A&D - Diversified closes buys totaling $235MM from EQT & Carbon - June 2020Diversified Gas & Oil completed acquisitions in late May of conventional Appalachian assets from EQT Corp. and Carbon Energy. The two deals boosted Birmingham, Alabama based Diversified’s net production by 20%, or 109 MMcfe/d, over its 2019 average. It will also increase its 12-month EBITDA starting June 1 by an estimated $61-65 million. In a deal announced May 12 and completed May 26, Diversified picked up conventional gas assets in West Virginia and Pennsylvania from Marcellus and...
Jun 12, 2020
A&D - Diversified expands Appalachia, this time in $125MM EQT deal - May 2020Diversified Gas & Oil announced on May 11 the acquisition of conventional gas assets in West Virginia and Pennsylvania from EQT Corp. for $125 million. The deal also includes up to $20 million in contingent payments over three years based on certain pricing targets. The agreement follows London-listed Diversified’s $110 million purchase on April 8 of Appalachian and Illinois Basin assets from Denver-based Carbon Energy. Through both acquisitions, Diversified will boost its net 2019...
May 22, 2020
CM - Prices plunge, and then along comes earnings… - May 2020First-quarter earnings have been mostly painful with the writedowns of billions in impaired oil and gas assets. Exxon Mobil Corp. incurred its first quarterly loss in 32 years (PG.1), ConocoPhillips reported a $1.7 billion loss (PG.12), Hess Corp. a $2.4 billion loss (PG.12), Diamondback Energy Inc. lost $272 million (PG.14) and Concho Resources Inc. has reported quarterly losses in five out of the last 10 quarters but never even close to the almost $9.3 billion (PG.13) it lost in Q1. Reliable...
May 15, 2020
CM - Oil in the time of coronavirus - April 2020US oil production has been holding at near record highs even as demand for gasoline falls, but it’s coming under pressure to tap the breaks on pumping out high volumes that are helping to bring prices down to historic lows and pushing cash-strapped companies to bankruptcy. Whiting Petroleum (PG.1) is the first high-profile shale producer to file a petition in what analysts believe may be a new parade of Chapter 11 filings. Oil executives themselves have asked the Texas Railroad Commission to...
Apr 03, 2020
A&D - EQT eyes divestments as debt reduction takes center stage - March 2020EQT Corp. confirmed in its 2019 earnings presentation Feb. 27 that it is seeking to monetize some Appalachian Basin assets by mid-2020 as part of a plan to reduce its $5.2 billion debt by 30%. The company is marketing mineral assets covering 50,000 core fee acres with average 8/8ths NRI of 83% in Pennsylvania and 85% in West Virginia. It also aims to divest unspecified upstream properties producing 600 MMcfe/d as of Jan. 31, representing 15% of the company’s overall volumes, with expected 2020...
Mar 19, 2020
A&D - Equitrans Midstream moving to C-Corp for $4.7B - March 2020Equitrans Midstream will complete its transformation from a master limited partnership to a C-Corp in a set of transactions totaling $4.69 billion. EQT Corp., which spun off the assets that became Equitrans, also signed a new 15- year gathering agreement in Pennsylvania and West Virginia and a separate deal guaranteeing volumes on the $5.3-5.5 billion Mountain Valley pipeline. Equitrans intends to buy the entire 40.1% public stake in EQM Midstream Partners LP for $1.88 billion in...
Mar 19, 2020
A&D - Analyst Notes - March 19, 2020Continental Resources (CLR; $17.46-Feb. 27; Buy; PT-$30) CLR’s 2020 plan came out flat given low forecasted growth w/moderate FCF at current levels after a solid 4Q19/2019. We believe given the operational acumen, solid assets & numerous monetization opportunities, CLR’s initial 2020 guidance could be considered conservative as with initial 2019 guidance. Further, a 2020 transition should set up for a notable 2021. We see near-term catalysts including upside from Springboard 2 &...
