Financial Data and Key Metrics Changes - The company reported approximately $240 million of Q2 free cash flow, despite incurring $134 million in net expenses related to a litigation settlement [6] - Cumulative free cash flow generation totaled nearly $2 billion over the past three quarters, with natural gas prices averaging just $3.3 per million Btu during this period [6] - The company exited the quarter with $7.8 billion of net debt, down approximately $350 million compared to Q1, marking nearly $6 billion of debt reduction over the past three quarters [16] Business Line Data and Key Metrics Changes - Production was at the high end of guidance, benefiting from robust well productivity and outperformance from compression projects [5] - Capital spending came in approximately $50 million below the low end of guidance, driven by midstream spending optimization and lower well costs [5] - The company closed on the acquisition of Olympus Energy, which is expected to enhance production and operational integration [7] Market Data and Key Metrics Changes - The company expects to add 180,000 horsepower of compression to the MVP mainline, increasing capacity from 2 to 2.5 Bcf per day, to serve Southeast markets [8] - The MVP Southgate project is expected to provide 550 million cubic feet per day of capacity into the Carolinas, enhancing natural gas delivery reliability [9] - The company anticipates significant demand growth in the Southeast, driven by new projects and partnerships [10] Company Strategy and Development Direction - The company is focused on sustainable growth through a pipeline of low-risk, high-return projects in both midstream and upstream businesses [8] - The strategy includes reducing cash flow risk and creating pathways for sustainable cash flow growth, with a focus on organic investment opportunities [14] - The company aims to leverage its low-cost structure and integrated infrastructure to capture new demand and meet it with supply backed by firm contracts [13] Management's Comments on Operating Environment and Future Outlook - Management expressed a structurally bullish view for natural gas prices looking out to 2026 and 2027, despite near-term headwinds [22] - The company noted that U.S. oil activity is expected to remain subdued, curbing a major source of incremental gas supply [23] - Management highlighted the importance of maintaining flexibility in production decisions based on market conditions and pricing signals [40] Other Important Information - The company has a pipeline of nearly $1 billion of organic investment opportunities, expected to generate an aggregate free cash flow yield of approximately 25% once fully online [12] - The company is working on long-term agreements to supply natural gas for significant power generation projects, enhancing its growth potential [10][11] - The company plans to continue focusing on debt paydown while also exploring opportunistic share buybacks during market downturns [20] Q&A Session Summary Question: Can the company continue to build cash while spending on growth? - Management emphasized the ability to generate robust free cash flow while funding sustainable growth opportunities, with capital expenditures back-weighted towards 2028 [34][36] Question: What would it take to add production instead of reallocating? - Management indicated that production growth decisions would be based on market pricing and demand signals, with a focus on maintaining flexibility [38][40] Question: Can management discuss the evolution of capital spending? - Management noted that maintenance capital expenditures are expected to decrease while growth capital expenditures will increase, reflecting operational efficiencies [46] Question: How does the company view the LNG contracting plans? - The company aims to link supply directly to end users in the LNG market, with a long-term goal of maintaining 5% to 10% of volume in LNG contracts [88][90] Question: What is the outlook for the M2 pricing dynamics? - Management discussed the potential for basis tightening in the M2 market, with a focus on matching supply with demand through existing infrastructure [95][100]

Financial Performance - EQT's 2Q25 total sales volumes reached 568 Bcfe[8] - The average realized price was $2.81 per Mcfe[8] - Adjusted EBITDA attributable to EQT was $1,033 million[8] - Free cash flow attributable to EQT was $240 million[8] - Capital expenditures amounted to $554 million[8] Operational Efficiency and Cost Reduction - Capital spending was 15% below guidance midpoint due to efficiency gains[9] - Per unit operating costs were below the low-end of guidance due to lower LOE and SG&A expense[9] - Updated guidance increases annual production by 100 Bcfe and lowers operating cost guidance by 6 cents per Mcfe[9] Strategic Growth and Infrastructure Projects - Working to finalize agreements for Shippingport Power Station (800 MMcf/d) and Homer City Redevelopment project (665 MMcf/d)[10] - Launched open season for MVP Boost, providing 500 MMcf/d of incremental takeaway capacity[10] - Closed on the Olympus Acquisition on July 1st[10] Debt Management - Total debt was ~$8.3 billion and net debt was ~$7.8 billion, down ~$1.4 billion from YE24 and nearly $6 billion below 3Q24 levels[9]

