EQT's Debt Target May Matter More Than Q3 Volumes

EQT's third quarter may be softer than expected due to natural gas curtailments and weak Appalachian prices.

However, UBS Securities notes that EQT is still aiming to end the year with about $5 billion of debt, which could have a more significant impact on the company's cash flow resilience.

EQT likely faced an additional 20-25 billion cubic feet of curtailed production, pulling output to around 590 billion cubic feet equivalent, down from the consensus estimate of 611. This would leave EQT with approximately $1.62 per share in cash flow, compared to the expected $1.76.

Despite this, UBS expects EQT to direct its free cash flow towards balance sheet improvement, aiming to pay down debt and reduce future interest expenses.