EQT changes focus to drilling to capitalize on Marcellus shale
EQT Corp. plans to sell more assets, trying to peddle coalbed gas production from Virginia as it looks for cash to drill in Pennsylvania, the company's chief executive said Wednesday.
The company hopes to raise hundreds of millions of dollars from the sale, CEO David L. Porges said, though it hasn't set an asking price.
Downtown-based EQT is in the middle of a shift, raising cash to become an exploration- and production-focused company. The company four months ago announced a deal to sell its gas-utility arm for $720 million.
“It has become so clear to us that the most attractive assets … are in the southwest part of the Marcellus shale” in Pennsylvania and West Virginia, Porges said on Wednesday after the company's annual shareholders meeting. “We'd have no interest in selling those assets.”
Protesters targeted the meeting for the third year but didn't get as rowdy as they did last year when several shareholders disrupted the meeting. About 20 protesters in front of the Liberty Avenue headquarters complained about the influence of corporate money in politics, and 10 city police officers watched them for an uneventful half-hour. The company had security workers inside, handed out admittance tickets to the meeting, and used metal detecting wands on attendees.
Activist shareholders did propose the company study whether to ban political contributions — the only voting matter the board rejected.
The board had studied the idea, set corporate responsibility standards and determined it's in EQT's best interest to be politically engaged, Porges said.
“Corporate spending injects a corrosive agent into our democracy,” said Blair Bowie, an advocate from the Pennsylvania Public Interest Research Group who led the protest outside. “(It) drowns out the voice of ordinary citizens.”
Few shareholders commented during the meeting. Tom Headley of Forward, where EQT is drilling in Allegheny County, said he supports the company's work and was pleased to hear Porges' promise of higher returns than one of its local drilling competitors, Range Resources Corp.
“I think he's doing the right thing in making the focus becoming an (exploration and production) company,” Headley said after the meeting. “Now you know what you have.”
Gas prices have edged above $4, making it a good time to make that move, said analysts at Gelber & Associates, a Houston-based energy consulting firm. Coalbed methane is expensive to produce; Marcellus shale gas is not, said Kent Bayazitoglu, Gelber's director of market analytics.
Natural gas prices closed Wednesday at $4.21 per million British thermal units on the New York Mercantile Exchange. Many investment houses estimate that drilling companies can break even at prices below $4 in much of the Marcellus, and sometimes at less than $3.
“There's a lot of growth still left to be done in the Marcellus shale,” Bayazitoglu said. “They want to capitalize on that.”
Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or email@example.com.