With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

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This year’s Fortune 500 marks the 67th running of the list.

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EQT is headquartered in Pittsburgh. Its business centers on finding, developing, and producing natural gas, with a growing midstream component that supports transportation and gathering across core acreage. The company’s roots go back to the late 19th century utility era, but its current identity was built through the modernization of its upstream operations and major acquisitions that expanded scale and infrastructure control.

Q2 2026

Q1 2026

EQT (EQT): Company Profile, Stock Price, News, Rankings

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Good morning, and thank you for joining our second quarter 2026 earnings results conference call. With me today are Toby Rice, President and Chief Executive Officer, and Jeremy Knop, Chief Financial Officer. In a moment, Toby and Jeremy will present their prepared remarks with a question-and-answer session to follow. An updated investor presentation has been posted to the investor relations portion of our website, and we will reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. I'd like to remind you that today's call may contain forward-looking statements. Actual results and future events could materially differ from these forward-looking statements because of factors described in yesterday's earnings release and our investor presentation, the Risk Factors section of our most recent Form 10-K, and in subsequent filings we make with the SEC.      

We do not undertake any duty to update any forward-looking statements. Today's call also contains certain non-GAAP financial measures. Please refer to our most recent earnings release and investor presentation for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. With that, I'll turn the call over to Toby.   

Thanks, Cam, and good morning, everyone. Our second quarter results are another powerful demonstration of the value of EQT's integrated platform. While our operating teams were busy setting more industry records in the field, we continued to build on our strategic momentum through a series of transactions. Our success this quarter underscores how EQT is uniquely positioned to capture a substantial amount of Appalachian demand growth and continue to improve realized pricing. Our operational performance remains the foundation of everything we do, and this quarter, our teams once again pushed the boundaries of what is possible. During the quarter, we drilled the longest lateral in the history of shale development at more than 29,000 feet, all while staying 100% in-zone with zero safety incidents. We also set a new basin 24-hour drilling record and a new EQT 48-hour drilling record in the process.   

While the success of our large-scale operations is defined by averages, it's records like this that redefine what is possible. These achievements are not isolated accomplishments. They reflect the culture we've created, the direct result of years of relentless operational focus and evolution aimed at improving our capital efficiency, lowering our cost structure, and enhancing the returns we generate for shareholders. This strong operational execution, along with robust well performance, is leading to significant production outperformance, which is evident in our second quarter volumes coming in well above the high end of our guidance. A significant portion of this outperformance is coming from our base production, reflecting better-than-expected results from our midstream compression projects, which are extending flat times on new wells and shallowing base declines on older wells.   

As a reminder, these projects were a key piece of the synergies we projected when we acquired Equitrans, they continue to exceed even our upside forecasts. We expect strong performance to continue throughout the year, as such, we are raising our 2026 production guidance by roughly 90 BCFE at the midpoint. Another important milestone this quarter was the receipt of FERC authorization to begin construction activities on MVP Southgate. With all key regulatory approvals now in hand, we have elected to pull forward capital spending and accelerate construction timing of MVP Southgate into 2026 to de-risk project execution. The project will provide critical infrastructure needed to connect low-cost Appalachian natural gas supply with one of the fastest-growing demand regions in the country. Bringing additional supply into the Carolinas will help utilities meet growing energy needs, support system reliability, and help keep energy costs affordable for consumers.

MVP Southgate enhances the strategic value of EQT's integrated platform, expanding market access for Appalachian natural gas while providing an attractive combination of long-term contracted cash flow visibility and compelling risk-adjusted returns. As a reminder, neither MVP Southgate nor the MVP Boost expansion were included in our Equitrans underwriting case. Alongside this performance we're seeing from our compression projects, these successes demonstrate how our vertically integrated platform and aligned teams continue to unlock value across both our upstream and midstream businesses and drive incremental returns for shareholders. Turning to Appalachian fundamentals, momentum continues to build for power generation and pipeline projects throughout the region, with an opportunity set in front of EQT today that is significantly larger than it was even six months ago.      

