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EQT CORP. Reports Operating Results (10-Q)

October 25, 2012 | About:
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10qk

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EQT CORP. (EQT) filed Quarterly Report for the period ended 2012-09-30.

Eqt Corporation has a market cap of $9 billion; its shares were traded at around $60.72 with a P/E ratio of 34.2 and P/S ratio of 5.5. The dividend yield of Eqt Corporation stocks is 1.5%. Eqt Corporation had an annual average earning growth of 7.8% over the past 10 years.

Highlight of Business Operations:

The average realized sales price to EQT Corporation for production sales volumes was $4.04 per Mcfe during the third quarter of 2012 compared to $5.25 per Mcfe in the same period of the prior year. The average NYMEX natural gas price decreased to $2.81 in 2012 from $4.19 in 2011. Hedging activities resulted in an increase in the price of production sales volumes of $1.16 per Mcf in 2012 compared to $0.47 per Mcf in 2011 as a result of higher volumes being hedged and decreases in NYMEX natural gas prices in the current year.

The average realized sales price to EQT Corporation for production sales volumes was $4.21 per Mcfe during the nine months ended September 30, 2012 compared to $5.42 per Mcfe in the same period of the prior year. The average NYMEX natural gas price decreased to $2.59 in 2012 from $4.21 in 2011. Hedging activities resulted in an increase in the price of production sales volumes of $1.38 per Mcf in 2012 compared to $0.46 per Mcf in 2011 as a result of higher volumes being hedged and lower NYMEX natural gas prices in the current year.

Total operating revenues were $195.3 million for the three months ended September 30, 2012 compared to $207.5 million for the three months ended September 30, 2011. The $12.2 million decrease in operating revenues was primarily due to a 29% decrease in the average wellhead sales price to EQT Production which more than offset a 33% increase in production sales volumes. The $1.17 per Mcfe decrease in the average wellhead sales price to EQT Production was primarily due to a 33% decrease in the average NYMEX price as well as lower NGL and basis prices partially offset by higher hedging gains and lower gathering rates compared to the third quarter of 2011. The average wellhead sales price was also impacted unfavorably in 2012 by an increase in the cost of third party transmission capacity, net of excess capacity sales, primarily due to the new transmission capacity on the El Paso 300 line. The increase in production sales volumes was primarily the result of increased production from the 2011 and 2012 drilling programs in the Marcellus play. This increase was partially offset by the normal production decline in the Companys wells.

Total operating revenues were $549.3 million for the nine months ended September 30, 2012 compared to $577.4 million for the nine months ended September 30, 2011. The $28.1 million decrease in operating revenues was primarily due to a 26% decrease in the average wellhead sales price to EQT Production which more than offset a 29% increase in production sales volumes. The $1.06 per Mcfe decrease in the average wellhead sales price to EQT Production was primarily due to a 39% decrease in the average NYMEX price as well as lower basis and NGL prices partially offset by higher hedging gains and lower gathering rates compared to 2011. The increase in production sales volumes was the result of increased production from the 2011 and 2012 drilling programs in the Marcellus, as well as the acquisition of producing properties associated with the ANPI transaction in May 2011 which added 2.6 Bcfe of sales volumes in the nine months ended September 30, 2012. This increase was partially offset by the normal production decline in the Companys wells.

Net operating revenues were $120.0 million for the first nine months of 2012 compared to $137.8 million for the first nine months of 2011. Net operating revenues from residential customers decreased $10.9 million as a result of weather which was 19% warmer than the first nine months of 2011 (22% warmer than the 30-year National Oceanic and Atmospheric Administration (NOAA) average for the Companys service territory). According to the NOAA, it was the warmest January through March time period on record in the Companys service territory. Commercial and industrial net operating revenues also decreased approximately $3.8 million primarily due to warmer weather and a decrease in performance-based revenues. Off-system and energy services net operating revenues decreased $3.1 million primarily due to a favorable change in estimated recoverable costs in 2011 and fewer asset optimization opportunities realized during the first nine months of 2012 as compared to the same period in 2011. These decreases were partially offset by higher revenues from gathering activities resulting from increased rates. The decreases in total operating revenues and purchased gas costs were primarily due to lower customer throughput as a result of warmer weather during the first nine months of 2012, a decrease in the commodity component of tariff rates and a decrease in asset optimization transactions.

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10qk
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