EQT Corporation EQT today announced that it has entered into a
definitive agreement for the transfer of its natural gas distribution
business, Equitable Gas Company, LLC, to Peoples Natural Gas. As part of the
transaction, EQT will receive cash proceeds of $720 million, subject to
certain purchase price adjustments, and select midstream assets and commercial
arrangements, which are expected to generate at least $40 million in EBITDA
(earnings before interest, taxes, depreciation, and amortization) per year.
Concurrent with this announcement, EQT will also reduce its annual dividend,
effective January 2013. The new dividend rate of $0.12 per share reflects the
blend of EQT's two remaining core businesses – a dividend-supporting midstream
business, and a capital-intensive, rapidly growing production business.
“Today's announcement allows us to focus on and reinvest in our rapidly
growing natural gas production and midstream businesses. The proposed
transaction provides capital to accelerate the monetization of our reserves
beyond 2013 and also adds to our Marcellus midstream assets,” stated David
Porges, Chief Executive Officer of EQT Corporation.
As part of the transaction, EQT will receive approximately 200 miles of
regulated transmission pipelines, as well as four storage pools that have a
total of 15.1 Bcf working gas capacity. These assets are strategically located
across multiple counties in Pennsylvania and connect to EQT's existing
transmission assets, which will increase the Company's transportation and
storage capabilities.
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