As illustrated on slide 22 of our investor presentation, our analysis suggests there are over 45 Appalachian demand and pipeline takeaway projects under construction or in evaluation, totaling nearly 20 BCF a day of potential demand. The success of even a fraction of these projects is expected to lead to significant strengthening of in-basin supply-demand fundamentals. This demand backdrop creates upstream growth optionality for EQT, thanks to our low cost, peer-leading inventory depth, and strong balance sheet position. However, any future growth will be measured and directly tied to demand underpinned by our commercial agreements. We have no interest in growing for growth's sake, as that is a strategy that has historically resulted in poor returns and value destruction in this industry.

Instead, our focus remains on growth with durable contractual demand in a manner that is accretive to corporate returns, expands free cash flow per share, and creates long-term shareholder value. Wrapping up, the broad takeaway is clear. EQT is delivering at a high level across every part of our business, stacking up wins operationally and strategically. We continue to drive operational excellence, execute commercial agreements that catalyze in-basin demand, improve price realizations for years to come, also advance infrastructure projects that connect our low-cost supply to premium markets. As Appalachia continues to emerge as one of the epicenters for secular power-driven natural gas demand growth in North America, EQT is uniquely positioned to capture an outsized share of this opportunity. With a differentiated integrated platform, industry-leading execution, and a growing portfolio of demand-driven projects, we have a clear path to creating durable, long-term value for our shareholders.     

With that, I'll turn the call over to Jeremy.

Thanks, Toby. This second quarter was another outstanding one for EQT. We again exceeded expectations across virtually every financial metric, including production, price realizations, operating costs, and capital spending. This resulted in $330 million of free cash flow attributable to EQT in Q2, despite natural gas prices averaging just $2.89 per MMBtu during the quarter, underscoring our advantaged position at the low end of the cost curve. Operational execution is leading to sustained production outperformance, and as a result, we are raising 2026 production guidance by approximately 90 BCFE, while also lowering full-year CapEx by $25 million. As Toby mentioned, we have also decided to accelerate MVP Southgate construction timing and are thus pulling forward $85 million of capital contributions to equity method investments from 2027 into 2026. During the quarter, we continued to build momentum across our commercial platform.

We recently signed a 10-year definitive agreement with Competitive Power Ventures to provide 325 million cubic feet per day of natural gas to a new 2 GW power generation facility planned in Doddridge County in the heart of West Virginia, which will pull gas south from EQT's core production base. This facility is expected to enter service in early 2031. Note this marks the second new combined cycle gas turbine project in West Virginia that EQT has helped catalyze following the Wolf Summit project we announced last year. Importantly, the CPV contract pricing is linked to PJM power pricing rather than a gas price index and represents EQT's second deal incorporating this structure. At the forward strip, we expect this agreement to provide EQT a material premium to local index pricing, while also enhancing the project's ability to secure financing.      

This structure provides us direct exposure to strong PJM power pricing fundamentals without any capital commitment. This transaction is yet another example of how EQT is uniquely positioned to directly capture a material amount of demand growth in Appalachia and the associated pricing benefits. Our integrated platform, investment grade ratings, commercial expertise, and reputation allow us to craft solutions that deliver superior value for customers while also improving returns for EQT shareholders. As power developers, data centers, and industrial customers look to secure gas supply, EQT is the clear partner of choice throughout the Appalachian region. We also announced the acquisition of Blackline Midstream for approximately $77 million. Blackline owns and operates two strategically located propane storage and distribution terminals in New England, representing the largest propane storage facility in the region, with both rail and waterborne access.      

Collectively, the assets provide 46 million gallons of storage capacity, with EQT currently supplying approximately 60% of Blackline's propane volumes. This transaction is particularly attractive as it requires essentially no incremental capital investment while creating multiple opportunities for value creation. The assets provide physical optionality for EQT's propane production, improve flow assurance, enhance our ability to optimize pricing, and create additional commercial optionality through domestic and international supply channels. We also see opportunities to leverage our commercial relationships to drive growth and optimize costs over time. From a financial perspective, we project a 20% free cash flow yield under our base case underwriting, with upside optionality that would roughly double this metric. Blackline is a natural fit within EQT's integrated platform as the acquisition complements our existing upstream and midstream businesses, expands our commercial reach, and allows us to capture additional value from our existing production.   

