Now the largest natural gas producer in the U.S., EQT Corp. easily beat earnings and production estimates as its new assets from Rice Energy Inc. were added in the fourth quarter of 2017.
EQT reported adjusted net income of $167.5 million for the quarter, or 76 cents per share. That topped S&P Capital IQ's consensus estimate calling for a normalized profit of 28 cents per share.
EQT said its production sales volume increased 17% year over year to 887.5 Bcfe. The company expects sales volumes to continue to increase at a similar pace in 2018 now that Rice's assets have been added in a $6.7 billion deal.
"We expect the quarterly volume profile for 2018 to look like this. Q1 will average approximately 4 Bcfe per day, consistent with our first-quarter guidance of 350 to 360 Bcfe. We then expect to see sequential quarterly increases in Q2, Q3 and Q4. We are reiterating our full-year volume guidance of 1,520 to 1,560 Bcfe, which will result in volume growth of 17% over pro forma 2017," Senior Vice President of Exploration and Production David Schlosser said on the company's Feb. 15 earnings call.
The knowledge and experience obtained from the members of Rice's staff that remained with the company have helped EQT become a more efficient operator, CEO Steven Schlotterbeck said.
"We've hit the ground running and have started capturing the various synergies related to the transaction. We currently expect to average 13,600-foot laterals in southwestern Pennsylvania Marcellus acreage, which is 1,600 feet, or 13%, longer than we anticipated when the deal was first announced. This places us ahead of schedule for achieving our capital synergies," he said. "As we continue blending the best of two cultures, we are confident that the exchange of ideas will result in continuous improvements to our programs and practices."
During its fourth-quarter 2017 earnings call, EQT Midstream Partners LP said all necessary permitting for its Mountain Valley Pipeline had been obtained and it would be the largest of $1.5 billion of organic growth projects under construction in 2018.
"Based on the progress we made today in our current level of construction activity, we are confident on our late 2018 target in-service date," COO Jeremiah Ashcroft said.