Just days after it announced that it would suspend drilling in the Huron Shale, EQT Corp. said Thursday that its 2011 earnings totaled $479.8 million and annual production increased more than 44% from a year ago, to 194.4 Bcfe.

The Pittsburgh-based company also reported its proved reserves in the Marcellus and Huron shales had increased to about 5.4 Tcfe.

EQT posted net income of $90.8 million (60 cents/share) during 4Q2011, a 24% increase from the $73.1 million (49 cents/share) earned during 4Q2010. Operating income was $172.8 million during 4Q2011, up 28% from the $134.6 million from the same quarter one year earlier.

The company said production for the year hit 194.4 Bcfe largely from horizontal drilling in the Marcellus, which it said accounted for 42% of the total, up from the 18.9% share the Marcellus accounted for in 2010. EQT drilled 222 gross wells during 2011; 105 targeted the Marcellus and 155 were drilled in the Huron.

"2011 was another record year for EQT," CEO David Porges told financial analysts during Thursday's earnings conference call. "Earnings per share, operating cash flow, sales volumes, midstream throughput and natural gas reserves were all higher than ever before."

The company's results for 2011 were affected by several items, including a $113.8 million after-tax gain from the sale of the Big Sandy Pipeline to Spectra Energy Partners LP during 3Q2011 (see Daily GPI, May 13, 2011), and a $14.4 after-tax gain from the sale of the Langley Natural Gas Processing Complex to MarkWest Energy Partners LP during 1Q2011 (see Shale Daily, Jan. 5, 2011).

EQT said it was reducing its forecast for production volume in 2012 by 5 Bcfe -- to between 250 and 255 Bcfe -- after its decision to suspend drilling in the Huron Shale because of low commodity prices (see Shale Daily, Jan. 24). The company classifies its assets in the Lower Huron, Cleveland, Berea sandstone and other Devonian shales -- except Marcellus -- as the Huron play.

Asked if the company was also considering dropping a drilling rig in the Marcellus because of the low prices, Porges indicated that wouldn't happen, for now.

"It still makes a fair amount of sense to continue with our approach in the Marcellus," Porges said. "So far what we've seen wouldn't cause us to make those alterations and drop a rig. We will look at the cash flows. If we thought, because of prices, that cash flows were drying up...we'd take a look at the rest of the operations to see what other forms of move was required. But as it is [the Huron shutdown] saves us enough so that it more than makes up for the cash flow reduction that we saw."

EQT said its total natural gas proved reserves were 5,365 Bcfe, a net increase of 145 Bcfe from 2010. Of the 2011 total, 3,414 Bcfe was in the Marcellus and 1,062 Bcfe in the Huron.

EQT disclosed last December that the company holds 532,000 acres of leasehold in the Marcellus Shale -- 279,000 acres in West Virginia and 253,000 in Pennsylvania. The company also said 342,000 acres held dry gas, while the remaining 190,000 acres held wet gas.