Acquisitions

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

Tug Hill and XcL Midstream Acquisition. On September 6, 2022, the Company entered into a purchase agreement with EQT Production Company (a wholly-owned indirect subsidiary of the Company), THQ Appalachia I, LLC (Tug Hill) and THQ-XcL Holdings I, LLC (XcL Midstream) (the Tug Hill and XcL Midstream Purchase Agreement), pursuant to which the Company and EQT Production Company agreed to acquire Tug Hill's upstream assets and XcL Midstream's gathering and processing assets through the acquisition of all of the issued and outstanding membership interests of each of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC (the Tug Hill and XcL Midstream Acquisition) for consideration of approximately $2.6 billion in cash and 55.0 million shares of EQT common stock, as adjusted pursuant to customary closing purchase price adjustments. The Tug Hill and XcL Midstream Purchase Agreement has an effective date of July 1, 2022. The Tug Hill and XcL Midstream Acquisition is expected to close in the fourth quarter of 2022, subject to regulatory approvals. Upon execution of the Tug Hill and XcL Midstream Purchase Agreement, the Company deposited $150 million into an escrow account, which will be credited toward the cash consideration upon closing of the Tug Hill and XcL Midstream Acquisition and is recorded in other assets in the September 30, 2022 Condensed Consolidated Balance Sheet.

Alta Acquisition. On July 21, 2021, the Company completed its acquisition (the Alta Acquisition) of Alta Marcellus Development, LLC and ARD Operating, LLC and subsidiaries (together, the Alta Target Entities), pursuant to that certain Membership Interest Purchase Agreement, dated May 5, 2021 (the Alta Purchase Agreement), by and among the Company, EQT Acquisition HoldCo LLC (a wholly-owned indirect subsidiary of the Company), Alta Resources Development, LLC (Alta Resources) and the Alta Target Entities. The Alta Target Entities collectively held all of Alta Resources' upstream and midstream assets and liabilities. The purchase price for the Alta Acquisition consisted of approximately $1.0 billion in cash and 98,789,388 shares of EQT common stock, as adjusted pursuant to customary closing purchase price adjustments. The Alta Purchase Agreement has an effective date of January 1, 2021.

As a result of the Alta Acquisition, the Company acquired approximately 300,000 net Northeast Marcellus acres, approximately 1.0 Bcfe per day of current net production, approximately 300 miles of midstream gathering systems, approximately 100 miles of a freshwater system and a firm transportation portfolio to premium demand markets.

The Company completed the purchase price allocation for the Alta Acquisition during the second quarter of 2022, at which time the value of the assets acquired and liabilities assumed were revised. The purchase accounting adjustments recorded in 2022 were not material to the Company's financial statements.

Post-Acquisition Operating Results. The Alta Target Entities contributed the following to the Company's consolidated results.

	July 21, 2021 through September 30, 2021
	(Thousands)
Sales of natural gas, NGLs and oil	$	251,129
Loss on derivatives not designated as hedges	(293,840)
Net marketing services and other	2,525
Total operating revenues	$	(40,186)
Net loss	$	(129,779)

Unaudited Pro Forma Information. The table below summarizes the Company's results as though the Alta Acquisition had been completed on January 1, 2021. Certain of Alta Resources' historical amounts were reclassified to conform to the Company's financial presentation of operations. The following unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Alta Acquisition occurred on January 1, 2021 nor are they necessarily indicative of future consolidated results of operations.

	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	(Thousands, except per share amounts)
Pro forma sales of natural gas, NGLs and oil	$	1,839,002	$	4,437,755
Pro forma loss on derivatives	(3,268,035)		(4,918,616)
Pro forma net marketing services and other	7,798		28,452
Pro forma total operating revenues	$	(1,421,235)	$	(452,409)
Pro forma net loss	$	(1,974,059)	$	(2,950,427)
Pro forma net loss attributable to noncontrolling interests	601		25
Pro forma net loss attributable to EQT Corporation	$	(1,974,660)	$	(2,950,452)
Pro forma loss per share (basic and diluted)	$	(5.53)	$	(9.67)