EQT keeps eyes on the Marcellus
EQT Corp. is ending its diversification experiment by selling off its Texas natural gas assets and writing down $2.3 billion on the value of oil and gas positions in the Permian basin and Huron shale.
Downtown-based EQT acquired the Permian acreage in Texas in an asset swap with Range Resources four years ago.
It had already impaired some of those assets in 2014, citing low commodity prices. On Thursday, EQT said it has found a buyer to pay $64 million for the Permian assets.
EQT’s work in the Huron in eastern Kentucky has also been through a few rocky years, with development periodically suspended because of low natural gas prices.
Plus, the company’s recent acquisition of Rice Energy Inc. has further grounded its efforts in southwestern Pennsylvania, where EQT has hundreds of thousands of acres under lease and where rates of return are highest.
Dave Porges, who returned to the operation as interim CEO after his successor, Steve Schlotterbeck, abruptly resigned over a pay dispute with the company’s board, told analysts that a search for a new CEO has begun and should be completed by the end of the third quarter. Suggestions are welcome, he said.
Until then, Mr. Porges said his focus at the helm will be on separating EQT’s oil and gas exploration and production division from its pipeline and processing businesses.
To that end, EQT announced Thursday a series of moves to consolidate its various midstream assets into one entity.
That involves EQM Midstream Partners, a separately traded master limited partnership, buying Ohio gathering assets that once belonged to Rice for $1.5 billion in cash and stock; EQM acquiring the remaining 25 percent interest in the Strike Force Gathering System, a former Rice joint venture with Gulfport Energy, for $175 million in cash; and merging EQM and Rice Midstream Partners in a unit swap valued at $2.4 billion.
EQT reported a net loss of $1.6 billion, or $5.99 per share, during the first quarter, with the large asset impairment weighing heavily on that result. Last year during the same three months, EQT had net income of $164 million, or 63 cents per share.