EQT nearly triples profits as Marcellus shale gas wells investment pays off
The Downtown-based driller EQT Corp. is continuing its pace of record growth, with profits nearly tripling on rising Marcellus shale production, the company announced Thursday.
EQT earned $88.3 million, or 58 cents per share, from July through September. That was up from $31.9 million, or 21 cents per share, in the same period a year ago.
Revenue rose 39 percent to $506.6 million from $364.1 million, bolstered by big increases in sales volume from the company’s Marcellus shale gas wells. Gas sales jumped 74 percent from last year, giving the company’s production arm a $97.6 million operating profit.
Marcellus gas accounted for 75 percent of all the company’s sales, Philip P. Conti, the company’s chief financial officer said. The company plans to keep accelerating Marcellus development and adding more Marcellus land, putting it at the top of its list of priorities after its annual strategy review, chief executive officer David L. Porges said.
Officials also want to expand the company’s pipeline system to transport more gas, even for other production companies. It recently spun off its pipeline holdings into a sister company, EQT Midstream Partners, which has the capital to fund an expansion, Porges said.
“There is a tremendous need for additional gathering and takeaway capacity,” he said. “And our midstream system is strategically situated to make profitable investments.”
The company is slowly expanding its production beyond the Marcellus. It’s likely to start drilling wells into a shallower formation, the Upper Devonian, along with the Marcellus wells it drills. It also announced what officials called “encouraging” production from its first three wells in Ohio’s Utica shale.
Each of those wells produced more than 240 barrels of oil a day, selling for about $101 per barrel, according to the company’s financial statement. The production was much better than when the company first started drilling Marcellus shale wells, said Steven T. Schlotterbeck, president of exploration and production.
The company plans to drill eight more Utica wells this year, but it won’t start rivaling the company’s focus on the Marcellus, officials said. Utica land is too expensive to become an immediate priority, company officials said.
EQT stock closed at $86.96 per share, down $1.06.
Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or email@example.com.