EQT will release Q2 results tomorrow (July 27).
I plan to add EQT to the Sweet 16 in the next newsletter unless I see some big negative in the report.
If you own AR, RRC or GPOR you should read the EQT report carefully since it is one of the largest Marcellus/Utica producers.
EQT Corp.
Re: EQT Corp.
Tom Abrams – Morgan Stanley
July 25, 2017 2:00 AM GMT
We remain Overweight EQGP/EQM as Street estimates move higher and MVP project progresses. A hypothetical combination of EQM/EQGP/RMP, likely with few premiums, could produce a large cap that drives additional investor interest.
Reiterate our Overweight rating on EQGP and EQM. Our current views are underpinned by expectations that Street volume estimates need to rise, future capital efficiency from the announced EQT/RICE consolidation, and anticipated progress on the Mountain Valley Pipeline (MVP) project. Broad Marcellus/Utica basin takeaway expansions is another positive backdrop for the region's producers. Giving us increased confidence in our OW ratings on EQGP and EQM, in the past few months, EQT has announced the pending acquisition of RICE and made regulatory progress on MVP. Going forward, in addition to further progress on volumes and MVP, we see a follow-on consolidation of EQGP/EQM/RMP as possible, which could make EQM an interesting large-cap midstreamer. (We have no knowledge of any potential transaction, and note that neither management team has commented.) EQM's 1st Driver: The Street appears low on EQM's volumes serving EQT. We see upside to Street EQM estimates as volume assumptions more fully reflect EQT Corp. production guidance (15-20% volume growth through 2020+). EQT production for 2018 is relatively certain considering wells that have already been spud. Meanwhile, EQT has not provided updated guidance for pro forma EQT/RICE, which we expect to support the duration of production growth.
The underlying volume outlook at EQM is supported by underappreciated capital efficiency. With the pending EQT/RICE merger, the contiguous nature of the acreage enables EQT to drill longer laterals and more wells per pad. In 2017-18, assuming (1) the average Washington/Greene county lateral increases from 8,000' to 12,000' and (2) wells per pad increase from 8 to 12, our E&P team estimates that production per pad could more than double.
July 25, 2017 2:00 AM GMT
We remain Overweight EQGP/EQM as Street estimates move higher and MVP project progresses. A hypothetical combination of EQM/EQGP/RMP, likely with few premiums, could produce a large cap that drives additional investor interest.
Reiterate our Overweight rating on EQGP and EQM. Our current views are underpinned by expectations that Street volume estimates need to rise, future capital efficiency from the announced EQT/RICE consolidation, and anticipated progress on the Mountain Valley Pipeline (MVP) project. Broad Marcellus/Utica basin takeaway expansions is another positive backdrop for the region's producers. Giving us increased confidence in our OW ratings on EQGP and EQM, in the past few months, EQT has announced the pending acquisition of RICE and made regulatory progress on MVP. Going forward, in addition to further progress on volumes and MVP, we see a follow-on consolidation of EQGP/EQM/RMP as possible, which could make EQM an interesting large-cap midstreamer. (We have no knowledge of any potential transaction, and note that neither management team has commented.) EQM's 1st Driver: The Street appears low on EQM's volumes serving EQT. We see upside to Street EQM estimates as volume assumptions more fully reflect EQT Corp. production guidance (15-20% volume growth through 2020+). EQT production for 2018 is relatively certain considering wells that have already been spud. Meanwhile, EQT has not provided updated guidance for pro forma EQT/RICE, which we expect to support the duration of production growth.
The underlying volume outlook at EQM is supported by underappreciated capital efficiency. With the pending EQT/RICE merger, the contiguous nature of the acreage enables EQT to drill longer laterals and more wells per pad. In 2017-18, assuming (1) the average Washington/Greene county lateral increases from 8,000' to 12,000' and (2) wells per pad increase from 8 to 12, our E&P team estimates that production per pad could more than double.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: EQT Corp.
PITTSBURGH (AP) _ EQT Corp. (EQT) on Thursday reported second-quarter net income of $41.1 million, after reporting a loss in the same period a year earlier.
On a per-share basis, the Pittsburgh-based company said it had profit of 24 cents. Earnings, adjusted for non-recurring gains, were 6 cents per share.
The results exceeded Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 5 cents per share.
The energy company posted revenue of $690.9 million in the period, also exceeding Street forecasts. Seven analysts surveyed by Zacks expected $631.3 million.
On a per-share basis, the Pittsburgh-based company said it had profit of 24 cents. Earnings, adjusted for non-recurring gains, were 6 cents per share.
The results exceeded Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 5 cents per share.
The energy company posted revenue of $690.9 million in the period, also exceeding Street forecasts. Seven analysts surveyed by Zacks expected $631.3 million.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group