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EQT’s Revenue Fell the Most in 2Q16: Why?

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Revenue growth: EQT, NBL, COG, and AR

EQT (EQT) and Cabot Oil and Gas (COG) recorded lower 2Q16 revenues compared to 2Q15. On the other hand, Noble Energy (NBL) and Antero Resources (AR) saw revenue growth from 2Q15 to 2Q16.

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Antero Resources and Noble Energy reported increased revenue

Antero Resources (AR) reported year-over-year revenue growth of ~27% in 2Q16. The increase in revenues was primarily due to its favorable hedges and its higher production volumes.

AR’s net daily production increased 19% year-over-year. Its total liquids production in 2Q16 indicates an organic production growth rate of 63% compared to 2Q15. AR’s liquids production contributed 33% of its total revenues before hedges in 2Q16 versus 25% in 2Q15.

AR’s peer Noble Energy also reported a year-over-growth of 5%. This growth was likely the result of its year-over-year growth in production in 2Q16 and higher realized energy prices. We’ll talk about this in detail in the next part of this series.

On the other hand, Cabot Oil and Gas’s revenues fell by ~7%, in 2Q16 versus 2Q15. The lower revenue was likely the result of lower realized energy prices.

EQT’s revenues fell the most

EQT’s revenues fell the most, by ~71% between 2Q15 and 2Q16. Again, lower realized prices could be the key reason behind the revenue drop. For more information about EQT’s 2Q16 performance, please read Why EQT’s Stock Fell after 2Q16 Earnings.

Note that all of the above companies were hedged in 2015 and are hedged in 2016 as well. Many other upstream companies are also hedged in 2016 to protect their cash flows. These companies include Chesapeake Energy (CHK) and Newfield Exploration (NFX).

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