ESG REPORTAbout EQT
EQT Corporation (NYSE: EQT) is an independent natural gas production company with operations in the Marcellus and Utica Shales in the Appalachian Basin, one of the lowest carbon-intensive and methane-intensive basins in the United States. We are dedicated to responsibly developing our world‑class asset base and being the operator of choice for our stakeholders. Our company culture prioritizes operational efficiency, technology, and sustainability and we look to continuously improve the way we produce an environmentally responsible, reliable, and low-cost energy source. We have a longstanding commitment to the safety of our employees, contractors, and communities and to the reduction of our overall environmental footprint. Our values — Trust, Teamwork, Heart, and Evolution — are evident in the way we operate and in how we interact each day.
Our mission is to realize the full potential of EQT to become the operator of choice for all of
As the largest producer of natural gas in the United States, we are responsible for producing the equivalent of over one minute of every hour of electricity consumed in the United States. We are dedicated to evolving energy and enhancing the critical role that natural gas plays in the future energy mix, both domestically and abroad.
Our business model and corporate strategy are rooted in the tenets of technological innovation, data transparency, and efficiency. We aim to maximize the value derived from our assets while minimizing the impact of our operations on the environment. We strive to improve the way we work, maintain a rewarding and collaborative workplace, and actively engage with our landowners and the communities where we operate and where our employees live and work. Furthermore, we are focused on testing the boundaries of what is possible in operational performance and leveraging technological and human capital to execute our combo-development strategy — leading to a step-change in operational efficiency.
In 2022, we had 2,040 billion cubic feet of natural gas equivalent (Bcfe) in gross production.[1] As of December 31, 2022, we had 25.0 trillion cubic feet of natural gas equivalent of proved natural gas, natural gas liquids (NGLs), and crude oil reserves across approximately 2.0 million gross acres, including approximately 1.8 million gross acres located in in the Marcellus Shale. Approximately 99% of our gross production is natural gas and NGLs. If EQT were a country, we would be the twelfth largest producer of natural gas in the world.[2] With 740 employees as of December 31, 2022, we generated approximately $7.5 billion in total operating revenues in 2022.
We have historically been involved in, and anticipate that we will continue to explore, opportunities to create value through strategic transactions whether through mergers and acquisitions, divestitures, joint ventures, or similar business transactions. For example, in the fourth quarter of 2020, we acquired upstream assets and an investment in midstream gathering assets located in the Appalachian Basin (collectively, the Chevron Assets) from Chevron U.S.A. Inc. (Chevron) for an aggregate purchase price of $735 million (Chevron Acquisition). The Chevron Acquisition closed on November 30, 2020, and had an effective date of July 1, 2020. Except as otherwise noted, all our data disclosed in this report includes data from the acquired Chevron Assets.
Additionally, in the third quarter of 2021, we acquired strategic assets located in the Appalachian Basin (Alta Assets) from Alta Resources Development, LLC (Alta) for total consideration of $1.0 billion in cash and 98,789,388 shares of EQT Corporation common stock (Alta Acquisition). The Alta Acquisition closed on July 21, 2021, and had an effective date of January 1, 2021. Data from the Alta Assets is included in this report as part of our data; however, production and sales volumes and emissions data related to the Alta Assets have been disclosed separate from our 2021 and 2022 data for purposes of tracking our progress against our 2025 emissions targets.
Unless otherwise noted, all references to “EQT,” “we,” “our,” or “us” in this report refer collectively to EQT Corporation and its consolidated subsidiaries.
[1] Includes gross production from EQT and the Alta Assets. “Gross Production” means the wellhead production of natural gas and oil/condensate produced from all wells operated by EQT, including 100% of volumes from EQT-operated wells subject to a third-party working interest. Natural gas liquids (NGLs) are derived from the processing of natural gas and are not directly produced from the wellhead. Therefore, gross production of NGLs is effectively included in the volume of natural gas produced.
[2] Based on billion cubic feet per day production data from S&P Global Commodity Insights as of December 31, 2022.
Markets and Products
The natural gas supply chain, from discovery to market delivery, is a complex series of activities. For end users to receive natural gas or natural gas-derived products, the resource must first be found and produced. We have investments within the discovery and production phase of the value chain — including drilling, completion, pumping, and gas field service providers, casings for drilling, and information technology products.
