Stock Monitor: Marathon Oil Post Earnings Reporting
LONDON, UK / ACCESSWIRE / February 23, 2018 / Active-Investors.com has just released a free research report on EQT Corp. (NYSE: EQT). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=EQT as the Company's latest news hit the wire. On February 21, 2018, the Company, which is the biggest natural gas producer in the US, declared that its Board of Directors has unanimously approved a plan to separate its upstream and midstream businesses. This would result in the creation of a standalone publicly traded corporation, NewCo, which will focus on midstream operations. This move to separate business units came after months of pressure from investors such as D.E. Shaw & Co and Jana Partners. Register today and get access to over 1000 Free Research Reports by joining our site below:
Active-Investors.com is currently working on the research report for Marathon Oil Corporation (NYSE: MRO), which also belongs to the Basic Materials sector as the Company EQT Corp. Do not miss out and become a member today for free to access this upcoming report at:
Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, EQT Corp. most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:
Plan of Action Prior To Separation
Prior to the separation of the business units, EQT plans to construct a drop-down of the retained midstream assets in an accretive transaction to EQT Midstream Partners LP (NYSE:EQM). The Company also intends to merge EQM and Rice Midstream Partners LP (NYSE:RMP) in an accretive transaction. Besides, it plans to sell the RMP Incentive Distribution Rights (IDRs) to EQT GP Holdings LP (NYSE:EQGP).
As per EQT's plan, EQGP will retain the EQM IDRs, while EQGP and EQM will remain separate publicly traded entities after separation. However, EQT does not mean to modify its existing gathering and transmission contracts with EQM with regards to the separation. Also, completion of midstream-related transactions is not a condition for the completion of separation.
EQT expects that this separation would qualify as tax-free for EQT's shareholders for US federal income tax purposes. Post the separation, EQT's shareholders will retain their shares of EQT stock and receive a pro-rata share of the new independent midstream Company. Both Companies will remain headquartered in Pittsburgh, Pennsylvania.
Strategic Rationale for Separation
EQT's decision to separate its business units has created one of the strongest midstream Companies in the Appalachian Basin. James Rohr, EQT's lead Independent Director, believes that this spin-off transaction represents a new chapter for the EQT business as it unlocks the value created by the Company over the last 10 years. Steve Schlotterbeck, President and Chief Executive Officer (CEO) at EQT, shared that the Rice Energy acquisition positioned the Company to further enhance value through separation. The acquisition accelerated the maturation of EQT's both businesses, and offered scale that considerably enhanced the standalone prospects of both businesses. EQT expects the following benefits from creating an independent midstream public Company:
- Creation of two pure-play Companies with clear investment thesis
- The visibility to attract long-term investors, suited for each business
- Capital structures aligned with cash flow risk/reward profiles for each business
- Dedicated management focused on their distinct strategic visions
- Simpler and easier to understand financial reporting systems
- More efficient allocation of capital
- Greater potential for organic growth and customer base expansion
- Investment grade ratings for both Companies
- Enhanced equity currency and access to capital
Competitive Strengths of EQT and NewCo
EQT is the largest natural gas producer in the US with an industry leading cost structure. It is spread across 680,000 core Marcellus acres and 65,000 core Ohio Utica acres. The Company has an inventory depth for sustained 10% - 15% production growth. EQT expects to generate $2.3 billion to $2.8 billion of free cash flow over 2019 to 2023, which is equivalent to 10% - 15% of its annual production growth. The Company expects to be cash flow breakeven in 2019, with a focus on returning cash from 2020.
NewCo's natural gas gathering is the third largest in the US, with a premier asset footprint in the Appalachian Basin. The Company has a 246,000-acreage dedication in core Marcellus and 166,000 in core Ohio Utica. Its Mountain Valley Pipeline extends its pipeline network into the southeast markets. NewCo has a stable and predictable cash flow profile and a 5-year projected organic growth capital of $4.8 billion. Approximately 85% of the Company's revenue is generated from investment grade counterparties.
Post the separation, Steve Schlotterbeck will retain his position as CEO of EQT.
Jerry Ashcroft, the senior Vice President and President, midstream for EQT, and senior Vice President and Chief Operating Officer (COO) of EQM, will lead NewCo as CEO after the completion of the separation. Ashcroft has over 15 years of experience in the oil, gas, and pipeline industries, and has held various roles of increasing responsibility at Gulf Oil L.P., JP Energy Partners, Buckeye Partners, L.P., and Colonial Pipeline Co., L.P.
Transaction Closing Conditions
- The proposed spin-off is subject to customary conditions, such as the receipt of a favorable opinion of legal counsel and/or a private letter from the Internal Revenue Service for the tax treatment of the transaction for US federal income tax purposes. The transaction also needs the effectiveness of a Form 10 registration statement, which is to be filed with the Securities and Exchange Commission (SEC) for the shares of NewCo.
- Moreover, the spin-off is subject to the final approval and declaration of the spin-off dividend by the EQT's Board of Directors.
- Post this clearance, the transaction is expected to close by the end of the third quarter of 2018.
Stock Performance Snapshot
February 22, 2018 - At Thursday's closing bell, EQT Corp.'s stock climbed 2.03%, ending the trading session at $50.82.
Volume traded for the day: 6.83 million shares, which was above the 3-month average volume of 3.85 million shares.
After yesterday's close, EQT Corp.'s market cap was at $13.71 billion.
Price to Earnings (P/E) ratio was at 30.23.
The stock has a dividend yield of 0.24%.
The stock is part of the Basic Materials sector, categorized under the Independent Oil & Gas industry. This sector was up 0.8% at the end of the session.
Active-Investors (A-I) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. A-I has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
A-I has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the ''Author'') and is fact checked and reviewed by a third-party research service company (the ''Reviewer'') represented by a credentialed financial analyst. For further information on analyst credentials, please email firstname.lastname@example.org. Rohit Tuli, a CFA® charterholder (the ''Sponsor''), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by A-I. A-I is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
A-I, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. A-I, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, A-I, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither A-I nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://active-investors.com/legal-disclaimer/.
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Phone number: 73 29 92 6381
Office Address: 6, Jalan Kia Peng, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.