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EQT Corporation (EQT - Free Report) recently trimmed its second-quarter production guidance. Moreover, the company closed the divestment of non-core assets in Pennsylvania and West Virginia for a total of $125 million in cash. Yesterday, the stock rose 7.4% following the news.
Volume Curtailment Analysis:
Due to demand destruction caused by coronavirus-induced lockdowns, the company decided to reduce gross production by 1.4 billion cubic feet of natural gas equivalent per day (Bcfe/d), earlier this month. The curtailment is expected to be on a temporary basis. If the situation persists through the rest of the second quarter, total quarterly sales volume will likely be in the range of 315-335 Bcfe. The metric is around 45 Bcfe lower than the previous guidance range of 360-380 Bcfe. It achieved sales volumes of 370 Bcfe in the year-ago quarter. However, the upstream energy player anticipates its full-year 2020 production and financial guidance to remain unchanged.
Moreover, second-quarter total operating costs are expected toward the higher limit of the guided range of $1.34-$1.46 per thousand cubic feet equivalent (Mcfe). In the year-ago quarter, the company’s total operating costs were $1.52 per Mcfe.
Divestment:
It closed the above-mentioned transaction to divest the non-core assets to Diversified Gas and Oil PLC. The move is expected to relieve EQT Corp. of $47 million in asset retirement obligations and other liabilities. The divestment is expected to reduce the company’s debt level by paying down the term loan due next year. It has retained the drilling rights on all acreages except in Tioga County of Pennsylvania.
This asset sale is in line with its commitment of maintaining investment grade credit profile and decision of lowering debt level by 30% within mid-2020. Notably, the company had earlier suspended dividend payouts to pay down near-term debt.
As of Mar 31, 2020, it had $18.7 million in cash and cash equivalents, significantly up from the fourth-quarter level of $4.6 million. Total debt of $5,036.9 million declined from the fourth-quarter level of $5,293 million, which is commendable.
Price Performance
EQT Corp.’s shares have increased 35.3% in the year-to-date period against the 45.4% decline of the industry it belongs to.
Cabot Oil & Gas beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 6.1%.
CNX Resources beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 111.5%.
Comstock Resources’ 2020 sales are expected to gain 32.7% year over year.
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EQT Corp. Slashes Q2 Output View, Closes Asset Divestment
EQT Corporation (EQT - Free Report) recently trimmed its second-quarter production guidance. Moreover, the company closed the divestment of non-core assets in Pennsylvania and West Virginia for a total of $125 million in cash. Yesterday, the stock rose 7.4% following the news.
Volume Curtailment Analysis:
Due to demand destruction caused by coronavirus-induced lockdowns, the company decided to reduce gross production by 1.4 billion cubic feet of natural gas equivalent per day (Bcfe/d), earlier this month. The curtailment is expected to be on a temporary basis. If the situation persists through the rest of the second quarter, total quarterly sales volume will likely be in the range of 315-335 Bcfe. The metric is around 45 Bcfe lower than the previous guidance range of 360-380 Bcfe. It achieved sales volumes of 370 Bcfe in the year-ago quarter. However, the upstream energy player anticipates its full-year 2020 production and financial guidance to remain unchanged.
Moreover, second-quarter total operating costs are expected toward the higher limit of the guided range of $1.34-$1.46 per thousand cubic feet equivalent (Mcfe). In the year-ago quarter, the company’s total operating costs were $1.52 per Mcfe.
Divestment:
It closed the above-mentioned transaction to divest the non-core assets to Diversified Gas and Oil PLC. The move is expected to relieve EQT Corp. of $47 million in asset retirement obligations and other liabilities. The divestment is expected to reduce the company’s debt level by paying down the term loan due next year. It has retained the drilling rights on all acreages except in Tioga County of Pennsylvania.
This asset sale is in line with its commitment of maintaining investment grade credit profile and decision of lowering debt level by 30% within mid-2020. Notably, the company had earlier suspended dividend payouts to pay down near-term debt.
As of Mar 31, 2020, it had $18.7 million in cash and cash equivalents, significantly up from the fourth-quarter level of $4.6 million. Total debt of $5,036.9 million declined from the fourth-quarter level of $5,293 million, which is commendable.
Price Performance
EQT Corp.’s shares have increased 35.3% in the year-to-date period against the 45.4% decline of the industry it belongs to.
Zacks Rank & Other Stocks to Consider
EQT Corp. currently has a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include Cabot Oil & Gas Corporation , CNX Resources Corporation (CNX - Free Report) , and Comstock Resources, Inc. (CRK - Free Report) , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cabot Oil & Gas beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 6.1%.
CNX Resources beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 111.5%.
Comstock Resources’ 2020 sales are expected to gain 32.7% year over year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>