Transactions like this demonstrate how our vertically integrated platform and strategic and commercial expertise can unlock unique value creation opportunities while enhancing the long-term earnings power of our business. Turning to our LNG portfolio, we recently executed a five-year offtake agreement with a large Asian integrated energy company for approximately 0.5 million tons per annum of LNG, sourced from various Gulf Coast LNG facilities beginning in 2028. This deal allows us to accelerate our LNG exposure and develop capabilities while reducing execution risk ahead of the planned commencement of our larger portfolio in 2030. Notably, the agreement was executed at a similar cost to our term deals rather than current market economics. At recent strip pricing, we expect the contract will increase EQT's 2028 free cash flow by roughly $45 million.   

This deal demonstrates our steady progress in developing our LNG business and the relentless hustle of the team on the front lines as we develop important relationships around the world and improve EQT's access to premium markets. Turning to capital allocation, we are on the doorstep of achieving our long-term net debt target of $5 billion, a milestone that represents the culmination of years of commitment towards bulletproofing our balance sheet. During times of turbulence, our balance sheet will become a fortress and cash on hand a strategic tool to fund aggressive share buybacks and long-term growth investments, even in low-price environments. To that end, in the near term, we intend to accumulate cash, which we plan to aggressively deploy into share buybacks during the industry's episodic down cycles.   

As we look ahead, we believe the next chapter of value creation at EQT will be driven by the combination of disciplined growth and capital returns, primarily through share buybacks. High-return midstream investments provide visible cash flow growth today and connect our production to new demand. While future upstream growth is supported by both announced supply agreements and a growing number of new demand opportunities. When combined, the ability to repurchase meaningful amounts of stock along the way, we see a clear pathway to driving significant alpha due to the compounding nature of this strategy. With that, we will now open the line for questions.   

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your headset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Josh Silverstein from UBS. Your line is open.

Thanks. Good morning, guys. Jeremy, I wanted to start with just the last comments that you had made there. Clearly, the balance sheet continues to improve. The stock price has gone back towards a 52-week low. How much cash do you want on hand to take advantage of some of these periods of stock price weakness versus continuing to just build cash? What's the right level of cash for you guys to have on hand?

Yeah, good question. Look, we're going to be patient with it. We're not opposed to accumulating at certain points in the cycle up to a few billion dollars of cash. I think where the stock price is right now, I think we look to be more aggressive in the buybacks. It just depends on what's going on in the market. Again, I think we'll be opportunistic and aggressive when we see those opportunities. We certainly want to be counter-cyclical rather than pro-cyclical.   

Got it. Then on the new LNG updates here, I want to see if you can provide a little bit more details on how you're implementing the strategy and the 2028 offtake agreements here. How are you sourcing the LNG? Is the infrastructure in place and capacity already lined up for this?

For the new agreement, specifically, we're able to pick the capacity up off a, like we said in prepared remarks, an integrated Asian buyer that is dealing with some tariff-related issues. We worked with them to alleviate that, really crafted a win-win deal to where that is in the money for us today and adds meaningfully to our 2028 cash flow. Those are volumes that will be coming from two facilities that are nearing completion right now. I would expect those to come online in early 2028. Contractually, it's January, but if there's slippage in project timing, it could be a little bit delayed. We have high confidence in that coming online during that year and contributing to uplift in realized pricing.    

Your next question comes from Doug Leggate from Wolfe. Your line is open. Please go ahead.

Thank you. Good morning, everybody. Jeremy, maybe this is for Toby. The idea that you've laid out this extraordinary volume potential, obviously, a lot of it's post-2030. Excuse me. I'm curious, Toby, when you talk about you're only going to grow when you've got contractual agreements, I'm curious why, if these are premium-priced deals in your backyard, why would you grow at all? Why wouldn't you reallocate existing volumes and get a premium price without having to incur the additional capital and ultimately the growth? That was my first question.  

You want to take your second question, throw it out there?

Yeah. It's a real quick one. It was for Jeremy, really. The compression is obviously having an impact on capital. I'm just curious how much lower do you think, how much better do you think your sustaining capital can become as a consequence of those compression projects? That's it. Thank you.

Yeah. Doug, I think your first question hits on something that we spend a lot of time thinking about. The first step our first focus is to get direct connections to this demand, I think we're showing a lot of progress on that front. The next question that we're going to have to ask ourselves is what part of that demand are we actually going to grow organically into? As you mentioned, strengthening basis is going to be one of those considerations, that's going to have an impact of lifting all EQT volumes, not just the volumes that would be exposed to growth. Our first focus is to capture as many of these opportunities as we can, then we'll step back and make that evaluation.  

