WSJ Says EQT is “Failing”, DE Shaw Says EQT Mgmt “Not Up to Task”

More drama in the ongoing soap opera of EQT and the Rice brothers’ attempt to take it over. The latest items of interest: The Wall Street Journal ran an article in today’s online edition with a headline that says EQT is “failing.” And one of EQT’s biggest investors, D.E. Shaw, is telling the board that current top management “doesn’t have what it takes” to get the company financially performing again. Ouch.
Continue reading

EQT Settles 2 Class Action Lawsuits for $5.7M re Employee Issues

Two separate cases before U.S. District Judge David S. Cercone (in Pennsylvania) were settled yesterday by EQT. One of class action cases, brought against EQT, alleged the company had intentionally misclassified employees as independent contractors to avoid paying overtime. The settlement awards “more than 100” workers back wages totaling $2.8 million. The other class action case is similar, except it was filed against Rice Energy before Rice was bought out by EQT. Now that Rice is part of EQT, it is EQT paying the bills. In the Rice Energy lawsuit, some 90 workers are being paid $2.9 million for unpaid overtime. Wednesday was an expensive day for EQT.
Continue reading

More Rice Bros. vs. EQT Intrigue – Better than Dynasty & Dallas!

Remember the Carrington’s from the 1980s prime time soap Dynasty? Or how about the Ewings, as in J.R. and Bobby, from the prime time soap Dallas? No, we’re not talking about the remakes of those shows appearing in recent years. We’re talking about the originals. Both shows revolved around oil families of immense wealth–one in Colorado, the other in Texas. We have a real-life version of Dynasty and Dallas playing out right now–in Pittsburgh–with the Rice brothers and EQT. Not all the sex stuff–get your head straight! We’re talking about the backroom deals and bare-knuckle politics stuff. Last week we told you that Toby and Derek Rice, formerly of Rice Energy, have launched an effort to take over the company they sold Rice Energy to (see Rice Brothers Attempt to Take Over EQT, Install Toby as CEO). Earlier this week we told you that EQT Chairman Jim Rohr and CEO Rob McNally want to “talk” (yell, scream?) some more with the Rice boys (see EQT Chairman Rohr & CEO McNally Ready to “Talk” with Rice Boys). According to an article appearing in the Wall Street Journal, the Rice boys have more backing for their takeover plan, from Elliott Management. The details that leaked say the Rices want to replace Rohr and McNally. This is epic.
Continue reading

EQT Chairman Rohr & CEO McNally Ready to “Talk” with Rice Boys

A week ago MDN brought you the news that Toby and Derek Rice, formerly of Rice Energy, have launched an effort to take over the company they sold Rice Energy to (see Rice Brothers Attempt to Take Over EQT, Install Toby as CEO). In recent months the Rice boys have had private conversations with EQT’s top dogs, Chairman of the Board Jim Rohr and CEO Rob McNally, but according to Toby and Derek, those talks went nowhere. The Rice boys say EQT needs some new energy and a new direction, to leverage the world class assets it now owns. And the Rice boys think they have just the plan to accomplish it. After going public with their plan and their intent to wage a proxy war (get board members elected who will endorse their plan), word has leaked out from “sources” that Rohr and McNally want to have another round of talks with the Rice boys, to hear more about their plan. Which causes us to ask, didn’t all that get discussed the first time around? What’s the real purpose of more “talks” with the Rice brothers?
Continue reading

Rice Brothers Attempt to Take Over EQT, Install Toby as CEO

“Well, the EQT situation is a total mess.” So began a super secret email to MDN from a highly-placed source we implicitly trust. Not long after receiving that email, we spotted a press release from the Rice brothers, Toby and Derek, who along with their other two brothers, previously founded and built Rice Energy into a major Marcellus/Utica operator. The Rice brothers sold their company to EQT last year for $8.2 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). As part of the deal, the boys took 80% of their compensation in the form of EQT stock. The Rice boys now say EQT and its stock performance ain’t doin’ so hot. They (the Rice boys) think they have the solution. The solution is to install Rice leadership at EQT. Wouldn’t that be the ultimate head fake? Sell your company to a much larger company, creating the the largest natgas producer in the U.S.–then take it ALL over. A reverse takeover. Dan Rice III didn’t raise stupid boys.
Continue reading

Contractor Sues EQT $1.9M for Refusing to Pay for Spill Cleanup

Yet more intra-industry snipping to report (o&g companies suing o&g companies), this time between EQT and a contractor the company hired to clean up a spill (for $1.9 million) who says EQT never paid. EQT Gathering hired InterCon Construction to drill and install replacement pipeline in Indiana County, PA. InterCon did the work. During construction, InterCon experienced an “inadvertent return” (drilling mud leaking out on the surface where it’s not supposed to). InterCon fixed the issue, finished their work, and left. Triad Engineering was also involved in the project. The leak later returned. EQT asked InterCon to return and clean it up, which they did (for a price). According to court documents, EQT sued Triad for not properly sealing a bore hole, leading to the “new” leak. Yet EQT is refusing to pay InterCon for the cleanup, inferring they were to blame.
Continue reading

EQT Avoids Trial, Settles WV Class Action re Royalty Deductions

Two weeks ago MDN told you about a class action lawsuit that’s been brewing in West Virginia since 2013, brought by 10,000 WV landowners and royalty rights owners against EQT over the company’s practice of deducting post-production expenses from royalty payments (see WV Class Action Against EQT re Royalty Deductions Heads to Court). The trial was set to begin this past Tuesday, but we’re just now learning that late last week EQT settled with the plaintiffs out of court. We don’t have many details. What we do have is confirmation that there’s been a settlement and that the trial was canceled. Here’s the details we have so far.
Continue reading

