EQT Inks Non-Operated Asset Deal With Equinor: Details

Zinger Key Points
  • EQT signs asset sale agreement with Equinor, selling 40% stake in non-operated natural gas assets for $500 million.
  • Deal includes assets in Ohio and Pennsylvania, with forecasted FY25 free cash flow of about $75 million from non-cash consideration.

Equinor ASA EQNR and EQT Corporation EQT shares are trading lower after the companies signed an asset sale agreement.

EQT inked a deal with Equinor USA Onshore Properties and their affiliates to sell an undivided 40% stake in its non-operated natural gas assets in Northeast Pennsylvania for $500 million of cash and upstream and midstream assets.

The assets represent around 225 MMcf/d of forecasted 2025 net production.  

The assets EQT will receive in the transaction include ~26,000 net acres in Monroe County, Ohio (2025 net production of ~135 MMcfe/d) and ~10,000 net acres in Lycoming County, Pennsylvania (2025 net production of ~15 MMcfe/d in existing EQT-operated assets).

Based on recent strip pricing, EQT forecasts an aggregate FY25 free cash flow of about $75 million from the non-cash consideration.

The deal is expected to close in the late second quarter of 2024, subject to customary closing conditions. EQT expects no cash tax leakage related to the transaction. 

EQT President and CEO Toby Z. Rice said, “This transaction marks an extremely positive start to our divestiture program, bringing in over $1.1 billion of value, including synergies and development plan optimization, for 40% of our non-operated assets, while retaining gas price upside.” 

ReadEQT Stock Downgraded Despite Merger News: Analyst Says Hold Your Horses

“We plan to opportunistically divest the remaining portion of our non-operated assets in Northeast Pennsylvania and have tremendous confidence in being able to achieve our de-leveraging goals.”  

Investors can gain exposure to the stock via  Invesco S&P 500 Equal Weight Energy ETF RSPG and Horizon Kinetics Energy And Remediation ETF NVIR.

Also ReadAnalyst Sees Volatile Future for North American Gas Prices, Upgrades Most Impacted Stock

Price Action: EQT shares are down 0.91% at $36.91 and EQNR by 0.09% at $28.20 on the last check Monday.

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