EQT 10-Q 2023-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE TRANSITION PERIOD FROM__________ TO__________

COMMISSION FILE NUMBER: 001-03551

EQT CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania						25-0464690
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania						15222
(Address of principal executive offices)						(Zip Code)

(412) 553-5700

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading symbol(s)						Name of each exchange on which registered
Common Stock, no par value						EQT						New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒						Accelerated filer			☐
Non-accelerated filer			☐						Smaller reporting company			☐
									Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 21, 2023, 361,642,666 shares of common stock, no par value, of the registrant were outstanding.

TABLE OF CONTENTS

						Page No.
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)
			Statements of Condensed Consolidated Operations			3
			Statements of Condensed Consolidated Comprehensive Income (Loss)			4
			Condensed Consolidated Balance Sheets			5
			Statements of Condensed Consolidated Cash Flows			6
			Statements of Condensed Consolidated Equity			7
			Notes to the Condensed Consolidated Financial Statements			8
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			28
Item 4.			Controls and Procedures			30
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			30
Item 1A.			Risk Factors			31
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			31
Item 6.			Exhibits			33
Signature						34

PART I. FINANCIAL INFORMATION

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)

			Three Months Ended March 31,
			2023						2022
			(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil			$	1,830,358					$	2,486,624
Gain (loss) on derivatives			824,852						(3,077,637)
Net marketing services and other			5,861						11,903
Total operating revenues			2,661,071						(579,110)
Operating expenses:
Transportation and processing			514,984						516,104
Production			47,940						71,012
Exploration			952						772
Selling, general and administrative			51,894						69,096
Depreciation and depletion			387,685						422,098
Loss (gain) on sale/exchange of long-lived assets			16,528						(1,209)
Impairment of contract asset			—						184,945
Impairment and expiration of leases			10,546						29,991
Other operating expenses			19,662						16,347
Total operating expenses			1,050,191						1,309,156
Operating income (loss)			1,610,880						(1,888,266)
(Income) loss from investments			(4,764)						20,785
Dividend and other income			(175)						(3,596)
(Gain) loss on debt extinguishment			(6,606)						6,923
Interest expense, net			46,546						67,902
Income (loss) before income taxes			1,575,879						(1,980,280)
Income tax expense (benefit)			356,646						(465,697)
Net income (loss)			1,219,233						(1,514,583)
Less: Net income attributable to noncontrolling interests			685						1,465
Net income (loss) attributable to EQT Corporation			$	1,218,548					$	(1,516,048)
Income (loss) per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding			361,462						374,142
Net income (loss) attributable to EQT Corporation			$	3.37					$	(4.05)
Diluted (Note 7):
Weighted average common stock outstanding			393,883						374,142
Net income (loss) attributable to EQT Corporation			$	3.10					$	(4.05)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

			Three Months Ended March 31,
			2023						2022
			(Thousands)
Net income (loss)			$	1,219,233					$	(1,514,583)
Other comprehensive income, net of tax:
Other postretirement benefits liability adjustment, net of tax expense: $15 and $20			164						63
Comprehensive income (loss)			1,219,397						(1,514,520)
Less: Comprehensive income attributable to noncontrolling interests			685						1,465
Comprehensive income (loss) attributable to EQT Corporation			$	1,218,712					$	(1,515,985)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

EQT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

			March 31, 2023						December 31, 2022
			(Thousands)
ASSETS
Current assets:
Cash and cash equivalents			$	2,127,262					$	1,458,644
Accounts receivable (less provision for doubtful accounts: $457 and $605)			628,132						1,608,089
Derivative instruments, at fair value			978,351						812,371
Prepaid expenses and other			215,809						135,337
Total current assets			3,949,554						4,014,441
Property, plant and equipment			27,831,803						27,393,919
Less: Accumulated depreciation and depletion			9,598,103						9,226,586
Net property, plant and equipment			18,233,700						18,167,333
Other assets			507,200						488,152
Total assets			$	22,690,454					$	22,669,926
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt			$	413,244

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The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT," the "Company," "we," "us," or "our" are to EQT Corporation and its subsidiaries, collectively.

