EQT Corp (EQT) Q4 Results - Feb 18

[dan_s]

EQT is the largest natural gas producer in the U.S. and getting bigger this year. It is one of the "Elite Eight" in our Sweet 16.
Q4 results beat my forecast.

Fourth Quarter Highlights:

Sales volumes of 401 Bcfe
Total per unit operating costs of $1.30/Mcfe, $0.14 lower than 3Q20 and below guidance
Net cash provided by operating activities of $406 MM; free cash flow of $109 MM
Capital expenditures of $266 MM, in-line with guidance
Well costs of $695/ft. in the PA Marcellus; second sequential quarter below $735/ft. target
Received $48 MM in federal income tax refunds
Extinguished $200 MM in 2021 and 2022 senior notes
Acquired Chevron's Appalachian assets for $735 MM, subject to standard closing adjustments
Received credit rating upgrade by S&P Global in October 2020
Upgraded by Moody's Investor Services in February 2021

EQT closed at $18.30 on Feb 18. My valuation was $25.00 in the last newsletter. My valuation will be going up.

[dan_s]

I have updated my forecast/valuation model for EQT and it will be posted to the EPG website early tomorrow morning. Sabrina posts all of the Sweet 16 updates to our website and she's had a tough week. Her power and water have been out for almost three days. The power came back on today but still no water. Add two small children to the mix and it is "hell" at her house.

I am very bullish on natural gas and even more bullish on NGLs.
EQT is the largest natural gas producer in the U.S. and one of the top five NGL producers.
Based on my forecast model, which is based on the Company's guidance, EQT will generate over $1.8 Billion of operating cash flow and over $0.6 Billion of FCF from operations this year.
My valuation increases $5 to $30 per share.

Based on EQT's audited balance sheet as of 12/31/2020 the book value per share is over $33/share of common stock. There is nothing that I can see which justifies this stock trading below book value unless you think natural gas prices are going back to $2.00.

The Wall Street Gang doesn't quite grasp how tight the U.S. natural gas market will be this year. Even prior to the Polar Vortex reaching Texas this week, the U.S. gas and NGL markets appeared to be under-supplied. Now the situation could get "dangerous" if the rigs drilling for gas don't double soon.

[dan_s]

EQT Corporation (EQT, $19.17, Buy) - Ramping FCF Leads
to Upcoming Growth in Shareholder Returns - EQT reported
strong 4Q20 FCF of $109MM and we forecast the company will
generate >$600MM this year and notably more in 2022. We
believe there is upside to our 2021/2022 FCF estimates given
potential operational efficiencies in WV Marcellus and further
CVX (Buy) acquisition synergies/upside not fully baked into our
model. Given what we believe to be notably increasing FCF, we
forecast shareholder returns to be materially higher late this year
continuing in 2022 resulting in one of the higher EV/FCF in our
coverage group. - Neal Dingmann at Truit Financial 2/18/2021