Core Insights - EQT Corporation reported second-quarter 2025 adjusted earnings from continuing operations of 45 cents per share, exceeding the Zacks Consensus Estimate of 44 cents, and a significant improvement from a loss of 8 cents in the same quarter last year [1][9] - Adjusted operating revenues rose to $1,599 million from $1,183 million year-over-year, although it fell short of the Zacks Consensus Estimate of $1,793 million [1][9] Production - Sales volume increased to 568 billion cubic feet equivalent (Bcfe) from 508 Bcfe year-over-year, but missed the estimate of 569 Bcfe [3] - Natural gas sales volume was 534.4 Bcf, up from 474.1 Bcf in the prior year, but also missed the estimate of 535.3 Bcf [3] - Total liquid sales volume reached 5,631 thousand barrels (MBbls), slightly up from 5,573 MBbls year-over-year, but below the projection of 5,660.6 MBbls [3] Commodity Price Realizations - The average realized price for natural gas equivalent was $2.81 per thousand cubic feet (Mcfe), an increase from $2.33 year-over-year [4] - The average natural gas price, including cash-settled derivatives, rose to $2.69 per Mcf from $2.16 [4] - The natural gas sales price was $3.63 per Mcf, significantly higher than $2.02 recorded a year ago [4] - Oil price was reported at $51.70 per barrel, down from $61.96 year-over-year, and below the estimate of $47.19 [5] Expenses - Total operating expenses increased to $1.42 billion from $949.5 million in the prior-year quarter [6] - Gathering expenses decreased to 8 cents per Mcfe from 59 cents year-over-year, while transmission expenses rose to 45 cents per Mcfe from 35 cents [6] - Lease operating expenses remained flat at 9 cents year-over-year [6] Cash Flows - Adjusted operating cash flow totaled $918 million, up from $405 million a year ago [7] - Free cash flow improved to $340 million from a negative $171 million in the same quarter last year [7] Capex & Balance Sheet - Total capital expenditure was $554 million, down from $576 million reported a year ago [10] - As of June 30, 2025, the company had cash and cash equivalents of $555 million and net debt of $7.76 billion [10] Guidance - For Q3 2025, EQT anticipates total sales volume between 590-640 Bcfe [11] - The full-year sales volume forecast has been raised to 2,300-2,400 Bcfe, an increase of 100 Bcfe from earlier projections [11] - Capital expenditures are projected to be in the range of $2,300-$2,450 million for the full year [11]

Group 1: Earnings Performance - EQT Corporation reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.44 per share, compared to a loss of $0.08 per share a year ago, representing an earnings surprise of +2.27% [1] - Over the last four quarters, the company has surpassed consensus EPS estimates four times [2] - The company posted revenues of $1.6 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 10.81%, compared to year-ago revenues of $1.18 billion [2] Group 2: Stock Performance and Outlook - EQT shares have increased approximately 16.1% since the beginning of the year, outperforming the S&P 500's gain of 7.2% [3] - The current consensus EPS estimate for the coming quarter is $0.66 on revenues of $1.98 billion, and for the current fiscal year, it is $3.37 on revenues of $8.37 billion [7] - The estimate revisions trend for EQT was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Group 3: Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 28% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that tracking these revisions can be beneficial for investors [5]

EQT Reports Second Quarter 2025 Results PITTSBURGH, July 22, 2025 -- EQT Corporation (NYSE: EQT) today announced financial and operational results for the second quarter of 2025. Second Quarter 2025 Results: Recent Highlights: President and CEO Toby Z. Rice stated, "Second quarter results highlight a continuation of operational excellence and robust financial performance at EQT. Production was at the high-end of guidance, benefiting from strong well productivity and compression project outperformance. Capit ...

