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EQT Raises Guidance, Expects More Liquids Production This Year

EQT Corp. on Monday bumped up its 2017 production guidance on longer lateral lengths, an increased Marcellus Shale type curve and higher anticipated natural gas liquids volumes than previously forecast.

According to an investor presentation released Monday, EQT is now guiding for 835-855 Bcfe of production this year. That's up from the 810-830 Bcfe guidance it released in December. The company produced 759 Bcfe in 2016, capping its seventh straight year of more than 25% year/year production growth.

The company is now targeting lateral lengths in the Marcellus Shale of 8,000 feet instead of its previous 7,000 feet. Type curves in the play have also been increased by 14% from 2.1 Bcfe per 1,000 feet of lateral to 2.4 Bcfe. The company has added about 230,000 net core acres since 2013 with plans to continue adding more to consolidate acreage and push out its laterals.

In another move, EQT is now guiding for 17,975-18,575 bbl of liquids production this year, up nearly 36% at the high end from the 13,100-13,700 bbl it forecast in December. While the company has consistently grown its liquids volumes since 2012, EQT noted the pricing impact more liquids production is likely to have this year, reflecting a slight reversal in Appalachia as the year unfolds. Operators in the basin have largely shied away from liquids production as prices slumped in recent years in favor of more economical dry gas.

EQT's 2017 exploration and production budget of $1.5 billion remains unchanged. Its plans to drill 119 Marcellus wells, 81 Upper Devonian Shale wells and seven deep Utica Shale exploratory wells also remain unchanged. But in another move that reflects the recovery in commodity prices, EQT has increased the high end of its Utica well cost assumptions from $12-$13 million to $12-$14 million to represent the 15% service cost increase it has factored into its forecast.

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