EQT Corp

Energy Companies | EQT Corp | Statewide WV | West Virginia

EQT Bd Member Continues to Stir Controversy in WV Gov Office Role
December 18, 2017December 18, 2017

Bray Cary

This is a story that won’t go away. Last week MDN told you about the kerfuffle over EQT board member Bray Cary and his work as an unpaid, “informal” adviser to WV Gov. Jim Justice (see EQT Board Member Unofficial Adviser to WV Gov Justice and More on EQT Board Member Serving in WV Gov’s Office). Cary has his own “swipe card” giving him 24/7 access to the Capitol. Cary has been “taking part in policy-oriented meetings.” He’s not on the payroll and he doesn’t answer to anyone. He’s also not subject to the state Ethics Act. Because Cary sits on the EQT board, and EQT has big assets in WV, critics see a conflict of interest. In our own simple words, Bray Cary has become a problem for EQT–a problem that needs to get fixed, fast. He either needs to end his role as unpaid adviser to West Virginia Gov. Jim Justice, or resign from EQT’s board of directors. Continuing to function in both roles is clearly a distraction EQT doesn’t need–and doesn’t want…
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Energy Companies | EQT Corp

EQT Drills Longest Marcellus Well Ever, Reveals 2018 Plans
December 14, 2017December 15, 2017

EQT, the country’s largest natural gas producer after buying out Rice Energy, announced yesterday their plans for 2018. The company will spend a massive $2.4 billion on exploration & production (drilling)–all of it in the Marcellus/Utica region. EQT is spending 60% more money spent on drilling in 2018 than they did in 2017. What will $2.4 billion buy you? In the Marcellus, EQT will drill 139 wells (111 in PA and 28 in WV). In the OH Utica, EQT will drill 38 wells. And in the Upper Devonian (in PA), EQT will drill 19 wells. EQT plans to bring online 160-170 wells in the Marcellus, 40-50 wells in the Utica, and 20-25 in the Upper Devonian. However, all of the reporting we’ve seen on yesterday’s announcement from EQT fails to highlight what we consider to be some of the biggest news of the day: EQT has become the reigning champ for drilling the longest Marcellus Shale well. The previous reigning champ was Range Resources, drilling a Marcellus well 15,000 feet long (see Range Resources Drills Longest Marcellus Well Ever – in Washington Co.). EQT has sailed far beyond the Range well by drilling a well 17,400 feet long in Washington County, PA (as was Range’s monster Marcellus well.) The EQT well, called Haywood H18, was brought online earlier this week. And that’s not all. EQT plans to drill 27 more monster Marcellus wells with laterals longer than 17,000 feet in 2018! Congrats to the biggest producer in the U.S., who now has the biggest Marcellus well ever drilled!…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream | Industrywide Issues | M&A | Rice Energy | Rice Midstream

EQT Begins Process of Separating Midstream…into New Company?
December 14, 2017December 14, 2017

Yesterday EQT released details about their plans for 2018 (see our lead story today, EQT Drills Longest Marcellus Well Ever, Reveals 2018 Plans). Plenty of news sources covered that news. However, EQT Midstream, the pipeline subsidiary of EQT, also released an announcement, which received almost no media coverage. And yet there is, for us, some big news in the EQT Midstream announcement. As you know by now, EQT recently bought and merged in Rice Energy, creating the largest onshore natural gas producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). EQT bought not only Rice the driller, but Rice the midstream company too. EQT has it’s own EQT Midstream subsidiary. And yet, EQT (the driller) still owns a number of midstream/pipeline assets, on paper, separate from EQT Midstream. Same with Rice Energy–they had Rice Midstream Partners as a subsidiary. It’s all kind of a mish mash–with pipeline assets spread around four (or more) different entities on paper. Yesterday’s announcement by EQT Midstream said (a) the EQT parent company is considering “dropping down” (shifting ownership on paper) for all remaining midstream assets to EQT Midstream, and (b) EQT is also considering combining EQT Midstream and Rice Midstream Partners into one single entity–one division for all midstream assets. Which certainly makes sense. Why not tidy up the operations and get everything under one umbrella? Except we think there may be another reason for combining all of the midstream assets into one, neat, lovable bundle: spinning off the midstream division into its own standalone company, completely separate from the EQT parent…
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Energy Companies | EQT Corp | Statewide WV | West Virginia

