EQT Loses $1.2B in 2019; Looks to Trim Debt by $1.5B in 2020
Yesterday the largest natural gas producing company in the United States, EQT, issued its fourth-quarter and full-year 2019 update. As is typical with these updates, EQT’s top brass (CEO Toby Rice) also spoke about the company’s strategy for the coming year. Of particular note is that EQT has struck a new deal with EQM Midstream (Equitrans) to get lower fees for gathering and piping the company’s natgas–a $535 million break in fees (see today’s companion story). Also of note was Toby’s comments about trimming the company’s debt load of $5.3 billion by about 30%, or $1.5 billion, this year. How does he plan to do that?
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Both EQT (the driller) and Equitrans (the midstream company) issued their quarterly/full-year 2019 updates yesterday. Equitrans, formerly EQT Midstream, separated from EQT in November 2018. Equitrans, via its EQM Midstream affiliate, gathers, processes, and flows most of EQT’s natural gas production, getting it to market. Last fall EQT began intense negotiations with Equitrans to lower its midstream costs (see 
The value of a company’s stock price is important, for a variety of reasons. The stock price reflects investor confidence in whether the company can earn its keep and grow profits in the future. A higher stock price wards off takeovers. Upper management gets a raise. And the company can borrow money when it needs to at reasonable interest rates. All sorts of reasons why the stock price is important. Unfortunately for top drillers in the Marcellus/Utica, their stock prices have tanked. As a group, and individually, the stock price is either near or even at the lowest it’s *ever been.* Let that sink in.
EQT is working on a deal to sell an “overriding royalty interest” (future share of royalty revenues) generated from the company’s prolific Marcellus/Utica production in return for a cool $1 billion. That’s according to a Reuters article published on Friday.
On Monday EQT, the nation’s largest natural gas producer (based in Pittsburgh) filed an update with the SEC to say it would write down the value (called an impairment) for some of it’s Marcellus/Utica assets–to the tune of $1.8 billion (see 
In a Securities and Exchange Commission (SEC) filing made yesterday, EQT, the country’s largest natural gas producer, informed the SEC (and investors) it will likely take an impairment charge (“write down”) for the value of some of its Marcellus/Utica assets–by $1.4 to $1.8 billion. Which pales in comparison to Chevron’s write down of it’s M-U assets to the tune of $5+ billion (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 
For months MDN has brought you bits and pieces of news from individual drillers, detailing plans to cut back on spending for new drilling in the Marcellus/Utica in 2020. It’s not just happening in the M-U–it’s happening across the country. The experts at RBN Energy have a terrific new post that pulls information about major drillers scaling back into one place. They analyze spending by three different groups of drillers: oil-focused, diversified, and gas-focused drillers. In the third category, all but one of the gas-focused drillers have major operations in the M-U. The stats are sobering. As a collective group, M-U gas drillers have pledged to cut their 2020 budgets 25% from the already-lower spending that happened this year. Ouch.
West Virginia’s co-tenancy law was signed into law by Gov. Jim Justice in March 2018 (see 
Masquerading as a nonpartisan, independent nonprofit, the Institute for Energy Economics and Financial Analysis (IEEFA) reportedly “conducts research and analyses on financial and economic issues related to energy and the environment.” The Institute’s stated mission is “to accelerate the transition to a diverse, sustainable and profitable energy economy.” In other words, they’re anti-fossil fuels. We spotted an article appearing on OilPrice.com that quotes a new “study” issued by IEEFA. The article opens by saying, “drillers in Appalachia are in particularly bad shape.” Is it true? Is the end near? Is it a shalepocalypse?
What’s the clinical term for a person who intentionally wants to harm him or herself? Self harm? Self injury? Self flagellation? That’s what we call the situation at the NGSA (Natural Gas Supply Association) which yesterday said it supports an economy and shale-killing carbon tax “as a critical pathway to aggressively reducing carbon emissions.” Are they nuts? Have they lost their collective minds?!
During the proxy fight earlier this year to control EQT Corporation’s board–and ultimately its management team–Toby Rice threw some sharp barbs including talk that EQT’s existing management was not up to the task of effectively running the company. The Rice boys said so, their board nominees said so, and Institutional Shareholder Services (ISS) said so. There will be change (i.e. personnel change) at the “operational level” said ISS. Imagine our surprise when, after assuming control, Toby said there would *not* be a wholesale replacement of top management (see