EQT Corporation

Managing Director, Investor Relations and Strategy. Please go ahead.

Good morning and thank you for joining our second quarter 2025 earnings results conference call. With me today are Toby Rice, President and Chief Executive Officer, and Jeremy Knope, Chief Financial Officer. In a moment, Toby and Jeremy will present their prepared remarks with a question and answer session to follow. An updated investor presentation has been posted to the investor relations portion of our website and we will reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. I'd like to remind you that today's call may contain forward-looking statements. Actual results and future events could materially differ from these forward-looking statements because of factors described in yesterday's earnings release, 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 any forward-looking statements. Today's call also contains certain non-GAAP financial measures. Please refer to our most recent earnings release and investor presentation for important disclosures regarding such measures, including reconciliation to the most comparable GAAP financial measures. With that, I'll turn the call over to Toby.

Thanks, Cam, and good morning, everyone. Second quarter results continue to showcase strong momentum at EQT. Production was at the high end of guidance, benefiting from robust well productivity and outperformance from compression projects. Year-to-date, our compression program is ahead of schedule, below budget, and driving production uplift well above expectations, showcasing continued synergy capture from the Equitrans acquisition. Capital spending came in approximately $50 million below the low end of guidance, driven by midstream spending optimization, continued improvements in completion efficiency, and lower well costs. Our teams set a new EQT record for completed footage per day during the quarter, and we believe there is still significant room for additional improvement. This strong performance resulted in approximately $240 million of Q2 free cash flow attributable to EQT, despite $134 million of net expense incurred relating to a litigation settlement that resolves outstanding securities class action litigation. We view this settlement as a positive step forward for EQT as it resolves remaining meaningful legacy liabilities inherited by current management. Without this legal expense, second quarter free cash flow attributable to EQT would have totaled approximately $375 million, materially exceeding expectations. To put into perspective, cumulative free cash flow generation totaled nearly $2 billion over the past three quarters, despite natural gas prices averaging just $3.30 per million BTU over this period, highlighting the differentiated earnings power of EQT's low-cost platform. Shifting gears, we closed on our acquisition of Olympus Energy on July 1st, funding the deal with $475 million of cash on hand, plus the issuance of approximately 25.2 million shares after purchase price adjustments. Recall the assets comprise a vertically integrated, contiguous 90,000 net acre position offsetting EQT's acreage in Southwest Appalachia with 500 million cubic feet per day of net production and over a decade of core Marcellus inventory along with significant upside optionality from the deep Utica. The teams are off to a fast start integrating the assets and we expect to have the bulk of operational integration items complete within the next 30 days. We also see the opportunity to organically bolt on low-cost acreage around the Olympus assets, which could materially expand inventory duration in this area. Turning to strategic growth opportunities, as discussed over the past several quarters, we have cultivated a significant pipeline of low-risk, high-return projects that should drive sustainable growth for our midstream and upstream businesses in the years ahead. Several of these projects recently crossed significant milestones, thus de-risking the path to value creation. First, we are concluding the open season of our MVP Boost project, which is set to add 180,000 horsepower of compression to the MVP mainline and increase capacity from 2 to 2.5 BCF per day. This project will provide additional takeaway from Appalachia into Virginia to serve the southeast markets unleashing reliable, low-cost, low-emissions natural gas into a region that is seeing significant demand growth. As a result of strong project momentum, we have elected to jumpstart long lead time orders this year in order to de-risk the MVP Boost construction timeline. We are also continuing to advance the MVP Southgate project and expect to receive the FERC environmental assessment in October of this year. MVP Southgate will provide 550 million cubic feet per day of capacity from MVP Mainline into the Carolinas serving anchor customers Duke Energy and the Public Service Company of North Carolina. This project will significantly enhance the reliability of natural gas delivery into this key growth market, reducing energy costs for consumers and support the