EQT 1Q22: Explores Investing in LNG Export Terminals
Yesterday EQT Corporation released its first quarter 2022 update and held a conference call with analysts. The big news came from CEO Toby Rice, who said in his opening remarks, “We are currently in discussions with LNG end-users across various geographies and are contemplating equity investment opportunities in LNG export facilities.” Later in the call, in response to a question, Rice added, “Our ultimate prize that we’re looking for here at EQT is to get exposure to international markets…One of the ways that we get more flexibility towards accessing those contracts is to take an investment in the LNG facility itself.”
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Last week Pennsylvania issued 22 new shale well permits, up ten from the prior week. EQT led the way with five permits, all in Greene County. Both LOLA Energy and Snyder Brothers had four permits each, LOLA in Butler County and Snyder in Armstrong. For the second week in a row, Ohio had no new shale permits issued last week. Bummer. West Virginia had eight permits, up from two in the prior week. Arsenal Resources had the most with four permits in Taylor County, while Southwestern Energy had three permits–one in Ohio County and two in Brooke County.
Bloom Energy, a provider of fuel cells that convert natural gas (or biogas, or hydrogen) into electricity without combustion, meaning no carbon dioxide emissions, has signed a two-year deal to buy all of its natural gas to power fuel cells at some 700 locations from EQT. But it’s not just any natural gas Bloom is buying–it’s EQT’s certified responsible natural gas. The financial terms of the deal were not disclosed.
One of the hottest of the hot sectors in which to invest (right now) is shale energy. That’s according to multiple sources, including a veteran finance writer, investor, engineer, and researcher. In an article appearing on the OilPrice.com website, Alex Kimani talks up mid-cap energy stocks as outperforming the supermajors. Among two of Kimani’s top three picks are two Marcellus/Utica drillers, who are having a stellar year in stock performance. We went looking for the stock performance of other M-U drillers too. We have a list to share showing just how much each driller’s share price has increased this year.
Ace reporter Paul Gough at the Pittsburgh Business Times has scored another exclusive. At least we can’t find any other mentions online about this latest, very big news. EQT Corporation has signed a memorandum of understanding to partner with ElementUS Rare Earths & Minerals, a Louisiana company, to potentially build a plant somewhere in the Marcellus/Utica region to process rare earth minerals that are “used in industry for everything from fuel cells to batteries, magnets for electric vehicles and insulator coatings.” The project is called ASCEND. Why is EQT interested in rare earths?
According to RBN Energy, 2021 was the most profitable year in at least the last two decades for oil and gas producers (i.e. drillers). Oil and gas producers reported income two-thirds higher than the previous peak in 2014, when commodity prices were significantly higher. There’s every indication that 2022 will be even better for the bottom line of O&G companies. What about Marcellus/Utica drillers? Yep, they’re on the list of phenomenal results too.
According to Reuters, at least a dozen U.S. shale gas executives met yesterday in Houston, TX, with European energy officials to discuss expanding U.S. fuel supplies to Europe. Among those in the meeting were “top executives” from Chesapeake Energy, Coterra Energy (formerly Cabot Oil & Gas), and EQT Corp., the largest natural gas producer in the U.S. Individual meetings are planned between the execs and representatives from Latvia, Estonia, and Slovakia. It seems that Europe has finally opened its eyes (and its mind) to the benefits of American natural gas.
Since February 2020 EQT Corporation’s credit rating (for company-issued bonds) has been at the “junk” (i.e. non-investment grade) level. Two of the three top credit ratings agencies–Standard & Poor’s Global Ratings and Fitch Ratings–recently upgraded EQT’s credit rating, returning it to investment grade. So far Moody’s has not followed, but we’re guessing it won’t be long before Moody’s upgrades EQT’s rating too.
Each quarter NGI (
You might think that Toby Rice, son of Daniel Rice III who was, at one time (for over a decade), the single most successful and profitable mutual fund manager in the world, was born with a silver spoon in his mouth. You might think that everything was given to Toby Rice on a silver platter. You would be wrong. Prior to running the largest natural gas producer in the U.S., Toby Rice was, among other professions, a chimney sweep (cue the song from Mary Poppins, Chim Chim Cher-ee). He then swept floors for $9 an hour while he attended grad school to learn about fracking. Toby knows what it’s like to work (hard) for a living.
We’ve heard of “supermajors”–those six to seven integrated oil and gas companies that have a market capitalization of $100 billion or more (including ExxonMobil, Shell, BP, Chevron, ConocoPhillips, and Total). We’ve heard of “majors”–integrated oil and gas companies defined as having a market capitalization of $10 billion to $100 billion. And we’ve heard of “independents”–smaller companies that focus just on drilling (not integrated, meaning no downstream and possibly no midstream operations). A Reuters article introduces to a new concept–mini-majors. Among that group is EQT Corporation.