Jul 28, 2016 3 min read

PITTSBURGH – EQT Corp. Thursday reported a second-quarter net of $258.6 million, or $1.55 per diluted share, compared to second quarter 2015 net income of $5.5 million, or 4 cents per share.

The Pittsburgh-based natural gas exploration and production company said its adjusted net loss was $57.6 million excluding hedge losses totaling $234.7 million in the second quarter, resulting from a significant improvement in forward natural gas prices.

The company said the loss for the quarter was $48.4 million lower than the second quarter 2015; and adjusted loss per share was 35 cents, down from a loss per share of 6 cents for the second quarter 2015. Adjusted operating cash flow attributable to EQT was $113.8 million; $32.7 million lower than the second quarter 2015.

For the latest reporting period, EQT saw its production sales volume of 184.5 billion cubic feet rise by 26 percent over the second quarter of 2015. Midstream gathering revenue was up 11 percent, while midstream transmission revenue was 14 percent higher than the comparable quarter of 2015.

However, the realized price was 23 percent lower.

During the quarter the company acquired 62,500 Marcellus and 53,000 Utica acres from Statoil.

EQT Production’s operating loss totaled $444 million for the quarter, compared to operating loss of $66.9 million in 2015. Operating revenue totaled $72.0 million for the second quarter 2016, which was $316.8 million lower than the second quarter 2015, primarily because of a lower average realized sales price, which more than offset the increase in production sales volume.

EQT Production’s adjusted operating loss totaled $112.5 million for the quarter, excluding hedge losses totaling $234.7 million, resulting from a significant improvement in forward natural gas prices, compared to adjusted operating loss of $31.8 million in 2015. Adjusted operating revenue for the quarter was $390.1 million, which was $14.7 million lower than the same period last year, primarily because of a lower average realized sales price, which more than offset the increase in production sales volume. Average realized price for the second quarter 2016 was $2.11 per Mcfe, 23% lower than the $2.75 per Mcfe realized in the same period last year.

EQT drilled 28 wells during the second quarter, including 27 Marcellus wells and one Utica well. The company said it plans to accelerate its drilling program for the second half of 2016 by drilling an additional 63 wells – 33 Pennsylvania Marcellus wells and 30 Upper Devonian wells – for a total of 105 Marcellus and 30 Upper Devonian wells in 2016.

The company’s 2016 capital expenditure forecast of $1 billion is unchanged, as lower costs per well offset the costs of increased activity.

EQT Midstream’s second quarter operating income was $124.5 million, an increase of $16.3 million over the second quarter 2015, primarily as a result of increased gathering and transmission revenue, partially offset by increased operating expenses. Operating revenue was $214.3 million, which was $21.9 million higher due to higher Marcellus volume. Gathering revenue was 11 percent higher at $136.4 million and transmission revenue increased by 14 percent to $69.7 million.

Total operating expenses for the quarter were $89.8 million, $5.5 million higher than last year.

On July 8, EQT closed a transaction with Statoil USA, acquiring 62,500 net acres located in EQT’s core Marcellus development area of West Virginia.

On May 6, the company completed a $796 million common stock offering. A portion of the proceeds was used to fund the acquisition.