UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification Number) |
(Address of principal executive offices, including zip code)
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01. Regulation FD Disclosure.
On May 10, 2021, EQT Corporation (EQT) issued a news release announcing its intent to offer (the Offering), subject to market conditions and other factors, $1.0 billion in aggregate principal amount of senior notes due 2026 and senior notes due 2031 (together, the Notes) in a private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the Securities Act). A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In connection with the Offering, EQT is furnishing under this Item 7.01 the information included in Exhibit 99.2 hereto, which is incorporated herein by reference. The information included in Exhibit 99.2 is excerpted from information being delivered to potential investors in connection with the Offering and is provided in this Item 7.01 to satisfy EQT's public disclosure requirements under Regulation FD.
The information contained in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Notes in the Offering or any other securities of EQT, and none of such information shall constitute an offer, solicitation or sale of securities in any state in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. The Notes have not been registered under the Securities Act or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws.
The information in this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
99.1 | News Release, dated May 10, 2021, issued by EQT Corporation (furnished solely for purposes of Item 7.01 of this Form 8-K). | |
99.2 | Excerpt from Preliminary Offering Memorandum (furnished solely for purposes of Item 7.01 of this Form 8-K). | |
104.1 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EQT CORPORATION | ||
Date: May 10, 2021 | By: | /s/ William E. Jordan |
Name: | William E. Jordan | |
Title: | Executive Vice President, General Counsel and Corporate Secretary |
3
Exhibit 99.1
EQT ANNOUNCES PRIVATE OFFERING OF $1.0 BILLION OF NEW SENIOR NOTES
PITTSBURGH, May 10, 2021 -- EQT Corporation (NYSE: EQT) (the “Company” or “EQT”) today announced that, subject to market conditions, it intends to offer $1.0 billion in aggregate principal amount of senior notes due 2026 and senior notes due 2031 (together, the “Notes” and such offering, the “Offering”) in a private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).
EQT intends to use the net proceeds from the Offering, together with cash on hand and/or borrowings under its revolving credit facility, to fund the cash consideration relating to its previously announced acquisition of Alta Resources Development, LLC’s upstream and midstream subsidiaries.
The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. This news release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, the Notes, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale is unlawful. No assurance can be made that the Offering will be consummated on its proposed terms or at all.
Investor Contact:
Andrew Breese
Director, Investor Relations
412.395.2555
About EQT Corporation
EQT Corporation is a leading independent natural gas production company with operations focused in the cores of the Marcellus and Utica Shales in the Appalachian Basin. We are dedicated to responsibly developing our world-class asset base and being the operator of choice for our stakeholders. By leveraging a culture that prioritizes operational efficiency, technology and sustainability, we seek to continuously improve the way we produce environmentally responsible, reliable and low-cost energy. We have a longstanding commitment to the safety of our employees, contractors, and communities, and to the reduction of our overall environmental footprint. Our values are evident in the way we operate and in how we interact each day – trust, teamwork, heart, and evolution are at the center of all we do.
Cautionary Statements
This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that do not relate strictly to historical or current facts are forward-looking. Statements regarding the Offering, including the size thereof and the expected use of proceeds therefrom, are forward-looking statements and are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. These risks and uncertainties include, but are not limited to, the ability to complete the Offering on favorable terms, if at all, general market conditions which might affect the Offering and the consummation of the acquisition of Alta Resources Development, LLC’s upstream and midstream subsidiaries. Other risks relating to the Company are described under Item 1A, “Risk Factors,” and elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and other documents the Company files from time to time with the Securities and Exchange Commission. In addition, the Company may be subject to currently unforeseen risks that may have a materially adverse impact on it. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Exhibit 99.2
Summary Historical Consolidated Financial Information of Alta
You should read the summary historical consolidated financial information set forth below in conjunction with the audited consolidated financial statements for Alta as of and for the years ended June 30, 2020 and 2019, and the notes related thereto and the unaudited condensed consolidated financial statements of Alta as of March 31, 2021 and for the nine months ended March 31, 2021 and 2020, and the notes related thereto, which are included in this offering memorandum. We derived the following summary historical statements of consolidated operations data and summary historical cash flow data for the years ended June 30, 2020 and 2019 and the summary historical balance sheet data as of June 30, 2020 and 2019 from Alta’s audited consolidated financial statements, and we derived the following summary historical statements of consolidated operations data and summary historical cash flow data for the nine months ended March 31, 2021 and 2020 and the summary historical balance sheet data as of March 31, 2021 from Alta’s unaudited condensed consolidated financial statements. Alta follows the full cost method of accounting for oil and gas activities and is not subject to income taxes due to its partnership structure.
