Q2 2024 EQT Corp Earnings Call - Q&A

Thank you for standing by and welcome to the EQT second quarter 2024 results conference call.

Cameron Jeffrey Horwitz: Thank you. I'd now like to turn the call over to Cameron Horwitz, Managing Director of Investor Relations and Strategy. You may begin. Good morning, and thank you for joining our second quarter 2024 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.

Operator: at the start of 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1.

Cameron Horwitz: I now like to turn the call over to Cameron Horwitz, Managing Director, Investor Relations and Strategy. You may begin.

Cameron Jeffrey Horwitz: Thank you. I'd now like to turn the call over to Cameron Horwitz, Managing Director, Investor Relations and Strategy. You may begin.

Cameron Horwitz: Good morning, and thank you for joining our second quarter 2024 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.

Cameron Jeffrey Horwitz: Good morning and thank you for joining our second quarter 2024 Earnings Results Conference call.

Speaker Change: With me today are Toby Rice, President and Chief Executive Officer, and Jeremy Knop, Chief Financial Officer.

Speaker Change: 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.

Cameron Horwitz: A replay of today's call will be available on our website.

Cameron Horwitz: 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 the factors described in yesterday's earnings release and our investor presentation, the risk factors section of our most recent Form 10-K, informed 10-Q, and then subsequent filings we make with the SEC. We do not undertake any duty to update forward-looking statements.

Cameron Jeffrey Horwitz: I'd like to remind you that today's call may contain forward-looking statements. Actual results and future events can materially differ from these forward-looking statements because of the factors described in yesterday's earnings release, in our investor presentation, the risk factors section of our most recent Form 10-K and Form 10-Q, and in subsequent filings we make with the SEC. We do not undertake any duty to update forward-looking statements.

Speaker Change: I'd like to remind you that today's call may contain forward-looking statements.

Speaker Change: Actual results and future events can materially differ from these forward-looking statements because of the factors described in yesterday's earnings release, in our investor presentation, the risk factor section of our most recent Form 10-K and Form 10-Q , and in subsequent filings we make with the SEC.

Cameron Horwitz: 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 reconciliation to the most comparable GAAP financial measures.

Cameron Jeffrey Horwitz: 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.

Speaker Change: We do not undertake any duty to update forward-looking statements.

Speaker Change: 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.

Toby Rice: With that, I'll turn the call over to Toby.

Toby Z. Rice: This week marked a significant milestone in the history of our company as we closed the acquisition of Equitrans Midstream, transforming EQT into America's only large-scale, vertically integrated natural gas business. To put the significance of our combined companies into perspective, EQT's assets now encompass nearly 2 million acres of leasehold, producing more than 6 BCFE per day, with almost 4,000 low-cost remaining drilling locations. More than 2,000 miles of gathering lines with greater than 8 BCFE a day of throughput.

Speaker Change: With that, I'll turn the call over to Toby.

Toby Z. Rice: Thanks, Cam, and good morning, everyone. This week marked a significant milestone in the history of our company as we closed the acquisition of Equitrans Midstream, transforming EQT into America's only large-scale, vertically integrated natural gas business.

Speaker Change: To put the significance of our combined companies into perspective, EQT's assets now encompass nearly 2 million acres of leasehold, producing more than 6 BCFE per day with almost 4,000 low-cost remaining drilling locations.

Toby Rice: Low cost remaining drilling locations, more than 2,000 miles of gathering lines with greater than 8 B.C.F.E. per day of throughput. Nearly 500 miles of water lines, 43 B.C.F. of natural gas storage, 800,000 horsepower of compression, almost 950 miles of critical transmission infrastructure, plus the newly commissioned 300-mile Mountain Valley Pipeline, all of which are located at the gateway of Appalachia. And ideally positioned to serve growing US and international natural gas demand for decades to come. This combination creates a differentiated business model among the US energy landscape, as EQT is now at the absolute low end of the North American natural gas cost curve.

Toby Z. Rice: Nearly 500 miles of water lines, 43 BCFE of natural gas storage, 800,000 horsepower of compression, almost 950 miles of critical transmission infrastructure, plus the newly commissioned 300-mile Mountain Valley pipeline. All of which are located at the gateway of Appalachia and ideally positioned to serve growing U.S. and international natural gas demand for decades to come.

Speaker Change: More than 2,000 miles of gathering lines with greater than 8 BCF a day of throughput.

Speaker Change: Nearly 500 miles of water lines, 43 BCF of natural gas storage, 800,000 horsepower of compression, almost 950 miles of critical transmission infrastructure, plus the newly commissioned 300-mile Mountain Valley Pipeline.

Speaker Change: All of which are located at the gateway of Appalachia and ideally positioned to serve growing U.S. and international natural gas demand for decades to come.

Toby Z. Rice: This combination creates a differentiated business model among the U.S. energy landscape, as EQT is now at the absolute low end of the North American natural gas cost curve. A low-cost structure is the only competitive advantage one can have in a commodity business, and with the closing of Equitrans' acquisition, EQT's unlevered free cash flow breakeven price is projected to be $2 per million BTU, with further downside potential upon synerg This cost profile structurally de-risks our business in the low parts of the commodity cycle, which in turn eliminates the longer-term need to defensively hedge, thus unlocking unmatched upside in higher-price environments.

Speaker Change: This combination creates a differentiated business model among the U.S. energy landscape, as EQT is now at the absolute low end of the North American natural gas cost curve.

Toby Rice: A low cost structure is the only competitive advantage one can have in a commodity business, and with the closing of Equatrans acquisition, EQT's unlearned free cash flow break-even price is projected to be $2 per million B.C.U. with further downside potential upon synergy capture.

Speaker Change: A low-cost structure is the only competitive advantage one can have in a commodity business.

Speaker Change: and with the closing of Equitrans Acquisition.

Speaker Change: EQT's unlevered free cash flow break-even price is projected to be $2 per million BTU, with further downside potential upon synergy capture.

Speaker Change: This cost profile structurally de-risks our business in the low parts of the commodity cycle, which in turn eliminates the longer-term need to defensively hedge, thus unlocking unmatched upside to higher-price environments.

Toby Rice: Williams. We believe the sustainable cost structure advantage combined with our scale, peer-leading inventory depth, low emissions profile, and world-class operating team offers the best risk-adjusted exposure to natural gas prices of any publicly investible asset in the world.

Toby Z. Rice: We believe the sustainable cost structure advantage, combined with our scale, peer-leading inventory depth, low emissions profile, and world-class operating team, offers the best risk-adjusted exposure to natural gas prices of any publicly investable asset in the world. I also want to welcome Equitrans employees and shareholders to the EQT crew.

Speaker Change: We believe that Sustainable Cost Structure Advantage, combined with our scale, peer-leading inventory depth, low emissions profile, and world-class operating team, offers the best risk-adjusted exposure to natural gas prices of any publicly investable asset in the world.

Toby Rice: I also want to welcome Equitrans employees and shareholders to the EQT crew. We're excited to get to work on locking the full potential of our combined company's asset base. With the acquisition closing a full quarter ahead of our original timeline, we estimate savings of nearly $150 million relative to our initial underwriting assumptions, even before synergies. We're also able to more rapidly mobilize our integration team, which has a proven track record of turning around EQT and efficiently integrating three large-scale acquisitions over the past several years, including seamlessly onboarding an entire mainstream division with the XCL acquisition last fall.

Speaker Change: I also want to welcome Equitrans employees and shareholders to the EQT crew. We're excited to get to work on locking the full potential of our combined company's asset base.

Toby Z. Rice: We're excited to get to work on locking the full potential of our combined company's asset base. With the acquisition closing a full quarter ahead of our original timeline, we estimate savings of nearly $150 million relative to our initial underwriting assumptions, even before Synergies. We're also able to more rapidly mobilize our integration team, which has a proven track record of turning around EQT and efficiently integrating three large-scale acquisitions over the past several years, including seamlessly onboarding an entire midstream division with the XEL acquisition last fall.

Speaker Change: With the acquisition closing a full quarter ahead of our original timeline, we estimate savings of nearly $150 million relative to our initial underwriting assumptions, even before Synergies.

Speaker Change: We are also able to more rapidly mobilize our integration team, which has a proven track record of turning around EQT and efficiently integrating three large-scale acquisitions over the past several years, including seamlessly onboarding an entire midstream division with the XEL acquisition last fall.

Toby Rice: This accelerated closing amplifies our momentum and pulls forward our timeline to synergy capture. We have continued to study synergy potential since announcement and have identified further upside potential to weapon by completion efficiency gains through water asset integration, which is on top of early compression uplift results that are exceeding our high end synergy assumption, and we plan to share additional details as our teams work through the integration process.

Toby Z. Rice: This accelerated closing amplifies our momentum and pulls forward our timeline to synergy capture. We have continued to study synergy potential since the announcement and have identified further upside potential driven by completion efficiency gains through water asset integration, which is on top of early compression uplift results that are exceeding our high-end synergy assumption, and we plan to share additional details as our teams work through the integration process. Shifting gears, June 14th, 2024 marked a historic moment of progress for our country as natural gas began flowing through the Mountain Valley Pipeline. The gas moving through this critical infrastructure will provide low-cost, low-emission energy to millions of Americans while strengthening our national security.

Speaker Change: This accelerated closing amplifies our momentum and pulls forward our timeline to SynergyCapture.

Speaker Change: We have continued to study synergy potentials since announcement and have identified further upside potentials driven by completion efficiency gains through water-asset integration.

Speaker Change: which is on top of early compression uplift results that are exceeding our high-end synergy assumption. And we plan to share additional details as our teams work through the integration process.

Toby Rice: Shifting gears, June 14th, 2024, marked a historic moment of progress for our country as natural gas began flowing through Mountain Valley Pipeline. The gas moving through this critical infrastructure will provide low cost, low emission energy to millions of Americans while strengthening our national security. The upstream development underpinning flows on MVP will generate hundreds of millions of dollars of royalties every year to local communities in the Appalachian region while supporting well-paying private sector jobs. Downstream, the delivery of low-cost Appalachian gas will strengthen the competitiveness of American manufacturers whose energy input costs will be a fraction of the price paid by global competitors, which should further support a manufacturing renaissance in America.

Speaker Change: Shifting gears, June 14, 2024 marked a historic moment of progress for our country as natural gas began flowing through Mountain Valley Pipeline.

Speaker Change: The gas moving through this critical infrastructure will provide low-cost, low-emission energy to millions of Americans while strengthening our national security.

Toby Z. Rice: The upstream development underpinning flows on MVP will generate hundreds of millions of dollars of royalties every year to local communities in the Appalachian region while supporting well-paying private sector jobs. Downstream, the delivery of low-cost Appalachian gas will strengthen the competitiveness of American manufacturers, whose energy input costs will be a fraction of the price paid by global competitors, which should further support a manufacturing renaissance in America. MVP will also provide utilities access to cheap, reliable fuel to power America's data center and artificial intelligence buildout, which is one of the strongest secular growth stories in the world.

Speaker Change: The upstream development underpinning flows on MDP will generate hundreds of millions of dollars of royalties every year to local communities in the Appalachian region while supporting well-paying private sector jobs.

Speaker Change: Downstream, the delivery of low-cost Appalachian gas will strengthen the competitiveness of American manufacturers whose energy input costs will be a fraction of the price paid by global competitors, which should further support a manufacturing renaissance in America.

Toby Rice: MVP will also provide utilities access to cheap, reliable fuel to power America's data center and artificial intelligence build out, which is one of the strongest secular growth stories in the world. Since announcing the Equatoran's acquisition earlier this year, we have fielded significant inbound interest from end users of gas in the region, underscoring the depth of demand in the value of EQT's MVP capacity. MVP's volumes alone are estimated to reduce carbon emissions by up to 60 million tons per year via displacement of legacy coal generation, which, to put in context, is five times the emission reductions associated with Tesla's electric vehicles.

Speaker Change: MVP will also provide utilities access to cheap, reliable fuel to power America's data center and artificial intelligence build-out, which is one of the strongest secular growth stories in the world.

Toby Z. Rice: Since announcing the Equitrans acquisition earlier this year, we have fielded significant inbound interest from end users of gas in the region, underscoring the depth of demand and the value of EQT's MVP capacity. MVP's volumes alone are estimated to reduce carbon emissions by up to 60 million tons per year via displacement of legacy coal generation, which, to put it in context, is five times the emission reductions associated with Tesla's electric vehicles.

Speaker Change: Since announcing the Equitrans acquisition earlier this year, we have fielded significant inbound interest from end-users of gas in the region, underscoring the depth of demand and the value of EQT's MVP capacity.

Speaker Change: MVP's volumes alone are estimated to reduce carbon emissions by up to 60 million tons per year via displacement of legacy coal generation, which, to put in context, is five times the emission reductions associated with Tesla's electric vehicles.

Toby Rice: In fact, thanks to MVP's completion, EVs in the Southeast region can now run on low-emission EQT gas delivered through MVP rather than the coal generation powering many of them today.

Toby Z. Rice: In fact, thanks to MVP's completion, EVs in the Southeast region can now run on low emission EQT gas delivered through MVP, rather than the coal generation powering many of them today. Given the regional exposure, upstream inventory depth, and counterparty quality, we believe NBP is among the most valuable natural gas pipelines in the world, and EQT is honored to be the operator and steward of this critical infrastructure. Turning to the second quarter results, we experienced yet another quarter of operational outperformance marked again by incremental efficiency gains.

Speaker Change: In fact, thanks to MVP's completion, EVs in the Southeast region can now run on low-emission EQT gas delivered through MVP, rather than the coal generation powering many of them today.

Toby Rice: Given the regional exposure, upstream inventory depth, and counter-party quality, we believe MVP is among the most valuable natural gas pipelines in the world, and EQT is honored to be the operator and steward of this critical infrastructure.

EQT: Given the regional exposure, upstream inventory depth, and counterparty quality, we believe NBC is among the most valuable natural gas pipelines in the world, and EQT is honored to be the operator and steward of this critical infrastructure.

Toby Rice: Turning to second quarter results, we have experienced yet another quarter of operational outperformance, marked again by incremental efficiency gains. A tangible example of this on our recent Mallory CPAD in Lycoming County, Pennsylvania, where our toppled rigs recently drove the fastest well to kickoff point in EQT history, with the overall average drilling time to kickoff point across the pad being 25% faster than the offset wells we drilled in 2022. This efficiency improvement is resulting in tangible well cost savings, as the average top hole drilling costs on the Mallory CPAD came in 14% below our pre-drill estimate.

EQT: Turning to second quarter results, we experienced yet another quarter of operational outperformance marked again by incremental efficiency gains.

Toby Z. Rice: A tangible example of this is a recent Mallory Seapad in Lycoming County, Pennsylvania, where our top hole rigs recently drilled the fastest well to kickoff point in EQT history, with the overall average drilling time to kickoff point across the pad being 25% faster than the offset wells we drilled in 2022.

EQT: A tangible example of this on our recent Mallory C-PAD in Lycoming County, Pennsylvania, where our top hole rigs recently drilled the fastest well-to-kickoff point in EQT history.

EQT: With the overall average drilling time to kickoff point across the pad being 25% faster than the offset wells we drilled in 2022.

Toby Z. Rice: This efficiency improvement is resulting in tangible well cost savings as the average top hole drilling costs on the Mallory Seapad came in 14% below our pre-drill estimate. In completions, recent improvements in logistics planning and water throughput have driven materially faster completion times on our latest wells. Our average footage completed per day is up 6% year over year thus far in 2024, but our most recent paths implementing new logistics techniques have outpaced our average 2023 completion speed by more than 35%, indicating the potential for material future capital efficiency improvement.

EQT: This efficiency improvement is resulting in tangible well cost savings as the average top hole drilling cost on the Mallory C-Pad came in 14% below our pre-drill estimate.

Toby Rice: Within completions, recent improvements in logistics planning and water throughput have driven materially faster completion times on our latest wells. Our average footage completed for day is up 6% year-over-year thus far in 2024, but our most recent paths, implementing new logistics techniques, have outpaced our average 2023 completion speed by more than 35%, indicating the potential for material future capital efficiency improvements. Notably, this average excludes the pad we are currently fracking, which today has seen completed footage per day that is a whopping 120% faster than our 2023 program average and set a new EQT record with more than 3200 feet of lateral completed in a single day.

EQT: With incompletions.

EQT: Recent improvements in logistics planning and water throughput have driven materially faster completion times on our latest wells. Our average footage completed per day is up 6% year-over-year thus far in 2024, but our most recent paths, implementing new logistics techniques, have outpaced our average 2023 completion speed by more than 35%.

EQT: Indicating the Potential for Material Future Capital Efficiency Improvements.

Toby Z. Rice: Notably, this average excludes a pad we are currently fracking, which to date has seen completed footage per day that is a whopping 120% faster than our 2023 program average and set a new EQT record with more than 3,200 feet of lateral completed in a single day.

EQT: Notably, this average excludes the pad we are currently fracking.

EQT: which to date has seen completed footage per day that is a whopping 120% faster than our 2023 program average and set a new EQT record with more than 3,200 feet of lateral completed in a single day.

