EQT to Sell Gas Utility for $720M in Cash; Cutting Annual Dividend to $0.12/Share
EQT Corporation (NYSE: EQT) today announced that it has entered into a definitive agreement for the transfer of its natural gas distribution business, Equitable Gas Company, LLC, to Peoples Natural Gas. As part of the transaction, EQT will receive cash proceeds of $720 million, subject to certain purchase price adjustments, and select midstream assets and commercial arrangements, which are expected to generate at least $40 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) per year.
Concurrent with this announcement, EQT will also reduce its annual dividend, effective January 2013. The new dividend rate of $0.12 per share reflects the blend of EQT's two remaining core businesses – a dividend-supporting midstream business, and a capital-intensive, rapidly growing production business.
“Today's announcement allows us to focus on and reinvest in our rapidly growing natural gas production and midstream businesses. The proposed transaction provides capital to accelerate the monetization of our reserves beyond 2013 and also adds to our Marcellus midstream assets,” stated David Porges, Chief Executive Officer of EQT Corporation.
As part of the transaction, EQT will receive approximately 200 miles of regulated transmission pipelines, as well as four storage pools that have a total of 15.1 Bcf working gas capacity. These assets are strategically located across multiple counties in Pennsylvania and connect to EQT's existing transmission assets, which will increase the Company's transportation and storage capabilities.
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