EQT Corp. plans to spend $1.5 billion on capital expenditures (capex), drill more than 170 wells and invest $320 million in midstream projects in 2013, according to the company’s operational forecast released Tuesday.

Pittsburgh-based EQT said its production division would spend most of the capex for 2013, $915 million, on well development. The company plans to spend about $820 million to drill 153 wells targeting the Marcellus Shale, $40 million to drill eight wells in the Utica Shale, and $55 million to drill 11 wells into the Upper Devonian formation. It will operate six horizontal rigs and two top-hole rigs in 2013.

According to EQT, the Marcellus wells will be drilled with an average lateral length of 4,500 feet. “All of the wells will be on multi-well pads to maximize operational efficiency and well economics,” the company said. “EQT Production plans to drill 88% of its 2013 wells with 30-foot cluster spacing. Approximately one-third of EQT’s Marcellus acreage can be developed using 30-foot cluster spacing.”

EQT said it divides its Marcellus Shale acreage into three tiers based on estimated ultimate recovery (EUR) with a 5,300-foot lateral length and standard 60-foot cluster spacing. It added that 30-foot cluster spacing has increased EUR by 20-25%.

The company said that in 2013, it plans to drill 11 dry gas wells into its Tier 1 acreage (with an expected EUR of 9.0 Bcf) using 60-foot cluster spacing, and 41 dry gas wells at 30-foot spacing; eight dry gas and 36 wet gas wells into its Tier 2 acreage (7.4 Bcf) using 30-foot spacing; eight dry gas wells into its Tier 3 acreage (6.4 Bcf) using 60-foot spacing; three dry gas wells, into Tier 3, using 30-foot spacing; and 46 wet gas wells, also into Tier 3, using 30-foot spacing.

EQT said the 11 wells targeting dry gas targets in Tier 3 acreage are in central Pennsylvania and would be used “to gather more data for infrastructure planning and to quantify the resource potential.”

In the Utica, the eight wells to be drilled in 2013 will target liquids-rich acreage in Guernsey County, OH, with an average lateral length of 6,000 feet. EQT said two of the wells will use 30-foot cluster spacing. The company has about 16,000 gross (13,600 net) acres in the liquids-rich portion of the Utica (see Shale Daily, March 15).

The 11 wells EQT plans to drill targeting the Upper Devonian formation will have an average lateral length of 4,200 feet, and will each share a pad with wells targeting the Marcellus, the company said, adding that it holds about 170,000 acres in the Upper Devonian that can be developed independently.

EQT said the largest portion of the $320 million allocated to its midstream division for 2013, $190 million, will go toward constructing gathering lines in the Marcellus. Another $110 million will be used for a Marcellus header project, and the remainder will help pay for maintenance and compliance costs.

“The Marcellus gathering investments are focused on EQT Production development areas in Pennsylvania and will increase gathering capacity by 400 MMcf/d,” the company said, adding that a 32-mile, 265 MMcf/d Marcellus header system will connect liquids-rich Marcellus acreage in north central West Virginia, including its own, with MarkWest Energy Partners’ Mobley processing plant in Wetzel County, WV (see Shale Daily, Nov. 8).

EQT projected operating cash flow of approximately $1.0 billion in 2013, based on current Nymex natural gas prices. It said its estimate could increase or decrease by about $55 million for every 25-cent change in the average Nymex price.

The company also projected between 335 and 340 Bcfe of produced natural gas sales in 2013, a 31% increase from the 2012 estimate of 257 Bcfe. EQT estimated between 3.3 and 3.4 million bbl of natural gas liquids (NGL) but added that “the increase in volumes throughout the year is not expected to be uniform as a result of multi-well pad drilling.”

Marcellus sales volumes are expected to be 242-247 Bcfe, a 63% increase over 2012, while sales volumes from elsewhere are expected to be about 93 Bcfe, about 14 Bcfe lower than 2012.

EQT estimates that consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for its midstream division, which includes financial results from EQT Midstream Partners LP, will be about $335 million in 2013, compared to $300 million in 2012. Net operating revenues will be about $325 million for gathering in 2013, the company said, plus another $145 million for transmission and $30 million for storage, marketing and other sources.