Toby Rice: As I mentioned previously, we believe the integration of EQT and Equitrans water systems can help sustain these completion efficiency improvements, as streamlining water logistics is one of the most imperative elements to systematically increasing completed footage for day. Despite efficiency gains accelerating activity into Q2, our second quarter capex still came in below the midpoint of our guidance range, highlighting how operational efficiency gains are driving tangible for well cost savings. Alongside well cost savings, we are also seeing strong well performance across our asset base, which drove upside to our second quarter volumes despite price-related curtailments. As shown on slide 6 of our investor deck, this represents a continuation of the track record of productivity gains that have been a hallmark of EQT since new management took over in 2019.

Toby Z. Rice: As I mentioned previously, we believe the integration of EQT and Equitrans water systems can help sustain these completion efficiency improvements, as streamlining water logistics is one of the most imperative elements to systematically increasing completed footage per day. Despite efficiency gains accelerating activity into Q2, our second quarter CAPEX still came in below the midpoint of our guidance range, highlighting how operational efficiency gains are driving tangible per well cost savings. Alongside well cost savings, we are also seeing strong well performance across our asset base, which drove upside to our second quarter volumes despite price-related curtailment.

EQT: As I mentioned previously, we believe the integration of EQT and Equitrans water systems can help sustain these completion efficiency improvements, as streamlining water logistics is one of the most imperative elements to systematically increasing completed footage per day.

EQT: Despite efficiency gains accelerating activity into Q2, our second quarter CAPEX still came in below the midpoint of our guidance range, highlighting how operational efficiency gains are driving tangible per well cost savings.

EQT: Alongside well-cost savings, we are also seeing strong well performance across our asset base, which drove upside to our second quarter volumes despite price-related curtailments.

Toby Z. Rice: As shown on slide six of our investor deck, this represents a continuation of the track record of productivity gains that have been a hallmark of EQT since new management took over in 2019. During this period, third-party data shows we have seen a nearly 40% improvement in average EOR per lateral foot, while most of our peers have seen productivity degradation as core inventory is exhausted. As a result, EQT is now generating the highest average EOR per foot of any major operator across the Appalachian Basin.

EQT: As shown on slide 6 of our investor deck, this represents a continuation of the track record of productivity gains that have been a hallmark of EQT since new management took over in 2019.

Toby Rice: Over this period, third party data shows we have seen a nearly 40% improvement in average EUR per lateral foot, while most of our peers have seen productivity degradation as core inventory is exhausted. As a result, EQT is now generating the highest average EUR per foot of any major operator across the Appalachian Basin. I also want to highlight this productivity improvement as come despite a material increase in field pressures across Equitrans' gathering system over the same period, which essentially makes it more difficult to slow our wells. We see significant upside from investing in compression to lower system pressures, which in turn should further improve well productivity and further reduce our upstream maintenance capital requirements in future years.

EQT: Over this period,

EQT: Third party data shows we have seen a nearly 40% improvement in average EOR per lateral foot.

EQT: While most of our peers have seen productivity degradation as core inventory is exhausted. As a result, EQT is now generating the highest average EUR per foot of any major operator across the Appalachian Basin.

Toby Z. Rice: I also want to highlight this productivity improvement has come despite a material increase in field pressures across Equitransit's gathering system over the same period, which essentially makes it more difficult to flow our wells. We see significant upside from investing in compression to lower system pressures, which, in turn, should further improve well productivity and further reduce our upstream maintenance capital requirements in future years. On slide seven of our investor deck, we highlight data from three recent infield examples showing how impactful adding compression and lowering line pressure can be on existing wells. After lowering system pressures by approximately 300 PSI, we saw per well production rates immediately jump by roughly 50% on average across the three projects.

EQT: I also want to highlight this productivity improvement has come despite a material increase in field pressures across Equitransit's gathering system over the same period, which essentially makes it more difficult to flow our wells.

EQT: We see significant upsides from investing in compression to lower system pressures, which in turn should further improve well productivity and further reduce our upstream maintenance capital requirements in future years.

Toby Rice: On slide 7 of our investor deck, we highlight data from three recent infield examples showing how impactful adding compression and lowering line pressure can be on existing wells. After lowering system pressures by approximately 300 psi, we saw per well production rate immediately jump by roughly 50% on average across the three projects. Over the first 12 months, post pressure reduction, we forecast cumulative product gains ranging from 18% to 27%, which in effect lowers our base TDP decline rate, and we believe we'll translate to higher EURs per well. Notably, the average production uplift from these projects is approximately two times more than what we assumed in our $175 million per annum of upside synergies with the E-train deal, indicating potential for even more positive benefit than we originally expected.

EQT: On slide 7 of our investor deck, we highlight data from three recent in-field examples showing how impactful adding compression and lowering line pressure can be on existing wells.

EQT: After lowering system pressures by approximately 300 PSI, we saw per well production rates immediately jump by roughly 50% on average across the three projects.

Toby Z. Rice: Over the first 12 months post-pressure reduction, we forecast cumulative production gains ranging from 18% to 27%, which in effect lowers our base PDP decline rate and, we believe, will translate to higher EURs per well. Notably, the average production uplift from these projects is approximately two times more than what we assumed in our $175 million per annum of upside synergies with the E-Train deal, indicating potential for even more positive benefits than we originally expected. These concrete examples underscore the impact of adding compression to lower system pressures on thousands of producing wells that comprise EQT's base production.

EQT: Over the first 12 months post-pressure reduction, we forecast cumulative production gains ranging from 18% to 27%, which in effect lowers our base PDP decline rate and we believe will translate to higher EURs per well.

EQT: Notably, the average production uplift from these projects is approximately two times more than what we assumed in our $175 million per annum of upside synergies with the E-Train deal, indicating potential for even more positive benefit than we originally expected.

Toby Rice: These concrete examples underscore the impact of adding compression to lower system pressures on thousands of producing wells that comprise EQT's base production. This uplift on base volumes should, in turn, allow us to drill and complete fewer wells to maintain production, driving sustainable improvements in long-term capital efficiency.

EQT: These concrete examples underscore the impact of adding compression to lower system pressures on thousands of producing wells that comprise EQTs-based production.

Jeremy Knop: This uplift on base volumes should, in turn, allow us to drill and complete fewer wells to maintain production, driving sustainable improvements and long-term capital efficiency. We are currently in the process of identifying optimal compression locations across the E-train system and expect the tailwinds from lower maintenance capital to begin accruing in 2026. Turning to our recent ESG report, I am proud to highlight that we took another material step forward towards our ambitious environmental goals as our 2023 scope one and two legacy production segment greenhouse gas emissions declined by 35% year over year to approximately 281,000 tons.

EQT: This uplift on base volumes should, in turn, allow us to drill and complete fewer wells to maintain production, driving sustainable improvements in long-term capital efficiency.

Toby Rice: We are currently in the process of identifying optimal compression locations across the E-train system and expect to tailwinds from lower maintenance capital to begin accruing in 2026.

EQT: We are currently in the process of identifying optimal compression locations across the E-Train system and expect the tailwinds from lower maintenance capital to begin accruing in 2026.

Toby Rice: Turning to our recent ESC report, I am proud to highlight that we took another material step forward towards our ambitious environmental goals, as our 2023 scope 1 and 2 legacy production segment greenhouse gas emissions declined by 35% year-over-year to approximately 281,000 tons. We have now reduced our historical scope 1 and 2 production emissions by nearly 70% over the past five years and are squarely on track to achieve our ambitious and peer-leading net zero goal by 2025.

EQT: Turning to our recent ESG report, I am proud to highlight that we took another material step forward.

EQT: towards our ambitious environmental goals as our 2023 Scope 1 and 2 Legacy Production Segment Greenhouse Gas Emissions declined by 35% year-over-year to approximately 281,000 tons.

Jeremy Knop: We have now reduced our historical scope one and two production emissions by nearly 70% over the past five years and are squarely on track to achieve our ambitious and peer-leading net zero goal by 2025. From an emissions intensity perspective, we achieved our 2025 greenhouse gas emissions intensity goal of 160 tons per BCFE, a full year ahead of schedule. Looking at methane, after significantly outperforming our pneumatic device replacement timeline, the methane intensity from our production operations is now 0.0074%, which is more than 60% below our 2025 goal and 97% below the one future 2025 target, making EQT among the lowest methane intensity producers of natural gas With that, I'll now turn the call over to Jeremy. Thanks, Toby.

EQT: We have now reduced our historical scope 1 and 2 production emissions by nearly 70% over the past 5 years, and are squarely on track to achieve our ambitious and peer-leading net zero goal by 2025.

Toby Rice: From an emissions intensity perspective, we achieve our 2025 greenhouse gas emissions intensity goal of 160 tons per PCFE, a full year ahead of schedule.

EQT: From an emissions intensity perspective, we achieved our 2025 greenhouse gas emissions intensity goal of 160 tons per BCFE, a full year ahead of schedule.

Toby Rice: Looking at methane after significantly outperforming our pneumatic device replacement timeline, the methane intensity from our production operations is now 0.0074%, which is more than 60% below our 2025 goal and 97% below the one future 2025 target, making EQT among the lowest methane intensity producers of natural gas anywhere in the world.

EQT: Looking at methane, after significantly outperforming our pneumatic device replacement timeline, the methane intensity from our production operations is now 0.0074%.

EQT: Which is more than 60% below our 2025 goal and 97% below the One Future 2025 target, making EQT among the lowest methane intensity producers of natural gas anywhere in the world.

Jeremy Knop: With that, I will now turn the call over to Jeremy.

Jeremy Knop: Thanks, Toby.

Jeremy Knop: Before I summarize QT's results, I want to take a moment to thank our shareholders for the tremendous show of support in last week's vote on the Equitrans acquisition. Of EQT shares cast, more than 99% voted in favor of the deal, despite this being an unconventional acquisition relative to what investors have become accustomed to in upstream M&A over the past decade. We see this vote underscoring the strong support from investors. They share a philosophical view that being at the absolute low end of the cost curve will create differentiated and sustainable long-term value amid a volatile commodity price landscape.

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

Jeremy Knop: Before I summarize QT results, I want to take a moment to thank our shareholders for the tremendous show of support in last week's vote on the Equitrain's acquisition. Of EQT shares cast, more than 99% voted in favor of the deal, despite this being an unconventional acquisition, relative to what investors have become accustomed to in upstream M&A over the past decade. We see this vote underscoring the strong support from investors; they share a philosophical view that being an absolute low into the cost curve will create differentiated and sustainable long-term value amid a volatile commodity price landscape.

Jeremy Knop: Thanks Toby. Before I summarize QT results, I want to take a moment to thank our shareholders for their tremendous show of support in last week's vote on the Equitrains acquisition.

Jeremy Knop: Of EQT shares cast, more than 99% voted in favor of the deal, despite this being an unconventional acquisition relative to what investors have become accustomed to in upstream M&A over the past decade.

Jeremy Knop: We see this vote underscoring the strong support from investors that share a philosophical view that being at the absolute low end of the cost curve will create differentiated and sustainable long-term value amid a volatile commodity price landscape.

Jeremy Knop: Since taking over EQT in 2019, we as a management team have never been more convicted that this company is on the right strategic path. We look forward to continuing our track record of execution on behalf of our Schifting. The second quarter results, as planned, showed that we curtailed one BCF per day of gross production throughout most of the quarter, which, along with non-operated curtailments, impacted net production by approximately 60 BCFe during Q2. Despite curtailments, strong operational efficiency and well performance drove production of 508 BCFe above the high end of our guidance range. Per unit operating costs came in at $1.40 per MCFe below the low end of guidance due to LOE and GNA expenses coming in below expectations.

Jeremy Knop: Since taking over EQT in 2019, we as a management team have never been more convinced that this company is on the right strategic path, and we look forward to continuing our track record of execution on behalf of our shareholders. Shifting to second quarter results, as planned, we curtailed one BCF per day of gross production throughout most of the quarter, which, along with non-operated curtailments, impacted net production by approximately 60 BCFE during Q2.

Speaker Change: Since taking over EQT in 2019, we as a management team have never been more convicted that this company is on the right strategic path, and we look forward to continuing our track record of execution on behalf of our shareholders.

Speaker Change: Shifting to second quarter results, as planned, we curtailed one BCF per day of gross production throughout most of the quarter, which along with non-operated curtailments impacted net production by approximately 60 BCFE during Q2.

Jeremy Knop: Despite curtailment, strong operational efficiency, and well-performance stroke production of 508 BCFE above the high end of our guidance range, per unit operating costs came in at $1.40 per MCFE below the low end of guidance due to LOE and G&A expenses coming in below expectations. CAPAX also came in below the midpoint of guidance despite an accelerated development pace as efficiency gains drove lower than expected well costs.

Speaker Change: Despite curtailment, strong operational efficiency and well-performance drove production of 508 BCFE, above the high end of our guidance range.

Speaker Change: Per unit operating costs came in at $1.40 per MCFE, below the low end of guidance due to LOE and G&A expenses coming in below expectations.

Jeremy Knop: Capax also came in below the midpoint of guidance, despite an accelerated development pace, as efficiency gains drove lower-than-expected well costs.

Speaker Change: CAPAX also came in below the midpoint of guidance despite an accelerated development pace as efficiency gains drove lower than expected well costs.

Jeremy Knop: Turning to the balance sheet, we're off to a fast start on our de-labourging plan as we repaid $600 million of 2025 senior notes last month with cash on hand and proceeds from the Equinoric transaction. We exited the quarter with net debt of roughly $4.9 billion, down from $5.7 billion at the end of 2023. Concurrent with the closing of Equitrans, we also upsized our revolver from $2.5 to $3.5 billion, which speaks to the depth of support for our bank group. This revolver is on par with the largest companies in the energy industry and gives us ample equity to handle any foreseeable natural gas price scenario moving forward.

Jeremy Knop: Turning to the balance sheet, we're off to a fast start on our deleveraging plan as we repaid $600 million of 2025 senior notes last month with cash on hand and proceeds from the Equinor transaction. We exited the quarter with net debt of roughly $4.9 billion, down from $5.7 billion at the end of 2023. Concurrent with the closing of Equitrans, we also upsized our revolver from $2.5 to $3.5 billion, which speaks to the depth of support for our bank group.

Speaker Change: Turning to the balance sheet, we're off to a fast start on our deleveraging plan as we repaid $600 million of 2025 senior notes last month with cash on hand and proceeds from the Equinor transaction.

Speaker Change: We exited the quarter with net debt of roughly $4.9 billion, down from $5.7 billion at the end of 2023.

Speaker Change: Concurrent with the closing of Equitrans, we also upsized our revolver from $2.5 to $3.5 billion, which speaks to the depth of support for our bank group.

Jeremy Knop: This revolver is on par with the largest companies in the energy industry and gives us ample liquidity to handle any foreseeable natural gas price scenario moving forward. With the close of Equitrains this week, pro forma gross debt is expected to be approximately $13.5 billion.

Speaker Change: This revolver is on par with the largest companies in the energy industry and gives us ample liquidity to handle any foreseeable natural gas price scenario moving forward.

Jeremy Knop: With the close of Equitrans this week, pro-forma gross debt is expected to be approximately $13.5 billion, inclusive of the redemption of Equitrans' 14% preferred equity closing. With the deal closing sooner than we originally anticipated, we expect our de-labourging timetable to be pulled forward by approximately six months.

Speaker Change: With the close of Equitrans this week, pro forma gross debt is expected to be approximately $13.5 billion, inclusive of the redemption of Equitrans' 14% preferred equity at closing.

Jeremy Knop: Inclusive of the redemption of Equitrains is 14% preferred equity at closing. With the deal closing sooner than we originally anticipated, we expect our deleveraging timetable to be pulled forward by approximately six months. On the midstream side, we plan to pursue a minority equity sale of Equitrans' regulated assets, which are projected to generate approximately $700 million of adjusted EBITDA. This strategy will allow EQT to retain full operational control and upside value associated with synergy capture and future pipeline expansions. We're also marketing the remaining 60% of our non-operated assets in Northeast Pennsylvania and are in active discussions with both domestic and international buyers.

Speaker Change: With the deal closing sooner than we originally anticipated, we expect our deleveraging timetable to be pulled forward by approximately six months.

Jeremy Knop: On the midstream side, we plan to pursue a minority equity sale of Equitrans regulated assets, which are projected to generate approximately $700 million of adjusted EBITDA. This strategy will allow EQT to retain full operational control and upside value associated with synergy capture and future pipeline expansions.

Speaker Change: On the midstream side, we plan to pursue a minority equity sale of Equitrans' regulated assets, which are projected to generate approximately $700 million of adjusted EBITDA.

Speaker Change: This strategy will allow EQT to retain full operational control and upside value associated with synergy capture in future pipeline expansions.

Jeremy Knop: We're also marketing the remaining 60% of our non-operated assets in Northeast Pennsylvania and are in active discussions with both domestic and international buyers. We continue to target reducing our long-term debt to $5 to $7 billion and are highly confident in achieving our goal. Alongside planned asset sales, we have further de-risked our de-labourging plan by increasing our near-term hedge position. We're approximately 60% hedge in the second half of 2024 with an average floor price of roughly $3.30 per MMBTU and approximately 60% hedge in the first half of 2025 at an average floor price of roughly $3.20 per MMBTU.

Speaker Change: We're also marketing the remaining 60% of our non-operated assets in Northeast Pennsylvania and are in active discussions with both domestic and international buyers.

Jeremy Knop: We continue to target reducing our long-term debt to $5 to $7 billion and are highly confident in achieving our goal. Alongside planned asset sales, we have further de-risked our deleveraging plan by increasing our near-term hedge position. We're approximately 60% hedged in the second half of 2024 with an average floor price of roughly $3.30 per MMBTU and approximately 60% hedged in the first half of 2025 with an average floor price of roughly $3.20 per MMBTU.

