EQT Corp (EQT) Q2 Results - Aug 1
Posted: Sun Aug 01, 2021 1:23 pm
EQT's 2nd quarter results came in below my forecast because their realized natural gas price was reduced by a $0.57 basis differential. Their high Btu gas actually sold for $3.00/mcf, but their realized cash price was reduced by the $0.57 differential and $0.15 cash settlements on their hedges to $2.28/mcf. This compared to the $2.65/mcf that I was using in my forecast model. Realized NGL prices were also less than my forecast. Lower revenues were offset by lower expenses than my model.
EQT's production mix in Q2 was 93.7% natural gas, 5.7% NGLs and just 0.6% crude oil.
The natural gas basis differential should be much lower in 2H 2021, but I've adjusted my model to use more conservative realized cash prices of $2.60 in Q3 and $3.00 in Q4.
The Alta Resources Acquisition closed on 7/21/2021, which will increase production by more than 17% from Q2 to Q3. When all of the "noise" of such a large acquisition is behind EQT, it should be in great shape heading into Q4 2021.
Free cash flow for 2021 should come in near the top of their guidance range of $725 to $800 million and it should be over $1.5 Billion in 2022 assuming a realized ngas price of $3.00/mcf.
Since EQT released Q2 results on July 23, three analyst have updated their price targets
> Sameer Panjwani at Tudor Pickering rates it a Hold with a price target of $27.00
> William Janela at Credit Suisse rates it a Buy with a price target of $26.00
> Gabriele Sorbara at Siebert Williams Shank & Co rates it a Buy with a price target of $28.00
EQT closed at $18.39 on July 30.
I'm still working on my forecast/valuation model. It will be posted to the EPG website later this afternoon.
EQT's production mix in Q2 was 93.7% natural gas, 5.7% NGLs and just 0.6% crude oil.
The natural gas basis differential should be much lower in 2H 2021, but I've adjusted my model to use more conservative realized cash prices of $2.60 in Q3 and $3.00 in Q4.
The Alta Resources Acquisition closed on 7/21/2021, which will increase production by more than 17% from Q2 to Q3. When all of the "noise" of such a large acquisition is behind EQT, it should be in great shape heading into Q4 2021.
Free cash flow for 2021 should come in near the top of their guidance range of $725 to $800 million and it should be over $1.5 Billion in 2022 assuming a realized ngas price of $3.00/mcf.
Since EQT released Q2 results on July 23, three analyst have updated their price targets
> Sameer Panjwani at Tudor Pickering rates it a Hold with a price target of $27.00
> William Janela at Credit Suisse rates it a Buy with a price target of $26.00
> Gabriele Sorbara at Siebert Williams Shank & Co rates it a Buy with a price target of $28.00
EQT closed at $18.39 on July 30.
I'm still working on my forecast/valuation model. It will be posted to the EPG website later this afternoon.