EQT (NYSE:EQT) management highlighted what it called a “stellar year” in 2025, emphasizing outperformance in production, costs, and free cash flow, along with a faster-than-expected path toward deleveraging. On the company’s fourth-quarter and full-year 2025 results conference call, President and CEO Toby Rice and CFO Jeremy Knop also detailed how Winter Storm Fern showcased EQT’s integrated upstream, midstream, and marketing platform and contributed to near-term cash flow strength.
Operational performance and marketing optimization
Rice said production “consistently topped expectations” throughout 2025, citing compression project outperformance and strong well productivity. He said compression projects executed last year generated 15% more base production uplift than expected and improved well productivity, adding that third-party data showed EQT had the strongest improvement in well performance among major Appalachia operators in 2025.
On costs and efficiency, Rice said operating costs and capital spending beat expectations due to returns on water infrastructure investments, midstream cost optimization, and upstream efficiency gains. He cited fourth-quarter operational records, including the company’s fastest quarterly completion pace and the most lateral footage drilled in 24- and 48-hour periods. Rice said EQT’s average 2025 well cost per lateral foot was 13% lower year over year and 6% below internal forecasts, while per-unit LOE was nearly 15% below expectations and about 50% below the peer average.
2025 and fourth-quarter free cash flow, leverage, and hedging
Rice reported $2.5 billion of free cash flow attributable to EQT in 2025, with NYMEX natural gas averaging about $3.40 per MMBtu. Knop said EQT generated nearly $750 million of free cash flow attributable to EQT in the fourth quarter, about $200 million above consensus expectations. He added that the company has exceeded consensus free cash flow estimates for six consecutive quarters, with an average beat of 40%.
EQT ended 2025 with net debt just under $7.7 billion, which included $425 million of working capital usage during the quarter. Knop said recent gas price strength tied to Winter Storm Fern and EQT’s “opportunistic approach to hedging” could drive “historic results” in the first quarter, including the potential for February free cash flow alone to approach $1 billion. He attributed that to selling about 98% of production at first-of-month pricing for February, with M2 settling at $7.22 per MMBtu and Henry Hub at $7.46 per MMBtu.
Knop said January and February performance already exceeded consensus first-quarter free cash flow expectations by more than 30%, and management expects to exit the first quarter with less than $6 billion of net debt, enhancing flexibility for infrastructure investment, dividend growth, and potential share repurchases.
On hedging, Knop said EQT entered the fourth quarter with minimal hedges to preserve upside optionality into winter. He said the company added collars and captured call option exposure during rallies, including a “company record amount of hedges” in a single day in December. With those additions, EQT is nearly 40% hedged in the first quarter of 2026 with an average floor around $4.30 per MMBtu and an average ceiling around $6.30. For the second and third quarters, the company is about 20% hedged with $3.50 floors and nearly $5 ceilings; and for the fourth quarter about 20% hedged with $3.75 floors and $5.15 ceilings.
Winter Storm Fern and infrastructure constraints
Management repeatedly pointed to Winter Storm Fern as evidence of EQT’s integrated model. Rice said coordination across upstream, midstream, and marketing helped maintain supply during the storm while also capturing peak cash market pricing.
Rice said the Mountain Valley Pipeline (MVP) flowed 6% above its 2 Bcf per day nameplate capacity during the storm, which he said effectively supported 14 gigawatts of power generation across the Southeast—enough to heat more than 10 million homes. Despite MVP flowing full, Rice said cash prices at Transco Station 165 spiked above $130 per MMBtu, which he cited as evidence the system remains structurally constrained and in need of additional pipeline infrastructure and permitting reform.
When asked to quantify the storm’s uplift, Rice said EQT’s normal uptime target is 98% and that uptime during the storm was 97.2%, which he said represented “a two-times factor outperformance” versus Appalachian peers. Knop said the commercial team executed trades including shutting down Gulf capacity and reselling in-basin when prices were $30-$45, and selling into Transco Station 165 at over $130 per MMBtu on certain days. He also highlighted EQT’s 98% nomination level as “probably an all-time high” for the company.