Speaker Change: We continue to target reducing our long-term debt to $5 to $7 billion and are highly confident in achieving our goal.

Speaker Change: Alongside planned asset sales, we have further de-risked our deleveraging plan by increasing our near-term hedge position.

Speaker Change: We're approximately 60% hedged in the second half of 2024 with an average floor price of roughly $3.30 per MMBTU and approximately 60% hedged in the first half of 2025 at an average floor price of roughly $3.20 per MMBTU.

Jeremy Knop: We are actively building our hedge position in the second half of 2025 in order to bulletproof our de-labourging plan in any reasonable natural gas price scenario.

Jeremy Knop: We are actively building our hedge position in the second half of 2025 in order to bulletproof our deleveraging plan in any reasonable natural gas price scenario. Turning briefly to the Appalachian macro landscape, while the pace of Eastern storage builds is moderated, absolute storage levels remain high on the back of warm winter weather last year, thus pressuring Appalachian prices this year.

Speaker Change: We are actively building our hedge position in the second half of 2025 in order to bulletproof our deleveraging plan in any reasonable natural gas price scenario.

Jeremy Knop: Turning briefly to the Appalachia macro landscape, while the pace of Eastern storage builds has moderated, absolute storage levels remain high on the back of warm winter weather last year.

Speaker Change: Turning briefly to the Appalachia macro landscape, while the pace of eastern storage builds is moderated, absolute storage levels remain high on the back of warm winter weather last year, thus pressuring Appalachia pricing this year.

Jeremy Knop: In response to market fundamentals, we continue to tactically curtail production, including over the past weeks, and expect to continue this tactical curtailment program during the upcoming fall shoulder season. To this end, our second half 2024 production guidance assumes 90 BCFE of anticipated curtailments, which should have a meaningful impact on both Eastern and total U.S. storage levels as the market wraps up its injection season. I want to highlight that normalized for the roughly 180 BCFE of total curtailments that we expect this year, our production would have been above the high end of our original 2024 guidance range, which speaks to the productivity and operational efficiency gains that Toby spoke about a few minutes ago.

Jeremy Knop: Thus pressuring Appalachia pricing this year. In response to market fundamentals, we continue to tactically curtail production, including over the past weeks, and expect to continue this tactical curtailment program during the upcoming fall, shoulder season. To this end, our second half, 2024 production guidance assumes 90 BCSE of anticipated curtailments, which should have a meaningful impact on both eastern and totally US storage levels as the market wraps up injection season. I want to highlight that, normalized for the roughly 180 BCSE of total curtailments that we expect this year, our production would have been above the high end of our original 2024 guidance range, which speaks to the productivity and operational efficiency gains that Toby spoke to a few minutes ago.

Speaker Change: In response to market fundamentals, we continue to tactically curtail production, including over the past weeks, and expect to continue this tactical curtailment program during the upcoming fall shoulder season.

Speaker Change: To this end, our second half 2024 production guidance assumes 90 BCFE of anticipated curtailments, which should have a meaningful impact on both Eastern and total U.S. storage levels as the market wraps up injection season.

Speaker Change: I want to highlight that normalized for the roughly 180 BCFE of total curtailments that we expect this year

Speaker Change: Our production would have been above the high end of our original 2024 guidance range.

Speaker Change: which speaks to the productivity and operational efficiency gains that Toby spoke to a few minutes ago.

Jeremy Knop: While Appalachian storage is elevated today, the startup of MVP last month should provide support to Appalachian differentials moving forward. To put MVP's impact in context, assuming MVP flows at just half of its capacity on average for a year, implies 300 to 400 BCF of gas that otherwise would end up in eastern storage that now will be directed to the Southeast demand centers. Given total maximum eastern storage is roughly 975 BCF, MVP flows represent a material in structural shift and local supply and demand fundamentals, which in turn should help tighten local bases over the coming years.

Jeremy Knop: While Appalachian storage is elevated today, the startup of MVP last month should provide support for Appalachian differentials moving forward. To put MVP's impact in context, assuming MVP flows at just half of its capacity on average for a year implies 300 to 400 BCF of gas that otherwise would end up in eastern storage that now will be directed to the Southeast Demand Centers.

Speaker Change: While Appalachian storage is elevated today, the startup of MVP last month should provide support to Appalachian differentials moving forward.

Speaker Change: To put MVP's impact in context, assuming MVP flows at just half of its capacity, on average for a year, implies 300 to 400 BCF of gas that otherwise would end up in eastern storage that now will be directed to the Southeast Demand Centers.

Jeremy Knop: Given total maximum Eastern storage is roughly 975 BCF, MVP flows represent a material and structural shift in local supply and demand fundamentals, which, in turn, should help tighten local bases over the coming years. In fact, between MVP coal retirements and organic load growth, we see implied Appalachian demand approaching 41 BCF per day by 2030, compared with 35 to 36 BCF per day of current basin supply, which should translate to better local pricing and present a sustainable growth opportunity for EQT at some point in the coming years, given we have the deepest, highest quality inventory of any operator in the basin.

Speaker Change: Given total maximum eastern storage is roughly 975 BCF, MVP flows represent a material and structural shift in local supply and demand fundamentals, which in turn should help tighten local bases over the coming years.

Jeremy Knop: In fact, between MVP cold retirements in organic load growth, we see implied Appalachian demand approaching 41 BCF per day by 2030, compared with 35 to 36 BCF per day of current basin supply, which should translate to better local pricing and present a sustainable growth opportunity for EQT at some point in the coming years, given we have the deepest, highest quality inventory of any operator in the basin.

Speaker Change: In fact, between MVP, coal retirements, and organic load growth, we see implied Appalachia demand approaching 41 BCF per day by 2030, compared with 35 to 36 BCF per day of current basin supply.

EQT: Which should translate to better local pricing and present a sustainable growth opportunity for EQT at some point in the coming years, given we have the deepest, highest quality inventory of any operator in the basin.

Jeremy Knop: Turning to guidance, we have issued proforma Q3 and Q4 metrics on slide 29 of our investor presentation.

Jeremy Knop: According to guidance, we have issued pro forma Q3 and Q4 metrics on slide 29 of our investor presentation. Our cash operating expenses are expected to range from approximately $1.10 to $1.25 per MCFE in the second half of the year, which at the midpoint is roughly $0.25 per MCFE below our standalone operating expenses in Q2.

EQT: According to guidance, we have issued pro forma Q3 and Q4 metrics on slide 29 of our investor presentation.

Jeremy Knop: Our cash operating expenses are expected to range from approximately $1.10 to $1.25 per MCFee in the second half of the year, which, at the midpoint, is roughly $0.25 per MCFee below our standalone operating expenses in Q2.

EQT: Our cash operating expenses are expected to range from approximately $1.10 to $1.25 per MCFE in the second half of the year, which at the midpoint is roughly $0.25 per MCFE below our standalone operating expenses in Q2.

Jeremy Knop: Mr. Reflex, the benefit of eliminating expenses associated with the equitrains acquisition, well, the most notable movement being our gathering rates, which are forecasted to decline from $0.59 per MCFee in Q2 to just $5 to $0.9 per MCFee in the second half of the year. Inclusive of the benefits from third-party revenue and the full run-write distributions from our MVP ownership, our net operating expense should equate to roughly $0.75 to $0.85 per MCFee by the fourth quarter, which is approximately $0.60 per MCFee lower than standalone EQT and drive some of the relative advantage of our vertically integrated cost structure.

Jeremy Knop: This reflects the benefit of eliminating expenses associated with the Equitrans acquisition, with the most notable movement being our gathering rates, which are forecasted to decline from $0.59 per MCFE in Q2 to just $0.05 to $0.09 per MCFE in the second half of the year. Inclusive of the benefits from third-party revenue and the full run rate distributions from our MVP ownership, our net operating expense should equate to roughly $0.75 to $0.85 per MCSE by the fourth quarter, which is approximately $0.60 per MCSE lower than standalone EQT and drives home the relative advantage of our vertically integrated cost structure.

EQT: This reflects the benefit of eliminating expenses associated with the Equitrain's acquisition, with the most notable movement being our gathering rates.

EQT: which are forecasted to decline from $0.59 per MCFE in Q2 to just $0.05 to $0.09 per MCFE in the second half of the year.

EQT: Inclusive of the benefits from third-party revenue and the full run rate distributions from our MVP ownership, our net operating expense should equate to roughly $0.75 to $0.85 per MCFE by the fourth quarter.

EQT: which is approximately 60 cents per MCSE lower than standalone EQT and drives home the relative advantage of our vertically integrated cost structure.

Jeremy Knop: It's also worth highlighting that we do not embed any of the $250 million of base synergies into our Q3 or Q4 numbers, as we have conservatively modeled base synergy capture beginning in mid-2025. As I mentioned previously, our second half, 2024 production outlook embeds approximately 90 BCFee of strategic curtailments as fall, which we will opportunistically execute and gas prices remain depressed. I'd note that curtailments are driving approximately five cents per MCFee of upward pressure on our second half, 2024 cost structure. So our 2025 expenses should be even lower than the ranges I cited previously.

Jeremy Knop: It's also worth highlighting that we do not embed any of the $250 million in base synergies into our Q3 or Q4 numbers, as we have conservatively modeled base synergies capture beginning in mid 2025. As I mentioned previously, our second half 2024 production outlook embeds approximately 90 BCFE of strategic curtailments this fall, which we will opportunistically execute should gas prices remain depressed. I'd note that curtailments are driving approximately $0.05 per MCFE of upward pressure on our second half 2024 cost structure, so our 2025 expenses should be even lower than the ranges I cited previously. While we still need to go through our full budgeting process for 2025, we preliminarily expect an all-in pro forma capital budget in the range of $2.3 to $2.6 billion.

EQT: It's also worth highlighting that we do not embed any of the $250 million of base synergies into our Q3 or Q4 numbers, as we have conservatively modeled base synergy capture beginning in mid-2025.

EQT: As I mentioned previously, our second half 2024 production outlook embeds approximately 90 BCFE of strategic curtailments this fall, which we will opportunistically execute should gas prices remain depressed.

EQT: I'd note that curtailments are driving approximately $0.05 per MCFE of upward pressure on our second half 2024 cost structure. So our 2025 expenses should be even lower than the ranges I cited previously.

Jeremy Knop: While we still need to go through our full budgeting process for 2025, we preliminarily expect an all-in pro forma capital budget in the range of $2.3 to $2.6 billion. Beyond 2025, we forecast long-term pro forma capital spending ranging from $2.1 to $2.4 billion per annum prior to capturing the $175 million of upside annual synergies we laid out with the Equitrans acquisition announcement. Set another way, our long-term capital spending inclusive of Equitrans should essentially be in line with standalone EQT capital spend in 2024. And this is before capturing upside synergies, which speaks to the structural capital efficiency improvements accruing in our upstream business.

EQT: While we still need to go through our full budgeting process for 2025, we preliminarily expect an all-in, pro-forma capital budget in the range of $2.3 to $2.6 billion.

Toby Z. Rice: Beyond 2025, we forecast long-term pro forma capital spending ranging from $2.1 to $2.4 billion per annum prior to capturing the $175 million of annual synergies we laid out with the Equitrans acquisition announcement. Said another way, our long-term capital spending inclusive of Equitrans should essentially be in line with standalone EQT capital spend in 2024. And this is before capturing upside synergies, which speaks to the structural capital efficiency improvements accruing in our upstream business.

EQT: Beyond 2025, we forecast long-term pro forma capital spending ranging from $2.1 to $2.4 billion per annum prior to capturing the $175 million of upside annual synergies we laid out with the Equitrans acquisition announcement.

EQT: Said another way, our long-term capital spending inclusive of Equitrans should essentially be in line with stand-alone EQT capital spend in 2024.

EQT: And this is before capturing upside synergies, which speaks to the structural capital efficiency improvements accruing in our upstream business.

Jeremy Knop: At recent strip pricing, we forecast pro forma cumulative free cash flow of approximately $16.5 billion from 2025 to 2029 in an average annual gas price of roughly $3.60 per annum BTU over this period. Even assuming a $2.75 natural gas price over this period, EQT will still generate north of $9 billion of five-year cumulative free cash flow. While the bulk of our peers would be cash flow neutral or negative, underscoring the power of our low-cost structure and highlighting how EQT is uniquely positioned to create differentiated shareholder value in all parts of the commodity cycle.

Toby Z. Rice: At recent strip pricing, we forecast pro forma cumulative free cash flow of approximately $16.5 billion from 2025 to 2029 at an average annual gas price of roughly $3.60 per MMBTU over this period. Even assuming a $2.75 natural gas price over this period, EQT will still generate north of $9 billion of five-year cumulative free cash flow, while the bulk of our periods would be cash flow neutral or negative, underscoring the power of our low-cost structure and highlighting how EQT is uniquely positioned to create differentiated shareholder value in all parts of the commodity cycle.

EQT: At recent strip pricing, we forecast pro-forma cumulative free cash flow of approximately $16.5 billion from 2025 to 2029 at an average annual gas price of roughly $3.60

EQT: for MMBTU over this period. Even assuming a $2.75 natural gas price over this period, EQT will still generate north of $9 billion of five-year cumulative free cash flow, while the bulk of our peers would be cash flow neutral or negative.

EQT: Underscoring the power of our low-cost structure and highlighting how EQT is uniquely positioned to create differentiated shareholder value in all parts of the commodity cycle.

Toby Z. Rice: And with that, I'll turn the call back over to Toby for some concluding remarks. Thanks, Jeremy. In closing, July 10th marks the five-year anniversary of the EQT takeover. It has been a lifetime of work, but it passes by in the blink of an eye.

Toby Rice: And with that, I'll turn the callback over to Toby for some concluding remarks.

EQT: And with that, I'll turn the call back over to Toby for some concluding remarks.

Toby Rice: Thanks, Jeremy. In closing, July 10th marks the five-year anniversary of the EQT takeover. It has been a lifetime of work, but passed by in the blink of an eye. We have been reflecting recently on what this management team has accomplished together, taking a struggling company with great assets and transforming it into a best-in-class producer recognized as an industry leader. We have increased production over 50% from 4 BCFE per day to 6.3 BCFE per day and have transformed our free cash flow cost structure from $3 per million BTU to a peer-leading $2 per million BTU through operational improvements and thoughtful and creative M&A deals.

Toby Z. Rice: Thanks, Jeremy. In closing, July 10th marks the five-year anniversary of the EQT takeover.

Speaker Change: It has been a lifetime of work, but passed by in the blink of an eye.

Unknown Executive: We have been reflecting recently on what this management team has accomplished together, taking a struggling company with great assets and transforming it into a best-in-class producer recognized as an industry leader. We have increased production over 50% from 4 BCFE per day to 6.3 BCFE per day and have transformed our free cash flow cost structure from $3 per million BTU to a peer-leading $2 per million BTU through operational improvements and thoughtful and accretive M&A deals.

Toby Z. Rice: We have been reflecting recently on what this management team has accomplished together, taking a struggling company with great assets and transforming it into a best-in-class producer recognized as an industry leader.

Toby Z. Rice: We have increased production.

Toby Z. Rice: Over 50% from 4 BCFE per day to 6.3 BCFE per day, and have transformed our free cash flow cost structure.

Toby Z. Rice: From $3 per million BTU to a peer-leading $2 per million BTU through operational improvements and thoughtful and accretive M&A deals.

Unknown Executive: Normalized for natural gas prices, we have grown the free cash flow generation of EQT by five times and increased free cash flow per share by nearly two times. Additionally, we have repaired our balance sheet and reattained investment grade credit ratings. Today, we are executing at a high level operationally, with identified opportunities and completions, and the midstream set to drive yet another step change in operational improvements. We are executing financially with a fast start to our deleveraging plan and robust support from our bank group and shareholders.

Toby Rice: Normalized for natural gas prices, we have grown the free cash flow generation of EQT by five times and increased free cash flow per share by nearly two times, and we have repaired our balance sheet and reattained investment-grade credit ratings. Today we are executing at a high level operationally, with identified opportunities and completions, and midstream set to drive yet another step change in operational improvements. We are executing financially with a fast start to our de-leveraging plan and robust support from our bank group and shareholders, and we are executing strategically at an industry-leading pace as we continue to transform EQT into the energy company of the future.

Toby Z. Rice: Normalized for natural gas prices, we have grown the free cash flow generation of EQT by 5 times, and increased free cash flow per share by nearly 2 times, and we have repaired our balance sheet and reattained investment grade credit ratings.

Toby Z. Rice: Today, we are executing at a high level operationally, with identified opportunities and completions in midstream set to drive yet another step change in operational improvements.

Toby Z. Rice: We are executing financially with a fast start to our deleveraging plan and robust support from our bank group and shareholders. And we are executing strategically at an industry-leading pace as we continue to transform EQT into the energy company of the future.

Unknown Executive: And we are executing strategically at an industry-leading pace as we continue to transform EQT into the energy company of the future. I'd now like to open the call to questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.

Operator: I now like to open the call-up for questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask that you limit yourself to one question and one follow-up.

Unknown Executive: We ask that you limit yourself to one question and one follow-up. Your first question comes from a line of Arun Jayaram from JP Morgan. Your line is open. Good morning, gentlemen.

