EQT Corporation (EQT) (EQT) announced that EQT Midstream Partners, LP (EQM) has agreed to acquire its Northern West Virginia Marcellus Gathering System, along with a preferred interest in an EQT subsidiary, for $1.05 billion. EQT will receive $997.5 million in cash and $52.5 million in common and general partner units. In addition, the Partnership will fund approximately $370 million of system expansion projects over the next several years.

The gathering system was designed and constructed to gather natural gas production in the wet gas and dry gas regions of the Marcellus; specifically in the Saturn, Mercury, Pandora and Pluto development areas. The system includes approximately 70 miles of natural gas gathering pipeline and nine compressor units with 25,000 horsepower of compression. In addition, the system includes a 30-mile, high-pressure wet gas header pipeline that moves wet gas from the development areas to the MarkWest Mobley processing facility. EQT contracted for 10-years of firm capacity on the system.

EQT Midstream Partners, LP expects to install approximately 100 miles of gathering pipeline and five compressor units with 23,700 horsepower of compression over the next several years. Ongoing maintenance capital expenditures related to the system are forecast to be less than $5 million per year.

EQT currently holds approximately 76,000 net acres in northern West Virginia that surround the acquired gathering system, including 59,000 net undeveloped acres. As of December 31, 2014, there were 199 Marcellus wells and 20 Upper Devonian wells being serviced by the gathering system, with an average daily gathered volume of approximately 410 MMcf per day.


$ millions 2015 2016 2017 2018
Revenues – firm contracts $ 113 $ 143 $ 174 $ 182
Revenues – volumes in excess of firm contracts $ 14 $ 4 $ 1 $
Total revenues $ 127 $ 147 $ 175 $ 182
Cash operating expenses $ 28 $ 30 $ 32 $ 35
Other income $ $ 11 $ 11 $ 11
Expansion capex $ 65 $ 175 $ 70 $ 30

The terms of the acquisition were approved by the Conflicts Committee of the board of directors of EQT Midstream Services, LLC, the general partner of the Partnership (General Partner), which is comprised entirely of independent directors. The committee was advised by Evercore Group L.L.C. regarding financial matters; and Richards, Layton & Finger P.A. regarding legal matters. The General Partner and its affiliates were advised by Baker Botts L.L.P. regarding legal matters.

About EQT Corporation:

EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, and transmission. EQT is the general partner and significant equity owner of EQT Midstream Partners, LP. With more than 125 years of experience, EQT continues to be a leader in the use of advanced horizontal drilling technology – designed to minimize the potential impact of drilling-related activities and reduce the overall environmental footprint. Through safe and responsible operations, the Company is committed to meeting the country’s growing demand for clean-burning energy, while continuing to provide a rewarding workplace and enrich the communities where its employees live and work. Company shares are traded on the New York Stock Exchange as EQT.

Visit EQT Corporation at www.EQT.com.

Cautionary Statements

Disclosures in this news release contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this news release specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Partnership and its subsidiaries, including guidance regarding the Partnership’s and the Northern West Virginia Marcellus Gathering System’s (the Gathering System) gathering revenue and volume growth; infrastructure programs (including the timing, cost, capacity and sources of funding with respect to such programs); projected compression capacity; asset acquisitions, including the Partnership’s ability to complete the acquisition of the Gathering System; capital commitments, projected capital and operating expenditures, capital budget and sources of funds for capital expenditures; liquidity and financing requirements, including funding sources for the acquisition of the Gathering System; projected firm reservation and usage revenues; projected cash flows resulting from the Partnership’s preferred interest in an EQT subsidiary; and anticipated synergies from the acquisition of the Gathering System. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Partnership has based these forward-looking statements on current expectations and assumptions about future events. While the Partnership considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond the Partnership’s control. With respect to the proposed acquisition of the Gathering System, these risks and uncertainties include, among others, disruption to the Partnership’s business, including customer and supplier relationships resulting from the transaction; risks that the conditions to closing may not be satisfied; and the impact of the transaction on the Partnership’s future operating income, 2015 capital program and distributions. The risks and uncertainties that may affect the operations, performance and results of the Partnership’s business and forward-looking statements include, but are not limited to, those risks discussed in the Partnership’s most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which such statement is made and the Partnership does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Legal Notice