More on EQT Board Member Serving in WV Gov’s Office
December 13, 2017December 13, 2017

Yesterday MDN told you about EQT board member Bray Cary and his work as an unpaid, “informal” adviser to WV Gov. Jim Justice (see EQT Board Member Unofficial Adviser to WV Gov Justice). WV media continues to track (hound) this story. The bone of contention is that Cary, who is a long-time WV resident (lives in Charleston) appears to have unfettered access to Justice. Cary has his own “swipe card” giving him 24/7 access to the Capitol. Cary has been “taking part in policy-oriented meetings.” He’s not on the payroll and he doesn’t answer to anyone. He’s also not subject to the state Ethics Act. And because Cary sits on the EQT board, and EQT has big assets in WV (and a big interest in pushing for a forced pooling law), critics see a conflict of interest. But is there? Yes, Cary sits on the EQT board, but that’s just one small piece of Cary’s background and active life. Cary is “best known for his former role as an executive with West Virginia Media.” He’s a player. He’s connected. An important guy. And Gov. Jim Justice wants to bend his ear on occasion, to get Cary’s advice and feedback. The real issue is not will/does Cary’s presence give EQT some sort of unfair advantage in the highest levels of WV state government. The real issue is the *appearance* of a conflict of interest–whether there actually is one or not…
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Energy Companies | EQT Corp

EQT Board Member Unofficial Adviser to WV Gov Justice
December 12, 2017December 12, 2017

EQT, now the largest natural gas producer in the United States since adding Rice Energy to the fold, has major assets in West Virginia–wells and leased acreage. The company also has a lot of influence in the state–in the judiciary (see WV Supreme Court Reverses Itself, Post-Production Deductions OK), the legislature (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018), and now in the executive branch. News has just broken that EQT board member Bray Cary is an unpaid, “informal” adviser to Gov. Jim Justice–a situation that’s raising some eyebrows…
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Accidents | Energy Companies | EQT Corp | Industrywide Issues | Marshall County | Trans Energy | West Virginia

Fire at EQT Well Pad in Marshall County, WV
November 30, 2017November 30, 2017

Yesterday, gas processing equipment at a Trans Energy well pad (now owned by EQT) in Marshall County, WV caught fire. The important things to know: (1) The fire was quickly extinguished, (2) nobody was injured, (3) this was not a well fire and was not related to drilling or fracking. There is a single operating Marcellus well at that location–drilled back in 2011. The well has been producing natural gas and other hydrocarbons since that time. As is common, some of the hydrocarbons (like condensate) are separated right at the well location, by equipment located near the pad. The fire began in that processing equipment. No residents were evacuated and the fire was out within a few hours. However, workers at the nearby Williams Fort Beeler natural gas processing plant were evacuated for a brief time, out of “an abundance of caution”…
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Energy Companies | EQT Corp | Industrywide Issues | Lease & Royalty Payments | Litigation | Statewide WV | West Virginia

U.S. Supreme Court Rejects Appeal of WV EQT Royalty Case
November 30, 2017November 30, 2017

The United States Supreme Court has refused to hear an appeal of an important West Virginia case, which means the current ruling stands that allows EQT and other drillers to deduct “reasonable” post-production expenses from landowner royalty checks. It is a victory for drillers and a blow to some landowners. How did we get here? A brief history: Last December MDN reported on the huge WV Supreme Court decision against EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). In February this year, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). In May the WV Supreme Court ruled on the reheard case, overturning its previous decision from last December. The court ruled to allow EQT to deduct “reasonable” post-production expenses (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Those who won the original case (and lost the reheard case) say newly elected Supreme Court Justice Elizabeth Walker had conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed. Newly elected Justice Walker, with (according to the losing side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, the case was appealed to the U.S. Supreme Court in September (see Lawyers ask US Supreme Court to Hear WV EQT Royalty Case). On Monday, with no explanation, the Supremes denied the request for an appeal…
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Accidents | Energy Companies | EQT Corp | Industrywide Issues | Pennsylvania | Regulation | Tioga County (PA) | Wastewater

PA Supreme Court Hears Arguments in EQT Wastewater Leak Case
November 29, 2017November 29, 2017