Toby Z. Rice: I'd now like to open the call up for questions.

Speaker Change: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your questions, simply press star 1 again.

Arun Jayaram: Your first question comes from a line of Arun Jayaram from JP Morgan. Your line is open.

Speaker Change: We ask that you limit yourself to one question and one follow-up. Your first question comes from a line of Arun Jayaram from J.P. Morgan. Your line is open.

Jeremy Knop: My questions are regarding a kind of asset sales or divestiture program. Jeremy, maybe, I was wondering if you could start with the amount or the process to sell some of your non-op in the Northeast. Could you gauge the level of interest that you're seeing for the remaining 60% and do you still believe the market is supportive of a similar valuation marker as you got in the Equinor transaction? Hey, Arun. Good morning.

Arun Jayaram: Good morning.

Jeremy Knop: Good morning, gentlemen. My questions are regarding kind of the asset sales or divestiture program. Jeremy, maybe I was wondering if you could start with the process to sell some of your non-op and in the Northeast. Could you gauge the level of interest that you're seeing for the remaining 60%, and you still believe the market is supportive of a similar valuation marker as you got in the market.

Arun Jayaram: Good morning, gentlemen. My questions are regarding kind of the asset sales or divestiture program. Jeremy, maybe, I was wondering if you could start with the amount or the process to sell some of your non-op and in the Northeast.

Speaker Change: Could you gauge the level of interest that you're seeing for the remaining 60% and do you still believe the market is supportive of a similar valuation marker as you got in the Equinor transaction?

Jeremy Knop: Good morning. We're seeing a really good interest. I think I would characterize it as a really renewed set of interest. A lot of new names actually in the process from the international space that we didn't see the first time around. That's been really encouraging. A lot of great engagement. I think our feeling towards that process remains really positive.

Jeremy Knop: Yeah, we're seeing really good interest. I think I would characterize it as a really renewed set of interest, a lot of new names actually in the process from the international space that we didn't see the first time around. So that's been really encouraging, a lot of great engagement. So I think our feeling towards that process remains really positive. And I hope to get that wrapped up by your end.

Jeremy Knop: Hey, Arun. Good morning. Yeah, we're seeing really good interest. I think I would characterize it as a

Jeremy Knop: Really a renewed set of interests, a lot of new names actually in the process from the international space that we didn't see the first time around. So that's been really encouraging, a lot of great engagement. So I think our feeling towards that process remains really positive and I hope to get that wrapped up by year end.

Jeremy Knop: I hope to get that wrapped up by your end.

Jeremy Knop: Great. Then my follow-up is you've highlighted kind of a structure you plan to pursue in terms of carving out your regulated assets and selling a minority interest in those assets.

Jeremy Knop: And then my follow-up question is you've highlighted kind of a structure you plan to pursue in terms of, you know, carving out your regulated assets and selling a minority interest in those assets. Do you plan to reduce gross debt at the EQT parent level as part of that process?

Jeremy Knop: Great.

Speaker Change: And then my follow up is you've highlighted kind of a structure you plan to pursue in terms of, you know, carving out your regulated assets and selling a minority interest in those assets.

Jeremy Knop: Do you plan to reduce growth debt at the EQT parent level as part of that process.

Speaker Change: Do you plan to reduce gross debt at the EQT parent level as part of that process?

Jeremy Knop: And just a question that's come up is what type of partner approvals is there a rofer on MVP but could just go through some of those types of things that you need to do to process that the next phase of your leveraging program. Yeah, taking the route that we outlined in the prepared remarks actually by taxes, most of the sort of considerations you might typically get hung up in with like drag rights, tag rights and a deal like that. So it really simplifies it. And I think it really provides a better, higher quality, more diverse set of assets to back an investment, which drives the cost to capital down.

Jeremy Knop: And just a question that's come up is, what type of partner approvals, is there a ROFR on MVP, but could you just go through some of those types of things that you'd need to do to process that next phase of your leveraging program? Yeah, taking the route that we outlined in the prepared remarks actually bypasses most of the sort of considerations you might typically get hung up on with like drag rights, tag rights, and a deal like that.

Speaker Change: And just a question that's come up is, what type of partner approvals, is there a ROFA on MVP, but could you just go through some of those types of things that you'd need to do to process the next phase of your leveraging program?

Speaker Change: Yeah, taking the route that we outlined in the prepared remarks actually bypasses most of the sort of considerations you might typically get hung up in with like drag rights, tag rights and a deal like that. So it really simplifies it and I think it really provides a better, higher quality, more diverse set of assets to back an investment which drives the cost of capital down.

Jeremy Knop: So it really simplifies it, and I think it really provides a better, higher quality, more diverse set of assets to back an investment, which drives the cost of capital down. Okay, so look, we've spent a lot of time.

Jeremy Knop: So look, we've spent a lot of time. We've had a lot of discussions with a lot of parties on this already, even pre-closing. And so it's closing happening a couple days ago. We're really in the stick of getting that data organized so we can kick that process off.

Jeremy Knop: We've had a lot of discussions with a lot of parties on this already, even pre-closing. And so with the closing happening a couple of days ago, we're, uh, we're really in the thick of getting that data organized so we can kick that process off. And I hope to be able to get that wrapped up as soon as year end. It might lead into early Q1, but I think there's a real chance that all gets wrapped up this year as well. Great. Thanks a lot.

Speaker Change: So, look, we've spent a lot of time, we've had a lot of discussions with a lot of parties on this already, even pre-closing.

Speaker Change: And so with closing happening a couple days ago, we're really in the thick of getting that data organized so we can kick that process off. And I hope to be able to get that wrapped up as soon as year end. It might bleed into early Q1, but I think there's a real chance that all gets wrapped up this year as well.

Jeremy Knop: And I hope to be able to get that wrapped up as soon as you're in. Might lead into early Q1, but I think there's a real chance that I'll get wrapped up this year as well.

Arun Jayaram: Thanks a lot.

Doug Ligate: Your next question comes from a line of Doug Ligate from Wolf Research. Your line is open.

Douglas George Blyth Leggate: Your next question comes from Doug Legate from Wolf Research. Your line is open. Hey guys, thanks for having me on, and congratulations. I didn't quite realize it had been five years, Toby. It has indeed flown by.

Speaker Change: Great, thanks a lot.

Speaker Change: Your next question comes from the line of Doug Legate from Wolfe Research. Your line is open.

Doug Ligate: Hey guys, thanks for having me on, and congratulations. I didn't quite realize it'd been five years to be. So it has indeed flown by.

Doug Legate: Hey guys, thanks for having me on and congratulations. I didn't quite realize it'd been five years Toby. It has indeed flown by. I've got two quick questions I hope. The first one is on the capital budget for the next two or three years.

Unknown Executive: I've got two quick questions, I hope. The first one is on the capital budget for the next two or three years, alongside the compression results that you've had. What we're trying to figure out is how much of the spending is related to that de-bottlenecking, if you like, and when does it roll over so that you basically get back to a steady state level of spending associated with your grilling program. Yeah, Doug, thanks for the question. On the compression, higher level, we just refer to this as pressure system optimization across our systems.

Doug Ligate: I got two quick questions. I hope the first one is on the capital budget for the next two or three years, alongside the compression results that you've had. What we're trying to figure out is how much of the spending is related to that debottle making, if you like, and when does it roll over so that you basically get back to a steady state level of spending associated with your grilling program.

Speaker Change: alongside the compression results that you've had.

Speaker Change: What we are trying to figure out is how much of the spending is related to that de-bottlenecking, if you like, and when does it roll over so that you basically get back to a steady state level of spending associated with your grilling program.

Jeremy Knop: Yeah, Doug, thanks for the question. On the compression high level, we just refer to this as pressure system optimization across our systems. We think this is going to be about a few hundred million dollars. Now, the timing of that, there's some lead time there, so that's probably going to start maybe 12 months from now, and that could span over a couple of years just determining on the type of pace that we see. But that being said, we have in our 25 budget right now, we have included some cushion to be able to get those projects started as quickly as possible.

Speaker Change: Yeah, Doug, thanks for the question. On the compression, higher level, we just refer to this as pressure system optimization.

Unknown Executive: We think this is going to be about a few hundred million dollars. Now, the timing of that, there's some lead time there, so that's probably going to start maybe 12 months from now, and that could span over a couple of years, just depending on the type of pace that we see. But that being said, in our 25 budget right now, we have included some cushion to be able to get those projects started as quickly as possible.

Speaker Change: across our systems. We think this is going to be about a few hundred million dollars.

Speaker Change: Now that the timing of that there's some lead time there so that's probably going to start

Speaker Change: maybe 12, 12 months from now. And that could span over a couple years just determining on the type of pace that we see.

Speaker Change: But, that being said, we have in our 25 budget right now, we have included...

Unknown Executive: And the results that we showed, the pilot that we showed today about the compression uplift, are really encouraging and will lead to some really exciting returns that we'd like to accelerate as quickly as possible. Yeah, Doug, welcome back, by the way.

Toby Rice: And the results that we showed, the pilot that we showed today about the compression uplift, is really encouraging and will lead to some really, really exciting returns that we'd like to accelerate as quickly as possible.

Speaker Change: Some cushion to be able to get those projects started as quickly as possible. And the results that we showed, the pilot that we showed today about the compression uplift is really encouraging and will lead to some really exciting returns that we'd like to accelerate as quickly as possible.

Toby Rice: Yeah, Doug, welcome back, by the way.

Unknown Executive: If you look at what we put in our new slide deck that we put out last night, we put a couple case studies from some recent pad-level compression projects that we've installed. These are not a perfect proxy for centralized compression, which is a lot, you know; it's going to have a much broader impact superior to what these examples show. But even those examples at $3 gas, I mean, these are, you know, you're generating two and a half to three times your money on that compression at just the pad level.

Toby Rice: If you look at what we've put in our new slide deck that we put out last night, we put a couple of case studies in from some recent pad level compression projects that we've installed. These are not a perfect proxy to centralize compression, which is a lot. You know, it's going to have a much broader impact, superior to what these examples show. But even those examples, it's $3 gas. I mean, these are, you know, you're generating two and a half to three times your money on that compression on just the pad level. So again, on a centralized basis, it's going to be higher than that.

Speaker Change: Yeah, Doug, welcome back, by the way.

Doug Legate: If you look at what we've put in our new slide deck that we put out last night, we put a couple case studies in from some recent pad-level compression projects that we've installed. These are not a perfect proxy to centralized compression, which is a lot, you know, it's going to have a much broader impact, superior to what these examples show.

Doug Legate: But even those examples at $3 gas, I mean these are, you know, you're generating two and a half to three times your money on that compression on just the pad level. So again, on a centralized basis, it's going to be higher than that. And then beyond just uplifting that base PDP for the existing production.

Unknown Executive: So again, on a centralized basis, it's going to be higher than that. And then, beyond just uplifting that base PDP for the existing production, you're going to see an impact on all of our future development as well. So the rate of return on this compression is superior to probably any well we could pick to drill. And as Toby said, the spend amount is really not that much.

Jeremy Knop: And then, beyond just uplifting that base PDP for the existing production, you're going to see an impact on all of our future developments as well. So the rate of return on this compression is superior to probably any well, we could pick drill. And as Toby said, the spend amount is really not that much when you space it out across a couple of years on an annual basis; it's mitigated even more. But if you look at slide eight of our investor presentation, the delta between that 2025 guidance number and then what we call long term right below that, you can kind of think about that as the annual difference and sort of uplift and spending we might see in a given year while we're doing that.

Doug Legate: You're going to see an impact on all of our future development as well. So the rate of return on this compression is superior to probably any well we could pick to drill.

Unknown Executive: When you space it out across a couple of years on an annual basis, it's mitigated even more. But if you look at slide eight of our investor presentation, the delta between that 2025 guidance number and then what we call long term right below that, you can kind of think about that as the annual difference and sort of uplift in spending we might see in a given year while we're doing that before reverting to a much lower range over the long term.

Doug Legate: And as Toby said, the spend amount is really not that much.

Speaker Change: When you space it out across a couple of years on an annual basis, it's mitigated even more. But if you look at slide 8 of our investor presentation, the delta between that 2025 guidance number and then what we call long term right below that, you can kind of think about that as the annual difference in sort of uplift in spending we might see in a given year while we're doing that before reverting to a much lower range long term.

Jeremy Knop: Before reverting to a much lower range long term. And as a reminder, that lower range that we show from 2.1 to 2.4 long term, that excludes the 175 million of synergies that we called upside synergies. So I would say that upside synergy assumption, assumed a level of uplift from compression less than what we're already seeing on even a pad level basis. So I think that number is probably even higher if we see the benefits of these projects come to fruition.

Unknown Executive: And as a reminder, that lower range that we show from 2.1 to 2.4 long term, that excludes the 175 million synergies that we call upside synergies. So I would say that the upside synergies assumption assumed a level of uplift from compression less than what we're already seeing on even a pad level.

Speaker Change: And as a reminder, that lower range that we show from 2.1 to 2.4 long term, that excludes the 175 million of synergies that we call upside synergies.

Doug Legate: So I would say that upside synergy assumption assumed a level of uplift from compression less than what we're already seeing on even a pad-level basis, so I think that number is probably even biased higher as we see the benefits of these projects come to fruition.

Unknown Executive: So I think that number is probably even biased higher as we see the benefits of these projects come to fruition. So guys, I'm sorry for the follow-up, but just to simplify it, would it be a stretch to say that when you get to that point with the synergies, your run rate capital could be under two billion? That's correct. That's a simple way to put it, Doug.

Doug Ligate: So guys, sorry for the follow-up, but this is simplified. So would it be a stretch to say that when you're when you get to that point with this synergies, your run rate capital could be under 2 billion. That's correct.

Speaker Change: So guys, I'm sorry for the follow-up, but just to simplify it, so would it be a stretch to say that when you get to that point with the synergies, your run rate capital could be under $2 billion?

Doug Ligate: I've got the simple way to put it up. Okay, that's what I was trying to get.

Unknown Executive: Okay, that's what I was trying to get to. Thank you, guys. My follow-up is a quick one, hopefully, Jeremy. This is right down your fairway.

Speaker Change: That's correct. That's a simple way to put it, Doug.

Doug Ligate: Thank you, guys. My follow up is a quick one.

Jeremy Knop: Hopefully, Jeremy, this is right down your fairway. Why does any ownership of the regulated assets make sense?

Speaker Change: Okay, that's what I was trying to get to. Thank you, guys. My follow-up is a quick one, hopefully, Jeremy. This is right down your fairway. Why is any ownership of the regulated assets make sense?

Jeremy Knop: Why is any ownership of the regulated assets making sense? Yeah, that's a great question. Actually, it's something we've kind of debated internally as we thought about the right structure here. So, for the regulated assets, specifically, if you start with a transmission storage segment of Aquatrans, that is really an extension of the gathering system. There are a lot of big header pipes that cross state lines, and so they are regulated.

Jeremy Knop: Yeah, that's a great question, actually.

Jeremy Knop: Something we've kind of debated internally as we thought about the right structure here. So for the regulated assets, specifically if you start with the transmission storage segment of Aquatrans. That is really an extension of the gathering system. There are a lot of big header pipes that cross state lines, and so they are regulated, maintaining the right pressures on those systems, being able to control things like expansions is really integral to managing the gathering systems appropriately. And then when you think about those pipes been flowing into a longer distance regulated pipeline like MVP, you know, maintaining that interconnection, that pressure at an appropriate level, it all kind of works together as a single system.

Jeremy Knop: Yeah, that's a great question. Actually, it's something we've we've kind of debated internally as we thought about the right structure here. So, for the regulated assets.

Speaker Change: Specifically, if you start with a transmission storage segment of aquatrans, that is really an extension of the gathering system. There are a lot of big header pipes that cross state lines, and so they are regulated.

Speaker Change: Maintaining the right pressures on those systems, being able to control things like expansions.

Jeremy Knop: Maintaining the right pressures on those systems, being able to control things like expansions, is really integral to managing the gathering systems appropriately. And then, when you think about those pipes then flowing into a longer-distance regulated pipeline, like MVP, you know, maintaining that interconnection, that pressure at an appropriate level, it all kind of works together as a single system. And then, as we think about MVP, as we talked about last quarter, the expansion on that project is, we think, a highly economic expansion.

Speaker Change: is really integral to managing the gathering systems appropriately. And then when you think about those pipes then flowing into a longer

Speaker Change: A longer distance regulated pipeline like MVP, you know, maintaining that interconnection, that pressure at an appropriate level, it all kind of works together as a single system.

Jeremy Knop: And then, as we think about MVP, as we talked about last quarter of the expansion on that project, we think is highly economic expansion. That's something that we want to get done to evacuate more gas out of Appalachia, get it to a premium and market in the Southeast. We want to make sure that the project happens. You know, whether 5 or 10 years from now, it makes sense to still own something like MVP once all that expansion is completed. I think that's something we'll always evaluate, but I think at this juncture, we do want to maintain the operator ship and ownership of it.

Jeremy Knop: That's something that we want to get done to evacuate more gas out of Appalachia and get it to a premium market in the Southeast. We want to make sure that project happens. You know, whether five or 10 years from now, it makes sense to still own something like MVP once all that expansion is completed. I think that's something we'll always evaluate.

