Page 13 - NorthAmOil Week 11

NorthAmOil
NEWS IN BRIEF
NorthAmOil
its expected 2020 capital expenditures by approximately $75mn to $1.075-1.175bn. Through schedule and well design optimisation, this shift in activity is not expected to impact EQT’s 2020 production guidance of 1,450-1,500 bcfe. EQT has now reduced its 2020 capital expenditure guidance by approximately $200mn since it was originally published in October 2019. Adjusted free cash flow for 2020 is now expected to be $225-325mn.
EQT has entered into an agreement with
a third-party to permanently release firm transportation obligations of approximately 400 mmcf/d, or approximately 15% of EQT’s current portfolio. In conjunction with the agreement, EQT entered into certain sales agreements to facilitate gas deliveries to the same premium markets. EQT expects its corporate-wide transmission expense to decrease by approximately $0.04 per mcfe, largely offset by expected weakened average differentials. Additionally, in connection
with its entry into the agreement, EQT was able to eliminate approximately $350mn in potential collateral posting requirements, further strengthening EQT’s liquidity outlook. As such, EQT’s current collateral exposure has been reduced even further to $1.1bn
from $1.4bn; collateral levels remain at a comfortable $0.6bn level in the aggregate.
On January 15, EQT issued $1.75bn in senior notes to address certain near-term maturities. Subsequently, EQT has paid down the $0.3bn balance on its revolving credit facility, retired $1.0bn of senior notes due 2020, repurchased $0.5bn of senior notes due 2021, and reduced its 2021 term loan balance by $0.2bn.
EQT, March 16, 2020
Goodrich Petroleum
announces revised capital
expenditure budget and
2020 guidance
Goodrich Petroleum today announced it has lowered its 2020 preliminary capital expenditure budget by $15mn to $40-50mn, which is expected to generate free cash flow of an estimated $15-25mn at $2.00-2.50 natural gas prices. At the midpoint of this revised guidance, the company estimates
it will generate a free cash flow yield of approximately 13% and 40% on the company’s current enterprise value and market capitalisation, respectively, and remain below the company’s net debt to EBITDA target of 1.5 times.
The company now expects to grow production by 5-7% versus 2019 to a range of approximately 50-52 bcfe, or an average of 137,000-142,000 mcfe per day for the year. Natural gas is expected to comprise approximately 99% of total production.
The preliminary capital expenditure budget is subject to quarterly review and approval
by the company’s board of directors, with the flexibility to accelerate in the second half of the year depending on commodity prices.
The Company has allocated the majority
of the budget to drilling and completing
core Haynesville shale wells in the Bethany- Longstreet area of Caddo and DeSoto Parishes, Louisiana.
The company has hedged approximately 50% of its expected natural gas volumes
for the year at a blended average price of approximately $2.60. In addition, to further support and protect the capital plans and
balance sheet, the company has recently added hedges from April, 2021 through March,
2022 as shown on the current management presentation posted on the company’s website. GOODRICH PETROLEUM, March 16, 2020
MIDSTREAM
TC Energy signs letter of
intent to acquire Pioneer
pipeline
TC Energy today announced that its wholly owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), has executed an exclusive letter of intent with Tidewater Midstream and Infrastructure and TransAlta to purchase the Pioneer pipeline for $255mn.
The Pioneer pipeline consists of 131 km of operating pipeline that, upon closing of the transaction, will be integrated into the NGTL system. The pipeline is located within Alberta and runs from west of Drayton Valley to west of Edmonton. The acquisition is underpinned by 15-year firm delivery contracts for 328mn cubic feet per day (mmcf/d) and an eight-year firm receipt contract for 47 mmcf/d.
“This acquisition presents a unique opportunity to connect Western Canadian Sedimentary Basin (WCSB) supply to Alberta power generation demand, which supports coal-to-gas conversion and lowers carbon emissions,” says Tracy Robinson, executive vice-president and president, Canadian natural gas pipelines. “Utilising the existing Pioneer Pipeline maximises the use of existing infrastructure and provides the most efficient solution to deliver gas to this growing demand.”
Week 11 19•March•2020
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