Buckle up while we explain the background for this story. In October 2014, the DEP fined EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT had sued the DEP over a different matter–that is, sour grapes. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. Not long after that ruling, the Environmental Hearing Board, a special “court” set up to hear appeals of DEP decisions, decided to reduce the original $4.5 million fine down to $1.1 million (see PA Hearing Board Reduces EQT Fine from $4.5M to $1.1M). We thought that would be the end of it. But no! Both the DEP and EQT appealed the matter back up to the PA Supreme Court and yesterday the Supremes heard the case once again…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Rice Energy CEO Dan Rice Gets $2.6M Golden Parachute from EQT
November 20, 2017November 20, 2017

The golden parachute has popped open for Rice Energy’s former CEO, Dan Rice IV. And it’s worth $2.6 million. EQT filed paperwork with the Securities and Exchange Commission last week to say that Dan Rice IV has been terminated (as an employee) as of the day the two companies merged. In a deal worked out prior to the merger, Dan is getting a check for $2.6 million–$1.91 million as a severance payment and $704,000 in lieu of his annual bonus. Which frankly doesn’t sound like a whole lot, given Dan was one of the shareholding owners of Rice Energy. His salary in 2016 was $3.35 million. But don’t shed any tears for Dan. We suspect his stock in the newly-merged EQT is worth a fortune. And Dan gets a seat on the EQT board of directors, a gig that will pay him. What’s next for Dan and the other Rice boys? We don’t have the particulars for all of the Rice boys, but we do know (from the SEC filing) that Dan signed a 3-year non-compete agreement, so we won’t see Rice Energy II in the northeast for at least three years. Other than that, we suspect the boys already have something up their proverbial sleeve. The Rice boys don’t strike us as the lounge-around-the-pool types…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Pennsylvania | Rice Energy | Washington County

Out with the Old – Part 2: EQT Sign Replaces Rice at HQ Building
November 17, 2017November 17, 2017

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). In that post we shared with you a short video taken by an MDN friend that showed a pair of cranes taking down the Rice Energy name from Rice’s (now former) headquarters building in Canonsburg, PA (just outside Pittsburgh). Another MDN friend sent us a pair of pictures (below), taken the following day, which show an EQT sign now fixed over top of where the Rice Energy sign once stood. Our second MDN friend also told us that all the parking lot signs at the facility have EQT stickers on them, covering over the Rice Energy name. As we said in our Tuesday post, EQT isn’t wasting any time making a statement: Out with the old, in with the new. EQT is firmly large and in charge. A few days after the merger and Rice is already a memory, starting to fade away…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Corp Raider Slinks Away After Losing EQT Fight; Selling Stock
November 17, 2017November 17, 2017

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way to the deal getting done–primarily opposition by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to vanquish Jana’s efforts to stop the merger. How did EQT do it? We went behind the curtain yesterday to share EQT’s winning strategy in defeating Jana (see EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal). They way corporate raiders work, as we’ve explained many times before, is to buy enough stock in a company to get a board seat, then agitate in the board room, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so the raider can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations. Since Jana lost face and reputation by not stopping the EQT/Rice merger, they’ve decided to slink away, back into the darkness. We spotted a story that says Jana has already sold a portion of their EQT stock–and they continue shop more of it. They’ve thrown in the towel on EQT and will now go pick on someone else to destroy…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal
November 16, 2017November 16, 2017

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Another corporate raider, D.E. Shaw, piled on too, but at least they supported the deal to merger Rice into EQT (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). You know we loathe corporate raiders. They buy enough stock in a company to get a board seat, then agitate, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so they can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations and disgusting people. Jana was the primary opponent to the EQT/Rice deal. Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to fend off Jana’s efforts against their company. How did they do it? That was the subject of a recent post on the Seeking Alpha investor’s website. Here’s a fascinating look at the strategy EQT used to fend off an evil corporate raider…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger
November 14, 2017November 17, 2017