Speaker Change: And then as we think about MVP, as we talked about last quarter, the expansion on that project, we think is a highly economic expansion, that's something that we want to get done to evacuate more gas out of Appalachia, get it to a premium in market in the southeast. We want to make sure that project happens.

Speaker Change: You know, whether five or ten years from now it makes sense to still own something like MVP, once all that expansion is completed. I think that's something we'll always evaluate, but I think at this juncture we do want to maintain the operatorship and ownership of it.

Jeremy Knop: But I think at this juncture, we do want to maintain the operatorship and ownership of it. Yeah, Doug, I'd say at a very high level, what we're doing here at EQT is creating a culture that is going to be able to pick up every penny, nickel, and dime within our operating footprint. And one of the ways that we can drive value creation is to expand the size of our operating footprint.

Toby Rice: Yeah, Doug, I'd say at a very high level, what we're doing here at EQT is creating a culture that is going to be able to pick up every penny, nickel, and dime within our operating footprint. And one of the ways that we can drive the opportunity to value creation is to expand the size of the operational footprint. And so there is an element of having, you know, those transmissions; a bigger commercial system is going to make it a little bit easier for us to identify and capture some of those opportunities. So that's just another factor that we have in the back of our heads.

Speaker Change: Yeah, Doug, I'd say at a very high level, what we're doing here at EQT is creating a culture that is going to be able to pick up every penny, nickel, and dime within our operating footprint.

Speaker Change: And one of the ways that we can drive the value creation is to expand the size of the operational footprint. And so there is an element of having, you know, those transmissions, a bigger commercial system.

Jeremy Knop: And so there is an element of having, you know, those transmissions; a bigger commercial system is going to make it a little bit easier for us to identify and capture some of those opportunities. So that's just another factor that we have in the back of our heads. All right, guys. That was very clear.

Speaker Change: is going to make it a little bit easier for us to identify and capture some of those opportunities. So that that's just another factor that we have in the back of our heads as well.

Toby Rice: as well.

Toby Rice: I guess that's very clear.

Unknown Executive: Thanks for taking my questions, and I see your comments, Jeremy. Your next question comes from Neil Mehta from Goldman Sachs. Your line is open. Yeah, congratulations on closing the transaction team. You know, two questions on macro here.

Doug Ligate: Thanks for taking my questions and placing your comments term.

Speaker Change: Alright guys, that was very clear. Thanks for taking my questions and telling us your comments, Jeremy.

Neil Mehta: Your next question comes from a line of Neil Mehta from Goldman Sachs. Your line is open. Yeah, congratulations on closing the transaction team. You know, two questions on the macro here. First is just a talk through your hedging strategy, both near and long-term, and how does the E-Train acquisition play into your hedging decisions going forward as you want to take advantage of the volatile market that you talk about?

Speaker Change: Your next question comes from a line of Neil Mehta from Goldman Sachs. Your line is open.

Neil Singhvi Mehta: Yeah, congratulations on closing the transaction team.

Neil Singhvi Mehta: First, I'm going to go through your hedging strategy, both near and long term. And, and how does the eTrain acquisition play into your hedging decisions going forward, as you want to take advantage of the volatile market that you're talking about? Yeah, good morning, Neil.

Neil Singhvi Mehta: You know, two questions on the macro here. First is just...

Neil Singhvi Mehta: Talk through your hedging strategy, both near and long term, and how does the e-train acquisition play into your hedging decisions going forward as you want to take advantage of the volatile market that you talk about?

Neil Mehta: Yeah, good morning, Neil. I'll break it into two pieces. Near-term, it's really all focused on balance sheet, de-risking, de-leveraging, call out through 2025. Beyond 2025, I think our view is the deal we just did. Not only unlocks the value, we've been talking about it, but it really provides a structural hedge for our business. So the need to hedge beyond that. We won't have financial leverage to really protect. We won't have operating leverage to protect. And so we don't, we don't really have to hedge at all. I think if we do, it'll be more opportunistic, but it'll be pretty small in nature.

Jeremy Knop: I'll break it into kind of two pieces. Near term, it's really all focused on the balance sheet, de-risking, and de-leveraging. I call that through 2025. Beyond 2025, I think our view is the deal we just did not only unlocks value, as we've been talking about it, but it really provides a structural hedge for our business. So the need to hedge beyond that, we won't have financial leverage to really protect, we won't have operating leverage to protect. And so we don't; we don't really have to hedge at all.

Speaker Change: Yeah, good morning, Neil. I'll break it into kind of two pieces. Near term, it's really all focused on balance sheet de-risking, de-leveraging. I call that through 2025.

Speaker Change: Beyond 2025, I think our view is the deal we just did not only unlocks the value we've been talking about it, but it really provides a structural hedge for our business.

Speaker Change: So the need to hedge beyond that.

Speaker Change: We won't have financial leverage to really protect, we won't have operating leverage to protect.

Jeremy Knop: I think if we do, it'll be more opportunistic, but it'll be pretty small in nature. You know, probably at a maximum around a 20% level if we just get really bearish on the outlook for some reason. But otherwise, I think the strategic goal of what we're trying to do is set ourselves up where we don't have to hedge, because we see so much more upside than downside. But I think, as you've seen this year, you've seen gas prices go as low as about $1.60.

Speaker Change: And so we don't, we don't really have to hedge at all. I think if we do, it'll be more opportunistic, but it'll be pretty small in nature, um, you know, probably at max around a 20% level. If, if we just get really bearish on, on the outlook for some reason.

Neil Mehta: You know, probably it maxed around a 20% level if we just get really bearish on the outlook for some reason. But otherwise, I think the goal strategically of what we're trying to do is set ourselves up where we don't have to hedge. Because we see so much more upside than downside, but I think, as you've even seen this year, you've seen gas prices go as low as about $1.60, rebound over $3, and now trade back towards $2. So you're already seeing this theme of volatility play out, and the best way to capture value from that is to not have to hedge.

Speaker Change: But otherwise, I think the goal strategically of what we're trying to do is set ourselves up where we don't have to hedge, because we see so much more upside than downside. But I think as you've even seen this year, you've seen gas prices go as low as about $1.60.

Jeremy Knop: Rebound over $3 and now trade back towards $2, right? So you're already seeing this, this theme of volatility, play out. And the best way to capture value from that is to not have to hedge. And so that's really the long-term plan and how we're trying to position. That's helpful.

Speaker Change: Rebound over $3 and now trade back towards $2 right so you're already seeing this this theme of volatility play out and the best way to capture value from that is to not have to hedge so that's really the long-term plan and how we're trying to position

Neil Mehta: So that's really the long-term plan and how we're trying to position.

Jeremy Knop: And can you just talk through, you've done a great job walking us through your long-term views around data centers and power demand growth, which we agree is a very compelling story. 2025 is a little trickier, just because you've got some push out of some major projects like Golden Pass, and we're trying to digest the spare capacity that might be in the system too. So how do you think about the supply and demand outlook for gas as we think about 2025? And what are you guys watching as benchmarks?

Neil Mehta: That's helpful, then. Can you just talk through, you've done a great job walking us through your long-term views around data centers and power demand growth, which we agree is a very compelling story.

Speaker Change: That's helpful. And can you just talk through, you've done a great job walking us through your long-term views around data centers and power demand growth, which we agree it's a very compelling story. 2025 is a little trickier, just because you've got some push out of some major projects like Golden Pass, and we're trying to digest the spare capacity that might be in the system too. So how do you think about the supply demand outlook for gas as we think about 2025, and what are you guys watching as markers?

Neil Mehta: 2025 is a little trickier, just because you've got some push out of some major projects like Golden Pass and we're trying to digest the spare capacity that might be in the system, too. So how do you think about the supply demand outlook for gas as we think about 2025? And what are you guys watching as markers? Yeah, so I think the key thing we're watching probably going into your end is production. I think this number hovering around 102 is a healthy number, but if you see a surge into winter again, if other producers turn on a lot of volume, I think we're watching for that because that could be a near-term headwind of price.

Jeremy Knop: Yeah, so I think the key thing we're watching probably going into year end is production. I think this number hovering around 102 is a healthy number. But if you see a surge into winter again, if other producers turn on a lot of volume, I think we're watching for that because that could be a near-term headwind to price. You know, I think at most, that would impact the first half of 2025. I know the team at Goldman has been pushed out into 2026 for the golden path and service date.

Speaker Change: Yeah, so, um...

Speaker Change: I think the key thing we're watching probably going into year-end is production. I think this number hovering around 102, it's a healthy number, but if you see a surge into winter again, if other producers turn on a lot of volume, I think we are watching for that because that could be a near-term headwind to price.

Neil Mehta: I think it most that would impact the first half of 2025. I know the team at Goldman has been pushed out into 2026 for Golden Pass in-service date. I think with some of the updates that we've seen even this week with that bankruptcy process of Zachary Holdings, it seems like that might get pulled back forward. But a couple of these key factors on the LNG side are really going to drive that. So I see it really is a story of production and a story of LNG.

Speaker Change: You know, I think at most that would impact the first half of 2025.

Speaker Change: I know the team at Goldman has been pushed out into 2026 for a golden path and service date. I think with some of the updates that we've seen even this week with that bankruptcy process of Zachary Holdings, it seems like that might get pulled back forward. But a couple of these key factors on the LNG side are really going to drive that. So I see it really as a story of production and a story of LNG. I don't beyond that see any sort of step change benefits necessarily in 2025 that are going to move the needle nearly as much as those two factors.

Jeremy Knop: I think with some of the updates that we've seen even this week with the bankruptcy process of Zachary Holdings, it seems like that might get pulled back forward. But a couple of key factors on the LNG side are really going to drive that. So I see it really as a story of production and a story of LNG. I don't beyond that see any sort of step change benefits necessarily in 2025 that are going to move the needle nearly as much as those two factors. Jeremy

Neil Mehta: I don't be on that scene, sort of step change benefits, necessarily in 2025, that are going to move the needle nearly as much as those two factors.

Scott Hanold: Thank you. Your next question comes from Lyna, Scott Hanold from RBC. Your line is open. Good morning. Hey, a question on now that MVP's online, I'm just going to curious, you know, is there any change in the dynamics you're seeing in the Appalachian of the Southeast market now that that's flowing? And, you know, related to that, have you seen any moves by, you know, some of the Appalachian producers to increase activity given the, you know, obviously extraction of some of the volumes in the basin?

Speaker Change: Jeremy.

Scott Michael Hanold: Your next question comes from the line of Scott Hanold from RBC. Your line is open. Good morning.

Speaker Change: Your next question comes from the line of Scott Hanold from RBC. Your line is open.

Unknown Executive: Hey, a question on now that MVP is online. I'm just kind of curious, you know, is there any change in the dynamics you're seeing in the Appalachian and Southeast market now that that's flowing and related to that? Have you seen any moves by, you know, some of the Appalachian producers to increase activity given the, you know, obviously, extraction of some of the volumes in the basin? Yeah, so this is actually something really exciting that we've been really pleasantly surprised by.

Scott Michael Hanold: Good morning. Hey, a question on, now that MVP's online, I'm just kind of curious, you know, is there any change in the dynamics you're seeing in the Appalachian or the Southeast market now that that's flowing? And, you know, related to that, have you seen any moves by, you know, some of the Appalachian producers to

Scott Michael Hanold: Increased activity given the, you know, obviously extraction of some of the volumes in the basin.

Scott Hanold: Yeah, so this is actually something really exciting that we've been really pleasantly surprised by. So I guess on the production side, we have not seen any reaction. So we have, we production continues to be flat, consistent with our expectations. What has surprised us, though, is that in that end market. We model the way we sort of mark that station 165 pricing where we're selling gas. We've sort of modeled it around a 20 cent premium dip to M2 pricing. We have seen pricing recently at an average 50 to 70 cents above, so significantly higher than what we have assumed.

Unknown Executive: So I guess on the production side, we have not seen any reaction. So production continues to be flat, consistent with our expectations. What has surprised us, though, is that in that end market, we model the way we sort of mark that Station 165 pricing where we're selling gas. We've sort of modeled it around a 20 cent premium dip to M2 pricing. We have seen pricing recently at an average of 50 to 70 cents above, so significantly higher than what we assumed.

Speaker Change: Yeah, so this is actually something really exciting that we've been really pleasantly surprised by. So, I guess on the production side, we have not seen any reaction, so production continues to be flat, consistent with our expectations.

Speaker Change: What has surprised us, though, is that in that end market

Speaker Change: We model, the way we sort of mark that Station 165 pricing where we're selling gas, we've sort of modeled it around a 20 cent premium dip to M2 pricing. We have seen pricing recently...

Unknown Executive: And there have been periods of time when it's well, well north of a dollar above M2. And so I think we've been really encouraged by how much gas that market has been taking. Part of it has been impacted by some maintenance on Transco, but I think for being a mid-summer period, seeing that demand and that premium price already show up is an awesome, really early sign. And so I think that the benefit we might see in winter periods could be even better as well, and certainly better than maybe what we have forecasted. But it's still early.

Speaker Change: On an average, 50 to 70 cents above, so significantly higher than what we have assumed. And there have been periods of time where it's well north of a dollar above M2.

Scott Hanold: And there have been periods of time where it's well, well more but dollar above M2. And so I think we've been really encouraged by how much gas that market has been taking. Part of it has been impacted by some maintenance on Transco. But I think for being a mid-summer period, seeing that demand and that premium price already show up, I think is an awesome, really early sign marker. And so I think the benefit we might see in winter periods could be even better as well. And certainly better than maybe what we have forecasted. But it's still early; there's a new price market that Plastic put out for that Station 165 market.

Speaker Change: And so I think we've been really encouraged by how much gas that market has been taking. Part of it has been impacted by some maintenance on Transco. But I think for being a mid-summer period, seeing that demand and that premium price already show up I think is an awesome really early sign marker. And so I think that the benefit we might see in winter periods could be even better as well and certainly better than maybe what we have forecasted. But it's still early. There's a new price market that Platts put out for that Station 165 market.

Unknown Executive: There's a new price market that Platts put out for that Station 165 market, so we're watching, like everybody else, to see how that develops. But I think all signs are pointing to a really positive direction for that. Have you take a look at slide six, where we talk about the improving EURs from EQT. If you look at sort of where the peers are at, and you're seeing the EURs come down over time, that's just a sign of some of the inventory, the core inventory depletion.

Scott Hanold: So we're watching, like everybody else, to see how that develops. But I think all signs are pointing to a really positive direction on that. Yeah.

Toby Rice: Scott, one other thing I just have you take a look at on slide six where we talk about the improving URs for EQT. If you look at sort of where the peers are at, you see in the URs come down over time. That's just the sign of some of the inventory; the core inventory depletion. You know, the read through there is there could be some pressure against operators and their willingness to go out there and accelerate or grow purely just to preserve inventory. So that's another thing that's happening in the background. And, you know, there's only a couple operators that really have high quality inventory like EQT and where we've been pretty vocal and staying in this maintenance mode, but continue to supply the market.

Speaker Change: Have you take a look at, you know, on slide six where we talk about, you know, the improving EURs from EQT, if you look at sort of where the peers are at and you're seeing the EURs come down over time, that's just a sign of some of the inventory, the core inventory depletion.

Unknown Executive: You know, the read through there is, you know, there could be some pressure against operators and their willingness to go out there and accelerate or grow purely just to preserve inventory. So that's another thing that's happening in the background.

Speaker Change: You know, the read through there is, you know, there could be some pressure against operators and their willingness to go out there and accelerate or grow purely just to preserve inventory. So that's another, you know,

Unknown Executive: And, you know, there's only a couple operators that really have high quality inventory, like EQT. We've been pretty vocal, and I think that's an important backdrop just to keep in the back of your head. I appreciate that. Sounds good. Here's my follow-up, Toby. You know, look, you've never been shy to discuss politics from time to time.

Speaker Change: [inaudible]

Toby Rice: So I think that's an important backdrop just to keep in the backyard. I appreciate that. Sounds good.

Speaker Change: Staying in this maintenance mode, but continue to supply the market. So I think that's an important backdrop just to keep in the back of your head.

Toby Rice: Is my follow up, Toby? You know, look, you know, you've been never shy to discuss politics from time to time. And as it relates to being a gas producer, you know, what do you think the biggest issues are in for the upcoming election? Like what are the things that you are really focused on? Well, I'd say, you know, we align our politics with the politics of our customers, which is every American that uses our products. So we don't try and be too biased one way or the other, just really set it on the facts. Listen, I think we're in a period of time where people are only going to get smarter about energy.

Speaker Change: I appreciate that, sounds good. Here's my follow-up, Toby, you know, look,

Toby Z. Rice: And as it relates to being a gas producer. You know, what do you think the biggest issues are in the upcoming election? Like, what are the things that you are really focused on?

Toby Z. Rice: You know, you've been never shy to discuss politics from time to time, and as it relates to being a gas producer, you know, what do you think the biggest issues are for the upcoming election? Like, what are the things that are you really focused on?

Toby Z. Rice: Well, I'd say, you know, we align our politics with the politics of our customers, which is every American that uses our products. So we don't try and be too biased one way or the other; we just really centered on the facts. Listen, I think we're in a period of time where people are only going to get smarter about energy. There are some clips talking about some politicians talking about banning fracking. And, you know, this is time for us as an industry and as Americans to hold leaders accountable for statements that I think are really damaging and cause completely unintended impacts.

Toby Z. Rice: Well, I'd say, you know, we align our politics with the politics of our customers, which is every American that uses our products. So we don't try and be too biased one way or the other, just really centered on the facts.

