Sliding prices aren’t good for largest gas driller in US

Even with colder weather in the forecast, natural gas traders weren’t impressed this week as futures prices dropped even more in trading. And it’s not good news for the country’s largest gas driller.

The February Nymex contract finished at $2.182, which was off 2 cents while March slid a penny to $2.158. Trading had been as high as $2.226/MMBtu and as low as $2.163.

It’s why Pittsburgh-based EQT, the largest natural gas driller in the U.S. announced a massive write-down of its assets. The company made a filing with the Securities and Exchange Commission and took a $1.8 billion impairment for the fourth quarter.

The write down comes as a result of the “changes to our development strategy and renewed focus on a refined core operating footprint,” stated EQT.  That’s a fancy way of explaining that the company assets aren’t worth what they once were.

EQT also slashed spending for 2020 to between $1.25 and $1.35 billion, down by another $50 million compared to the guidance the company provided in the third quarter of last year.

EQT is not only a giant in the Marcellus shale where Oklahoma City’s Chesapeake Energy once reigned as king of gas, but is the largest gas producer in the country. It acquired Rice Energy in 2017 but posted some disappointing financial figures in the past few years too.

Even under new leadership in the past year, the company’s financial problems have continued.


EQT itself admits that it can’t succeed in this environment. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice said in December “A lot of this development doesn’t work as well at $2.50 gas.”

EQT hopes to cut $1.5 billion in debt by selling assets and boosting cash flow. However, the cash flow part will be hard to pull off with prices stuck in the doldrums.