EQT to sell gas pipeline system to EQT Midstream subsidiary for $1.18 billion
EQT Corp. will get $1.18 billion to focus on gas drilling in the Appalachian Basin and newly acquired oil-and-gas-rich areas in Texas by selling a pipeline system to its subsidiary.
The Downtown-based gas company announced after markets closed on Wednesday that EQT Midstream Partners, which the company spun off two years ago, would buy the Jupiter gathering system, 35 miles of pipes that collect gas from Marcellus shale wells in Greene and Washington counties.
The company, which also authorized a repurchase of 1 million common shares, has not decided how to allocate the money from the sale. Earlier in the day, CEO David Porges told board members and shareholders that investing in Marcellus operations was the company's “primary driver.”
After the annual shareholder meeting, he told reporters that investors expect such “drop-down” sales of non-Marcellus assets to fund gas exploration and production.
“We'll probably do one drop-down a year,” he said.
EQT Midstream said it would raise money by offering 8.75 million units of limited partner interests. It did not advertise a price. Before the announcement, EQT Midstream stock closed up $1.39 at $77.03.
EQT also announced a swap with fellow Marcellus company Range Resources for gas operations outside the area. Fort Worth-based Range gets EQT's land and gathering system in the Nora Field of Virginia, where both companies gather gas from coal bed methane. EQT gets 73,000 acres and 900 working wells in the Permian Basin of West Texas.
“We see tremendous upside not only in the exploration and development of clean burning natural gas in Virginia, but also in the growing demand both here and in surrounding markets,” Range Vice President Jerry Grantham said about the Nora operations.
Range expects each side to hire the other company's workers in the exchanged operations.
Range had half the land in the area and expects to sell gas to power generators in Virginia.
Porges said EQT wanted out of Virginia but could not sell the operations for cash as it focuses on Marcellus, the Huron shale in Kentucky and potentially the Utica shale in Pennsylvania.
Last week, Porges announced during a quarterly earnings report that EQT would stop drilling in the Utica in Ohio because it was not getting good gas from those wells in Guernsey County. But, he said, EQT would watch how companies such as Range did with Utica wells closer to home.
“We would like to not have to pay the full tuition on the classes we get” from watching Range, he said.
The earnings report showed EQT posted $192.2 million in net income during the first three months of the year, a 92 percent increase from the year before that Porges said was fueled by Marcellus production. EQT stock closed up 57 cents at $108.99, a 23 percent increase from the beginning of the year.
David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or firstname.lastname@example.org.
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.
- Ebola watch lists to shrink
- Opposing defenses find success against Steelers by eschewing blitz
- West Virginia University warns students over riots
- Loophole rewards expelled Nazi suspects with Social Security benefits
- Freeport falls prey to Montour firepower
- Steelers looking for Spence to step up game at inside linebacker
- Shale oil, gas finds put Mon Valley on path to renaissance, leaders say
- Large-scale batteries are integral in shift to renewable energy
- Penguins forward Downie becoming a hit with teammates
- Scottdale appoints borough solicitor
- Legal titans prepared to tussle in Ferrante cyanide homicide trial