Toby Z. Rice: Listen, I think we're in a period of time where...

Toby Rice: There are some clips talking about some politicians talking about banning fracks. and, you know, this is time for us as an industry to, and, and as, as Americans, to hold leaders accountable for statements that I think are, are really damaging and cause completely unintended impacts. I mean, as it relates to hydro-op fracturing in the ban of that, we cannot ignore the science on this. Over 10 years, it's been studied, and under the Obama administration, the EPA put it out of reports saying hydro-op fracturing is safe. And, understanding the implication of these type of decisions, you know, 98% of the wealth in this country require hydro-op fracturing, path goes away, you snap your fingers and a 30th production in the United States, which we fought for decades to, to create America as a, as an energy powerhouse, with sort of evaporate.

Speaker Change: People are only going to get smarter about energy. There are some clips talking about some politicians talking about banning fracking.

Speaker Change: Um, and, you know, this is a time for us as industry to, and as Americans, to hold leaders accountable for statements that I think are really damaging.

Toby Z. Rice: I mean, as it relates to hydraulic fracturing and the ban on that, we cannot ignore the science on this. For 10 years, it's been studied, and under the Obama administration, the EPA put out a report saying hydraulic fracturing is safe.

Toby Z. Rice: and cause completely unintended impacts. I mean, as it relates to hydraulic fracturing.

Toby Z. Rice: and the ban of that. We cannot ignore the science on this. Over 10 years it's been studied under the Obama administration.

Toby Z. Rice: The EPA put out a report saying hydraulic fracturing is safe. And understanding the implications of these type of decisions, you know, 98% of the wells in this country require hydraulic fracturing. That goes away. You snap your fingers.

Toby Z. Rice: And understanding the implications of these decisions, you know, 98% of the wells in this country require hydraulic fracturing. That goes away. You snap your fingers, and the production in the United States, which we fought for decades to create America as an energy powerhouse, would sort of evaporate.

Toby Z. Rice: A 30-bit production in the United States, which we fought for decades to create America as an energy powerhouse.

Toby Z. Rice: And we'd see production in this country drop 35%. That's going to lead to a lot of terrible things. And, you know, the ironic thing is, as an oil and gas operator, you know, this is a price times volume game, our production at EQT would go down, you know, call it 25% or corporate decline, but price uh... with with skyrocket and you know, That's the tough part here is that it would actually be constructive for prices, but it'd be bad for Americans, and that's why we need to make sure our politicians are putting the right policies in place.

Toby Rice: And we see production in this country drop 35%. That's going to lead to a lot of terrible things. And, you know, the, the ironic thing is, is an oil and gas operate. You know, this is a price times volume game. Our production at EQT would go down, you know, call it 25% our corporate decline, but price would skyrocket. And, you know, that's the tough part here is that we would actually be constructive for prices, but it'd be bad for Americans, and that's why we need to make sure our politicians are putting the right policies in place.

Toby Z. Rice: would sort of evaporate, and we'd see production in this country drop 35%. That's going to lead to a lot of terrible things. And the ironic thing is, as an oil and gas operator,

Speaker Change: You know, this is a price times volume game. Our production at EQT would go down, you know, call it 25% or corporate decline, but price...

Toby Z. Rice: would skyrocket and, you know.

Toby Z. Rice: That that's the tough part here is that

Toby Z. Rice: It would actually be constructive for prices, but it'd be bad for Americans, and that's why we need to make sure our politicians are putting.

Toby Z. Rice: And with all the crazy things that are happening in this world, we're really encouraged to see that energy is still at the top of the list as a key issue for American voters, and it's something that we need to take very seriously. Appreciate the color, thanks.

Toby Rice: And with all the crazy things that are happening in this world, we're really encouraged to see that energy is still at the top of the world.

Toby Z. Rice: With all the crazy things that are happening in this world, we're really encouraged to see that energy is still at the top of the list as a key issue for American voters and it's something that we need to take very seriously.

Toby Rice: The list is a key issue for American voters, and it's something that we need to take very seriously.

Toby Rice: Appreciate the color. Thanks.

Joshua Silverstein: Your next question comes from a line up, Josh Silverstein from UBS. Your line is open. Good morning, guys. Just on, on the outlook for next year, I'm trying to think about the trajectory of the natural gas volumes. Should we think about, you know, kind of the second half, run rate going forward with the curtailments coming back? Do you think you'd probably keep the volumes curtailed to maybe a little bit more clarity. They would be helpful. Thanks.

Joshua Ian Silverstein: Your next question comes from the line of Josh Silverstein from UBS. Your line is open. Good morning, guys.

Speaker Change: Appreciate the color, thanks.

Speaker Change: Your next question comes from a line of Josh Silverstein from UBS. Your line is open.

Unknown Executive: Just on the outlook for next year, I'm trying to think about the trajectory of the natural gas volumes. Should we think about, you know, kind of the second half run rate going forward with the curtailments coming back? Do you think you'd probably keep this, the volumes curtailed? So maybe a little bit more clarity there would be helpful. Thanks.

Joshua Ian Silverstein: Good morning, guys.

Joshua Ian Silverstein: Just on the outlook for next year, I'm trying to think about the trajectory of the natural gas volumes. Should we think about the second half run rate going forward with the curtailments coming back? Do you think you'd probably keep the volumes curtailed? So maybe a little bit more clarity there would be helpful. Thanks.

Jeremy Knop: Yeah, Josh, I think in our view, it's just maintenance mode. I mean, I think, you know, in our prepared remarks, we commented that if we had not curtailed this year, we would have been above the high end of the range.

Unknown Executive: Yeah, Josh, I think in our view, it's just maintenance mode. I mean, I think, you know, in our prepared remarks, we commented that if we had not curtailed this year, we would have been above the high end of the range. Originally, that was 2300 BCFE on the high end.

Joshua Ian Silverstein: Yeah, Josh. I think in our view, it's just maintenance mode. I mean, I think, you know, in our prepared remarks, we commented that if we had not curtailed this year, we would have been above the high end of the range.

Jeremy Knop: Originally, it was 2300 BC F.E. on the high end. We're running our business in maintenance mode, so I would expect looking at it next year, that's the volume level you look at. I think the only difference there is the divestment of our non-off interest and some of the transaction impacts from that, but aside from that, we're running enough in a steady maintenance, both cadence. Got it. So is that kind of around maybe like a five, if you're so kind of quarterly cadence around there? That call of 550 to 600, depending on the quarter. Right. Got it.

Unknown Executive: We're running our business in maintenance mode. So I would expect, looking at it next year, that that's the volume level you look at. I think the only difference there is the divestment of our non-op interest and some of the transaction impacts from that. But aside from that, we're running in a steady maintenance mode cadence.

Joshua Ian Silverstein: Originally that was 2,300 BCFE on the high end. We're running our business in maintenance mode, so I would expect looking at it next year. That's the volume level you look at. I think the only difference there is the divestment of our non-op interest and some of the transaction impacts from that. But aside from that, we're running in a steady maintenance mode cadence.

Unknown Executive: So is that kind of around maybe a five, 50 or so kind of quarterly cadence around there? Yeah, call it 550 to 600, depending on the quarter. Right. Got it.

Speaker Change: Got it. So is that kind of around maybe like a 5, 50 or so kind of quarterly cadence around there?

Unknown Executive: Okay. So still growth into next year relative to the back half. Got it.

Jeremy Knop: Okay. So still growth into infrastructure relative to the back F got it. Okay.

Speaker Change: Yeah, call it 550 to 600, depending on the quarter. Right. Got it. Okay, so still growth into next year relative to the back half. Got it. Okay. And then just on the...

Joshua Silverstein: And then just on the, the pro forma kind of cash flow profile. When you first announced the transaction with each train, you mentioned about 30% of the pro forma cash flow would be midstream. I'm wondering if that still holds, given the minority sales that you guys are looking at, with the number actually being lower.

Unknown Executive: Okay. And then just on the pro forma kind of cash flow profile, when you first announced the transaction with eTrain, you mentioned about 30% of the pro forma cash flow would be midstream. I'm wondering if that still holds, given the minority sales that you guys are looking at, would the number actually be lower? And if it is lower, would you want to reduce that even further to be where you guys want to be pro forma? Thanks.

Speaker Change: the pro forma kind of cash flow profile when you first announced the transaction with with eTrain

Speaker Change: You mentioned about 30% of the pro-former cash flow would be midstream.

Speaker Change: I'm wondering if that still holds, given the minority sales that you guys are looking at. Would the number actually be lower? And if it is lower, would you want to reduce that even further to be where you guys want to be performing?

Jeremy Knop: And if it is lower, would you want to reduce that even further to be where you guys want to be pro forma? Thanks. Yeah, it really comes down to kind of what value and multiple we would sell that at, but yeah, I mean, all else equal, if you sell down some of that, it could, it should drop a little bit, but that's factored into how we look at pro forma leverage already, so I, I don't think it really impacts how we think about our, our plans. The only other thing that's going to impact that next year or two is obviously gas prices, so if prices decline or go up a lot, that percent of midstream is going to oscillate with that as well.

Unknown Executive: Yeah, it really comes down to kind of what value and multiple we would sell that at. But yeah, I mean, all else equal, if you sell down some of that, it could, it should drop a little bit. But that's factored into how we look at pro forma leverage already, so I don't think it really impacts how we think about our plans. The only other thing that's going to impact that next year, too, is obviously gap prices.

Speaker Change: Yeah, it really comes down to kind of what what value and multiple we would sell that at But yeah, I mean all else equal if you sell down some of that it could it

Speaker Change: It should drop a little bit.

Speaker Change: But that's factored into how we look at pro-forma leverage already, so I don't think it really impacts how we think about our plans. The only other thing that's going to impact that next year too is obviously gas prices. So if prices decline or go up a lot, that percent of midstream is going to oscillate with that as well.

Roger Read: Yeah, I think that your next question comes from a line of Roger Read from Wells Fargo. Your line is open. Yeah, thanks.

Unknown Executive: So if prices decline or go up a lot, that percent of midstream is going to oscillate with that as well. Thanks, guys. Your next question comes from Roger Reed from Wells Fargo. Your line is open. Yeah, thanks. Good morning, everybody.

Speaker Change: Thanks, guys.

Speaker Change: Your next question comes from a line of Roger Read from Wells Fargo. Your line is open.

Roger Read: Good morning, everybody. Um, I'd like to take a look at slide 11. You have the organic deleveraging and the free cash flow expectations 25 through 29. Um, just curious, clearly you're not going to be, you know, on aggressive on the hedging side in the future. So what's sort of the underlying assumption on gas prices, gas volumes that gets us the numbers you lay out there? Uh, yeah, so the, the numbers we look at on page 11 are really based on our internal assumptions around the asset sales and then we're strip pricing is today. Um, but that, look, that's the reason why we're also hedging.

Roger David Read: Um, I'd like to take a look at slide 11, you have the organic deleveraging and the free cash flow expectations 25 through 29. I'm just curious, clearly, you're not going to be, you know, aggressive on the hedging side in the future. So what's the sort of underlying assumption on gas prices, gas volumes, that gets us the numbers you lay out there? Yeah, so the numbers we look at on page 11 are really based on our internal assumptions around asset sales and then where strip pricing is today. But look, that's the reason why we're also hedging.

Roger David Read: Yeah, thanks. Good morning, everybody.

Speaker Change: I'd like to take a look at slide 11. You have the organic deleveraging and the free cash flow expectations 25 through 29.

Roger David Read: Just curious, clearly you're not going to be, you know, aggressive on the hedging side in the future, so what's sort of the underlying assumption on gas prices, gas volumes, it gets us the numbers you lay out there?

Speaker Change: Yeah, so the numbers we look at on on page 11 are really based on our internal assumptions around the asset sales and then where strip pricing is today.

Jeremy Knop: If you look at this, just organic pre cash flow, really between now and the end of 2025 at 275 gas prices, you're still generating over a billion dollars of pre cash flow. So I really, in any case that we've laid out, if we take a more conservative lean to that, if things just go wrong in the macro for whatever reason, I think we still feel really good about that assumption. That initial target, we have the specific target of 7.5 billion by the end of 2025. I call that our initial target level. I think that's within a, uh, a margin of safety that the rating agencies outlined for us, but longer term, we would like to take that lower.

Jeremy Knop: If you look at it just as organic pre-cash flow, really between now and the end of 2025, at 275 gas prices, you're still generating over a billion dollars of pre-cash flow. So I really, in any case that we've laid out, if we take a more conservative lean to that, if things just go wrong in the macro for whatever reason, I think we still feel really good about that assumption. That initial target we have, the specific target of seven and a half billion by the end of 2025, I'd call that our initial target level.

Speaker Change: But that look that's the reason why we're also hedging if you look at that just organic free cash flow really between now and the end of 2025

Speaker Change: At 275 gas prices, you're still generating over a billion dollars of free cash flow. So, I really, in any case that we've laid out, if we take a more conservative lean to that, if things just...

Speaker Change: https://www.youtube.com.au

Speaker Change: That initial target we have, the specific target of seven and a half billion by the end of 2025, I'd call that our initial target level. I think that's within a margin of safety that the rating agencies outlined for us.

Jeremy Knop: I think that's within the margin of safety that the rating agencies outlined for us. But, longer term, we would like to take that lower. That's why we talked about that five to seven billion dollar level. That could fluctuate over time depending on where we are in the cycle, depending on the opportunities of where else to invest cash. And look, we also want to very intentionally position ourselves so we have ample liquidity so that if there is volatility in the macro landscape and in our stock, we're positioned to step in and buy a lot of stock back counter-cyclically. If you don't pay down debt below a mid-cycle level, if you don't have a lot of liquidity, you can't do that.

Jeremy Knop: That's where we talked about that 7 to, or that 5 to 7 billion dollar level. Uh, that could oscillate in time, depending on where we are in the cycle, depending on the opportunities where else to invest cash. And look, we also want to very intentionally position ourselves. So we have ample liquidity so that if there is volatility in the macro landscape and in our stock, that we're positioned to step in and buy a lot of stock back counter-stick quickly. And if you don't pay down debt below a mid-cycle level, if you don't have a lot of liquidity, you can't do that.

Speaker Change: But longer term, we would like to take that lower. That's why we talked about that $5-7 billion level. That could oscillate in time, depending on where we are in the cycle.

Speaker Change: and Jeremy Knop are the co-founders and co-founders and co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-co-

Jeremy Knop: So, you know, another, another example of that, that revolver, we just expanded by a billion dollars to a 3.5 billion dollar size. Uh, that's also trying to key up and position ourselves for volatility and to take advantage of those opportunities. So this is all kind of placed hand in hand together with how we're trying to position ourselves to maximize values. We reallocate capital in the coming years.

Jeremy Knop: Another example of that, that revolver we just expanded by a billion dollars to a three and a half billion dollar size. That's also trying to tie up and position ourselves for volatility and to take advantage of those opportunities. So this all kind of plays hand in hand together with how we're trying to position ourselves to maximize value as we reallocate capital in the coming years. I appreciate that. Thanks.

Speaker Change: Another example of that revolver we just expanded by a billion dollars to a three and a half billion dollar size.

Speaker Change: That's also trying to tee up and position ourselves for volatility and to take advantage of those opportunities. So this all kind of plays hand-in-hand together with how we're trying to position ourselves to maximize value as we reallocate capital in the coming years.

Roger Read: I appreciate that's very helpful. Thanks.

Roger Read: I'll turn it back.

Speaker Change: I appreciate that's very helpful. Thanks. I'll turn it back.

David Deckelbaum: Your next question comes from a line of David Dekkelbaum from TD Cowan. Your line is open. Thanks, Toby and Jeremy, for taking my questions. I want to just go back to the capital progression, you know, just in the context of the benefits that you've seen on the upstream side. I think you highlighted, obviously, the impressive achievements is getting your cycle times down on completions like 35%. How much of that is reflected in the reduction and spend in 25 versus 24? And I guess just in conjunction with that, how much do you expect upstream catbecs to moderate next year?

Jeremy Knop: I'll turn it back. Your next question comes from a line David Deckelbaum from TD Cowan. Your line is open. Thanks, Toby and Jeremy, for taking my questions. I wanted to just go back to the capital progression.

Speaker Change: Your next question comes from the line of David Deckelbaum from TD Cowan. Your line is open.

David Adam Deckelbaum: You know, just in the context of the benefits that you've seen on the upstream side, I think you highlighted, obviously, the impressive achievements of getting your cycle times down on completions, like 35%. How much of that is reflected in the reduction in spend in 25 versus 24? And I guess just in conjunction with that, how much do you expect upstream CapEx to moderate next year? Yeah, we have a small amount of those completion efficiencies baked into our 25 plan right now. Given the newness of this step change in completion efficiencies, we want to see a little bit more time, but we'll continue to add that back in. And the second part of the question...

David Adam Deckelbaum: Thanks Toby and Jeremy for taking my questions.

David Adam Deckelbaum: I wanted to just go back to the capital progression, you know, just in the context of the benefits that you've seen on the upstream side. I think you highlighted, obviously, the impressive achievements of getting your cycle times down on completions like 35%.

Speaker Change: How much of that is reflected in the reduction in spend in 2025 versus 2024? And I guess just in conjunction with that, how much do you expect upstream CapEx to moderate next year?

