EQT's Transformative Year: Record-Breaking Operational Accomplishments and Strategic Positioning
EQT, one of the leading natural gas companies in the United States, has wrapped up an extraordinary year marked by unprecedented speed and efficiency. During its Q4 2024 earnings conference call, EQT's leadership presented a compelling picture of the company's operational accomplishments and strategic positioning.
At the heart of EQT's transformation was the acquisition of Equitrans in July 2024, which created America's only large-scale integrated natural gas company. With this bold move, EQT set out to revolutionize its operational efficiency and drive value for shareholders. The integration process has been swift, with synergies captured to date exceeding base-case expectations.
According to Toby Rice, President and Chief Executive Officer of EQT, "We shattered multiple company efficiency records last year, resulting in a 20% increase in completed lateral footage per day relative to 2023." This remarkable achievement enabled the company to drop from three to two frac crews in April, prioritizing cost savings over production growth. As a result, EQT's average well costs are expected to fall by approximately $70 per foot compared to 2024.
Well productivity has also improved, driving 65 Bcf of production outperformance in 2024. Had the company not curtailed volumes in response to market conditions, production would have exceeded the high end of its original guidance by 3%. This performance is expected to carry into 2025, with more volume and higher prices anticipated without increased activity or capital.
EQT's operational momentum has resulted in outperformance across the board. The company delivered production at the high end of guidance and CapEx 7% below the low end of guidance during the fourth quarter. Operational expenses were kept in check, driving costs to the low end of guidance.
The company generated more than $750 million of net cash provided by operating activities and nearly $600 million of free cash flow during the fourth quarter alone, despite Henry Hub averaging just $2.81 per million BTU. These results showcase EQT's unparalleled earnings power and underscore its unrivaled free cash flow durability even at low gas prices.
Reserves-wise, EQT's year-end 2024 proved reserves were essentially unchanged year-over-year at approximately 26 Tcfe despite the SEC price deck dropping from $2.64 to $2.13 per million BTU. The PV-10 of its proved reserves totals approximately $28 billion, highlighting the resiliency of its premier low-cost Appalachian reserve base.
As EQT continues to push boundaries and drive innovation in the natural gas industry, its focus on operational efficiency, strategic positioning, and long-term sustainability has positioned it for success even in challenging market conditions."