CAUTIONARY STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act). Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof, in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop our reserves; drilling plans and programs, including availability of capital to complete these plans and programs; total resource potential and drilling inventory duration; projected production and sales volume and growth rates; natural gas prices; changes in basis and the impact of commodity prices on our business; potential future impairments of our assets; projected well costs and capital expenditures; infrastructure programs; the cost, capacity, and timing of obtaining regulatory approvals; our ability to successfully implement and execute our operational, organizational, technological and environmental, social and governance (ESG) initiatives, and achieve the anticipated results of such initiatives; projected gathering and compression rates; potential or pending acquisition transactions, including the pending acquisition of Tug Hill's upstream assets and XcL Midstream's gathering and processing assets (the Tug Hill and XcL Midstream Acquisition), or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions; the amount and timing of any repayments, redemptions or repurchases of our common stock, outstanding debt securities or other debt instruments; our ability to retire our debt and the timing of such retirements, if any; the projected amount and timing of dividends; projected cash flows and free cash flow and the timing thereof; liquidity and financing requirements, including funding sources and availability; our ability to maintain or improve our credit ratings, leverage levels and financial profile; our hedging strategy and projected margin posting obligations; the effects of litigation, government regulation and tax position; and the expected impact of changes to tax laws.

The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by us. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. These risks and uncertainties include, but are not limited to, volatility of commodity prices; the costs and results of drilling and operations; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and other resources among our strategic opportunities; access to and cost of capital, including as a result of rising interest rates and other economic uncertainties; our hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; cyber security risks and acts of sabotage; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and sand and water required to execute our exploration and development plans, including as a result of inflationary pressures; risks associated with operating primarily in the Appalachian Basin and obtaining a substantial amount of our midstream services from Equitrans Midstream Corporation (Equitrans Midstream); the ability to obtain environmental and other permits and the timing thereof; government regulation or action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; and disruptions to our business due to acquisitions and other significant transactions, including the pending Tug Hill and XcL Midstream Acquisition. These and other risks and uncertainties are described under Item 1A., "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, and may be updated by Part II, Item 1A., "Risk Factors" in subsequent Quarterly Reports on Form 10-Q and other documents we subsequently file from time to time with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Consolidated Results of Operations

Net income attributable to EQT Corporation for the three months ended March 31, 2023 was $1,218.5 million, $3.10 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2022 of $1,516.0 million, $4.05 per diluted share. The change was attributable primarily to a gain on derivatives in the first quarter of 2023 as compared to a loss on derivatives in the first quarter of 2022 and impairment of the contract asset in the first quarter of 2022, partly offset by increased income tax expense and lower sales of natural gas, NGLs and oil.

See "Sales Volume and Revenues" and "Operating Expenses" for discussions of items affecting operating income and "Other Income Statement Items" for a discussion of other income statement items. See "Investing Activities" under "Capital Resources and Liquidity" for a discussion of capital expenditures.

Trends and Uncertainties

Our sales volume and operating expenses for 2022 and the first quarter of 2023 were negatively impacted by fewer wells turned-in-line during 2022 compared to our 2022 planned development schedule due to third-party supply chain constraints. As a result of such third-party supply chain constraints during 2022, we shifted the planned development of approximately 30 wells from 2022 to 2023 (the Rescheduled Wells). As we work to complete the Rescheduled Wells, we anticipate that our capital expenditures will be elevated until the Rescheduled Wells are completed and turned-in-line, which we project will occur during the first half of 2023; however, supply chain constraints or declines in natural gas prices may result in us adjusting our 2023 planned development schedule. Adjustments to our 2023 planned development schedule could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

The annual inflation rate in the United States was particularly high during 2022, and, although the inflation rate began to fall in the first quarter of 2023, it still remains elevated compared to historical levels. Furthermore, many analysts anticipate inflation will remain elevated through 2023. Inflationary pressures have multiple impacts on our business, including increasing our operating expenses and our cost of capital. Additionally, certain of our commitments for demand charges under our existing long-term contracts and processing capacity are subject to consumer price index adjustments. Although we believe our scale and supply chain contracting strategy of using multi-year sand and frac crew contracts allows us to maximize capital and operating efficiencies, future increases in the inflation rate will negatively impact our long-term contracts with consumer price index adjustments.

Additionally, while the prices for natural gas, NGLs and oil have historically been volatile, price volatility was especially pronounced during 2022, and continued to be volatile during the first quarter of 2023. The daily spot prices for NYMEX Henry Hub natural gas ranged from a high of $9.85 per MMBtu to a low of $1.93 per MMBtu between the period from January 1, 2022 through March 31, 2023, and the daily spot prices for NYMEX West Texas Intermediate crude oil ranged from a high of $123.64 per barrel to a low of $66.61 per barrel during the same period. We expect commodity price volatility to continue or increase throughout the remainder of 2023 due to rising macroeconomic uncertainty and geopolitical tensions, including the Russian invasion of Ukraine, which began in February 2022 and has put upward pressure on natural gas and oil prices. Our revenue, profitability, rate of growth, liquidity and financial position will continue to be impacted in the future by the market prices for natural gas and, to a lesser extent, NGLs and oil.

