EQT posts $110.9 million profit in latest quarter
EQT Corp. is prepared to take a $15 million risk on Pennsylvania's Utica shale.
Leaders of the Downtown-based gas company said on Thursday that they're ready to test their deepest well ever, to tap a promising pool of dry natural gas below the popular Marcellus layer in Greene County.
“There's little disagreement that there's a tremendous amount of gas in place in the play. The question is whether the gas can be profitably produced, as each well can cost as much as $15 million,” Steve Schlotterbeck, an executive vice president at EQT, said during a conference call discussing the company's profit in the second quarter. “We realize that this well is an experiment and could result in a $15 million dry hole.”
The announcement comes about three months after EQT expressed disappointment in Utica wells it drilled on the edge of proven fields in Ohio. Company leaders said they watched competitors get good results in Greene County, where EQT has Marcellus well pads and infrastructure.
“They've been cautious in talking about the Utica and approaching it,” said Stewart Glickman, an energy equity analyst in New York with S&P Capital IQ. He noted that companies have less experience in parts of the Utica that produce only gas and no liquid. “Cautious makes a lot of sense.”
EQT's earnings report for the three months that ended June 30 provided mixed news. The company posted $110.9 million in net income, or 73 cents per share, a 27 percent increase over the $86.9 million profit, or 58 cents a share, it recorded in the quarter last year. Revenue increased to $526 million from $473 million a year ago, despite a 10 percent drop in its average sale price for gas.
The profit was less than the $192.2 million it posted in the first quarter, though, and the company missed expectations of earnings of 86 cents per share and $597 million in revenue.
Officials said they came up short on production because of delays in connecting 22 Marcellus wells to pipelines.
Glickman called the explanation “understandable,” given problems many companies are having as pipeline building catches up with drilling.
Investors seemed not to mind. EQT stock rose $4.26 to $104.18.
The company reported a 17 percent increase in the amount of gas it sold and greater revenue from midstream transmission, the pipelines and facilities it owns that move the gas to market. It drilled 89 wells during the quarter, 55 of them in the Marcellus shale.
The results include profit from EQT Midstream Partners, a spin-off in which the parent has an interest. The midstream company reported $52.1 million in net income during the quarter, up from $40.7 million last year, on $91.6 million in revenue.
CEO David Porges said the company would build the Ohio Valley Connector, a 35-mile pipeline from West Virginia to Clarington, Ohio, where it will connect to lines headed to the Rockies and Texas.
David Conti is a Trib Total Media staff writer. Reach him at 412- 388-5802 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Bayer profit edges higher, raises forecasts
- CCAC, Energy Innovation Center respond to energy industry’s growing demand
- Profit falls at vitamin retailer GNC Holdings in third quarter
- Hedge funds sue to block EDMC deal
- Highmark’s new REMWorks Sleep Store will sell sleep apnea equipment
- Roundup: WesBanco to acquire ESB Financial for $324M; PNC to replace credit cards used during Home Depot breach; more
- Apple CEO Tim Cook: ‘I’m proud to be gay’
- Kennametal profit, sales improve in 1Q, but forecast reduced
- Range Resources reports $146M in Q3 profits on record Marcellus production
- Investors jockey for higher rates as Fed sounds note of optimism on economy
- Consol looks to spin off some coal operations as separate firm