EQT continues to combat low prices, selling assets and cutting costs
Tuesday, March 3, 2020
Last week EQT announced it renegotiated its gas transportation rates and sold half its stake in pipeline company Equitrans Midstream Corp, according to Reuters. The recent moves are in line with the company’s ongoing effort to try to cope with low fuel prices.
In the fourth quarter, EQT recorded a $1.6 billion non-cash impairment charge. With U.S. natural gas prices trading at its lowest in nearly two decades, the country’s largest natural gas producer has been forced to find ways to mitigate prices.
In addition to selling its stake in the pipeline operator and renegotiating gas transportation rates, EQT has refined its hedging strategy and cut annual capital expenditure. The company expects 2020 capital expenditure between $1.15 billion and $1.25 billion, compared with a prior outlook of between $1.25 billion and $1.35 billion.
Learn more: Reuters > EQT Corp sells half its stake in pipeline operator, strike rate relief deal
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
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Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.