We produce natural gas, and to a lesser extent, natural gas liquids (NGLs) sold as a commodity to marketers, utilities, power generators, and industrial customers in the Appalachian Basin and in other markets accessible through our current transportation portfolio. Our transportation portfolio includes markets in the Gulf Coast, Midwest, and Northeast United States, and in Canada. As of December 31, 2022, approximately 53% of our sales volume is sold outside Appalachia. We also contract with certain processors to market a portion of our NGLs on our behalf.
In 2022, we spent over $1.5 billion with 1,871 suppliers. Of our total supplier spend, approximately 60% was spent inside our operational footprint while the remaining 40% went to suppliers outside our operating area. See Economic and Societal Impact for additional information.
Our value chain is illustrated below.
Reserves and Production
The table below shows our annual gross production using various standard industry denominations[1] for measuring volumes of natural gas, oil/condensate, and NGLs.
Gross Production[2]
|
|
2018 |
2019 |
2020 |
2021 (EQT) |
2021 (Alta Assets) |
2022 (EQT) |
2022 (Alta Assets) |
|
Natural Gas |
|||||||
|
Bcfe |
1,739 |
1,802 |
1,919 |
1,942 |
222 |
1,834 | 192 |
| MBOE | 289,814 | 300,293 | 319,821 | 323,750 | 37,064 | 305,683 | 31,967 |
| MMcf | 1,738,883 | 1,801,755 | 1,918,923 | 1,942,499 | 222,384 | 1,834,098 | 191,804 |
|
Oil/Condensate |
|||||||
|
Bcfe |
4 | 5 | 19 | 21 | 0 | 14 | 0 |
| MBOE | 680 | 820 | 3,199 | 3,542 | 0 | 2,250 | 0 |
| Mbbl | 680 | 820 | 3,199 | 3,542 | 0 | 2,250 | 0 |
|
Total Gross Production |
|||||||
| Bcfe | 1,743 | 1,807 | 1,938 | 1,964 | 222 | 1,848 | 192 |
| MBOE | 290,494 | 301,113 | 323,020 | 327,292 | 37,064 | 307,933 | 31,967 |
In 2022, our daily gross production averages[3] (including production from the Alta Assets) were as follows:
- Natural gas: 5,550 MMcf per day
- Oil/Condensate: 6 Mbbl per day
The following chart provides a breakdown of our proved natural gas, NGLs, and crude oil reserves (the estimated quantity of economically producible hydrocarbons) held within the formations where we operate. Our 2022 Form 10-K provides an explanation of how we determine our reserves. As of December 31, 2022, we had 25.0 trillion cubic feet of natural gas equivalent of proved natural gas, NGLs, and crude oil reserves across approximately 2.0 million gross acres, including approximately 1.8 million gross acres in the Marcellus Shale.
2022 Proved Reserves (Bcfe)
As a natural gas producer, our production process encompasses both producing and in-process wells as outlined in the table below.
2022 Wells
|
|
Gross |
Net |
|
Productive wells — natural gas |
4,697 |
3,603 |
|
In-process wells — natural gas |
354 |
308 |
As of December 31, 2022, we also owned and operated an insignificant number of high-pressure gathering lines. We had no productive or in-process oil wells as of December 31, 2022.
[1] Throughout this report, we use the following denominations to measure and disclose volumes of natural gas, oil/condensate, and NGLs: MMcf = million cubic feet; Mbbl = thousand barrels of oil/NGLs; Bcfe = billion cubic feet of natural gas equivalent, with one barrel of NGLs and/or crude oil being equivalent to 6,000 cubic feet of natural gas; MBOE = thousand barrels of oil equivalent. A conversion rate of 6 MMcf to 1 MBOE is used to convert MMcf to MBOE.
[2] “Gross Production” means the wellhead production of natural gas and oil/condensate produced from all wells operated by EQT, including 100% of volumes from EQT-operated wells subject to a third-party working interest. NGLs are derived from the processing of natural gas and are not directly produced from the wellhead. Therefore, gross production of NGLs is effectively included in the volume of natural gas produced.
[3] Based on a 365-day year.
