EQT will finance 2017 budget from operations and cash-on-hand; Pennsylvania, West Va. Benefit
EQT Corporation (ticker: EQT) announced its 2017 capital budget Monday.
The company forecasts a 2017 capex budget of $1.5 billion, excluding business development and land acquisitions, and including $1.3 billion for well development. Funding will be provided by cash generated from operations, and cash-on-hand, the company said in its press release.
The primary focus of the EQT 2017 budget will be the Marcellus, where the company plans to drill 119 wells with an average lateral length of 7,000 feet. All of the wells will be on pads, EQT said. 76 wells will be drilled in Pennsylvania and 43 wells in West Virginia.
Based on current NYMEX natural gas prices, adjusted operating cash flow attributable to EQT is projected to be approximately $1,200 million for 2017, which includes approximately $200 million from EQT’s interest in EQT GP Holdings, LP (ticker: EQGP), the general partner for the company’s midstream subsidiary.
EQT forecasts 2017 production sales volume of 810 – 830 Bcfe, which includes volume growth of 70 Bcfe, the majority of which stems from the previous year’s drilling program. The majority of the volume expected from the 2017 drilling program will be realized in 2018, at which time EQT forecasts production volume growth of 15 – 20% per year for several years.
Source: EQT
Upper Devonian
EQT plans to drill 81 Upper Devonian wells with an average lateral length of 7,300 feet. These wells will be limited to co-development on Marcellus pads in Pennsylvania.
Deep Utica exploration wells on tap
The company plans to drill seven deep Utica exploratory wells with an average lateral length of 6,800 feet. EQT owns approximately 490,000 net acres that the company believes to be prospective for the deep Utica.
EQT also announced a modification to the company’s midstream agreement with Williams Ohio Valley Midstream, LLC related to the dedicated portion of the approximately 62,500 Marcellus acres EQT acquired from Statoil USA Onshore Properties, Inc. earlier this year. Under the new agreement, EQT has committed firm volumes of 50 MMcfe/d initially and growing to 200 MMcfe/d by the fourth year.
In addition to the existing right to provide wellhead gathering services, EQT Midstream Partners (ticker: EQM) can now provide high pressure pipeline services on the volume in excess of the commitment. EQM is currently coordinating with EQT Production to design a midstream system to support the Marcellus well development plans on this acreage. The investment opportunity for EQM is estimated to be $600 million for full buildout of wellhead gathering and high pressure pipeline services, the company said in its press release.