MVP ownership increase and 2026 plan
Rice said EQT elected to exercise its option to purchase additional interests in MVP Mainline and MVP Boost from a Con Edison affiliate. He said the MVP Mainline interest will be purchased by EQT’s midstream joint venture with Blackstone, while EQT will acquire the MVP Boost interest directly. EQT expects to fund about $115 million of the total consideration and, upon close, ownership in MVP Mainline and MVP Boost is expected to increase to about 53%. Rice said EQT estimates the purchase price is roughly 9x adjusted EBITDA and delivers a low-risk 12% IRR inclusive of MVP Boost growth CapEx and expansion, supported by 20-year contracts.
For 2026, management initiated a production forecast of 2.275-2.375 Tcfe, with Rice suggesting operational efficiency and well productivity could create an upside bias. EQT set a maintenance capital budget of $2.07 billion to $2.21 billion, including the full-year impact from the Olympus acquisition. With deleveraging “nearly complete,” management said it plans to allocate the first $600 million of post-dividend free cash flow in 2026 to selective growth projects.
Those 2026 growth investments are expected to include:
- Compression projects
- Water infrastructure connecting legacy systems with the Tug Hill network
- The Clarington Connector pipeline into Ohio
- Strategic leasing
Knop said the Clarington Connector is a 400 MMcf/d pipeline moving gas from Pennsylvania into Ohio, intended to access data center demand and interstate pipeline receipt points. He said EQT expects Ohio dry gas Utica inventory to be largely depleted by the end of the decade, which management believes could support stronger regional pricing and allow EQT to “backfill” supply from its Pennsylvania inventory base.
At recent strip pricing, Rice said EQT expects 2026 adjusted EBITDA attributable to EQT of about $6.5 billion and 2026 free cash flow attributable to EQT of $3.5 billion, including the $600 million in growth investments. He added that free cash flow would exceed $4 billion before those elective investments, and projected cumulative free cash flow attributable to EQT of more than $16 billion over the next five years.
Capital allocation priorities, breakevens, and market outlook
In Q&A, management said leverage reduction remains a priority even as EQT increases infrastructure investment. Rice said the company expects to “bust through” its $5 billion long-term net debt target and continue paying down debt beyond that, while also funding high-return projects. Knop said EQT views maintenance capital as the baseline for breakeven comparisons, with growth projects treated as elective. He pegged breakeven cost structure at around $2.20 on a levered basis for 2026, noting that figure should fall as debt is repaid.
Knop also discussed a tightening U.S. gas market, saying winter-to-date has been 5% colder than normal and tightened inventories by 225 Bcf versus prior expectations, pushing inventories below the five-year average. He forecast storage exiting winter around 1.65 Tcf under normal weather through March and said the 2027 storage situation “looks even tighter” with growing LNG exports. He also pointed to eastern storage levels being 13% below the five-year average and said later-decade basis differentials have strengthened, citing 2029 basis trading at a $0.70 discount to Henry Hub, a $0.50 improvement versus recent years.
On power demand, Knop said natural gas turbine orders have increased meaningfully and that units ordered since 2023, once commissioned, represent about 13 Bcf/d of U.S. demand. He added the company has line of sight to about 45 gigawatts of data center capacity under construction, including 12 gigawatts in EQT’s core operating footprint.
Management also said it is active in LNG-related discussions and characterized international demand as “more real than people realize,” with rising interest from buyers in securing physical Henry Hub-linked molecules. On storage, Knop said the company is studying opportunities—particularly Gulf Coast salt storage—while noting that, from an investor perspective, storage value can be difficult to model and may receive a low multiple.
About EQT (NYSE:EQT)
EQT Corporation (NYSE: EQT) is a U.S.-based energy company focused on the exploration, development and production of natural gas. Headquartered in Pittsburgh, Pennsylvania, the company concentrates its upstream operations in the Appalachian Basin, producing from major shale formations including the Marcellus and Utica. EQT’s primary product is natural gas, with production activities supported by associated liquids and conventional gas assets where applicable.
In addition to drilling and well development, EQT operates and coordinates the infrastructure and commercial activities necessary to bring gas to market.
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