EQT Corp

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The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT" are to EQT Corporation and all references in this report to the "Company," "we," "us," or "our" are to EQT Corporation and its consolidated subsidiaries, collectively. For certain industry specific terms used in this Quarterly Report on Form 10-Q, please see "Glossary of Commonly Used Terms, Abbreviations and Measurements" in EQT's Annual Report on Form 10-K for the year ended December 31, 2025.

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CAUTIONARY STATEMENTS

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This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section "Trends and Uncertainties" in Item 2., "Management's Discussion and Analysis of Financial Condition and Results of Operations," and expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop our reserves; drilling plans and programs, including availability of capital to complete these plans and programs; total resource potential and drilling inventory duration; projected production and sales volume, including natural gas liquids (NGLs) and liquefied natural gas (LNG) volumes and sales; the projected volume and timing of LNG offtake and tolling commitments subject to final investment decisions; potential curtailments and the anticipated volume and duration thereof; natural gas prices; changes in basis and the impact of commodity prices on our business; potential future impairments of our assets; projected well costs and capital expenditures; infrastructure projects; the cost, capacity and timing of obtaining regulatory approvals; our ability to successfully implement and execute our operational and organizational initiatives, and achieve the anticipated results of such initiatives; projected gathering and compression rates; potential acquisitions or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions or from any recently completed strategic transactions, including the Company's acquisition of all of the operating subsidiaries of Blackline Midstream, LLC; the amount and timing of any repayments, redemptions or repurchases of EQT common stock, outstanding debt securities or other debt instruments; our ability to retire our debt and the timing of such retirements, if any; the projected amount and timing of dividends; projected cash flows and free cash flow, and the timing thereof; liquidity and financing requirements, including funding sources and availability; our ability to maintain or improve our credit ratings, leverage levels and financial profile; our hedging strategy and projected margin posting obligations; the effects of litigation, government regulation and tax position; and the expect…

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The forward-looking statements included in this Quarterly Report on Form 10-Q are subject to risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by us. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. These risks and uncertainties include, but are not limited to, volatility of commodity prices; the costs and results of drilling and operations; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and other resources among our strategic opportunities; access to and cost of capital; our hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, NGLs and oil; operational risks and hazards incidental to the gathering, transmission and storage of natural gas as well as unforeseen interruptions; cyber security risks and acts of sabotage; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and sand and water required to execute our exploration and development plans, including as a result of inflationary pressures or tariffs; risks associated with operating primarily in the Appalachian Basin; the ability to obtain environmental and other permits and the timing thereof; construction, business, economic, competitive, regulatory, judicial, environmental, political and legal uncertainties related to the development and construction by us or our joint ventures of pipeline and storage facilities and transmission assets and the optimization of such assets; our ability to renew or replace expiring gathering, transmission or storage contracts at favorable rates on a long-term basis or at all; risks relating to our joint venture arrangements; government regulation or action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; and disruptions to our business due to recently completed divestitures, acquisitions and other significant strategic transactions. These and other risks and uncertainties are described under the "Risk Factors" section and elsewhere in EQT's An…

Excerpt shortened here; the source contains the full paragraph.

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Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

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Recent and Significant Events

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Blackline Midstream Acquisition

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On July 21, 2026, we completed our acquisition (the Blackline Midstream Acquisition) of all of the operating subsidiaries of Blackline Midstream, LLC, an owner and operator of liquefied propane gas storage, distribution and marine terminal facilities and associated assets on the Piscataqua River in Newington, New Hampshire and Providence, Rhode Island. The purchase price for the Blackline Midstream Acquisition was approximately $77 million, subject to customary post-closing purchase price adjustments. We funded the consideration with borrowings under EQT's revolving credit facility.

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MVP A and MVP C Interest Acquisitions

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On March 30, 2026, we completed our acquisitions (the MVP A and MVP C Interest Acquisitions) of an approximately 3.94% interest in each of MVP A and MVP C (each defined in Note 8 to the Condensed Consolidated Financial Statements) from an affiliate of Con Edison Gas Pipeline and Storage, LLC pursuant to a preferential buy-out right under the MVP LLC Agreement (defined in Note 8 to the Condensed Consolidated Financial Statements). Total consideration for our acquisition of equity interests in MVP A (MVP A Interest Acquisition), excluding transaction costs, was $198.3 million, of which $98.4 million was funded by the BXCI Affiliate (defined in Note 9 to the Condensed Consolidated Financial Statements). Total consideration for our acquisition of equity interests in MVP C was $15.6 million. We funded our share of the consideration for the MVP A and MVP C Interest Acquisitions with cash on hand.