Core Insights - EQT Corporation reported strong financial and operational results for Q2 2025, highlighting operational excellence and robust financial performance [3][6] - The company generated approximately $3.7 billion in cumulative net cash from operating activities and nearly $2 billion in cumulative free cash flow over the past three quarters [3][8] - EQT is focusing on in-basin supply and midstream growth projects to enhance sustainable growth pathways [3][8] Financial Performance - Total sales volume reached 568 Bcfe, an increase from 508 Bcfe in Q2 2024, reflecting strong well performance [6][8] - Average realized price increased to $2.81 per Mcfe from $2.33 per Mcfe year-over-year [6][8] - Net income attributable to EQT was $784 million, a significant increase from $10 million in Q2 2024 [6][8] - Adjusted net income attributable to EQT was $273 million, compared to a loss of $37 million in the same quarter last year [6][8] - Free cash flow attributable to EQT was $240 million, a recovery from a loss of $171 million in Q2 2024 [6][8] Operational Efficiency - Capital expenditures were $554 million, 15% below the mid-point of guidance due to efficiency gains [8] - Total per unit operating costs were $1.08 per Mcfe, below the low-end of guidance, driven by lower lease operating expenses and SG&A [7][8] - The company achieved a record-setting quarter for completion efficiency and lower well costs [3][8] Strategic Initiatives - EQT is advancing multiple in-basin natural gas power and data center demand projects, leveraging its production scale and integrated infrastructure [3][8] - The company closed the acquisition of Olympus Energy's upstream and midstream assets on July 1, 2025, with integration expected to be completed within 30 days [8] - EQT is working to finalize agreements for supplying natural gas to significant power projects, including the Shippingport Power Station and the Homer City Redevelopment project [8] Guidance and Outlook - The company updated its 2025 guidance, increasing total sales volume expectations to 2,300 – 2,400 Bcfe, an increase of 100 Bcfe from prior guidance [16] - Full-year per unit operating cost guidance was lowered by 6 cents per Mcfe, reflecting efficiency gains from the Olympus Acquisition [16] - EQT plans to turn-in-line 95 – 120 net wells in 2025, with expectations for Q3 sales volume between 590 – 640 Bcfe [16][17]

Group 1 - Natural gas producers and transportation stocks have significantly declined, following a drop in U.S. natural gas futures, erasing most of last week's gains due to cooler weather forecasts and high production levels near 107 billion cubic feet [1] - The number of natural gas drilling rigs in the U.S. increased by 9 to a total of 117, indicating plans for increased production, which may provide short-selling opportunities in the natural gas market [1] - The NYMEX August natural gas futures price fell sharply by 6.7% to $3.325 per million British thermal units, marking the lowest settlement price since July 11 [1] Group 2 - The four biggest decliners in the S&P 500 index were all from the natural gas energy sector, with EQT Energy down 9.5%, Expand Energy down 8.5%, Coterra Energy down 5.3%, and Targa Resources down 4.5% [2] - The significant drop in natural gas futures and related stocks is rare this year, especially following favorable policies for the oil and gas industry and the ongoing high temperatures driving demand [2] - Major tech companies like Google, Microsoft, and Amazon AWS are significantly increasing their demand for natural gas due to the construction of large data centers, which aligns with the global trend towards cleaner energy sources [2] Group 3 - The importance of natural gas resources, particularly liquefied natural gas (LNG), is increasing as countries seek cleaner energy alternatives to oil and coal, making it a core energy source for large AI data centers in the coming years [3]

