Help Wanted: New CFO for EQT – David Khani Leaving in July
Yesterday EQT announced the “planned transition” of David Khani, Executive Vice President and Chief Financial Officer for the company, effective July 2023. The announcement does not say what Khani is transitioning to, but by all appearances, it means he’s leaving the company. The announcement also says EQT will be conducting a search to identify a successor and that Khani will stick around to be sure there is a smooth transition.
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The Ohio Court of Appeals recently issued a decision in a case involving lease language about a “depth severance clause” that is very important for both landowners and drillers to know about. In Tera LLC v. Rice Drilling D LLC, et al., a landowner in Belmont County, OH, signed a lease with language that leases both the Marcellus and Utica shale layers, but all other formations were “reserved to the lessor” (i.e. the landowner). However, the driller, Rice (now EQT), drilled into and produced hydrocarbons from the Point Pleasant layer that sits immediately below the Utica. According to the lease (and the decision by the court), that was a no-no.
The CEO of the largest natural gas driller/producer in the U.S., EQT’s Toby Rice, is currently attending the Atlantic Conference in Abu Dhabi, the capital of the United Arab Emirates. He spoke with Bloomberg reporters about what he sees ahead for U.S. natural gas production coming this year and, more broadly, about the problems he sees in general. Rice said, “The gas markets in the US are broken.” Why? Lack of pipeline infrastructure and the inability to build new ones.
Yesterday, Chesapeake Energy, EQT, and Equitrans Midstream launched what the three companies call the Appalachian Methane Initiative (AMI), a coalition committed to further enhancing methane monitoring throughout the Appalachia Basin with an aim to reduce methane emissions throughout the region. Is this yet another certification scheme to prove methane leakage is low?
We’re catching up the permit report for the past two weeks (since we were off all of last week). Permits issued for Dec. 19 through Jan. 1 in the Marcellus/Utica included 19 new permits in Pennsylvania, 7 new permits in Ohio, and 12 new permits in West Virginia.
Last September, EQT Corporation announced it is buying privately-owned Tug Hill Operating’s West Virginia shale assets for $5.2 billion (see 
What a difference three years can make! Three years ago, Henry Hub prices were hovering around $2 per thousand cubic feet (Mcf). Stock valuations for Marcellus/Utica drillers were majorly depressed (down 80-90% from previous highs), and gas producers were struggling. Fast forward to today. Balance sheets and earnings statements are through the roof. Most experts believe $4-$5/Mcf gas is sustainable–at least for the next X years. What does the future look like for M-U drillers? What are the risks? And can we keep the current bright outlook going?
Hydrogen energy is the new savior that will keep the world from toasting itself out of existence. So goes the current faddish meme. But not just any old hydrogen (or H2) can be used. No, no, no! Hydrogen has to be “low carbon” hydrogen (i.e. produced by means that is low or no-carbon), or it is persona non grata. It reminds us of when “low fat” was all the rage in diets–until it wasn’t. But we digress… The Open Hydrogen Initiative (OHI) was convened earlier this year to measure and map the emissions footprint of “clean” (low or no-CO2) hydrogen. Earlier this week, a number of prominent energy companies joined OHI, including EQT, the largest natural gas producer in the U.S. (focused 100% on the Marcellus/Utica).
In September, EQT Corporation announced it is buying Tug Hill Operating’s West Virginia shale assets for $5.2 billion (see Confirmed: 
Just last week, we told you that a West Virginia Circuit Court judge who allegedly waved and pointed a gun at an attorney for EQT Corporation during a hearing about a case brought against EQT by landowners for improper deductions of post-production expenses from their royalty payments had resigned (see 
EQT Corporation, the largest producer of natural gas in the U.S, has cut a deal to send 15 petajoules (PJ) of RSG (responsibly sourced gas) from the Marcellus/Utica to Canada’s largest natural gas distribution company, Enbridge Gas, over the next 12 months. This is a major deal. Running the numbers, 15 petajoules works out to be roughly 14 billion cubic feet (Bcf) of Marcellus/Utica gas.