There will be a portion that we'll consider growing, but it would not be the full amount of demand.

Yeah. Doug, just to add to that, and then address your second question. We have a disproportionate amount of our gas sold into first of month to day on a short-term basis. I think it's about 30% of our volumes are sold on more medium and longer-term contracts. There certainly is the ability to reallocate. Effectively what happens is less volumes that are sold into that first of month market drives a little more scarcity in that market, and if all else is equal, would lift index pricing. Most of those longer-term deals being indexed to first of month, you get that price benefit.

There certainly is flexibility around that, and I think the way you structure those and where you index it back to liquid hubs is really critical to make sure that you are able to have the flexibility in supplying those volumes over the longer term. It's something that we're very focused on. Look, I think if you look at that slide 22, which I'd encourage everybody to look at, is really the culmination of a lot of the analysis we're doing and the opportunities we're tracking in Appalachia today. We don't have to grow into this one for one, day one. You do see a bit of almost looks like a hockey stick ramp around the end of this decade. A lot of that's really just due to the fact that it takes three to five years to build most of this large-scale infrastructure.   

We're not looking to add any sort of step change in production. If you see two Bcf a day added in a given year, we might grow a fraction of that, and over time we fill it. If the market's a little tighter in the intermediate term, there's ample gas, the market will balance. I think to your point, I think we still benefit because we're in a price times volume business. On your second question around midstream and compression, look, candidly, we're working with our reservoir team and our finance team, just trying to recalibrate how we forecast some of this stuff. I think our original expectations on the impact on our well performance and type curves from lower pressures have been kind of blown away.

We're trying to recalibrate our hydraulic models and just how we forecast type curves and base declines that could lead to further out performance, but it's something we're still in the middle of the process of right now. Obviously, we're seeing quarter after quarter, these big beats that continue to surprise us too. I think that if that trend continues, which it feels like it is, that will lead to continued capital efficiency in the years ahead.

That's great. Thanks, fellas. Appreciate it.

The next question comes from Betty Jiang from Barclays. Your line is open. Please go ahead.

Hi. Good morning. I want to start with a bigger picture question, speaking to that slide 22. Just given where this market is going, we're seeing more midstream pipeline projects. How do you guys see these projects ultimately get supplied? How do you think about the competitive tension to fill these incremental egress projects and how that's creating tension against the in-basin power projects? Related to EQT, your ability to be able to leverage better pricing in these supply agreements that you're talking to.   

Yeah. Betty, I'd say when we look at slide 22, I'd say probably one of the bigger moves that has become a lot clearer over the past few months, as we referenced in our last quarterly update, was just the number of pipeline takeaway opportunities that are showing up largely in that Clarington area. Those are going to be large potential projects. They're going to require supply to be brought from M2 or basically our core production region, to fill those projects. That's going to give us an opportunity to build infrastructure, and with infrastructure, I think we have an edge in making sure that we supply those projects as well.

That's sort of the dynamics that's really exciting to see materialize, and I think EQT will be able to continue to play a role in creating win-win solutions for our customers while giving our shareholders access to some premiums, in the meantime. Those will come in the form of midstream fees. As we do anticipate these large egress projects, the capacity will be taken from utilities downstream.

Great. Thank you. Jeremy, a question to you on the CPV contract being linked to power price. How do you think about the upside downside risk around that contract structure? Is there a floor price in for EQT to protect you? Is there any downside risk protection to that?

Yeah, great question, Betty. Just to frame this and put it into perspective, this is a deal that, if just say hypothetically, this contract came online for the full year of 2027 and just flowed at full capacity. Obviously, there would be a lower utilization, so you can make your assumptions there. It would improve our free cash flow by about $100 million a year, improve corporate overall differentials by $0.05. It is a material contract, it is a material premium, and honestly, it is a true win-win for us and the developer. We can hedge it if we would like to.      

If you look at the way electricity prices and gas prices in PJM specifically are correlated, just due to where gas is in the dispatch, they are tightly correlated, as the cost of building new generation continues to rise, I would expect that spark spread to widen, as there needs to be more and more of a market signal long-term for more generation to be built. We actually think we're on the right side of the bet here, having that long exposure into power. To some degree, it's almost like what you're seeing in the liquids markets today, where you have a lot more tightness in the refined products market as opposed to in the crude market specifically from what's going on in the Middle East.

