EQT Corp (EQT) Q4 Results - Feb 15

[dan_s]

EQT is the largest natural gas producer in the U.S.

Fourth Quarter and Recent Highlights:

Repurchased 5.9 million shares of common stock for $200 million subsequent to the end of fourth quarter 2022 at an average price of $33.86 per share; repurchased 20.4 million shares of common stock for $622 million since the inception of the repurchase program at an average price of $30.48 per share

Retired $283 million of senior note principal during and subsequent to the end of fourth quarter 2022; retired over $1.1 billion of debt principal since the beginning of 2022

Awarded Gold Standard rating by United Nations' Oil & Gas Methane Partnership 2.0

Completed $28 million pneumatic device replacement program one year ahead of schedule, eliminating approximately 9,000 natural gas-powered pneumatic devices and reducing methane emissions by 70 percent compared to 2021

Full Year 2022 Highlights:

Generated approximately $3.5 billion of net cash provided by operating activities, nearly $2 billion of free cash flow, and returned almost $1.7 billion to shareholders via base dividend, share repurchases and debt retirement. < Forecast was $3.7 billion of operating cash flow.

Total proved reserves of 25.0 Tcfe, up slightly year-over-year, and total discounted after-tax future net cash flows of $40 billion, an increase of $23 billion compared to 2021

Announced agreement to acquire Tug Hill and XcL Midstream, which is anticipated to lower corporate free cash flow breakeven gas price by approximately $0.15 per MMBtu

Entered into hedge positions for 2023 and 2024 covering 62% of production with weighted-average floors of $3.37 per MMBtu and 10% with weighted-average floors of $4.20 per MMBtu, respectively

Doubled '22–'23 share repurchase authorization to $2.0 billion and raised year-end 2023 debt retirement target from $2.5 billion to $4.0 billion

Added to S&P 500 Index, joining the top companies across all sectors of the U.S. economy

Achieved investment grade ratings from S&P and Fitch and upgraded to positive outlook at Moody's

Announced Appalachian Regional Clean Hydrogen Hub (ARCH2) collaboration with the State of West Virginia and leading energy & technology companies

President and CEO Toby Z. Rice stated, "EQT achieved an impressive suite of milestones in 2022 across all aspects of our business. We generated significant free cash flow, materially improved our balance sheet and returned meaningful capital to shareholders via our base dividend and share repurchases. Our 2022 reserve report underscores the consistency and repeatability of our large-scale combo development approach and highlights the tremendous value potential at EQT with an after-tax PV-10(1) of $40 billion. We also completed our pneumatic device replacement program a full year ahead of schedule and at a cost of approximately $6 per metric ton of CO2e abated, which materially de-risks our path to net zero by 2025."

Rice continued, "Our 2022 achievements represent yet another positive step of the journey we've been on since taking over the helm of EQT in 2019. Over this period, our team continued to improve asset productivity, strengthened our balance sheet, evolved our hedging strategy and added to our successful M&A track record, creating a durable, free cash flow focused business model that will thrive in all natural gas price scenarios. These efforts will inevitably show through in 2023 and beyond and position EQT to create differentiated, through-cycle value for all our stakeholders."

Announced Appalachian Methane Initiative (AMI) collaboration to further enhance methane monitoring throughout the Appalachian Basin
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I will update my forecast/valuation model for EQT tomorrow.