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Olympus Energy Acquisition

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Our financial results for 2026 reflect our operation of the assets acquired in our acquisition (the Olympus Energy Acquisition) of certain oil and gas properties and related upstream and midstream assets from Olympus Energy LLC, Hyperion Midstream LLC and Bow & Arrow Land Company LLC, which was completed on July 1, 2025.

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Trends and Uncertainties

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Commodity prices were volatile in the first half of 2026 and we expect commodity prices to continue to be volatile for the remainder of 2026 due to macroeconomic uncertainty, changes to the regulatory environment and geopolitical instability and tensions, including in the Middle East, Venezuela, Russia and Ukraine, and potential further imposition of domestic and foreign tariffs. Our revenue, profitability, liquidity and financial position will continue to be impacted in the future by the market prices for natural gas and, to a lesser extent, NGLs and oil.

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In response to natural gas price volatility and to optimize in-basin pricing, we implement strategic curtailments from time to time. Strategic curtailments during the second quarter of 2026 were below our previously disclosed guidance and were not significant to our results. Low natural gas prices or volatility in the natural gas market may result in further adjustments to our 2026 planned development schedule and/or adjustments to the development schedule of non-operated wells in which we have a working interest. We cannot control or otherwise influence the development schedule of non-operated wells in which we have a working interest. Adjustments to our 2026 planned development schedule or the development schedule of non-operated wells in which we have a working interest, including due to declines in natural gas prices, the pace of well completions, access to sand and water to conduct drilling operations, access to sufficient pipeline takeaway capacity, unscheduled downtime at processing facilities or otherwise, could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

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On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. We expect the enactment of the OBBBA to favorably impact our future projected cash income tax obligations by deferring the payment of a significant portion of current federal income taxes.

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President Trump has also executed several executive orders, some of which impact the oil and gas industry, and he and others in Congress have indicated the potential for further changes to regulations, many of which could impact the oil and gas industry, as well as the implementation of tariffs on foreign goods and services. It is uncertain to what extent such changes in regulations and tariffs will impact our business. Tariffs on foreign goods and services could result in other countries instituting tariffs on U.S. goods and services, which could impact the demand for and price of natural gas, increase the price of supplies and raw materials that we rely on to conduct our business, and impact interest rates. A changing regulatory environment and domestic or foreign tariffs could ultimately impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

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Consolidated Results of Operations

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Net income attributable to EQT Corporation for the three months ended June 30, 2026 was approximately $211 million, $0.34 per diluted share, compared to approximately $784 million, $1.30 per diluted share, for the same period in 2025. The decrease was driven primarily by lower derivative gains and lower average realized natural gas prices, partly offset by lower income tax expense and lower legal reserves.

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Net income attributable to EQT Corporation for the six months ended June 30, 2026 was approximately $1,699 million, $2.70 per diluted share, compared to approximately $1,026 million, $1.70 per diluted share, for the same period in 2025. The increase was driven primarily by higher natural gas sales, lower legal reserves and lower interest expense, partly offset by a loss on derivatives in 2026 compared to a gain in 2025, higher income tax expense and higher depreciation expense.

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See "Average Realized Price Reconciliation" for a discussion and calculation of our average realized price, which is based on our Upstream segment's adjusted operating revenues (Upstream adjusted operating revenues), a non-GAAP supplemental financial measure that has been reconciled to total Upstream operating revenues in "Non-GAAP Financial Measures Reconciliation." See "Business Segment Results of Operations" for a discussion of segment operating revenues and expenses and "Other Income Statement Items" for a discussion of other income statement items. See "Investing Activities" under "Capital Resources and Liquidity" for a discussion of capital expenditures, including by business segment.

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Average Realized Price Reconciliation

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The following table presents detailed natural gas and liquids operational information to assist in the understanding of our consolidated operations, including the calculation of our average realized price ($/Mcfe), which is based on Upstream adjusted operating revenues, a non-GAAP supplemental financial measure. Upstream adjusted operating revenues is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Upstream adjusted operating revenues should not be considered as an alternative to total Upstream operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of Upstream adjusted operating revenues to total Upstream operating revenues, the most directly comparable financial measure calculated in accordance with United States generally accepted accounting principles (GAAP).