replacement of coal. MVP Southgate and MVP Boost are projected to begin service in 2028 and in 2029 respectively, following the anticipated commencement of the Transco Southeast supply expansion. Additionally, we are working to finalize our 20-year definitive agreement with the Frontier Group of Companies to provide long-term natural gas supply for the Shipping Port Industrial Park project northwest of Pittsburgh. The project will convert a retired coal power plant into a large-scale, 3.6 gigawatt natural gas power generation facility with peak natural gas consumption of approximately 800 million cubic feet per day. The project has secured a partner to build a co-located data center facility to support AI infrastructure and contemplate several phases of development beginning in 2027 and ramping through 2028, providing significant upstream growth optionality for EQT to meet increasing demand. We are also working to finalize our 20-year definitive agreement with Homer City Redevelopment to build midstream pipeline infrastructure and be the project's exclusive supplier of natural gas. Once completed, Homer City will be the largest natural gas power plant ever built in North America with an existing grid interconnection for added reliability to support AI data center loads across its 3,200-acre campus. The facility will consist of seven new gas turbines powered by 665 million cubic feet per day of EQT's low emissions natural gas. We plan to leverage our newly acquired Olympus assets to supply the facility as it ramps up before reaching peak capacity in late 2028. Additionally, we signed an agreement to build midstream infrastructure serving a new 610 megawatt combined cycle natural gas power plant in West Virginia. with gas demand of approximately 100 million cubic feet per day that will serve the PJM market. This project is poised to be the state's first large-scale gas-fired power plant and is being developed by a global investment-grade power company in partnership with a marquee private equity sponsor. In-service for the project is expected in 2028, and the commercial structure includes a 10-year term with recontracting optionality. We also secured a new gathering contract with a large private producer to expand capacity on our Saturn pipeline system in West Virginia. This project is expected to be in service in 2027 with a 10 year initial term and is backed by attractive minimum volume commitments. This opportunity highlights success with our strategic initiative to grow Equitrans' third party business which further lowers EQT's free cash flow breakeven by driving stable fee-based revenue growth. Collectively, these projects represent a pipeline of nearly $1 billion of organic investment opportunity with premium low-risk supply agreements, which we estimate will generate an aggregate free cash flow yield of approximately 25% once fully online. This is particularly noteworthy given the relatively low-risk annuity-like cash flow streams from the infrastructure components of these projects, which are underpinned by the deepest, highest quality natural gas resource in the United States. Further, this free cash flow yield is prior to any potential benefits from local basis improvement and the upstream growth optionality created by these projects. The shipping port and Homer City facilities The West Virginia Power Plant, the increase in MVP utilization plus the MVP boost expansion represent new Appalachian gas demand of nearly three BCF per day. This demand will be served in large part by EQT volumes flowing predominantly through EQT infrastructure, underscoring the differentiated growth opportunity for EQT. Through our integrated platform, we are demonstrating what responsible, sustainable growth looks like for oil and gas companies. This means partnering with end users to enable new demand, then meeting that demand with supply backed by firm contracts rather than simply chasing commodity price signals. This tremendous opportunity is unique to EQT. Enabled by the past five years of strategic work transforming our business and highlights what is possible when you have the combination of a low-cost structure, scale integrated high quality infrastructure, a multi-decade core inventory and investment grade credit ratings. As we highlighted last quarter, the next leg of our corporate strategy is built on the dual pillars of reducing cash flow risk and creating pathways for sustainable cash flow growth. And these projects represent a tangible step forward in executing that strategy. I also want to give a special thank you to our leadership in the state of Pennsylvania. Senator McCormick and Governor Shapiro, as well as the administration in Washington, for taking bold steps to unlock the vast economic potential of the region and shining a spotlight on the massive opportunity for technology and AI to prosper in the Pittsburgh area. As we have demonstrated, EQT is ready to do its part and deliver affordable, reliable, and low-carbon energy to power this growth. And with that, I'll now turn the call over to Jeremy.