I think you're going to see a lot of the same dynamics in power, where that power market gets tighter and tighter. It will trickle through to gas, but not on a one-for-one basis. Being able to, in a manner without putting any capital in, get direct exposure to the other side of the generator, I think is really interesting. Again, it's our second deal like that. I'd be open to doing more deals like that. Again, I think it speaks to just the structural creativity and what our team is capable of, to provide solutions for all these types of projects and play a lot of different roles to make them come to fruition.

Your next question comes from Arun Jayaram from JPMorgan Securities. Your line is open. Please go ahead.

Good morning, team. I wanted to go back to the Shay Energy project. Toby and Jeremy, I wondered if you could just discuss what has given EQT perhaps the right to win on this project. You mentioned the Wolf Summit, that infrastructure project maybe was an enabler. Perhaps you could talk about timing here. You mentioned as early as 2031. What are some of the gating items for this project to achieve that startup time, including permit approvals, which has been some of the question from investors on some of these large data center or power projects in the basin?  

In terms of competitive dynamics, I'd say we are close on other projects and also including West Virginia. I think before the end of the year, you'll probably see at least one more, maybe more, potentially some very large ones, too. I think, Arun, it's really what we've been saying for the past year. It's the power of the platform we've put together, more than anything, it's the quality of the team here at EQT, working in a really collaborative, aligned way. Starting with our commercial team with our commodity traders out there structuring this stuff, the depth of relationships, the trust we have, the balance sheet, the integrated platform. We don't have to do the midstream, we don't have to do certain pieces of this, we can. Understanding the whole value chain, I think adds a lot of value.

Being comfortable doing things like we did on CPV Shay, pricing it linked to electricity, not gas, showing that flexibility because it's best for the customer. Really starting out with a mindset of what's best for the customer is what's going to win the deal, how do you create that win-win solution? I think when you put all those pieces together, we're just in a really unique spot, it's allowed us to continue building that momentum, that momentum builds more momentum, which is why we're in the position we are today. Again, I don't think we're done. I think there's a lot more to come.  

Arun, I'd just put some comments here. Certainly have a mentality to help the customers, be creative, we certainly have a number of capabilities from being an integrated producer. I'd also say, we've got great support with the board. The governance on this, the ability to work through these issues, ask the questions that we need to be asked, allows us to stretch strategically, make, we think, a really high-quality decision. This organization is firing from top to bottom, it's what it takes to produce these type of wins. I think it's worth noting that EQT continues to puts up these results, we seem to be winning almost 100% of these deals that we're on, it is a lot of work, we are really putting the customer first.       

Arun, I think what's amazing too is, we talk about feel like we have a new deal every quarter, it seems like lately to talk about. If you really rewind a couple of years back to the end of 2023 when we first announced those sales deals to some of the big utilities in the Southeast, those deals start to come online now at the end of next year, and into 2028. Those deals alone are $300 million a year of uplift of value. At the time, and I'd argue today, we're still not getting credit for that. We keep stacking up these deals, whether it's LNG deals or power deals or whatever it might be, and that value continues to build. From our perspective, EQT is really the only platform with that. As that momentum grows, we're going to continue stacking that margin.   

At the same time, you have the macro backdrop you do as we have talked about in prepared remarks, as we've illustrated on slide 22, which is a further tailwind. Again, it's focusing on what we control every day to differentiate EQT from the rest of the group and deliver the wins in a differentiated way.  

Got it. A quick follow-up is I wanted to refer to slide seven. You guys have highlighted your first half 2026 till performance where you're beating your type curve by 8%. I was wondering if you could, Toby, maybe unpack what is going on. Are you drilling better rock? Is there different flow back procedures? Wondering if you could maybe help determine what is maybe driving this outperformance.

With the till accelerations that we put in place, really, this just comes down to extending flat times, and this is a by-product of producing into optimal pressures on the gathering side. This is just another benefit from the compression. It's not just having an impact on improving our base production, it's also improving our wedge performance, which is the new tills that we're putting in. It's one of the great things when operationally, these wins create other opportunities for us. I'd say some of the other things that we're looking at on compression that we haven't really wrapped our heads around, but as Jeremy mentioned, we're really digging into this.

