EQT earnings out this morning
- 2020E capex remains at $1.075B to $1.175B
- The YTD spend = $565M, leaving $560M to be spent in 2H’20 (at the mid-point of guidance).
- However, drilling and completion efficiencies will allow EQT to lower its activity metrics.
- For 2020, the company now intends to average 2-3 frac crews and 2-3 HZ drilling rigs. It will also use 2 top hole rigs.
- As of its Q1 earnings call, the company had announced an expectation of 3-4 frac crews, 3-4 HZ rigs and 2-3 top hole rigs.
- The conclusion: EQT is able to do more with less.
- As for operational highlights, EQT has many.
- The company reports a 20% increase in pumping hours per month from Q3’19 to Q2’20.
- In Q2’20, it is averaging close to 350 hours/month.
- The company reports a 20% increase in stages per month from Q3’19 to Q2’20.
- In Q2’20, it is averaging close to 190 stages/month.
- EQT’s horizontal drilling speed (feet/hour) is up 63% since Q2’19.
- EQT has witnessed a 36% decrease in days to drill 1,000 feet.
- The company uses an electric frac fleet and a hybrid drilling rig (provides reduced fuel consumption).
- In its press release, EQT calls out an instance in June where it drilled over 10,500 feet in 24 hours.
- Our note last night touched on the impact of efficiencies and how that might impact rig and frac crew demand.
- The EQT comments add fuel to the fire.
- Now off to get coffee.
- Have a good day.
- Take a look at the EQT slides.
- One final thing before we hit send, the company’s operational performance improvement and cost cuts since new management came in is impressive.
- To be fair, we haven’t taken a deep operational dive into the full EQT story, but we do watch its IR slide decks as they come out and the changes appear significant.
- Based on these improvements, it’s time to book a trip to Pittsburgh to learn more.
Friendly reminder, this is not investment advice. Just takeaways from EQT’s press release and IR slide deck.
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