David Deckelbaum: Yeah, we have a small amount of those completion efficiencies baked into our 25 plan right now. You know, given the newness of this step change in completion efficiencies, we want to see a little bit more time, but we'll continue to add that back in there. And the second part of the question is just thinking about just if you think you're over a year what you're spending on upstream in 25 in that two three to two six versus this year. Yeah, I would say we think the upstream spending profile is going to be pretty similar to what we had pre-E Train.

Speaker Change: Yeah, we have a small amount of that those completion efficiencies baked into our 25 plan right now. You know, given the newness of this step change in completion efficiencies, we want to see a little bit more time, but we'll continue to add that back in there. And the second part of the question?

Unknown Executive: I was just thinking about just if you think year over year what you're spending on upstream in 2025 in that 2.3 to 2.6 versus this year. Yeah, I would say, I think the upstream spending profile is going to be pretty similar to what we had pre-e-train. I'd say that the impacts of the reduced CapEx are going to really start once those compression projects start hitting the front lines, which I'd say ballpark 12 to 18 months before that slopes down.

Speaker Change: I was just thinking about just if you think year over year what you're spending on upstream in 25 in that 2.3 to 2.6 versus this year.

Speaker Change: Yeah, I would say, um...

Speaker Change: We think the upstream spending profile is going to be pretty similar to what we had pre-e-train. I'd say that the impacts of

Jeremy Knop: I'd say that the impacts of the reduced capex is going to really start one of those compression projects, targeting the front lines, which I'd say ballpark 12 to 18 months before that slopes down. So everything that you're seeing and the upstream spending now is really just driven by based operating efficiencies and balancing the service pricing we see. David, it from like a modeling perspective, I think about it this way: at a high level, we've baked in in the guidance we've given on those capital cost numbers, we've baked in all the capital costs, but we haven't baked in the benefits.

Speaker Change: The reduced CapEx is going to really start once those compression projects start hitting the front lines, which I'd say ballpark.

Unknown Executive: So everything that you're seeing in the upstream spending now is really just driven by base operating efficiencies, balancing the service price. David, from a modeling perspective, I think about it this way at a high level. We've baked in, in the guidance we've given on those capital cost numbers, all the capital costs. But we haven't baked in the benefits.

Speaker Change: 12 to 18 months before that slopes down. So everything that you're seeing in the upstream spending now is really just driven by base operating efficiencies and balancing the service pricing we see.

Jeremy Knop: We haven't baked in the really completion benefits nearly, nearly to the level that we're actually seeing right now. We haven't baked in the 175 million of upside synergies, even though the more work we do, I think our bias is that that number probably grows. So I think there's a lot still on the table. Beyond what we have given out, we're hopeful to achieve, but it's still early innings. And so we want to see more definitive results there before we actually bake that into our definitive guidance. Thanks, Jeremy.

Speaker Change: David, from like a modeling perspective, I think about it this way at a high level, we've baked in, in the guidance we've given on those capital cost numbers, we've baked in all the capital costs, but we haven't baked in the benefits.

Jeremy Knop: We haven't baked in the really the completion benefits nearly, nearly to the level that we're actually seeing right now. We haven't baked in the 175 million of upside synergies, even though the more work we do, I think our biases that that number probably grows.

Speaker Change: We haven't baked in really the completion benefits nearly to the level that we're actually seeing right now. We haven't baked in the $175 million of upside synergies, even though the more work we do, I think our bias is that that number probably grows.

Jeremy Knop: So I think there's a lot still on the table beyond what we have given out that we're hopeful to achieve, but it's still early innings, and so we want to see more definitive results there before we actually bake that into our definitive guidance. Thanks, Jeremy. Just continuing on that, I guess that long-term guidance of 2-1-2-4, you know, at the midpoint, is it fair to say that that's just reflecting the benefits from the installed compression bringing down that upstream budget relative to sort of the 2-3-2-6 and 25. No, we'd say that 2-1-2-4 really reflects that the spend on the compression is behind us, as we mentioned earlier in the call, that 175 million of annual cost reductions as a result of that spending would reduce that 2-1-2-4 lower.

Speaker Change: So I think there's a lot still on the table beyond what we have given out that we're hopeful to achieve, but it's still early innings, and so we want to see more definitive results there before we actually take that into our definitive guidance.

Jeremy Knop: Just continuing on that, I guess that the long-term guidance of 2.1 to 2.4, you know, at the midpoint, is it fair to say that that's just reflecting the benefits from the installed compression bringing down that upstream budget relative to sort of the 2.3 to 2.6 and 2.5? So we'd say that 2.1 to 2.4 really reflects the spend on the compression is behind us. As we mentioned earlier in the call, that $175 million of annual cost reductions as a result of that spending would be... would reduce that 2.1 to 2.4 lower.

Speaker Change: Thanks, Jeremy. Just continuing on that, I guess that long-term guidance of 2.1 to 2.4, you know, at the midpoint, is it fair to say that that's just reflecting the benefits from the installed compression bringing down that upstream budget relative to sort of the 2.3 to 2.6 and 2.5?

Speaker Change: We'd say that 2.1 to 2.4 really reflects the spend on the compression.

Speaker Change: is behind us. As we mentioned earlier in the call, that $175 million of annual cost reductions as a result of that spending

Speaker Change: would be

Jeremy Knop: So I think we're going to just continue to quantify this, and then you can see that come down in the future.

Speaker Change: reduce that 2.1 to 2.4 lower. So I think we're going to just continue to quantify this and then

David Deckelbaum: Appreciate it, guys.

Speaker Change: You can see that come down in the future.

Kevin McCurdy: Your next question comes from a line of Kevin McCurdy from Pickering Energy Partners. Your line is open. Hey, good morning. We appreciate all the details on 2025 included in slide 8, and the further commentary you've offered in the Q&A. I have just a few more clarifying questions on that slide. I guess my first question is, does the adjusted even a number include the MVP distributions for next year, and it's just annualizing your 4Q guidance kind of a good run rate for that? That number that you've done number actually does not include the MVP distributions, because that's going to be more of an equity method investment.

Jeremy Knop: So I think we're going to just continue to quantify this, and I don't see that coming down. Appreciate it, guys. Your next question comes from the line of Kevin McCurdy from Pickering Energy Partners. Your line is open. Hey, good morning.

Speaker Change: Appreciate it, guys.

Speaker Change: Your next question comes from a line of Kevin McCurdy from Pickering Energy Partners. Your line is open.

Kevin Moreland MacCurdy: We appreciate all the details on 2025 included in slide eight and the further commentary you've offered in the Q&A. I have just a few more clarifying questions on that slide. I guess my first question is, does the adjusted even number include the MVP distributions for next year? And is just annualizing your 4Q guidance kind of a good run rate for that? That number, the EAPDOT number, actually does not include the MVP distributions because that's going to be more of an equity method investment. So we'll provide more clarity on that as we go forward. And the second part of your question was, "What again?"

Kevin Moreland MacCurdy: Hey, good morning. We appreciate all the details on 2025 included in slide 8 and the further commentary you've offered in the Q&A. I have just a few more clarifying questions on that slide.

Kevin Moreland MacCurdy: I guess my first question is, does the adjusted even in number include the MVP distributions for next year? And it's just annualizing your 4Q guidance kind of a good run rate for that?

Speaker Change: That number, the EAPDOT number actually does not include the MVP distributions because that's going to be more of an equity method investment. So we'll provide clarity on that as we go forward. And the second part of your question was what again?

Kevin McCurdy: So we'll provide clarity on that as we go forward, and the second part of your question was, what again? and if it's just a good estimate to annualize the fourth quarter guidance for the MVP distribution for 2025? Yeah, I think it is for MVP specifically. I think we're on a whole company basis; the main impact was what we noted in our remarks earlier that curtailments are skewing the per unit cost metrics higher. So I think as you look into 2025, if you're to look at per unit metrics, those should skew lower. I assume we know curtailments, but otherwise I think it should be a pretty decent proxy, which is why we broke it out separately.

Unknown Executive: and if it's just a good estimate to annualize the fourth-quarter guidance for the MVP distribution for 2025. Yeah, I think it is for MVP specifically. I think on a whole company basis, the main impact was what we noted in our remarks earlier that curtailments are skewing the per unit cost metrics higher. So I think as you look into 2025, if you're to look at per unit metrics, those should skew lower, assuming there are no curtailments.

Speaker Change: And if it's just a good estimate to annualize the fourth quarter guidance for the MVP distribution for 2025.

Speaker Change: Yeah, I think it is for MVP specifically. I think on a whole company basis, the main impact was what we noted in our remarks earlier, that curtailments are skewing the per unit cost metrics higher. So I think as you look into 2025, if you were to look at per unit metrics, those should skew lower, assuming no curtailments.

Unknown Executive: But otherwise, I think it should be a pretty decent proxy, which is why we broke it out separately. Great. And then you mentioned that this Outlook was built using a maintenance production number. What is the risk of shut-ins coming back next year?

Speaker Change: But otherwise, I think it should be a pretty decent proxy, which is why we broke it out separately.

Kevin McCurdy: Great.

Unknown Executive: And how have you thought about that in terms of your free cash flow? Or does the lower cost structure kind of reduce that shut-in? Yeah, we don't proactively on like a year ahead basis make things like shut-ins.

Jeremy Knop: And then you mentioned that this outlook was building was built using a maintenance production number. What is the risk of shut-ins coming back next year, and how have you thought about that in terms of your free cash flow, or does the lower cost structure kind of reduce that shut-in risk? Yeah, we don't proactively on like a year ahead basis, making things like shut-ins; that's more of in response to the market. So if we did say the whole thesis in 2526, NLG just got derailed for some reason and there was a need to curtail, that would take production below, you know, that this sort of quarterly annualized number that I think you were getting at.

Speaker Change: Great, and then you mentioned that this Outlook was built using a maintenance production number. What is the risk of shut-ins coming back next year and how have you thought about that in terms of your free cash flow or does the lower cost structure kind of reduce that shut-in risk?

Speaker Change: Yeah, we don't proactively on like a year ahead basis make in things like shut-ins, that's more of in response to the market. So if we did, if we did, you know, say the whole thesis in 25-26 analogy, just...

Speaker Change: God derailed for some reason and there was a need to curtail that would take production below But you know that this sort of quarterly annualized number that I think you're getting at But that's something that I think we would address more real-time is the market evolves

Jeremy Knop: But that's something that I think we would address more real time as the market evolves. Great.

Unknown Executive: That's more of in response to the market. So if we did, if we did, you know, say the whole thesis and 2526 analogy got derailed for some reason, and there was a need to curtail production, that would take production below, but you know, that this sort of quarterly annualized number that I think you're getting at. But that's something that I think we would address more in real time as the market evolves. Great, I appreciate the detail, and congratulations on a good quarter. Your next question comes from the line of Jacob Roberts from TPH. Your line is open. Good morning.

Kevin McCurdy: I appreciate the detail and congratulations on a good quarter.

Speaker Change: Great, I appreciate the detail and congratulations on a good quarter.

Jacob Roberts: Your next question comes from a line of Jacob Roberts from TPH. Your line is?

Speaker Change: Your next question comes from the line of Jacob Roberts from TPH. Your line is open.

Jacob Roberts: Good morning.

Jacob Roberts: Morning. Maybe staying on that topic, is there any difference in how we should be thinking about the curtailments being baked into the guide of the back half of this year relative to what we saw in the first half? And what we're trying to think about is if there's a change in EQT's U.S. ethnicity of supply between the two periods, perhaps with MVP Online? No, I don't think MVP impacts that at all. I think we maintain full flexibility. I do think having midstream wholly owned where those MVCs effectively have been integrated away. I think that does give us a tremendous amount more flexibility to be a little more, I guess, really to pursue curtailments more than maybe we had in the past where we felt like we otherwise had a big debt obligation.

Jacob Phillip Roberts: Maybe staying on that topic, is there any difference in how we should be thinking about the curtailments being baked into the guide for the back half of this year relative to what we saw in the first half? And what we're trying to think about is if there's a change in EQT's elasticity of supply between the two periods, perhaps with MVP Online? No, I don't think MVP Online impacts that at all.

Jacob Phillip Roberts: Morning.

Speaker Change: Good morning. Good morning.

Speaker Change: Maybe

Speaker Change: Staying on that topic, is there any difference in how we should be thinking about the curtailments being baked into the guide of the back half of this year relative to what we saw in the first half?

Speaker Change: And what we're trying to think about is if there's a change in EQT's elasticity of supply between the two periods, perhaps with MVP Online.

Unknown Executive: I think we should maintain full flexibility. I do think having midstream wholly owned, where those MVCs effectively have been integrated away, I think that does give us a tremendous amount more flexibility to be a little more, Yeah, I guess really to pursue curtailment more than maybe we had in the past, where we felt like we otherwise had a big debt obligation we were having to pay to the midstream service provider, but I think our reaction in the back half of this year will be more just

Speaker Change: No, I don't think MVP impacts that at all. I think we maintain full flexibility. I do think having midstream wholly owned where those MVCs effectively have been integrated away, I think that does give us a tremendous amount more flexibility to be a little more

Speaker Change: Yeah, I guess really to pursue curtailments more than maybe we had in the past where we felt like we otherwise had a big debt obligation we're having to pay to the midstream service provider. But I think our reaction in the back half of this year is more just governed by pricing.

Jeremy Knop: We're having to pay to the midstream service provider, but I think our reaction in the back half of this year is more just governed by pricing. We haven't changed for the pricing levels we outlined earlier this year, where we would look to curtail just because we own the midstream. I think we still have that sort of floor threshold level for focus on earning returns on sure older capital, not just well capex, not just maintaining realized pricing above cash cost. It's got to be higher than that. That's why we're proactively trying to guide to that. Got it.

Unknown Executive: We haven't changed sort of the pricing levels we outlined earlier this year where we would look to curtail just because we own the midstream. I think we still have that sort of floor threshold level, sort of focused on earning returns on shareholder capital, not just well capex, not just maintaining. Realized Pricing Above Cash Cost, it's got to be higher than that.

Speaker Change: We haven't changed for the pricing levels we outlined earlier this year where we would look to curtail Just because we own the midstream I think we still have that sort of floor threshold level so focused on earning returns on shareholder capital not just well capex not just maintaining

Unknown Executive: So that's why we're proactively trying to guide you to that. Got it. Thank you. Quick second one.

Speaker Change: Realized pricing above cash cost, it's got to be higher than that. So that's why we're proactively trying to guide to that.

Unknown Executive: On slide seven, the three sites you've highlighted, I think you mentioned that you see kind of thousands of opportunities across the field to implement this. Can you give a sense of how many wells each site touches, so to speak? Well, I wouldn't say that that wouldn't be the way we think about it. I would just say, at a very high level, we just look at the system pressures.

Jeremy Knop: Thank you. Quick second one. On slide seven, the three sites you've highlighted, I think you mentioned the UC kind of thousands of opportunities to across the field to implement this. Can you give a sense of which how many wells each site touches, so to speak? Well, I wouldn't say that that would be the way we think about it. I would just say, at a very high level, we just look at the system pressures. We've got over a dozen gathering systems that are all hydraulically connected. Each one of those has an operating pressure that is sort of based on the amount of volume that's going through there.

Speaker Change: Got it. Thank you. Quick second one. On slide seven, the three sites you've highlighted, I think you mentioned that you see kind of thousands of opportunities to across the field to implement this. Can you give a sense of which, how many wells each site touches, so to speak?

Speaker Change: Well, I wouldn't say that that would be the way we think about it. I would just say at a very high level, we just look at the system pressures. We've got over a dozen gathering systems that are all hydraulically connected. Each one of those has an operating pressure.

Unknown Executive: We've got over a dozen gathering systems that are all hydraulically connected, and each one of those has an operating pressure. That is sort of based on the amount of volume that's going through there, and the vintage of the wells that feed that. We also layer in where our development program is going to go, and that will influence pressures as well. So the exercise that the teams have run through is sort of forecasting what those system pressures look like and then assessing through compression what the productivity uplift will be if we lower the system pressures by three, four, five hundred PSI and what that will look like.

Jeremy Knop: The advantage of the wells that feed that drive that we also layering where our development program is going to go and that will influence pressures as well. So the exercise that the teams have run through is sort of forecasting what those system pressures look like and then assessing through compression. What the product productivity uplift will be if we lower the system pressures three, four, five hundred psi, and what that will look like.

Speaker Change: That is sort of, uh...

Speaker Change: Based on the amount of volume that's going through there, vintage of the wells that feed that, drive that. We also layer in where our development program is going to go and that will influence pressures as well.

Speaker Change: The exercise of the teams I've run through is sort of forecasting what those system pressures look like, and then...

Speaker Change: Assessing, through compression, what the...

Speaker Change: Productivity Uplift will be...

Speaker Change: If we lower the system pressures 3, 4, 500 PSI...

Unknown Executive: So I would say, as a whole, this is a pretty large opportunity for us at EQT and it's really exciting to look at. The evolution of the improvements we made in this business, I'd say the last five years have really been focused on optimizing the efforts on site, you know, drilling, completing wells and being more efficient on the production side. But now the efficiencies that we're focused on are going to be really more on the midstream footprint and the actual field wide. Great. Thank you.

Jeremy Knop: So I would say as a whole, this is a pretty large opportunity for us at EQT, and it's really exciting to look at the evolution of the improvements we made in this business. I took the last five years have really been focused on optimizing the efforts on site, drilling, completing wells, and being more efficient on the production side. But now the efficiencies that we're focused on are going to be really more on the midstream footprint and actual field wide. and improvements.

