Energy Prospectus

I have updated my forecast/valuation model for EQT for Q3 results, which were inline with my forecast, and their Q4 guidance.

At the time of this post EQT was trading at $41.98

My current valuation increases by $2.50 to $49.50.
> To value EQT you need to understand the full impact of Tug Hill and XcL acquisitions that closed August 22.
> EQT will start generating a lot of free cash flow in Q4 and probably over $2 billion FCF in 2024. < Based on realized natural gas prices of $3.25/mcf
> Their hedges for Q1 to Q3 2024 significantly lower gas price risk.

TipRanks: "Since EQT announced Q3 results, 6 respected energy sector analysts have submitted updated price targets that average $50/share. The 6 price targets range from $42 (Citi) to $62 (Bank of America)." < Obviously, there is a wide range of opinions on where natural gas prices are headed.

EQT is currently the largest natural gas producer in the U.S. To appreciate this one's potential, go to their website and review their updated slide presentation.

From Truist Financial

EQT Corporation (EQT)
2027 Is Gonna Be One Heck Of A Year For EQT

EQT turned in a nice 3Q23 FCF beat on the back of lower capex and higher gas realizations,
however newly issued 4Q23 guidance, which now includes Tug Hill operations, shows
higher capex requirements and lower production than both us and the Street were modeling.

Total per unit costs were guided in-line with our model, with LOE slightly higher and GP&T
slightly lower, and gas diffs coming in better than we were expecting. EQT is well on its
way to integrating the Tug Hill assets, and the company continues to pursue SPAs for its
existing tolling agreement volumes. Given the weaker guidance, we expect EQT will slightly
underperform the group tomorrow, as the current investor base is not likely to give as much
credit to the 2027 improvements despite the potential material upside.

Operational/Guidance Updates
• EQT signed two firm sales agreements starting in '27, restructuring all of EQT's MVP
volumes, improving price exposure to the tune of ~$300mm/yr
• EQT did not repurchase any shares in 3Q23, as expected given the lack of FCF
• The company broke its own world record drilling ~3.5 miles in two days
• 4Q23 capex guidance of $550mm versus Truist Securities/Street's $534mm/$528mm
• 4Q23 production guidance of 5,707-6,250 mmcfepd versus Truist Securities/Street's
6,452/6,251 mmcfepd
• Overall cost guidance was in-line with our estimates, with LOE slightly worse and GP&T
slightly better
• The company added meaningful hedging for 2024, moving to ~40% of production for the
year with a weighted average floor of ~$3.59/m through the first three quarters