We also have a number of wells that could benefit from workovers that maybe not would have been a prize in a high-pressure system, but now with the pressures lowered, those workovers make sense. All of these things are incremental, and they just continue to strengthen the operational story that we have here at EQT.

Your next question comes from Neil Mehta from Goldman Sachs. Your line is open. Please go ahead.

Yeah. Good morning, Toby and Jeremy. Thanks for all the updates here. Just wanted your perspective on the hedging strategy here. Saw you layered in a little bit more and how are you thinking about the optionality of running a little bit more unhedged? How are you thinking about being opportunistic around your hedging strategy?      

Yeah, it's a good question. Look, I think candidly, we're seeing some of the same very near-term risks that others are seeing around Permian growth potential and some of the super El Niño weather patterns. I think for us, it's more of just ensuring as we look into next year, the balance sheet's in a strong position. We are intending to start buying back quite a bit of stock. We want to make sure if there is a down cycle, there's nothing that holds us back from leaning in pretty aggressively and deploying a lot of cash into that. If that does happen, our hedging has been focused specifically on next summer, where we would expect more of the weakness to show up. Making sure that through a cycle like that, if there is temporary weakness, that we can be aggressive and on offense.

As you look into late 2027 and beyond, though, we really see this inflecting again. This feels to us like potentially a very short-term soft spot. I think the structural case for gas as you get into 2028 and 2029 with what's going on in power and LNG and production beyond this near term potential bump from the Permian looks lackluster, increasingly lackluster to us. When you look at the Haynesville and some of the rest of these plays, we see a really strong macro backdrop, and frankly, we want to be aggressive trying to buy a lot of stock ahead of it. That's how we're thinking about the hedging strategy. I don't know if you'll see us add a bunch more at pricing levels around where the strip is right now. We don't think there's a lot more downside to come.   

We're really just trying to put this in place so we can be aggressive.

That makes a lot of sense. Then maybe the follow-up is just on M2. We've seen local pricing in Appalachia strengthen here in part because of in-basin demand. Can you talk about your conviction around that story, and how are you seeing some of the moving pieces through the curve?

It's been a story we've talked about for years, I think the market's much more aware of it now. All this demand we're talking about as we get later into this decade, I just don't think, even if some of this doesn't happen and things get off track for some reason, I don't see a way for basis not to continue to strengthen materially. Again, I think we're in a perfect position to benefit from a lot of that. Again, as we think about a potential strategy to start adding mid-single-digit type of growth at some point between now and the end of the decade, I think that's going to be a market that can absorb multiples of anything we could add. If our top line is price and volume, we can modestly add volume.      

I think we'll benefit from price all the same, and that's going to drive a lot of improvement in the bottom line as we're buying stock back at the same time. We think it's a recipe for a lot of success.

Your next question comes from Phillip Jungwirth of BMO. Your line is open. Please go ahead.

Yeah, thanks. Good morning. Coming back to the Appalachia growth wave slide. I know this is un-risked, is there a good way to think about just risking the projects? You do list a lot of the parties behind these, I guess, what do you see as the biggest challenges to this demand materializing? Also from EQT's seat, what are the things that you typically look for when deciding who to partner with on some of these?

Yeah, Phil, good question. I know you and I have spent some time in the last couple of months talking about this, and I think you've done some good work on this as well. What we've done is we've tried to take a very intentional approach in listing all these out, having direct dialogue with most of these customers, and understanding what exactly their needs are and what their obstacles are to getting these projects to FID and financed, and coming up with solutions to help alleviate some of those roadblocks. When we have gone through this internally and assigned probabilities across the spectrum for each project, we come up with high single-digit Bcf a day of growth. Call it 40-ish% of the total potential here, we think is probably realistic, as we alluded to in our conference call last quarter.

As we think about what does it take and where to focus to increase those odds, we see our role is taking what is in that navy color, that hockey stick wedge, and trying to understand where can we use the tools available, whether it's midstream or is it volumetric, is it something else working with the downstream customers on gas supply or whatever it might be, to use EQT platform and help actually improve the odds of success for these projects. Really just trying to be that partner of choice, and work with them so they're win-win solutions, just like we've done with CPV. I think the reputation we've built by doing that makes more people want to work with EQT. We've also attracted a lot of talent here that further enables our odds to be the best service provider available.   

