Integrated energy player EQT Corporation’s EQT first-quarter 2015 adjusted earnings per share of $1.08 handily beat the Zacks Consensus Estimate of 64 cents. Quarterly earnings, however, decreased 20% from $1.35 in the year-earlier quarter.
Net operating revenue in the quarter came in at $708.8 million, which comfortably surpassed the Zacks Consensus Estimate of $570.0 million. The top line also increased 7% year over year.
Segment Details
EQT Production's first-quarter operating revenue decreased 17.2% year over year to $401.8 million. This was due to the segment’s focus on the Marcellus Shale, where sales volume rose 46% year over year to 121.5 billion cubic feet equivalent (Bcfe). Natural gas liquids (NGL) volume totaled 2,214 Mbbls, 71% higher than the year-ago level.
Operating income declined about 33% year over year to $185.8 million.
In the EQT Midstream segment, net gathering revenues increased 44.2% year over year to $128.9 million owing to 46.5% growth in gathered volumes. Net transmission revenues increased 38.1% to $72 million. Net storage, marketing and other operating revenues were $5.8 million, representing a decline of 20% year over year.
Operating income surged 56.2% year over year to $129.7 million in the reported quarter.
Cash Flow
The company’s operating cash flow was $382.0 million during the quarter, reflecting a decrease of 20.4% year over year.
Wells Spud
The company spud 49 gross wells during the quarter – 36 wells drilled in the Marcellus with an average length-of-pay of 5,280 feet; 11 wells drilled in the Upper Devonian with an average length-of-pay of 5,680 feet; and two wells drilled in the Permian with an average length-of-pay of 7,750 feet. Owing to low oil prices, EQT Corp. decided to suspend drilling in the Permian Basin during the first quarter.
Guidance
Production sales volume for 2015 has been increased to 585–600 Bcfe. Liquids volume is expected at 9,000–10,000 thousand barrel of oil equivalent (MBBl).
Production sales volume for the second quarter is projected at 145–150 Bcfe while liquids volume is expected at 2,300–2,400MBBls.
Zacks Rank
EQT currently carries a Zacks Rank #3 (Hold). Better-ranked stocks from the energy sector include Valero Energy Partners L.P. VLP, CNOOC Ltd CEO and Hallador Energy Company HNRG. All these stocks sport a Zacks Rank #1 (Strong Buy).
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