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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported):  May 10, 2021

 

EQT CORPORATION

(Exact name of registrant as specified in its charter)

 

Pennsylvania   001-3551   25-0464690
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (IRS Employer
Identification Number)

 

625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222

(Address of principal executive offices, including zip code)

 

(412) 553-5700

(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):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities Registered Pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, no par value   EQT   New York Stock Exchange

 

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).

 

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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

 

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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

[email protected]

 

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 

 

 

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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.

 

 

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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 

 

 

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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.

 

 

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