EQT 1Q18: Interim CEO Porges Focused on Splitting Company in Two

EQT, now the largest natural gas-producing company operating in the United States (since its acquisition of Rice Energy in 2017) issued its first quarter 2018 update yesterday. Among the flood of news coming from the update: EQT lost $1.6 billion in 1Q18, versus making a $164 million profit in 1Q17. But the big loss was not money out of pocket–it was a paper loss, mostly due to “writing down” the value of assets in the Permian (Texas) and Huron (Kentucky) shale plays. EQT is ending its flirtation with the Texas Permian, selling its Permian assets for a minuscule $64 million. The company refused to talk about whether or not they plan to sell or keep the Huron assets. Most of EQT’s drilling remains Marcellus Shale-focused. In 1Q18 EQT drilled 24 Marcellus wells, 2 Upper Devonian wells, and 6 Ohio Utica wells. Kind of funny (for us) was the way acting CEO David Porges described the current situation he finds himself in. Porges was CEO of EQT until early 2017 when Steve Schlotterbeck took over as CEO (groomed by Porges for the job). Porges has been Executive Chairman of the board since that time. But Schlotterbeck suddenly resigned in March when the board refused to pay him what other top energy CEOs make (see EQT CEO Steve Schlotterbeck Suddenly Quits, Leaves Company). Apparently his abrupt departure didn’t sit well with Porges. On yesterday’s analyst phone call, Porges said this: “Approximately one year ago, I retired as CEO and transitioned to the role of Executive Chairman. As you know, my replacement resigned in mid-March and I assumed the role of CEO to give the board a chance to decide upon a replacement. That search has begun and we expect to have a new CEO in place by the time of separation, which is still scheduled for the third quarter.” Porges wouldn’t even mention Schlotterbeck by name! Called him “my replacement.” Talk about frosty. We don’t think Schlotterbeck will be getting a Christmas card from Porges this year. šŸ™‚ At any rate, as Porges said in his statement, the company expects to name a new CEO no later than third quarter of this year–when the existing EQT splits in two and becomes a drilling company AND a separate midstream (pipeline) company…

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