strategy, which is focused on achieving the best combination of upside exposure and downside risk mitigation. Our tolling capacity gives us direct connectivity to end users of natural gas globally, allowing for end-market structuring flexibility and superior downside protection."
Rice continued, "EQT's low-cost structure, peer-leading core inventory depth and environmental attributes uniquely position us to compete and win in the global energy arena and we believe the international market will increasingly covet our molecules as a long-duration secure supply source that can drive meaningful emissions reductions via coal displacement."
Texas LNG projects operations to begin in 2028.
ttps://www.rigzone.com/news/texas_lng_secures_20year_lng_agreement_with_eqt-24-jul-2024-177510-article/
Farrell