EQT Announces 2011 Capital Expenditure Forecast; 31% Production Sales Volume Growth

Tuesday, January 4, 2011 8:08 am EST



Public Company Information:


EQT Corporation (NYSE: EQT) announces the company’s 2011 capital expenditure (CAPEX) forecast of $970 million; 19% lower than the 2010 CAPEX forecast. Sales of produced natural gas in 2011 are projected to be 175 Bcfe, 31% higher than the 2010 estimate of 134 Bcfe.

The CAPEX forecast includes $691 million for EQT Production, $244 million for EQT Midstream and $35 million for distribution infrastructure projects and other corporate items. Funding will be provided by cash generated from operations plus approximately $230 million in proceeds from the sale of the Kentucky natural gas processing complex announced today. Operating cash flow is projected to be $750-$800 million in 2011 at current NYMEX natural gas prices, net of approximately $18 million of annual cash flow associated with the sold Kentucky assets.

EQT Production expects to invest $413 million to drill 86 Marcellus shale wells with an average length of 4,200 feet of pay and $84 million to drill 58 Huron/Berea wells with an average length of 5,200 feet of pay. The company expects to invest $45 million in land and geological and geophysical activities supporting the drilling program. The remainder of the EQT Production spending is for capitalized overhead, maintenance and to finish wells spud in 2010.

EQT Midstream projects will support the Marcellus drilling program. The company plans to spend $94 million on Equitrans transmission expansion and $69 million for Marcellus gathering in Pennsylvania. The Equitrans expansion project, projected to cost $220 million over two years, is expected to increase transmission capacity by 230 MMcf per day in 2011 and 330 MMcf per day in 2012 and will, among other things, connect the outlet of the MarkWest processing plant in West Virginia to five interstate pipelines. The Marcellus gathering investments are expected to increase capacity by 130 MMcf per day in Pennsylvania in 2011. The remainder of the EQT Midstream spending is for maintenance and compliance activities.

EQT will continue to evaluate additional asset sales and joint ventures to fund further development of its extensive reserves.

The company has posted an updated analyst presentation reflecting the 2011 CAPEX forecast on the Investors page to its website at http://ir.eqt.com.

Cautionary Statements

Operating cash flow represents net cash provided by operating activities, less changes in operating assets and liabilities. Operating cash flow is a supplemental financial measurement in the evaluation of EQT’s business. EQT believes that it provides additional information regarding EQT’s ability to meet its future debt service, capital expenditures and working capital requirements. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Operating cash flow is not a measure of financial performance under generally accepted accounting principles (GAAP). Accordingly, it should not be considered as a substitute for net income, operating income, or net cash provided by operating activities prepared in accordance with GAAP. EQT is unable to provide a reconciliation of its projected operating cash flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with generally accepted accounting principles, because of uncertainties associated with projecting future net income and changes in assets and liabilities.

Disclosures in this press release contain certain forward-looking statements. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, and objectives, and anticipated financial and operational performance of the company and its subsidiaries, including guidance regarding the company's projected operating cash flows, drilling programs (including the expected number of wells to be drilled and expected average feet of pay) and infrastructure programs (including the Equitrans expansion project), production and sales volumes, transactions, including asset sales and/or joint ventures involving the company’s assets, the proceeds from the recently announced sale of Kentucky processing assets, capital expenditures, capital budget and sources of funds for capital expenditures. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The company has based these forward-looking statements on current expectations and assumptions about future events. While the company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the company's control. The risks and uncertainties that may affect the operations, performance and results of the company's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of the company's Form 10-K for the year ended December 31, 2009, as updated by any subsequent Form 10-Qs.

Any forward-looking statement applies only as of the date on which such statement is made and the company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, processing, transmission and distribution. Additional information about the company can be obtained through the company’s web site, http://www.eqt.com; Investor information is available on that site at http://ir.eqt.com. EQT Corporation uses its web site as a channel of distribution of important information about the company, and routinely posts financial and other important information regarding the company and its financial condition and operations on the Investors web pages.


EQT Corporation
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Media: Karla Olsen, 412-553-5726

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