PITTSBURGH - EQT Corporation (NYSE: NYSE:EQT (ST:EQTAB)), a prominent independent natural gas producer, has entered into an agreement to sell a 40% interest in certain non-operated natural gas assets in Northeast Pennsylvania. The deal with Equinor USA Onshore Properties Inc. and its affiliates is expected to generate approximately 225 million cubic feet per day of net production in 2025.
The transaction, valued at $500 million in cash, also includes the exchange of upstream and midstream assets. EQT will acquire roughly 26,000 net acres in Monroe County, Ohio, and about 10,000 net acres in Lycoming County, Pennsylvania, with respective 2025 estimated net productions of 135 million cubic feet equivalent per day (MMcfe/d) and 15 MMcfe/d.
Additionally, EQT will gain a 16.25% interest in EQT-operated gathering systems in Lycoming County and a gas buy-back agreement with Equinor that promises a premium to in-basin pricing through early 2028.
Toby Z. Rice, President and CEO of EQT, remarked on the strategic benefits of the transaction, emphasizing the anticipated value over $1.1 billion, including synergies and optimization of the development plan. Rice also noted the deal's role in EQT's divestiture program and its contribution to the company's de-leveraging goals.
Subject to customary closing adjustments and necessary regulatory approvals, the transaction is slated to close in the latter part of the second quarter of 2024. EQT anticipates no cash tax implications from the deal.
Jefferies LLC and TD Securities served as financial advisors, while Kirkland & Ellis LLP provided legal counsel to EQT for the transaction.
EQT Corporation, headquartered in the Appalachian Basin, is dedicated to responsible development of its natural gas resources, emphasizing operational efficiency, technology, and sustainability. The company maintains a strong focus on safety, environmental stewardship, and community engagement.
The information in this article is based on a press release statement.
InvestingPro Insights
EQT Corporation's recent move to sell a significant interest in its non-operated natural gas assets aligns with a broader strategy to optimize its portfolio and strengthen its financial position. According to InvestingPro data, EQT holds a market capitalization of approximately $16.42 billion and maintains a Price/Earnings (P/E) ratio of 8.15, which slightly increased to 8.7 in the last twelve months as of Q4 2023. Despite a notable revenue decline over the same period, with a decrease of 58.53%, the company has managed to maintain a robust gross profit margin of 53.44% and an operating income margin of 50.64%.
InvestingPro Tips indicate that while analysts have revised their earnings expectations downwards for the upcoming period, they also predict the company will remain profitable this year. In fact, EQT has been profitable over the last twelve months. This suggests that the company's financial health, despite facing challenges, remains on solid ground. Investors interested in EQT's financial metrics and future earnings projections can find additional insights on InvestingPro, where more than three additional InvestingPro Tips are available. Use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
As EQT continues to navigate through its divestiture program and aims to de-leverage its balance sheet, these financial metrics and insights could prove valuable to investors monitoring the company's progress towards achieving its strategic goals and assessing its potential for long-term value creation.
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