Years ended June 30, | Nine months ended March 31, | |||||||||||||||
(In thousands) | 2020 | 2019 | 2021 | 2020 | ||||||||||||
(unaudited) | ||||||||||||||||
Consolidated statements of operations | ||||||||||||||||
Revenues: | ||||||||||||||||
Natural gas revenue | $ | 448,076 | $ | 684,406 | $ | 446,651 | $ | 354,708 | ||||||||
Other operating revenue | 15,217 | 9,756 | 16,052 | 11,212 | ||||||||||||
Net gain (loss) on commodity risk management activities | 103,716 | (4,822 | ) | 71,572 | 98,102 | |||||||||||
Total revenues | 567,009 | 689,340 | 534,275 | 464,022 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Gathering, transportation and compression | 109,670 | 99,141 | 104,683 | 79,230 | ||||||||||||
Direct operating | 55,799 | 53,383 | 45,643 | 41,895 | ||||||||||||
Depreciation, depletion and amortization | 171,562 | 158,192 | 139,453 | 126,069 | ||||||||||||
Impairment of natural gas properties | 139,063 | — | 631,641 | — | ||||||||||||
General and administrative | 8,631 | 10,791 | 4,847 | 6,972 | ||||||||||||
Accretion of asset retirement obligations | 1,618 | 1,433 | 1,316 | 1,182 | ||||||||||||
Total costs and expenses | 486,343 | 322,940 | 927,583 | 255,348 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net and other | (35,048 | ) | (52,016 | ) | (22,582 | ) | (27,455 | ) | ||||||||
Net (loss) gain on interest rate derivatives | (12,786 | ) | (7,099 | ) | 2,407 | (11,135 | ) | |||||||||
Total other expense | (47,834 | ) | (59,115 | ) | (20,175 | ) | (38,590 | ) | ||||||||
Net income (loss) | $ | 32,832 | $ | 307,285 | $ | (413,483 | ) | $ | 170,084 | |||||||
Consolidated statements of cash flows | ||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||
Operating activities | $ | 356,987 | $ | 436,151 | $ | 343,753 | $ | 286,464 | ||||||||
Investing activities | (269,627 | ) | (233,196 | ) | (226,105 | ) | (193,790 | ) | ||||||||
Financing activities | (102,477 | ) | (195,273 | ) | (104,512 | ) | (102,593 | ) |
As of June 30, | As of March 31, | |||||||||||
(In thousands) | 2020 | 2019 | 2021 | |||||||||
(unaudited) | ||||||||||||
Consolidated balance sheets | ||||||||||||
Total assets | $ | 1,516,723 | $ | 1,558,985 | $ | 1,011,191 | ||||||
Net property and equipment | 1,422,837 | 1,441,371 | 854,602 | |||||||||
Long-term debt, net | 604,155 | 621,126 | 520,935 | |||||||||
Total members’ equity | 742,516 | 792,184 | 310,033 |
1
Summary Reserve Information for Alta
The following tables present summary information with respect to Alta’s proved natural gas reserves as of December 31, 2020 and June 30, 2020. The reserve estimates attributable to Alta’s properties as of December 31, 2020 presented in the table below were prepared by Alta’s engineers and were audited by NSAI, Alta’s independent reserve engineers. The reserve estimates attributable to Alta’s properties as of June 30, 2020 presented in the table below are based on a reserve report prepared by NSAI. Such reports are contained in this offering memorandum in Annex A. Such reserve reports and all of the reserve estimates below were prepared in accordance with the definitions and regulations of the SEC, and gas prices used in such reserve report are based on SEC pricing (i.e., the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the periods presented).
As of December 31, 2020 | As of June 30, 2020 | |||||||
(Bcf) | (Bcf) | |||||||
Proved developed reserves | 1,945 | 1,944 | ||||||
Proved undeveloped reserves | 2,186 | 1,877 | ||||||
Total proved reserves | 4,131 | 3,821 |
The following table summarizes information with respect to Alta’s estimated future net cash flows from proved reserves.
As of December 31, 2020 | ||||
(In millions) | ||||
Standardized measure (SEC pricing)(1) | $ | 790 | ||
Strip pricing(2)(3) | $ | 2,346 |
(1) | Average realized product prices weighted by production over the remaining lives of the properties: $1.27 per Mcf of gas using SEC pricing as of December 31, 2020. |
(2) | Reflects five-year strip pricing as of December 31, 2020 and held constant thereafter using the NYMEX five-year strip for gas, adjusted for regional differentials consistent with those used in the calculation of the standardized measure, and with all other assumptions held constant. |
(3) | The average realized product prices weighted by production over the remaining lives of the properties: $1.961 per Mcf of gas. |
The information provided in the table above relating to estimated future net cash flows from proved reserves using NYMEX strip pricing is intended to illustrate reserve sensitivities to market expectations of commodity prices and should not be confused with “SEC pricing” proved reserves and do not comply with SEC pricing assumptions. We believe that this information provides investors with additional useful information about Alta’s reserves because the forward prices are based on the market’s forward-looking expectations of oil and gas prices as of a certain date. The price at which production can be sold in the future is the major determinant of the likely economic producibility of reserves. We hedge substantial amounts of future production based upon futures prices. In addition, we use such forward-looking market-based data in developing our drilling plans, assessing our capital expenditure needs and projecting future cash flows.