Mar 19, 2020
CM - Oil markets rocked, prices roll, prompting firms to recalibrate
- March 2020The oil, stock and capital markets are reacting to a price war launched by Saudi Arabia against Russia after the collapse of their three-year OPEC+ collaboration, which attempted to balance the markets. Though not a cartel member, Russia had considerable sway over OPEC policy, and the two parties failed to agree on more production cuts at a meeting last Friday in response to falling demand stemming from the worldwide coronavirus outbreak, which had already depressed prices. Russia’s belief that...
Mar 13, 2020
CM - Equitrans coming out from MLP as C-Corp. with an EQM fold-in - March 2020Equitrans Midstream is transforming into a C-Corp from a master limited partnership through a series of transactions valued at $4.69 billion. Currently a 20% owned unit of EQT Corp., it will buy back 25.3 million of its units for $53 million from EQT for cash and $196 million in rate relief on the companies’ gathering contracts, cutting EQT’s stake to 6%. In the bigger part of the transformation, Equitrans will take fellow EQT affiliate EQM Midstream Partners private—buying up the...
Mar 13, 2020
MI - Equitrans moves to C-Corp for $4.7B, secures EQT volumes - March 2020Equitrans Midstream will complete its transformation from master limited partnership to C-Corp in a set of transactions valued in total at $4.69 billion. It also secured a new 15-year gathering agreement in Pennsylvania and West Virginia with former parent company EQT Corp. and a separate deal guaranteeing volumes on the $5.3-5.5 billion Mountain Valley pipeline. Equitrans intends to buy the entire 40.1% public stake in EQM Midstream Partners LP for $1.88 billion in equity, offering...
Mar 05, 2020
A&D - EQT reportedly plans to sell ORRI for up to $1B, among other sales - February 2020Appalachian gas producer EQT Corp. aims to sell some of its royalty interests for up to $1 billion, sources told Reuters in a Jan. 31 report. The company is reportedly in talks to find an investor to purchase a 1% ORRI in the net revenue generated from EQT’s production. The sale would be part of the company’s plans to reduce its $5.2 billion debt by ~30%, or $1.5 billion, by mid-2020 through asset sales and increased cash flow, according to a Jan. 13 regulatory filing. Besides the...
Feb 06, 2020
A&D - Analyst Notes - February 6, 2020EQT Corp. (EQT; $8.24-Jan. 17; Overweight; PT-$12.50) Given weak natural gas fundamentals, we anticipate an acute focus on the company’s deleveraging program and incremental progress to simplify its services contracts with key midstream partners. To that end, we understand negotiations with Equitrans (ETRN) on a “win-win” adjustment to its services contract (i.e., lower market based gathering fees in exchange for higher MVCs/contract duration) are at an advanced stage, with a potential...
Feb 06, 2020
CM - EQT sells $1.75B in bonds for redemptions, plans debt reduction - January 2020EQT Corp. priced $1 billion aggregate principal amount of 6.125% senior notes due 2025 and $750 million aggregate principal amount of its 7% senior notes due 2030 at 100 in a public offering that closed Jan. 21. The sales of the 2025 and 2030 bonds are the company’s first trips to the debt market since last summer’s heated proxy fight that toppled the former leadership in favor of new CEO Toby Rice and his management team and its first new offerings since September 2017. EQT expects to...
Jan 31, 2020
PS - People & Companies - January 6, 2020Baytex Energy announced that Mark Bly has been appointed chairman. Bly joined the board in 2017 and last March was appointed lead independent director and chair of the human resources and compensation committee. Bly is an independent businessman with over 35 years of experience in the oil and gas industry, primarily with BP. Chaparral Energy announced that its board has appointed Charles “Chuck” Duginski as president and CEO. Duginski succeeds K. Earl Reynolds in those roles as...
Jan 06, 2020
CM - Midstream Briefs - January 10, 2020Diamond S Shipping signed a five-year, $525 million credit facility comprising a $375 million term loan and a $150 million revolver. Proceeds from the new credit facility were used to repay $501 million of the company’s current outstanding term loans. The new credit facility is payable at LIBOR plus 250 bps. The syndicate included Nordea Bank, Crédit Agricole, Skandinaviska Enskilda, ABN AMRO, National Australia Bank and BNP Paribas. EQM Midstream Partners expects to spend $500-700...
Jan 10, 2020