EQT 2015 Update: Production Up 27%, Price Received Down 35%
EQT issued its fourth quarter and full year 2015 numbers yesterday. EQT is one of the largest drillers in the Marcellus Shale, and increasing in the Utica (see today’s companion article, EQT is in Love with the Utica – Comments from Analyst Call). The bad news is that EQT lost $134.5 million in just 4Q15. The good news is that unlike many other companies, EQT actually made money for the full year–a profit of $85 million–although that’s down from $387 million in 2014. EQT pulled 27% more gas from its wells in 2015 than it did in 2014, but the company saw a 35% decline in the average price it received in 2015. Yesterday’s update yields some bad news, but on the whole we’d say it’s good news for EQT. Some interesting stats from the update: As of Dec. 31, 2015, EQT has drilled 854 Marcellus wells with 693 of them online and flowing and another 57 wells completed but not yet hooked up to a pipeline. Here’s the full report…
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In addition to releasing their third quarter 2015 results yesterday, the top brass from EQT also held an analyst phone call. On that call we got updated details from EQT’s president of exploration and production, Steven Schlotterbeck, about the single highest initial-producing Utica Shale well ever drilled, EQT’s Scotts Run 591340. We also heard from Steve about two more Utica wells they’re currently drilling–one in Greene County, PA (about five miles from the Scott’s Run well), and one in Wetzel County, WV. But the big news from yesterday’s call came from EQT CEO David Porges. He said EQT has decided to suspend drilling in central PA and in the Upper Devonian–anyplace outside of their “core” Utica locations. Essentially, EQT is giving up on the Marcellus (for now) and going after the Utica instead. This is certainly big news and affects landowners in Marcellus-only areas–pretty much any place outside of southwest PA and the northern panhandle of WV. Porges says IF the Utica pans out as expected, it will be bigger than the Marcellus production-wise over time. EQT’s current thinking is that they will trim their drilling program to concentrate on drilling 10-15 Utica wells in 2016…
EQT published their third quarter 2015 financials and operating update yesterday. Like Southwestern and other Marcellus/Utica drillers releasing their updates, EQT shows good news, like an increase in production (27% higher in 3Q15 than in 3Q14). However, there’s also the bad news: EQT got 55% less money for their gas in 3Q15 than they did a year ago. Consequently it shows up in the bottom line. In 3Q14 EQT had a $77 million profit, in 3Q15 they had a $50 million loss. Here’s the full update with select financials…