On Wednesday, August 14, 2019, EQT’s new CEO Toby Rice held a landowner town hall at the EQT Rec Center in Greene County. EQT holds 2/3 of the leases in Greene County – a total of approximately 220,000 acres. This was followed with a meeting at Bentworth High School’s gymnasium in Washington County on Tuesday, August 20, 2019. EQT has “significant” holdings in Washington County, but did not provide acreage details.
Toby Rice took over as CEO of EQT in July after shareholders voted to oust the management team. In August he held a series of town halls to communicate EQT’s values and mission moving forward. EQT’s new mission: “Transform EQT into a modern, digitally enabled energy producer focused on lowering well costs to maximize free cash flow per share.” Toby also explained that he and his brother, Derek Rice, bring four key values to EQT: trust, heart, teamwork and evolution. He repeated EQT’s vision to be a “modern, connected, digitally enabled” organization.
What’s EQT’s new strategy for making money despite low gas prices? Lower the cost to drill wells. EQT is overhauling how it spends money and implementing what it calls “big combo drilling.” Big combo drilling is large-scale, sequential, highly choreographed drilling and hydraulic fracturing. Combo drilling consists of multiple wells drilled from multiple nearby pads simultaneously. According to EQT, big combo drilling will result in faster drilling and fewer returns to pads. Rather than drilling one well, leaving and then later returning to drill subsequent wells on the same pad, EQT will now develop well pads in two phases – drilling wells to the north and returning to drill wells to the south. EQT hopes to coordinate its drilling operations to develop 4 nearby well pads simultaneously. We suggest that residents living near operations ask questions about how EQT will mitigate increased levels of air pollutants being emitted at higher levels at one time with the concentration of drilling and fracking operations.
With this change in operations, Toby claims there will be fewer disruptions to the community and landowners, particularly in terms of royalties. When an additional well is drilled on a pad, the existing wells are shut off temporarily, meaning that checks may or may not be sent. We could see royalty payments that are larger because of the volume of gas being extracted at once, but that might mean their duration is shorter. As these changes in operation come into effect, it will be important to pay close attention to the details of your lease to know how payments are being handled.
One popular question arose at the Washington County meeting: whether EQT has plans to drill to the Utica shale. In response, Toby responded, “In West Greene, we’re in the Utica. We’re categorizing that now as experimental.” This is another question EQT needs to solve in the next year: gas may be present in the Utica, but it may be too expensive to develop economically; especially, as Toby said, “with this commodities market.”
EQT is also committing to invest in the areas impacted by their extraction activities, a commitment echoed at both the Greene and Washington County meetings. While much of the EQT Foundation’s charitable giving has been in Pittsburgh, moving forward the EQT Foundation will follow the drilling operations and focus their charitable giving in the areas that EQT operates.
Finally, EQT has renewed its commitment to resolving landowner issues. Landowners may contact EQT’s Landowner Relations by phone or e-mail:
Of course, all of these commitments were made verbally at the #ConnEQTing to Landowners events. While EQT did a great job of talking about stakeholders at this event, their first obligation as a corporation will always be to their shareholders. If you are dealing with EQT moving forward - for a pad, a pipeline, etc - make sure that you get any and all commitments made in writing. If you need support in understanding your rights or in dealing with any operator, do not hesitate to reach out to CCJ at email@example.com or 724-229-3550.