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EQT Provides More Details on DGO Asset Sale, 1.4 Bcf/d Curtailment
EQT announced yesterday it has closed on a deal to sell “certain non-strategic assets” to Diversified Gas & Oil (DGO) for $125 million, plus another potential $20 million later on. MDN first told you about this deal on May 13 (see Diversified Buys 900 EQT Wells (67 Shale Wells) for $125M). This is the first time EQT has commented publicly on the DGO deal. EQT’s statement differs from previous news accounts about the deal.
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The nation’s largest natural gas producer, EQT Corporation, is temporarily curtailing or shutting in roughly one-third of its natural gas production in Pennsylvania and Ohio. So says EQT’s main midstream (pipeline) provider, Equitrans (formerly EQT Midstream).
Wow! What a difference three months can make. In January Moody’s Investors Service downgraded EQT Corporation’s bonds to “junk” status (see 
Diversified Gas & Oil (DGO) continues its program of buying up mostly older conventional oil and gas wells in Appalachia. In April DGO cut a deal to buy 6,500 conventional wells spread across West Virginia, Kentucky, and Tennessee, along with a 4,700-mile gathering pipeline system located in WV, for $110 million (see 
During yesterday’s quarterly update and conference call with analysts, EQT CEO Toby Rice took the time to outline his company’s efforts to keep field workers safe during the COVID-19 coronavirus pandemic. Not unsurprisingly, the “young Turks” who now run the company are using technology to help protect employees and contractors. EQT is ahead of the curve (way ahead of the state Dept. of Environmental Protection) in its contact tracing system to protect workers.
Last year at this time the EQT’s then-management team was locked in a heated battle with the Rice boys–Toby and Derek Rice–who wanted to boot the existing management team and run the company themselves. EQT’s management at the time delayed the annual meeting until July (see 
Last July MDN broke the news that LOLA Energy had filed a lawsuit in Greene County, PA against EQT for allegedly drilling shale wells under property EQT formerly leased, but property for which the leases had lapsed and were subsequently scooped up by LOLA Energy II (see 
With yesterday’s historic crash in the price of West Texas Intermediate (WTI) oil comes a big boost in the stock price for a number of Marcellus/Utica drillers. As we’ve outlined multiple times, but will repeat here again, stock traders believe that with the crash in oil prices and U.S. shale oil drillers laying down rigs faster than we can count, the high volume of “associated gas” coming from the oilfields will vastly decrease. That means less supply in the market. With less supply and the same (or increasing) demand comes higher prices for natgas. And higher prices for natgas means more profits and likely more new drilling for Marcellus/Utica drillers. Hence, investors are snapping up stocks for M-U drilling companies.
EQT and U.S. Well Services (USWS) have signed a deal for USWS to provide electric fracking for one-third of EQT’s completions operations over the next three years. Does USWS (and e-fracking) sound familiar? It should! Range Resources signed with USWS in January (see 
Companies in the Marcellus/Utica shale industry have stepped up and given money, and in some cases retooled manufacturing operations, in order to help communities, first responders and medical professionals respond to the COVID-19 coronavirus pandemic. Companies like ExxonMobil, Range Resources, Cabot Oil & Gas, EQT, Alta Resources, Chevron, Greylock Energy, Olympus Energy, Penn E&R, Southwestern Energy and others. We are gratified and proud of the industry where we hang our hat.
Last week MDN told you that a contractor working in EQT’s hydraulic fracturing (“completions”) operation who had worked at a site in Belmont County, OH tested positive for COVID-19 coronavirus (see 
The Pittsburgh Business Times is reporting that a contractor working in EQT’s hydraulic fracturing (“completions”) operation who last worked at a site in Belmont County, OH has tested positive for COVID-19 coronavirus. Because that worker has been in contact with a number of other workers in EQT’s completions unit, the company has temporarily shut down all completions (fracking) operations. In a separate and unrelated announcement, EQT told investors they are (for now) suspending quarterly dividend payments and will use the money instead to pay down near-term debt.
Yesterday EQT, the nation’s largest natural gas producing company, issued a press release to update investors and the marketplace on a couple of important issues. First, the company has sliced off another $75 million in previously-planned spending for 2020. The company now plans to spend $1.075 – $1.175 billion on drilling and other expenses this year. Second, the company “has entered into an agreement with a third-party to permanently release firm transportation obligations of approximately 400 MMcf/d, or approximately 15% of EQT’s current portfolio.” Translation: EQT was able to cancel 15% of the contracted pipeline capacity they had, lowering expenses.
A number of Marcellus/Utica drillers and pipeline companies are taking action to slow and potentially stop the spread of the COVID-19 coronavirus. Several companies (so far) have instituted mandatory work-from-home orders. Those companies include the Pittsburgh-based companies CNX Resources, Equitrans, and EQT Corp. By the time this is published more may have joined the list.