Tags: EQT | gas | energy | stock

EQT Poised to Be Top Energy Stock

By    |   Monday, 24 Oct 2011 11:50 AM

 The EQT Corporation (EQT) covers the natural gas market, from drilling wells to providing gas to retail customers. The company has put together a low cost structure, an advanced technology drilling program, and it appears to be on the verge of a serious increase in natural gas production. The EQT one-year stock chart is one of the few you may run across in the current market environment which has a positive slope for the full year.

EQT has natural gas exploration and production operations in Pennsylvania, West Virginia and eastern Kentucky. The larger portion of gas production is taking place in the productive Marcellus shale region.

The company's midstream segment provides gas pipeline gathering and transport services in the same areas where the company has well operations. Finally, the Equitable Gas subsidiary provides retail natural gas to about 300,000 residential and commercial customers. Natural gas production accounts for about half of operating income, midstream operations bring in 33 percent and the balance is from the retail distribution segment.

For the second quarter of 2007, EQT reported operating cash flow of $188 million, up 66 percent from a year earlier. Net income was 58 cents per share, up from 20 cents. Of those earnings, 7 cents per share was due to one-time items in the quarter. On the gas production front, sales volume increased 43 percent year-over-year and the midstream increased gathered volumes by 32 percent.

Rapid growth

EQT has undertaken an aggressive drilling and production program in the Marcellus shale. The 40 percent-plus production growth is expected to extend to the end of 2011 and beyond.

At the same time, the company has kept production costs under control. EQT's $1.02 per 1,000 cubic feet (MCF) of gas production expenses is a third lower than the industry average. The company is pioneering new horizontal drilling techniques to provide more exposure and production from each well drilled. Midstream gathering and transmission costs are also declining, dropping by 33 percent in the second quarter.

Recently, the analysts at Barclays Capital reiterated their overweight rating on EQT and increased their target price by $19 per share. Robert W. Baird analysts have upgraded the stock to outperform from neutral.

The company reports next on Oct. 27.

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The EQT Corporation (EQT) covers the natural gas market, from drilling wells to providing gas to retail customers. The company has put together a low cost structure, an advanced technology drilling program, and it appears to be on the verge of a serious increase in natural...
EQT,gas,energy,stock
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2011-50-24
Monday, 24 Oct 2011 11:50 AM
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