Responsibly Sourced Gas
We have a longstanding commitment to operating responsibly and producing our natural gas in accordance with high environmental, social, and governance (ESG) standards. Recently, new certifications have been developed that enable responsible producers like EQT to differentiate their gas in the market based on ESG performance. One such product, often referred to as “independently certified gas,” or “responsibly sourced gas” (RSG), involves obtaining certification from an independent third party stating that the gas produced by an operator is sourced through environmentally responsible procurement practices. Certification is based on standards such as greenhouse gas (GHG) and methane emissions, water sustainability, land use, and community impacts.
In November 2021, we obtained certification under Equitable Origin’s EO100™ Standard for Responsible Energy Development, which focuses on ESG performance, and the MiQ methane standard, for a significant portion of our natural gas production. Responsible Energy Solutions, an approved independent assessment organization for both the EO100™ and MiQ standards, assessed our performance against those standards at approximately 200 well pads located in Greene and Washington Counties, Pennsylvania. Our certified operating area comprises a substantial component of our operations. For example, in 2022, we paid $21,073,700 in taxes in Greene County, Pennsylvania and $10,630,700 in taxes in Washington County, Pennsylvania[1] among other charitable donations to local fire departments, first responders, and community development organizations. From a production standpoint, a significant portion of the natural gas we produce is derived from wells located in these two counties, collectively producing approximately 3.3 billion cubic feet per day in 2022.
Equitable Origin certified our produced natural gas against the following five principles of the EO100™ Standard:
- Corporate governance and ethics;
- Social impacts, human rights, and community engagement;
- Indigenous Peoples’ rights;[2]
- Occupational health and safety and fair labor standards; and
- Environmental impacts, biodiversity, and climate change.
For the 2022 certification period (i.e., November 1, 2021, through October 31, 2022), we obtained a “B+” score under the EO100™ Standard. Additionally, as part of our MiQ certification, MiQ calculated the methane intensity for our operations covered under the certification program as being 0.035% for the 2022 certification period, which is approximately 28% lower than our 2020 methane intensity calculated by MiQ in our inaugural certification year. The methane intensity was calculated in accordance with the Natural Gas Sustainability Initiative Protocol and is based on total methane emissions, total gross gas production, natural gas composition, and natural gas heating values. Based on our methane intensity of 0.035%, we obtained an “A” rating for the methane intensity component of our MiQ certification (granted to producers with a methane intensity under 0.05%), and an overall rating of “A” for our MiQ certification for 2022.
We believe that facilitating the establishment of a market for certified natural gas and other products that leverage our low emissions intensities and focus on sustainability will open additional opportunities for symbiotic financial growth and ESG value creation. As of December 31, 2022, we were the largest producer of RSG in North America.[3] We were also the first operator to be issued certificates on the MiQ Digital Registry, a global secure digital ledger in which joint MiQ-EO100™ Certificates are held from issuance to retirement.
We seek to comply with the principles of international agreements to which the United States is a signatory, and we are an active participant in voluntary programs aimed at monitoring and reducing methane emissions on a global scale. In 2022, we continued our membership with the Oil and Gas Methane Partnership (OGMP) 2.0. — a Climate and Clean Air Coalition initiative led by the United Nations Environment Programme in partnership with the European Commission, the United Kingdom Government, the Environmental Defense Fund, and other leading oil and natural gas companies. In November 2022, OGMP 2.0 awarded us a “Gold Standard” rating, the highest reporting level under the initiative, in recognition of our ambitious methane emissions reduction targets and advanced commitment to accurately measuring, reporting, and reducing our company-specific and site-level methane emissions. EQT is among 14 upstream companies globally qualifying as “Gold Standard” under OGMP 2.0 for 2022. We believe that our certifications from Equitable Origin and MiQ, coupled with our participation in initiatives like OGMP 2.0, will enable us to further differentiate ourselves and our natural gas as a leader in sustainable development and emissions reduction.
[1] Greene County and Washington County tax amounts include a Pennsylvania Impact fee, which is paid to the Pennsylvania Public Utility Commission and then distributed by the Pennsylvania Public Utility Commission to the respective county. The amount of the Pennsylvania Impact fee is directly related to the location of the wells to which the fee applies.
[2] Indigenous Peoples' rights were determined to not be applicable to our covered operations by Equitable Origin under the EO100™ Standard.
[3] Based on the amount of North American RSG certificates issued during 2022 under MiQ’s Digital Registry (https://www.miqregistry.org/).
