• Annualized Base Synergies: Over $200 million captured, representing 85% of the forecasted plan.
• Completed Lateral Footage Increase: 20% increase in completed lateral footage per day compared to 2023.
• 2025 Average Well Costs: Expected to fall by approximately $70 per foot compared to 2024.
• Production Outperformance: 65 Bcf of production outperformance in 2024.
• Q4 Production: Delivered at the high end of guidance with CapEx 7% below the low end of guidance.
• Q4 Net Cash from Operating Activities: Over $750 million.
• Q4 Free Cash Flow: Nearly $600 million.
• Year-End 2024 Proved Reserves: Approximately 26 Tcfe.
• PV-10 of Proved Reserves: Approximately $28 billion at strip pricing.
• 2025 Production Guidance: 2,175 Bcfe to 2,275 Bcfe.
• 2025 Maintenance Capital Budget: $1.95 billion to $2.1 billion.
• 2025 Free Cash Flow Projection: Approximately $2.6 billion.
• Q4 Sales Volumes: 605 Bcfe.
• Q4 Operating Costs: $1.07 per Mcfe.
• Q4 CapEx: $583 million, 7% below the low end of guidance.
• Q4 Third-Party Pipeline Revenue: $166 million.
• Year-End 2024 Total Debt: $9.3 billion.
• Year-End 2024 Net Debt: $9.1 billion.
• 2025 Expected Net Debt: Approximately $7 billion.

• Warning! GuruFocus has detected 9 Warning Signs with EQT.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EQT Corp (NYSE:EQT) achieved significant operational efficiencies, resulting in a 20% increase in completed lateral footage per day compared to 2023.
• The company successfully integrated the Equitrans acquisition, capturing more than $200 million in annualized base synergies.
• EQT Corp (NYSE:EQT) delivered production at the high end of guidance and CapEx 7% below the low end of guidance, showcasing strong operational momentum.
• The company generated nearly $600 million of free cash flow in Q4 2024, despite low gas prices, highlighting its low-cost business model.
• EQT Corp (NYSE:EQT) expects to generate approximately $2.6 billion of free cash flow in 2025, with a strong outlook driven by robust well performance and efficiency gains.

Negative Points

• EQT Corp (NYSE:EQT) experienced less than 1 Bcf of freeze-offs during recent polar vortex events, indicating some vulnerability to extreme weather conditions.
• The company is facing medium-term headwinds with nearly 5 Bcf per day of new Permian gas pipelines expected in late 2026, potentially impacting future gas prices.
• EQT Corp (NYSE:EQT) remains unhedged in 2026 and beyond, which could expose the company to market volatility.
• The company has no plans to invest in production growth in 2025, which may limit its ability to capitalize on potential market opportunities.
• EQT Corp (NYSE:EQT) is focusing on debt reduction, which may limit its ability to pursue aggressive growth or share buybacks in the near term.

Q & A Highlights

Q: Can you discuss the maintenance CapEx for 2025 and how it might evolve in the coming years? A: Toby Rice, President and CEO, explained that the maintenance CapEx is based on asset quality and operational efficiencies. The company has integrated structural fixes, such as the E-Train and water infrastructure, which have historically been challenges. These improvements are expected to reduce maintenance intensity over time. Jeremy Knop, CFO, added that the peak spend for compression investments has been pulled forward to 2025, with a decline expected in 2026.

Q: How are the benefits of compression factored into your 2025 production guidance? A: Toby Rice stated that compression benefits are included in the plans, with the main focus being the timing of these projects. The company has identified additional compression projects for the future, which will be part of the base maintenance plans. The team has been commended for quickly integrating these projects post-acquisition.

Q: What is the long-term CapEx trajectory for EQT, and how does it relate to strategic growth projects? A: Toby Rice highlighted that the maintenance CapEx is trending downwards, with a focus on upstream cost reductions. Jeremy Knop noted that the current maintenance capital is already below prior guidance, and successful compression results could lower it further. The strategic growth budget includes midstream projects, which are expected to decline after 2025.

Q: How does EQT plan to achieve its net debt target of $5 billion, and how does this relate to the hedging strategy? A: Jeremy Knop explained that the company plans to reach the $5 billion net debt target through organic free cash flow. EQT is being patient with hedging, expecting potential high gas prices in 2025 and 2026. The company remains unhedged for 2026 and beyond, providing full exposure to potential price increases.

Q: How does EQT view the potential for in-basin demand growth, particularly in relation to power demand? A: Jeremy Knop noted that discussions with hyperscalers and power producers have accelerated, with EQT's investment-grade rating and net-zero credentials being key differentiators. The company is optimistic about capturing demand growth opportunities, particularly in the Southeast region, where MVP flows have reached maximum capacity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.