That's, I think, why you keep seeing us stack these wins up.

Okay, great. Then on the supply side, is there an upper limit on what you think Appalachia production can grow in any given year, just given inventory depth, and also just logistics around gathering water? Just because the top operators are talking about growth, but it still probably sums up to less than a Bcf if you add it all up. Just wondering if you've looked at all at an upper limit on what this could be, assuming demand growth materializes in the outer years.

I think we're confident in Appalachia's ability to meet these volumes. What I do think you're going to see price sensitivity from operators. While you hear some of the larger operators talking about their ability to grow, those operators typically have inventory to support that growth. That's not the case for a number of the other operators here in Appalachia. I think they're going to be sensitive on price and a little bit more disciplined before they think about growing. The molecules are going to show up, but price will be a determination.

I would add to that. When we go with the data we have, land data and understanding inventory depth of peers. When you look at the peers who have inventory versus who don't, specifically in Southwest Appalachia, where most of this demand is showing up, we think about a third of the basin's total supply will be challenged to hold flat, actually, by the time you get towards the end of this decade. If you have the Ohio Utica, you have some producers in the Panhandle of West Virginia area, and I think up in Northeast PA, struggle to hold flat while you have demand showing up.      

I think you get to this inflection point, what we keep referring to as a paradigm shift that happens towards the end of this decade, where the demand and these long-term infrastructure projects come online, they will pull gas right at the time where I think you have operators like EQT who can meet the moment and grow into that. I think other operators there are going to struggle. I think to your point, the ability to grow year-over-year and meet this, I think you're going to have to see pricing that provides a further incentive to go into zones that are less economic, so certain operators can still have the economic justification to drill.

If you're EQT, and we actually see our cost structure falling in time, not holding flat, not rising, but falling, I think you're going to see significant margin enhancement from that as the marginal producers push pricing up while our pricing falls and we grow volume into that. That's how you create outsized value in the alpha we refer to in prepared remarks.

Your next question comes from Neal Dingmann from William Blair. Your line is open. Please go ahead.

Morning, guys. Thanks for the time. Toby, maybe for you or Jeremy, just a question on the power side also. I'm just wondering specifically given your obvious leading integrated gas company status. When you look at these future contracts that you've been discussing, is there potential for these contracts to maybe structure whereby you all would think about participating in some of the future data center upside? I'm just wondering more on the contract structures going forward.   

Yeah, Neal, that would be a little bit of a jump to go from spark spread to, I guess, spark spread. It is a concept that we've thought about.

I don't see the market opportunity right now, yeah. It is pretty insane to see the margins that are being created off of megawatt of power on the token side of things. Those aren't opportunities that are available in the market right now. We'll keep an eye on that.

Perfect. Just quickly. Maybe could you all talk about what's your current reinvestment rate? Seems like it's now incredibly low, given that how low it is, does that imply, would you all think now you have even more potential for M&A given how low your reinvestment rate is?

Look, I think it's been, call it two years since we did any sort of big M&A. I think our focus right now is on what we feel like is a stock price that's somewhat dislocated, certainly for the quality of the business we've built. I think that is our M&A target right now. Buybacks are going to be a big part of our M&A strategy, if you want to think about it like that. Buying back the best company available in the market every day.

Your next question comes from Sam Margolin from Wells Fargo. Your line is open. Sam, you're on mute.   

Hey. Good morning. Thanks for taking the question. Hi. Sorry. Good morning. Thanks for the question. Wanted to talk a little bit about MVP Southgate. This is an interesting delivery point. It's between a huge amount of in-basin demand in Appalachia and then sort of a big wedge of LNG capacity coming south of it. It's got its own load growth, too, in the Southeast, just from population movement and power. The question is, as you have these demand spikes happen on either side of the MVP Southgate delivery point, what's going to happen to this market? Does it basically just have the same effects as what you'll see in Appalachia, just a little bit extended, or could it develop kind of a unique deficit, just given the fact that nobody else but you seems to be really focused on it?  