Speaker Change: and what that will look like. So I would say as a whole, this is a pretty large opportunity for us at EQT and it's really exciting to look at.

Speaker Change: The evolution of the improvements we've made in this business, I'd say the last five years have really been focused on

Speaker Change: optimizing the efforts on site, you know, drilling, completing wells and being more efficient on the production side. But now the efficiencies that we're focused on are going to be really more on the midstream footprint and actual field wide improvements.

Michael Scialla: Appreciate the time, guys. Your next question comes from the line of Michael Scialla from Stevens. Your line is open.

Speaker Change: Great. Thank you. Appreciate the time, guys.

Unknown Executive: Appreciate the time, guys. Your next question comes from the line of Michael Scialla from Stevens. Your line is open. Yeah, good morning, everybody.

Speaker Change: Your next question comes from the line of Michael Scialla from Stevens. Your line is open.

Michael Scialla: Yeah, good morning, everybody. I just wanted to ask on the expansion of MPP. It sounds like I heard you're right. The time frame you're thinking there's maybe five years down the road, even though you're seeing pricing there, getting a pretty hefty premium to other parts of the basin. So I just wanted to explore that timing. Is that because you don't think that the man there is there right now, or just any more color you could provide on the timing of that expansion?

Michael Stephen Scialla: Just want to ask about the expansion of MVP. Sounds like I heard you right, the timeframe you're thinking there's maybe five years down the road, even though you're seeing pricing, they're getting a pretty hefty premium to other parts of the basin. So just wanted to explore that timing.

Michael Stephen Scialla: Yeah, good morning, everybody. I just want to ask on the expansion of MVP.

Michael Stephen Scialla: Sounds like I heard you right the time frame you're thinking there's maybe five years down the road

Speaker Change: Even though you're seeing pricing, they're getting a pretty hefty premium to other parts of the basin, so just wanted to explore that timing. Is that because you don't think the demand there is

Speaker Change: Is there right now or just any more color you could provide on the timing of that expansion?

Michael Scialla: Yeah, I'm not sure where the five years came from. I think we're excited to pursue that expansion as soon as possible. Actually, I think you know, the only thing that we would do would cause us any delay is just making sure that it was time to come online with that expansion project on Transco to take all the gas. But beyond that, I think we're incentivized to get that built as soon as possible. And again, that, you know, net to EQT, that's a cost of probably $200 to $250 million net to get that built. And I would say that the guidance that we have given out in our slide deck, that longer term guidance today, I just say there's ample cushion built in.

Unknown Executive: Is that because you don't think the demand is there right now? Or is there any more color you could provide on the timing of that expansion? Yeah, I'm not sure where the five years came from.

Speaker Change: Yeah, I'm not sure where the five years came from. I think we're excited to, um...

Unknown Executive: I think we're excited to pursue that expansion as soon as possible. Actually, I think, you know, the only thing that we would that would cause us any delay is just making sure that it was time to come online with that expansion project on Transco to take all the gas. But beyond that, I think we're incentivized to get that built as soon as possible. And again, net to EQT, that's a cost of probably 200 to $250 million to get that built.

Speaker Change: Pursue that expansion as soon as possible, actually. I think, um...

Speaker Change: You know, the only thing that would cause us any delay is just making sure that it was time to come online with that.

Speaker Change: We are incentivized to get that built as soon as possible. And again, you know, net to EQT, that's a cost of probably $200 to $250 million net.

Unknown Executive: And I would say that the guidance that we have given out in our slide deck, that longer-term guidance today, I just say there's an ample cushion built in. So I wouldn't expect that capex number longer term to really change at all, despite the timing that we decide to pursue that expansion project. So that remains something that is high on our priority list to get knocked out. Okay, great. Sorry, I misheard you on that. Have you started the open season there yet?

Speaker Change: Um, to get that built. And I would say that the guidance that we have given out...

Speaker Change: In our slide deck, that longer term guidance today, I just say there's there's ample cushion built in, so I wouldn't expect that capex number longer term to really.

Michael Scialla: So I wouldn't expect that capex number longer term to really change at all, despite the timing that we decide to pursue that expansion project. So that remains something that, you know, high on our priority list to get knocked out. Okay, great.

Speaker Change: change at all, despite the timing that we decide to pursue that expansion project. So that that remains something that, you know, high on our priority list to get knocked out.

Michael Scialla: Sorry, Mr. John. Have you started the open season there yet, or is that still down the road? No, I mean, we just closed two days ago. So it's a little, little quick to do that. But I think it's something that we're going to start exploring quickly. Got you.

Speaker Change: Okay, great. Sorry, I misheard you on that. Have you started open season there yet or is that still down the road?

Unknown Executive: Or is that still down the road? No, I mean, we just closed two days ago, so it's a little quick to do that, but I think it's something that we're going to start exploring quickly. Gotcha. Just wanted to ask about curtailments. Can you say how much you're currently curtailing in that 90 BCF in the second half? Is that all assumed to be in the third quarter? Any more color you can provide there?

Speaker Change: No, I mean, we just closed two days ago. So it's a little quick to do that. But I think it's something that we're going to start exploring quickly.

Michael Scialla: And just wanted to ask on curtailments. Can you say how much you're currently curtailing in that 90 BCF in the second half? Is that all assumed to be in the third quarter? Any more color you can find there? I would look; it's in response to the market. If we can make money selling gas, who wouldn't curtail anything? Obviously, but our assumption right now is that the majority of those curtailments probably take place in September and October. We have curtailed even over the past week some volumes on given days, depending on weather, depending on, you know, maybe it's over a weekend, not up quite to an optimizing value creation and not just giving our product away for price where we can't make money.

Speaker Change: Gotcha, just wanted to ask on curtailments, can you say how much you're currently curtailing in that 90 BCF in the second half, is that all assumed to be in the third quarter, any more color you can provide there?

Jeremy Knop: I would, look, it's in response to the market. If we can make money selling gas, we wouldn't curtail anything, obviously. But our assumption right now is that the majority of those curtailments probably will take place in September and October. We have curtailed, even over the past week, some volumes on given days, depending on weather, depending on, you know, maybe it's over a weekend, not up quite to the one VCF a day level.

Speaker Change: I would

Speaker Change #100: Look, it's in response to the market. If we can make money selling gas, we wouldn't curtail anything, obviously. But our assumption right now is that the majority of those curtailments probably take place in September and October .

Speaker Change #100: We have curtailed, even over the past week, some volumes on given days, depending on weather, depending on, you know, maybe it's over a weekend, not up quite to a one VCF a day level, but we do, on a very dynamic basis, optimize

Speaker Change #100: Realize Pricing to make sure that we're optimizing value creation and not just giving our product away for a price where we can't make money. And that's what we'll continue to do.

Michael Scialla: And that's what we'll continue to do. Makes sense.

Noel Parks: Your next question comes from a line of Noel Parks from Two-E Brothers. Your line is open. Hi, good morning. I just had a couple. I was wondering, you talked a bit about the impact of MVP on regional gas storage, especially in the East. And where do you say we are in really offsetting the effect of seasonality as, you know, a big driver of gas pricing. LNG eventually, as a feed-in, is going to offset that, but just some thoughts on where you think we are at this point. Yeah, I mean, look at winner has always been, and I expect to continue to be the biggest source of demand for natural gas.

Jeremy Knop: But we do, on a very dynamic basis, optimize, and realize pricing to make sure that we're optimizing value creation and not just giving our product away for a price where we can't make money. And that's what we'll continue to do. Makes sense. Thanks, Jeremy. Your next question comes from the line of Noel Parks from Tui Brothers. Your line is open. Hi, good morning. I just had a

Jeremy Knop: Makes sense. Thanks, Jeremy.

Jeremy Knop: Your next question comes from the line of Noel Parks from Tui Brothers. Your line is open.

Noel Augustus Parks: Hi, good morning. Just had a couple. I was wondering, you talked a bit about the impact of MVP on regional gas storage, especially in the east. And

Noel Augustus Parks: I was wondering, you talked a bit about the impact of MVP on regional gas storage, especially in the east. And where do you say we are in really offsetting the effect of seasonality as, you know, a big driver of gas pricing LNG, eventually, as it feeds in, is going to offset that. But just some thoughts on where you think we are at this point.

Noel Augustus Parks: Where do you say we are in really offsetting the effect of seasonality?

Speaker Change #102: as a big driver of gas pricing. LNG, eventually as it feeds in, is going to offset that. But just some thoughts on where you think we are at this point.

Jeremy Knop: Yeah, I mean, look, winter has always been and will continue to be the biggest source of demand for natural gas. I think I'd love to see a world where power generation grows and helps increase that demand in the summertime as well. So you kind of see two peaks in the market. But I think it's probably a little too early to say exactly how quickly that develops.

Winner: Yeah, I mean, look, I... Winner...

Winner: Has always been and I expect to continue to be the biggest source of demand for natural gas I think you know, I'd love to see a world where power generation grows and helps

Noel Parks: I think, you know, I'd love to see a world where power generation grows and helps increase that demand in the summertime as well. So you kind of see two peaks in the market. But I think it's probably a little too early to say exactly how quickly that develops. Now I will say, if you look at our slides from last quarter, what we outlined in power demand growth for natural gas, and the fact that over the past decade you had an increase of about 10 BCF a day just on the power side. And now what's happening with load growth on top of that on top of full retirements.

Winner: increase that demand in the summertime as well so you kind of see two peaks in the market.

Jeremy Knop: Now, I will say if you look at our slides from last quarter, what we outlined for power, demand growth for natural gas, and the fact that, over the past decade, you've had an increase of about 10 BCF a day just on the power side, and now what's happening with load growth on top of that, on top of coal retirements, I do think we are moving that direction in time. But you know, it doesn't mean you're getting away from seasonality, it just means that you have a lot of demand at peak summer and a lot of demand at peak winter. So I just think the nature that's going to evolve a little bit and then LNG sendouts in the middle of that, which also could be somewhat seasonalally driven, will only amplify that seasonality. I got it.

Winner: But I think it's probably a little too early to say exactly how quickly that develops. Now I will say if you look at our slides from last quarter, what we outlined in power demand growth for natural gas.

Winner: And the fact that over the past decade you've had an increase of about 10 BCF a day just on the power side.

Noel Parks: I do think we are moving that direction in time. But, you know, it doesn't mean you're getting away from seasonality. It just means that you have a lot of demand to peak summer and a lot of demand peak winter. So I just think the nature that's going to evolve a little bit, and then LNG send out some of that, which also could be somewhat seasonally driven. I think only amplify that seasonality.

Winner: And now what's happening with load growth on top of that, on top of coal retirements.

Winner: I do think we are moving in that direction in time, but, you know, it doesn't mean you're getting away from seasonality, it just means that you have a lot of demand at peak summer and a lot of demand peak winter.

Winner: So I just think the nature of that's going to evolve a little bit. And then LNG sendouts in the middle of that, which also could be somewhat seasonally driven, I think only amplify that seasonality.

Noel Parks: Got it. And I'm wondering just if you had thoughts on the outlook for industrial demand, both sort of in region and out of region in terms of gas from more than energy security. The resiliency level, just taking a greater role in sort of on a microgrid level as power demand overall keeps increasing. Yeah, I mean, look, I think this theme of reshoring manufacturing. Well, you know, it's going to continue. It seems like they're both sides of the aisle are very supportive of that. I think the sort of decalobalization movement out of Asia for manufacturing will be a tailwind of that.

Jeremy Knop: And wonder just if you had thoughts on the outlook for industrial demand, both sort of in the region and out of the region, in terms of gas, from more of an energy security, you know, resiliency level, just taking a greater role and sort of on a micro grid level, as you know, as power demand overall keeps increasing. Yeah, I mean, look, I think this theme of reshoring manufacturing is going to continue. It seems like both sides of the aisle are very supportive of that.

Speaker Change #104: Got it. And wondered just if you had thoughts on the outlook for industrial demand, both sort of in region and out of region, in terms of

Speaker Change #104: Gas, from more of an energy security, you know, resiliency level, just taking a greater role and sort of on a micro grid level, as you know, as power demand overall keeps increasing.

Speaker Change #106: Yeah, I mean, look, I think the theme of re-shoring manufacturing, um,

Speaker Change #105: Well, you know is going to continue it seems like they're both sides of the aisle are very supportive of that

Jeremy Knop: I think the sort of de-globalization movement out of Asia for manufacturing will be a tailwind for that. I think energy policy and prices in Europe are a tailwind for that. That is something that, you know, is baked into our comments that we made earlier about Appalachian demand growing upwards by the end of the decade, maybe to 40, 41 BCF a day. There is a component of that baked in.

Speaker Change #104: I think the sort of de-globalization movement out of Asia for manufacturing.

Noel Parks: I think energy energy policy and prices in Europe are a tailwind for that. That is something that, you know, is baked into our comments that we made earlier on about Appalachia demand growing upwards by the end of the decade, maybe to 41 BCF a day. There is a component of that baked in, but I would say, you know, the beauty of industrial is it's pretty steady. It's pretty predictable. And if you, I think if you look at recent history, that has been flat, slowly growing. And I think that trend should continue. I wouldn't say there's any sort of big catalyst needle movers that should really skew up a fundamentals model all that much.

Speaker Change #104: We'll be a tailwind of that. I think energy policy and prices in Europe are a tailwind for that.

Speaker Change #104: That is something that is baked into our comments that we made earlier on about Appalachian demand growing.

Jeremy Knop: But I would say, you know, the beauty of industrial production is it's pretty steady, it's pretty predictable. And if you I think if you look at recent history of that, it has been flat and slowly growing, and I think that trend should continue. I wouldn't say there's any sort of big catalyst needle movers that should really skew a fundamentals model all that much. Yeah, I'd say at a very high level, energy and security are going to continue to be a big theme around the world and even in parts of this country.

Speaker Change #104: I wouldn't say there's any sort of big catalyst needle movers that should really skew up a fundamentals model all that much. Yeah, I'd say at a very high level, energy and security is going to continue to be a big theme around the world and even in parts of this country. And the volatility that we see...

Noel Parks: Yeah, I said at a very high level energy and security is going to continue to be a big theme around the world and even in parts of this country. And the volatility that we see is only going to drive consumers of natural gas closer to the source of where that energy is produced. To reduce the number of things in between their manufacturing facility and the source of energy, that's one way they can protect their supply and protect their business. And that just is going to mean that we think this volatility is going to drive more in base and demand for natural gas products.

Jeremy Knop: And the volatility that we see is only going to drive consumers of natural gas closer to the source of where that energy is produced, to reduce the number of things in between their manufacturing facility and the source of energy. That's one way they can protect their supply and protect their business, and that just is going to mean that we think this volatility is going to drive more base and demand for natural gas products.

Speaker Change #104: is only going to drive consumers of natural gas closer to the source of where that energy is produced.

Speaker Change #104: to reduce the number of things in between.

Speaker Change #104: their manufacturing facility and the source of energy. That's one way they can protect their their supply and protect their business. And that just is going to mean that we think this volatility is going to drive more in base and demand for natural gas products.

Noel Parks: Great.

Noel Parks: Thanks for that.

Operator: That concludes our question and answer session.

Speaker Change #107: Great, thanks a lot.

Jeremy Knop: Great, thanks a lot. That concludes our question and answer session. I will now turn the call back over to Toby Rice for closing remarks. Thanks, everybody, for being here today. You know, with this being our five-year anniversary, I just want to reiterate to everybody that all of the progress that we've made at EQT would not have been possible without the shareholders. It was you that voted 80% to put in a new management team here and give us this opportunity to realize the full potential of EQT.

Toby Rice: I will now turn the call back over to Toby Rice for closing remarks. Thanks, everybody, for being here today.

Speaker Change #104: That concludes our question and answer session. I will now turn the call back over to Toby Rice for closing remarks.

Jeremy Knop: It was you all that voted, and brought in a board of directors that has really been amazing at guiding us through this amazing transformation. And with this 99% shareholder vote supporting the transformative transaction with the E-Train assets, you've given us a platform to continue this momentum, and we're really excited about working hard for you going forward.

Toby Rice: You know, with this being our five-year anniversary, I just want to reiterate to everybody that all of the progress that we've made at EQT would not have been possible without the shareholders. It was you that that voted 80% to put in a new management team here and give us this opportunity to realize the full potential of EQT. It was you all that voted a brought in a board of directors that has really been amazing at guiding us through this this amazing transformation and with this 99% shareholder vote supporting transformative transaction with the E Train assets.

Toby Z. Rice: Thanks everybody for being here today. You know, with this being our five-year anniversary, I just want to reiterate to everybody that all of the progress that we've made at EQT would not have been possible without the shareholders.

Toby Z. Rice: It was you that voted 80 percent.

Toby Z. Rice: to put in a new management team here and give us this opportunity to realize the full potential of EQT. It was you all that voted.

Toby Z. Rice: Brought in a board of directors that has really been

Toby Z. Rice: Amazing at guiding us through this amazing transformation and with this 99% shareholder vote supporting transformative transaction with the E-Train assets You've given us a platform to continue this momentum, and we're really excited about working hard for you going forward

Toby Rice: You've given us a platform to continue this momentum, and we're really excited about working hard for you going forward.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change #108: This concludes today's conference call. Thank you for your participation. You may now disconnect.