NEPA Non-Operated Asset Divestitures

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

NEPA Non-Operated Asset Divestitures

NEPA Non-Operated Asset Divestitures

First NEPA Non-Operated Asset Divestiture. On May 31, 2024, the Company completed the divestiture (the First NEPA Non-Operated Asset Divestiture) of an undivided 40% interest in the Company's non-operated natural gas assets in Northeast Pennsylvania with a carrying amount of approximately $523 million to Equinor USA Onshore Properties Inc. and its affiliates (collectively, the Equinor Parties). The carrying value was composed of approximately $549 million of property, plant and equipment, approximately $6 million of other current liabilities and approximately $20 million of other liabilities and credits. In exchange, as consideration, the Company received from the Equinor Parties cash of $500 million, subject to customary post-closing purchase price adjustments, certain upstream assets and the remaining 16.25% equity interest in the NEPA Gathering System. The total fair value of consideration received, net of liabilities assumed, was approximately $832 million, subject to customary post-closing purchase price adjustments, and included $413 million of property, plant and equipment.

As a result of the First NEPA Non-Operated Asset Divestiture, the Company recognized a gain of approximately $299 million in (gain) loss on sale/exchange of long-lived assets in the Statement of Consolidated Operations. The gain was calculated as the carrying value of the divested assets less the fair value of consideration received, net of liabilities assumed, and approximately $10 million of divestiture costs incurred. The long-lived assets divested and received and resulting gain are reported in the Company's Production segment. The Company used cash proceeds from the First NEPA Non-Operated Asset Divestiture to partly fund EQT's redemption of its 6.125% senior notes.

The fair values of the developed and undeveloped natural gas properties received as consideration for the First NEPA Non-Operated Asset Divestiture were measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Significant inputs include future commodity prices, projections of estimated quantities of reserves, estimated future rates of production, projected reserve recovery factors, timing and amount of future development operating costs and a weighted average cost of capital as well as future development plans from a market participant perspective with respect to undeveloped properties.

The fair value of the interest in the NEPA Gathering System received as consideration for the First NEPA Non-Operated Asset Divestiture was measured using the cost approach based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Significant inputs include replacement cost for similar assets, relative age of the assets and potential economic or functional obsolescence.

See Note 5 for a description of the fair value hierarchy.

In addition, subsequent to the completion of the First NEPA Non-Operated Asset Divestiture, the Company and the Equinor Parties entered into a gas buy-back agreement with respect to the assets received by the Company as consideration for the First NEPA Non-Operated Asset Divestiture, whereby the Equinor Parties agreed to purchase a specified amount of natural gas from the Company through the first quarter of 2028.

Second NEPA Non-Operated Asset Divestiture. On December 31, 2024, the Company completed the divestiture (the Second NEPA Non-Operated Asset Divestiture, and, together with the First NEPA Non-Operated Asset Divestiture, the NEPA Non-Operated Asset Divestitures) of the remaining undivided 60% interest in the Company's non-operated natural gas assets in Northeast Pennsylvania with a carrying amount of approximately $772 million to the Equinor Parties. The carrying value was composed of approximately $812 million of property, plant and equipment, approximately $9 million of other current liabilities and approximately $31 million of other liabilities and credits. In exchange, as consideration, the Company received from the Equinor Parties cash of $1.25 billion, subject to customary post-closing purchase price adjustments and transaction costs.

As a result of the Second NEPA Non-Operated Asset Divestiture, the Company recognized a gain of approximately $463 million in (gain) loss on sale/exchange of long-lived assets in the Statement of Consolidated Operations. The gain was calculated as the carrying value of the divested assets less the consideration received and approximately $7 million of divestiture costs incurred. The long-lived assets divested and resulting gain are reported in the Company's Production segment. The Company used cash proceeds from the Second NEPA Non-Operated Asset Divestiture to repay a portion of outstanding borrowings under EQT's revolving credit facility.