While NYMEX strip prices represent a consensus estimate of future pricing, such prices are only an estimate and not necessarily an accurate projection of future oil and gas prices. Actual future prices may vary significantly from the NYMEX prices; therefore, actual revenue and value generated may be more or less than the amounts disclosed. Investors should be careful to consider forward prices in addition to, and not as a substitute for, SEC pricing, when considering our reserves.
2
Summary Unaudited Pro Forma Condensed Combined Financial Information
The following summary unaudited pro forma condensed combined statements of operations data for the three months ended March 31, 2021 and the year ended December 31, 2020 are presented as if the Alta Acquisition and this offering and the application of the proceeds therefrom (the “pro forma events”) had occurred on January 1, 2020 while the summary unaudited pro forma condensed combined balance sheet data give effect to the pro forma events as if they had occurred on March 31, 2021.
The following summary unaudited pro forma condensed combined financial information has been prepared for informational purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated position of the Company would have been had the pro forma events occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. Future results may vary significantly from the results reflected because of various factors, including those discussed in the “Risk Factors” section in this offering memorandum. The following summary unaudited pro forma condensed combined financial information should be read in conjunction with the “Unaudited Pro Forma Condensed Combined Financial Information” section included in this offering memorandum.
(In thousands) | Year ended December 31, 2020 | Three months ended March 31, 2021 | ||||||
Unaudited pro forma condensed combined statements of operations data | ||||||||
Sale of natural gas, NGLs and oil | $ | 3,092,762 | $ | 1,344,747 | ||||
Net (loss) income attributable to EQT Corporation | (908,022 | ) | 33,017 |
(In thousands) | As of March 31, 2021 | |||
Unaudited pro forma condensed combined balance sheet data | ||||
Total assets | $ | 21,036,071 | ||
Net property, plant and equipment | 18,770,588 | |||
Total debt | 5,790,448 | |||
Total equity | 11,032,499 |
3
Summary Pro Forma Reserve Information
The following tables present the estimated pro forma combined net proved developed and undeveloped, natural gas, NGLs and oil reserves as of December 31, 2020, which are derived from the separate reserve reports for the Company and Alta, both of which were prepared in accordance with the definitions and regulations of the SEC, using SEC pricing (i.e., the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the periods presented). The pro forma reserve information set forth below gives effect to the Alta Acquisition as if the transaction had occurred on January 1, 2020.
As of December 31, 2020 | ||||
(Bcfe) | ||||
Proved developed reserves | 15,586 | |||
Proved undeveloped reserves | 8,347 | |||
Total proved reserves | 23,933 |
The following table presents the estimated pro forma combined future net cash flows from natural gas, NGLs and crude oil reserves (the “pro forma combined standardized measure”), which has been derived from the separate reserve reports for the Company and Alta, adjusted to incorporate future estimated tax expense on Alta’s reserves to conform Alta’s historical information, which is derived based on a non-taxable corporate structure, with EQT’s taxable corporate structure.
As of December 31, 2020 | ||||
(In millions) | ||||
Standardized measure (SEC pricing)(1) | $ | 4,152 | ||
Strip pricing(2)(3) | $ | 10,956 |
(1) | Average realized product prices weighted by production over the remaining lives of the properties: $20.94 per barrel of oil, $11.97 per barrel of NGL and $1.361 per Mcf of gas using SEC pricing as of December 31, 2020. |
(2) | Reflects five-year strip pricing as of December 31, 2020 and held constant thereafter using (a) the NYMEX five-year strip for gas and (b) the NYMEX WTI five-year strip for oil, in each case, adjusted for regional differentials consistent with those used in the calculation of the standardized measure, and with all other assumptions held constant. |
(3) | The average realized product prices weighted by production over the remaining lives of the properties: $27.18 per barrel of oil, $13.55 per barrel of NGL and $2.054 per Mcf of gas. |
The information provided in the table above relating to estimated future net cash flows from proved reserves using NYMEX strip pricing is intended to illustrate reserve sensitivities to market expectations of commodity prices and should not be confused with “SEC pricing” proved reserves and do not comply with SEC pricing assumptions. We believe that this information provides investors with additional useful information about our reserves because the forward prices are based on the market’s forward-looking expectations of oil and gas prices as of a certain date. The price at which we can sell our production in the future is the major determinant of the likely economic producibility of our reserves. We hedge substantial amounts of future production based upon futures prices. In addition, we use such forward-looking market-based data in developing our drilling plans, assessing our capital expenditure needs and projecting future cash flows.
While NYMEX strip prices represent a consensus estimate of future pricing, such prices are only an estimate and not necessarily an accurate projection of future oil and gas prices. Actual future prices may vary significantly from the NYMEX prices; therefore, actual revenue and value generated may be more or less than the amounts disclosed. Investors should be careful to consider forward prices in addition to, and not as a substitute for, SEC pricing, when considering our reserves.
The above pro forma information has been prepared for informational purposes only and does not purport to represent what the actual results would have been had the Alta Acquisition occurred on January 1, 2020, nor are they necessarily indicative of future results. Future results may vary significantly from the information presented above because of various factors, including those discussed in the “Risk Factors” section in this offering memorandum.
4