Yesterday the Marcellus/Utica experienced a fracking earthquake of historic proportions. That is, a fracking earthquake metaphorically speaking. Yesterday Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States. The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Shame on both of them. Fortunately their effort to stop the deal didn’t gain traction. Yesterday was the day when the two companies became one. Two Rice Energy board members, Dan Rice IV and Bobby Vagt, joined the EQT board. Another two independent (outside either firm) board members were also added–Thomas Karam, founder and Chairman of Karbon Partners, and Norman Szydlowski, former president and CEO of SemGroup Corporation. Standing by the virtual water cooler, MDN has overheard that many Rice personnel were nervous about what yesterday would bring. You know the routine: Two rooms–one for those staying, and one for those getting the heave-ho. Everyone waiting to get “the call” to whichever room they’re assigned. We’ve been there. It sucks. But that’s the reality in today’s corporate world. One thing we found interesting is that the huge Rice Energy sign on the company’s (former) HQ building was taken down yesterday–the very day the two merged. An MDN friend caught some of it on a smartphone video (below). EQT isn’t wasting any time making a statement: In with the new, out with the old…
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Antero Resources | Eclipse Resources | Energy Companies | EQT Corp | Hydraulic Fracturing | Industrywide Issues | Range Resources Corp

Longer Laterals Major Trend in 2017 Marcellus-Utica Drilling
November 14, 2017November 14, 2017

Yesterday MDN updated you on Eclipse Resources’ program of drilling looooong laterals–the horizontal part of shale wells (see Eclipse Res. 3Q17: Super-Laterals Proving to be Super Productive). Eclipse is the reigning champ, having drilled the three longest onshore horizontal wells–in the WORLD. Upward of 3.5 miles underground! All three of Eclipse’s record-breakers are Utica wells. However, Eclipse isn’t the only driller hopping on the long lateral bandwagon. In June, Range Resources reported drilling the longest Marcellus lateral well (see Range Resources Drills Longest Marcellus Well Ever – in Washington Co.). If you compare the lateral length of Range’s wells from 3Q17 with 3Q16, they are drilling laterals 90% longer than they were just one year ago! EQT and Antero Resources are also experimenting with longer laterals. All of which leads us to christen 2017, “the year of the longer lateral”…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

EQT/Rice Shareholders Make it Official – Merger Happens Nov 13
November 10, 2017November 14, 2017

Next Monday the largest natural gas-producing company in the these United States will be born–from the merger of EQT and Rice Energy, based in Pittsburgh. Yesterday the shareholders for both EQT and Rice voted to approve the merger/deal by overwhelming majorities. The megadeal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). Evil corporate raider Jana Partners tried to stop the deal–but failed, as they acknowledged earlier this week (see Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote). Next Monday the transaction will be complete and the new EQT will produce more natural gas in the Lower 48 States than Chesapeake Energy, the current reigning champ. Some 84% of the EQT shareholders who voted, voted to approve the deal, and 74% of voting Rice shareholders voted in favor of the deal. What happens next? After the consummation of the merger on Monday, EQT CEO Steve Schlotterbeck said the company will immediately appoint a committee to look into…splitting the company. Yes, you read that right. Not splitting it back into EQT and Rice, but splitting it into upstream (drilling) and midstream (pipelines). Two companies will become one and then become two again. Go figure. A recommendation and decision about whether to proceed with a split will happen, according to Schlotterbeck, by “the end of the first quarter 2018.” There’s little doubt the decision will be “yes” on a split…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote
November 6, 2017November 6, 2017

The guy who runs the investment firm Jana Partners, Barry Rosenstein, is a corporate raider. He invests millions in a company he’s targeted in order to get one or two people elected to the board of directors. Those people then agitate and force the company to lay off hundreds or thousands of employees, and sell off assets, in a bid to make the stock price jump. When the price does jump, corporate raiders like Rosenstein then sell their shares, making a profit on the new/higher price (buy low sell high). It may be legal, but we consider it immoral. In June, EQT, one of the biggest drillers in the Marcellus/Utica, announced a deal to buyout and merge in Rice Energy, another sizable M-U driller (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later Jana targeted EQT in an attempt to stop the deal (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana believes it could make a whole lot more money if the deal doesn’t go through, and instead if EQT splits itself in two–one half a drilling company, the other half a pipeline company (firing a bunch of people along the way). So Jana went on a smear campaign, making all sorts of wild accusations against EQT, including calling EQT management’s compensation structure “perverse,” and accusing the company of using “deceptive” maps of EQT and Rice acreage positions (see Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9). All the trash-talking and bullying didn’t worked. The deal will happen–this week–and Jana is now officially throwing in the towel. They will still vote against the deal with their shares, but they have withdrawn their proxy fight to enlist enough other shares to vote down the deal…
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