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(a)Basis represents the difference between the ultimate sales price for natural gas, including the effects of delivered price benefit or deficit associated with our firm transportation agreements, and the New York Mercantile Exchange (NYMEX) natural gas price.

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(b)NGLs, ethane and oil were converted to thousand cubic feet of natural gas equivalents (Mcfe) at a rate of six Mcfe per barrel.

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(c)Also referred to in this report as Upstream adjusted operating revenues, a non-GAAP supplemental financial measure.

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Non-GAAP Financial Measures Reconciliation

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The table below reconciles Upstream adjusted operating revenues, a non-GAAP supplemental financial measure, to total Upstream operating revenues, the most comparable financial measure calculated in accordance with GAAP. See Note 2 to the Condensed Consolidated Financial Statements for a reconciliation of total Upstream operating revenues to EQT Corporation operating revenues as reported in the Statements of Condensed Consolidated Operations.

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Upstream adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Upstream adjusted operating revenues is defined as total Upstream operating revenues, less the revenue impact of changes in the fair value of derivative instruments prior to settlement and Upstream other revenues. We believe that Upstream adjusted operating revenues provides useful information to investors regarding our financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods. Upstream adjusted operating revenues reflects only the impact of settled derivative contracts; thus, the measure excludes the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement. The measure also excludes Upstream other revenues, which consists of costs of, and recoveries on, pipeline capacity releases and other revenues.

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(a)Net cash settlements received (paid) on derivatives are included in average realized price but may not be included in operating revenues. For the three months ended June 30, 2026, net cash settlements received on derivatives consisted of net cash settlements received on NYMEX natural gas hedge positions of approximately $76 million and net cash settlements paid on basis and liquids hedge positions of approximately $3 million. For the three months ended June 30, 2025, net cash settlements paid on derivatives consisted of net cash settlements paid on NYMEX natural gas hedge positions of approximately $102 million and net cash settlements received on basis and liquids hedge positions of approximately $1 million.

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For the six months ended June 30, 2026, net cash settlements paid on derivatives consisted of net cash settlements paid on NYMEX natural gas hedge positions of approximately $38 million and net cash settlements paid on basis and liquids hedge positions of approximately $193 million. For the six months ended June 30, 2025, net cash settlements paid on derivatives consisted of net cash settlements paid on NYMEX natural gas hedge positions of approximately $145 million and net cash settlements paid on basis and liquids hedge positions of approximately $48 million.

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Business Segment Results of Operations

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We have three reportable segments consisting of Upstream, Gathering and Transmission.

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Effective December 31, 2025, we renamed our previously reported "Production" segment as the "Upstream" segment to better align with the nature of our operations and our internal reporting framework. This change had no impact on the structure of our internal organization, including the composition of our reportable segments.

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The following sections present operating income and key operational measures by reportable segments. We believe this information provides useful information to investors regarding our financial condition, results of operations and trends and uncertainties. See Note 2 to the Condensed Consolidated Financial Statements for financial information by business segment.

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Items that are managed on a consolidated basis, including cash and cash equivalents, debt, income taxes and amounts related to our corporate function, and items related to our energy transition initiatives have not been allocated to our reportable segments. These items are discussed under "Other Income Statement Items."

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Upstream Results of Operations

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(a)Transportation and processing to affiliate represents intercompany transactions with our Gathering and Transmission segments, which are eliminated in consolidation.

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Sales of Natural Gas, NGLs and Oil. Sales of natural gas, NGLs and oil decreased by approximately $90 million for the three months ended June 30, 2026 compared to the same period in 2025, reflecting a decrease of approximately $288 million from lower average sales price, partly offset by approximately $198 million from increased sales volumes.

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Average sales price decreased for the three months ended June 30, 2026 compared to the same period for 2025 due primarily to a lower NYMEX price, partly offset by a favorable basis differential and higher liquids prices. Sales volume increased for the three months ended June 30, 2026 compared to the same period for 2025 due primarily to a 48 billion cubic feet equivalent (Bcfe) increase from the assets acquired in the Olympus Energy Acquisition, increases from wells turned-in-line since the second quarter of 2025 and increases from well performance optimization.