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EQT’s Production Mix and Realized Prices

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EQT’s production mix

As you can see in the graph below, for 3Q15, EQT’s (EQT) production mix was ~90% natural gas, ~9% natural gas liquids, and only ~1% crude oil. This means that EQT is mainly a natural gas producer. Its total liquids production comes at only ~10%. Typically, upstream companies with more liquids production have better operating margins.

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EQT’s production mix trend

In 3Q15, EQT’s natural gas percentage in its production mix decreased by ~0.3% when compared to 3Q14.

Since 1Q11, EQT’s natural gas percentage in its production mix oscillated between ~89.5% and ~93%. EQT’s natural gas percentage in its production mix averaged around ~91% during the same period.

EQT’s realized prices

Including the effect of hedges, EQT’s average realized natural gas price in 3Q15 was $2.83 per Mcf (thousand cubic feet), down ~26% from $3.83 per Mcf in 3Q14.

For 3Q15, EQT’s average realized price for natural gas liquids production decreased ~81% to $8.10 per barrel compared to $42.27 per barrel for the same period in 2014.

For 3Q15, EQT’s average realized price for crude oil production decreased ~55% to $39.13 per barrel compared to $87.91 per barrel for the same period in 2014.

EQT’s natural gas realized prices benefited from its gains on commodity hedges. We’ll look at EQT’s hedges in the next part.

Oil and gas producers

Other upstream companies from the SPDR S&P 500 ETF (SPY) that have higher natural gas percentages in their production mix are Southwestern Energy (SWN), Consol Energy (CNX), and Range Resources (RRC). These companies have ~92%, ~86%, and ~73% natural gas, respectively, in their production mix.

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