EQT Provides 3rd Quarter Update, Mulls Changes After Rice Merger Goes Through

From Seeking Alpha's transcript of EQT's 3rd-quarter earnings call:
Now for the operational update. On October 13, FERC issued the Certificate of Public Convenience and Necessity for the Mountain Valley Pipeline or MVP. The FERC Certificate is a significant step in the regulatory process and keeps us on track to achieve our targeted 2018 in-service date. The MVP team is working hard to secure the remaining federal and state permits and approvals over the coming weeks. We expect to receive the FERC notice to proceed by the end of this year and commence construction soon after. In addition to the progress we've made on the regulatory front, we've also made significant progress on the project management side. We recently awarded contracts for about 80% of the construction work and we expect to have the remaining construction work awarded soon. 
Moving on to an update of the HammerHead project. As a reminder, HammerHead is a gathering header pipeline, which will feed gas to the Mobley hub in West Virginia from Pennsylvania. In addition to the return on capital from the HammerHead investment, we think the expansion prospects for Ohio Valley Connector, OVC, and Mountain Valley Pipeline are greatly enhanced by delivering an additional 1.2 Bcf per day of supply into West Virginia, which is where OVC and MVP originate. We've been working closely with EQT production on the details of the project to ensure an optimal final design and expect that the vast majority of the capacity will be subscribed by EQT under our firm reservation agreement. The current capital estimate is approximately $460 million and we anticipate the pipeline being in service in Q3 2019. 
On the gathering side, we continue to collaborate with EQT production on the development plans across EQT's core Marcellus acreage position. During the quarter, we installed two compressor units adding 10,000 horsepower to our Northern West Virginia gathering system. Last quarter, we provided some detail around the benefits we expect from EQT's proposed acquisition of Rice Energy. Including the $130 million of drop-down EBITDA in 2018, the increased opportunity to build out the supply hub with projects like HammerHead, the potential acceleration of OVC and MVP expansions and a more efficient build out of the gathering systems. EQT's acquisition of Rice is expected to close shortly after their respective shareholder meetings, which are both set for November 9. As soon as the transaction closes, we'll be back -- getting back to work to put these opportunities into action. 
In summary, it was another solid quarter from both a financial results and operating perspective, we look forward to executing on the opportunities set in front of us and ultimately creating significant value for our unitholders.
Click here to read the whole transcript.

With a closer look at some of the comments from EQT, here is the Pittsburgh Business Times:
EQT Corp. executives don’t expect that a committee that will study future options for the natural gas producer will recommend keeping the company the way it is, E&P and midstream divisions together. 
That’s the word from EQT CEO Steve Schlotterbeck, who spoke Thursday morning during the company’s conference call discussing third-quarter results and providing an update on its planned $6.7 billion merger with Rice Energy(NYSE: RICE). In response to shareholders’ concerns about the value of EQT (NYSE: EQT) holding both drilling and pipeline divisions, EQT earlier this year created a board committee that will address what is called the “sum of the parts discount.” 
EQT, which committed to making the committee’s decision public by the end of the first quarter, has repeatedly said that no decision yet been made and that the company could be split or sold. Schlotterbeck, on the conference call Thursday, said that the committee had to do the work but in response to a question seemed to say that keeping the company together the way it is now isn’t a likely option. 
“(What) should be a clear indication is that our expectation is that the status quo is highly unlikely to be the best answer for addressing the sum of the parts,” Schlotterbeck said.
Continue this article by clicking here. 

Connect with us on Facebook and Twitter!

Popular posts from this blog

Fracktivist in Dimock Releases Carefully Edited Video, Refuses to Release the Rest

The Second Largest Oil and Gas Merger - Cabot and Cimarex

Josh Fox Takes Another Approach to Attacking Oil & Gas Industry: They Don't Care About Worker Safety