EQT Corporation ( EQT Quick Quote EQT - Free Report) has gained 7.5% in the year-to-date period against the 10.5% decline of the composite stocks belonging to the industry.
The company, currently carrying a Zacks Rank #3 (Hold), has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.
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EQT Corp is a pure-play Appalachian explorer and one of the largest natural gas producers in the United States. The company has a massive inventory of drilling locations in the core Appalachian Basin, which can provide significant production volumes.
At 2022-end, the company had total proved reserves of 25 trillion cubic feet equivalent (Tcfe), up marginally from the 2021 levels. Through 2022, the company produced 1,940,043 million cubic feet equivalent of natural gas. Of the total volumes, natural gas comprises almost 94%.
EQT Corp is uniquely positioned to take an active role in addressing climate change. The firm emits lower greenhouse gases than the major oil-producing companies. Of the total GHG emission reductions in the United States since 2005, the contribution of EQT is roughly 5%. It aims to achieve net-zero Scope 1 and Scope 2 by 2025.
The upstream energy player has lower exposure to debt capital than composite stocks belonging to the industry. EQT Corp raised its 2023 year-end debt reduction target to $4 billion from $2.5 billion. Hence, the company can rely on its strong balance sheet to sail through the volatility in commodity prices.
Apart from accelerating the reduction of its debt load, EQT is focused on generating strong free cash flows and rewarding its shareholders. The company doubled its 2022-2023 share buyback program to $2 billion.
EQT Corp expects to generate more than $5.6 billion of free cash flow through 2023 from 2022. As the scope of free cash flow generation looks promising, EQT is expecting ample room to reward shareholders with dividend hikes.
EQT Corp’s lack of geographic diversification is concerning since the majority of its asset base is located in the Appalachian Basin. As such, it is more vulnerable to basin-specific delays and interruptions in production from wells, which can potentially hamper growth.
Investors interested in the
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