Core Viewpoint - EQT Corporation is expected to report its second-quarter 2025 results on July 22, with adjusted earnings per share (EPS) estimated at 45 cents, reflecting a significant increase of 662.5% from the previous year, and revenues projected at $1.81 billion, indicating a 52.97% year-over-year growth [1][2][8] Estimate Trend - The Zacks Consensus Estimate for second-quarter EPS is 45 cents, which has seen one downward revision in the past week, with no upward revisions [2] - The revenue estimate of $1.81 billion represents a 52.97% increase compared to the same quarter last year [2] Factors to Consider - EQT is the largest natural gas producer in the U.S., primarily operating in the Appalachian Basin [3] - Average Henry Hub Natural Gas Spot prices for April, May, and June were $3.42, $3.12, and $3.02 per million Btu, respectively, compared to $1.60, $2.12, and $2.54 per million Btu in the previous year [3] - The company's decision to limit hedging to 50% of output exposes it to spot price volatility, which may negatively impact performance this quarter [4] - Pipeline bottlenecks in the Appalachian region are constraining EQT's ability to take advantage of favorable pricing in downstream markets [4] - Integration costs from the Olympus acquisition may also weigh on margins despite a modest boost in volumes [4][5] Earnings Whispers - Current analysis suggests that EQT may not achieve an earnings beat this quarter, with an Earnings ESP of -3.27% and a Zacks Rank of 3 (Hold) [6]

Core Insights - EQT Corporation has signed an agreement with Homer City Redevelopment to supply natural gas for the Homer City Energy Campus, which will serve as an AI-integrated, high-performance computing data center spanning 3,200 acres [1][10] - The Homer City Energy Campus will feature a 4.4 GW gas-fired power generation facility, transforming Pennsylvania's largest former coal plant into a modern data infrastructure campus [2][10] - EQT will be the exclusive supplier of natural gas for the campus, with delivery facilitated through the Texas Eastern Transmission and Eastern Gas Transmission & Storage pipeline systems, ensuring a reliable energy supply [3][10] Natural Gas Supply Details - The natural gas supply for the project could reach up to 665,000 million British thermal units per day (MMBtu/d), highlighting the significant energy demands of data centers [4][10] - This agreement is considered one of the largest single-site gas transactions in North America, reflecting the growing energy needs of high-level computing and data storage [4][10] Infrastructure and Equipment - GE Vernova has secured a deal to supply seven 7HA.02 natural gas turbines, which are essential for the energy supply infrastructure of the data center, with deliveries expected to begin in 2026 [5]

Industry Overview - The Zacks Oil and Gas - Exploration and Production - United States industry is facing challenges due to lower crude prices influenced by geopolitical factors and an oversupply of natural gas [1][3][5] - The industry is currently ranked 186 out of 245 Zacks industries, placing it in the bottom 24% [8][10] - The industry's earnings estimates for 2025 have decreased by 41.6% over the past year, indicating a negative outlook [10] Key Trends - Easing geopolitical tensions have led to a reduction in oil prices, with WTI crude trading around $65, impacting companies reliant on higher prices for new investments [3][4] - OPEC forecasts a significant increase in global oil demand to 123 million barrels per day by 2050, necessitating an investment of $18.2 trillion in the oil and gas sector [4] - Natural gas production in the U.S. has reached record levels, with storage exceeding seasonal norms by 6%, which may limit price increases [5] - The International Energy Agency (IEA) predicts a slowdown in global oil demand growth post-2026 due to the rise of electric vehicles and cleaner energy policies [6][7] Company Highlights - **W&T Offshore (WTI)**: A leading oil and natural gas explorer with a market capitalization of nearly $270 million, known for its disciplined operations and positive cash flow for 28 consecutive quarters [18][19] - **EQT Corporation (EQT)**: The largest natural gas producer in the U.S. with a market cap of approximately $35 billion, expected EPS growth rate of 46.3% over the next three to five years [21][22] - **APA Corporation (APA)**: Engaged in exploration and production with a market cap of around $7 billion, known for its successful drilling in Suriname and the Permian Basin [23][24] - **Civitas Resources (CIVI)**: Focused on the DJ Basin and Permian Basin, with a market cap of about $2.8 billion, recognized for strong well returns and shareholder returns [26][27] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 11.28X, significantly lower than the S&P 500's 17.71X, but above the sector's 4.86X [15]