EQT Midstream IPO Rakes in the Cash

EQT Corp, one of the larger drillers in the Marcellus and Utica Shale, has spun off its midstream (pipeline and processing plant) operations into its own company. Shares of the new EQT Midstream started selling yesterday in an initial public offering (IPO), and today those shares will start to be publicly traded on the New York Stock Exchange (ticker symbol EQM).

What does it mean? It means EQT’s midstream activities will have a nice new pot of cash to expand with—somewhere around $260 million (put another way—over a quarter of a billion dollars). EQT’s drilling activities will now be serviced by a bigger, more robust midstream operation to get their gas to market.

From the EQT press release:

EQT Midstream Partners, LP, a Delaware limited partnership (the Partnership) and an EQT Corporation company, today announced it has priced its initial public offering (IPO) of 12,500,000 common units representing limited partner interests at $21.00 per common unit. The underwriters have been granted a 30-day option to purchase up to an additional 1,875,000 common units at the IPO price, less underwriting discounts to cover allotments, if any. The common units of the Partnership will begin trading on June 27, 2012 on the New York Stock Exchange, under the symbol EQM. The offering will close on July 2, 2012, subject to customary closing conditions.

Upon conclusion of the offering, the public ownership will represent a 35.3% limited partner interest in the Partnership, or 40.6% limited partner interest if the underwriters exercise their over-allotment option in full. EQT Corporation will hold the 2% general partner interest and a 62.7% limited partner interest in the Partnership, or 57.4% if the underwriters exercise their over-allotment option in full.

The net proceeds from any exercise of the underwriters’ option to purchase additional common units will be distributed to EQT Corporation. Citigroup, Barclays, BofA Merrill Lynch, Credit Suisse, J.P. Morgan and Wells Fargo Securities are acting as joint book-running managers for the offering. Deutsche Bank Securities, Goldman, Sachs & Co. and RBC Capital Markets are acting as co-managers for the offering.

EQT Corp (Jun 26, 2012) – EQT Midstream Partners, LP Prices Initial Public Offering of Common Units (PDF)

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