Yeah. Good question. We do see that Zone 5 market is actually one of the most lucrative in probably all the continental U.S. because you have the demand pull south from LNG down Transco Which is pulling gas out of that market, while at the same time you have the dynamics you just described locally in that market, you really have the dual benefits. That is why we are so attracted to it, and why we're building Southgate to get more gas into the Carolinas to Duke and to PSNC. Yeah. I think long-term it's a tremendous market to have access to, and I think we're one of the only producers that do at this point.     

Yeah. I would add, just given these dynamics that we're seeing, we've announced to accelerate Southgate. We're not seeing any benefits of that right now, the commercial teams are out there working to pair up the accelerated construction and service date of our project with the commercial terms. Maybe we'll have some progress on that in the future.  

Got it. That makes sense. Yeah, this came up on the call. It's another market question. It came up on the call last quarter. Maybe a little bit of an evolution in the outlook for the LNG market, where at one point there was obviously a lot of concern for a multi-year glut, and now just given geopolitical conditions, that's changing. I wonder if you could just touch on if there's been any changes to your LNG market in terms of either the shape of it or even the long-term addressable market size just in the last three months. Again, in the context that you did update some thoughts last quarter.  

Yeah. I'd say what's changed over the last three months, certainly our view coming into this pre-Iran war was that 2028, 2029 was going to be a little bit oversupplied. I think that's gone away with Iran. That's now not going to be the situation. I think in the last three months, people were anticipating when the recovery was going to take place, and when that LNG capacity was going to be restored. I think with the current conflict extending, that's just delaying the recovery, which is deepening the hole in supply. Right now you've got Europe sitting at storage levels north of 10% below year-over-year where they were. It's starting to hit. You see spot prices internationally north of $17. There's a very large spread forming.

When we look at 2028 on pricing, pre-Iran to where we're at today, we've seen the Henry Hub JKM spread lift over $2. It's another reason why this LNG deal that we just signed up coming in the market in 2028 is so attractive to us.   

Your next question comes from Gabe Daoud from Truist. Your line is open. Please go ahead.  

Thanks. Hey, morning everyone. Maybe just going back to the West Virginia comments around maybe just signing a couple more deals by year-end. One of the bigger campuses there, maybe 60 miles west is the Monarch campus. Just curious, is your understanding that campus is still on track for 2 GW operational next year, and has construction started on that Prosperity Line? 

Yeah, we're in discussions with them. Probably no surprise. There's a lot of work to be done on that campus, but I think progress continues to be made. But I'd leave it up to the projects to give the specific updates. We're, again, more focused on the gas supply portion of it. Again, there's others that I think we're very close on down there in West Virginia and in southwest Pennsylvania. And we'll give updates as those get definitive documents signed.

Okay. Cool. Thanks, Jeremy. Maybe just a quick follow-up would be some more comments around the Blackline Midstream acquisition, maybe strategically. Could you just talk about how that maybe makes sense for you guys? I know you highlighted it in the prepared remarks, but curious if there's anything else that you could speak to.

Yeah, I would think about it like Equitrans in a way, where we're their largest customer, and we saw it as a way to effectively buy that contract in at a really attractive rate. Through the integrated platform, squeeze even more value out of it. The guy who ran Blackline is actually a former EQT employee from our NGL team in our trading business. We have a lot of great relationships there already. Happy to welcome him back. We see it as an opportunity where when you get an asset like that, and then you give them access to investment grade support, the relationships we have, the volume we have, the capital we have to support them in going from being capital constrained to really being able to think outside the box in how they optimize a facility like that.    

There's a lot of value that's created, and that's exactly what we've done with Equitrans, and I think we see similar opportunities with this platform. It's obviously a lot smaller. Again, I think it shows what you're able to do with a platform like EQT's, where you just keep building through adjacencies as they become core competencies and generate a lot of value in the process.

Awesome. Thanks. Actually, just a quick follow-up. Southgate, Toby, did you just say you're working on accelerating the in-service date to 2027? Is that what I heard? Thanks, guys.

Yeah, construction should be available by the end of this year. The question's going to be when can we start the commercial arrangements on that project? Those are the conversations we're having right now, is taking advantage of the acceleration of construction. This obviously would all be upside for our 2027 plans.

Your next question comes from James West from Melius Research. Your line is open. Please go ahead.

EQT (EQT) Q2 2026 Earnings Call Transcript

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