Deep Dive into EQT Hedging, CEO Toby Rice’s “Brutal Honesty”

The third quarter was not kind to Marcellus/Utica drillers with respect to the official income statements. Why? In a word, hedging. Take EQT for example. During 3Q, EQT lost nearly $2 billion because of bad hedges--locking in prices to sell production far below current market prices (see EQT Lowers Pipeline Costs via New Deals, Eyes Export Opportunities). EQT was not alone, but because EQT is the largest natural gas producer in the country (averaged 5.5 Bcf/d in 3Q), it makes a great case study.

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