WV Surface Owners Accuse EQT of Selling Wells Should be Plugged

The West Virginia Surface Owners’ Rights Organization (WVSORO) is making some big accusations against EQT (perhaps other drillers too) in saying that EQT, which once owned thousands of conventional oil and gas wells in the state, is selling those wells to companies that may go out of business and therefore will not be able to properly plug those wells as they reach end-of-life and no longer produce. Specifically, WVSORO mentions the recent sale by EQT of its WV conventional assets to Diversified Gas & Oil. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV). In October they did it again, announcing a deal to buy out Core Appalachia for $183 million, which includes ~5,000 producing wells (90% of production is natgas) and 1.3 million acres in West Virginia, Kentucky and Virginia (see Diversified Gas & Oil Buys Core Appalachia for $183M). WVSORO’s charge is that Diversified is buying those wells intending to never plug them when they’re exhausted. WVSORO is asking the state to deny transferring those wells from EQT to Diversified.
Continue reading

3 Drillers Pay $50K to Fund Mobile Emergency Unit for Belmont, OH

New mobile emergency response trailer (Credit: WTOV)

A feel-good story for your Friday. Three Utica Shale drillers operating in Belmont County, OH–EQT Corp., Ascent Resources and Antero Resources–between them donated $50,000 to the Belmont County Emergency Management Agency to purchase a mobile command unit trailer that can be hauled to sites where’s there is an ongoing emergency/crisis and used on location. Neighboring Monroe County will get to use it too. Taxpayers didn’t have to pay a dime. Everyone is tickled pink. Yes, there is some self interest in the donation, since better emergency response can theoretically aide their own workers in case of an emergency. But such incidents (in the shale industry) are rare. Chances are the trailer will be used for other types of emergencies. Which is just fine with the shale industry.
Continue reading

EQT Tries to Gut WV 1982 Minimum Royalty Law for Flat Rate Leases

EQT certainly isn’t following Dale Carnegie’s advice on How to Win Friends and Influence People. Just the opposite, as the company continues to squeeze every last penny it can out of landowners’ pockets who hold old “flat rate” leases in West Virginia. We’ve reported on EQT’s efforts to overturn WV’s Senate Bill (SB) 360, passed earlier this year and signed into law by Gov. Jim Justice (see EQT Still Fighting WV Minimum Royalty Law for Flat Rate Leases). That law disallows post-production deductions for flat rate leases, ensuring landowners receive a minimum 12.5% royalty. In April, EQT sued to overturn the original law, from 1982, on which SB 360 rests–the law that guarantees a 12.5% royalty. Get rid of the original law, and the later law (disallowing deductions) disappears too.
Continue reading

EQT Pays $394K for Acid Mine Leak in Mon River Following HDD Work

On January 29, 2017, EQT used underground horizontal directional drilling (HDD) to drill a hole under State Route 136 in Allegheny County, PA, to install a water pipeline. As they were drilling, using what we now know was an out-of-date map, EQT hit an abandoned coal mine full of water, and four million gallons of acid mine drainage (AMD) leaked into the Monongahela River. EQT worked hard and fast to stop the leak (stopping it two days later) and set up a system to prevent any further leaks. Now, nearly two years later, it’s time to pay the piper. EQT just agreed to a fine of $294,000 for violating the Clean Streams Law, and payment of an additional $100,000 to the Clean Streams Foundation to provide for maintenance, operation, and replacement of a system to keep AMD from leaking at the site in the future.
Continue reading

EQT Stock Falls 46% in One Day, but Investors Didn’t Lose 46%

Click for larger version

Normally if a company’s stock falls upward of 50% in a single day, it indicates a catastrophe has happened. Bad news of biblical proportions. But such is not the case with EQT, the country’s largest natural gas producing company. EQT’s stock closed at $34.64 per share on Monday. By the end of Tuesday, it was $18.56, down 46.4%. Why? Because the company split in two, with EQT Corporation retaining all of the drilling assets, and a new company, Equitrans Midstream Corp., taking off with all of the midstream (pipeline) assets.
Continue reading

WV Class Action Against EQT re Royalty Deductions Heads to Court

It’s been five years in the making, but finally a class action lawsuit that began in 2013, on behalf of 10,000 West Virginia landowners and royalty rights owners against EQT’s practice of deducting post-production expenses from royalty payments, will finally get its day in court in two weeks. That’s what we learn from an extended article published by ProPublica and the Charleston Gazette-Mail on the topic of WV drillers and their practice of “whittling away payments” from rights owners. Just over a month ago MDN told you about an elderly WV couple who won their private lawsuit against EQT on the same matter (see EQT Loses Post-Production Deduction Lawsuit to WV Couple). Based on the outcome of that lawsuit, EQT should be a tad nervous about this class action proceeding to trial.
Continue reading

It’s Here! EQT Midstream Division Now Split into Standalone Co.

As of today, EQT Midstream, a division of EQT (the driller), is no more. In its place is Equitrans Midstream Corporation–a completely new, standalone company that is no longer tied to, nor a part of, EQT. The changeover happened at 11:59 pm Eastern time last night. Today is the first full day of a new era for EQT and its former midstream division. Thomas F. Karam is president and chief executive officer of the new Equitrans Midstream. What led to the split between EQT (the driller) and EQT (the midstream company)? We’ll explain.
Continue reading