Average Realized Price Reconciliation

The following table presents detailed natural gas and liquids operational information to assist in the understanding of our consolidated operations, including the calculation of our average realized price ($/Mcfe), which is based on adjusted operating revenues, a non-GAAP supplemental financial measure. Adjusted operating revenues is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues should not be considered as an alternative to total operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of adjusted operating revenues with total operating revenues, the most directly comparable financial measure calculated in accordance with GAAP.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

			Three Months Ended March 31,
			2023						2022
			(Thousands, unless otherwise noted)
NATURAL GAS
Sales volume (MMcf)			433,397						466,136
NYMEX price ($/MMBtu)			$	3.45					$	4.90
Btu uplift			0.17						0.23
Natural gas price ($/Mcf)			$	3.62					$	5.13
Basis ($/Mcf) (a)			$	0.33					$	(0.22)
Cash settled basis swaps ($/Mcf)			(0.17)						(0.21)
Average differential, including cash settled basis swaps ($/Mcf)			$	0.16					$	(0.43)
Average adjusted price ($/Mcf)			$	3.78					$	4.70
Cash settled derivatives ($/Mcf)			0.32						(1.73)
Average natural gas price, including cash settled derivatives ($/Mcf)			$	4.10					$	2.97
Natural gas sales, including cash settled derivatives			$	1,775,135					$	1,383,196
LIQUIDS
NGLs, excluding ethane:
Sales volume (MMcfe) (b)			13,497						14,634
Sales volume (Mbbl)			2,250						2,439
NGLs price ($/Bbl)			$	38.75					$	64.05
Cash settled derivatives ($/Bbl)			(2.36)						(4.85)
Average NGLs price, including cash settled derivatives ($/Bbl)			$	36.39					$	59.20
NGLs sales, including cash settled derivatives			$	81,856					$	144,381
Ethane:
Sales volume (MMcfe) (b)			9,927						9,839
Sales volume (Mbbl)			1,654						1,640
Ethane price ($/Bbl)			$	7.04					$	10.54
Ethane sales			$	11,652					$	17,289
Oil:
Sales volume (MMcfe) (b)			1,984						1,666
Sales volume (Mbbl)			331						278
Oil price ($/Bbl)			$	58.37					$	85.55
Oil sales			$	19,298					$	23,756
Total liquids sales volume (MMcfe) (b)			25,408						26,139
Total liquids sales volume (Mbbl)			4,235						4,357
Total liquids sales			$	112,806					$	185,426
TOTAL
Total natural gas and liquids sales, including cash settled derivatives (c)			$	1,887,941					$	1,568,622
Total sales volume (MMcfe)			458,805						492,275
Average realized price ($/Mcfe)			$	4.11					$	3.19

(a)Basis represents the difference between the ultimate sales price for natural gas, including the effects of delivered price benefit or deficit associated with our firm transportation agreements, and the New York Mercantile Exchange (NYMEX) natural gas price.

(b)NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.

(c)Total natural gas and liquids sales, including cash settled derivatives, is also referred to in this report as adjusted operating revenues, a non-GAAP supplemental financial measure.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Non-GAAP Financial Measures Reconciliation

The table below reconciles adjusted operating revenues, a non-GAAP supplemental financial measure, with total operating revenues, its most directly comparable financial measure calculated in accordance with GAAP. Adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues excludes the revenue impacts of changes in the fair value of derivative instruments prior to settlement and net marketing services and other. We use adjusted operating revenues to evaluate earnings trends because, as a result of the measure's exclusion of the often-volatile changes in the fair value of derivative instruments prior to settlement, the measure reflects only the impact of settled derivative contracts. Net marketing services and other consists of the costs of, and recoveries on, pipeline capacity releases, revenues for gathering services provided to third parties and other revenues. Because we consider net marketing services and other to be unrelated to our natural gas and liquids production activities, adjusted operating revenues excludes net marketing services and other. We believe that adjusted operating revenues provides useful information to investors for evaluating period-to-period comparisons of earnings trends.

			Three Months Ended March 31,
			2023						2022
			(Thousands, unless otherwise noted)
Total operating revenues			$	2,661,071					$	(579,110)
Add (deduct):
(Gain) loss on derivatives			(824,852)						3,077,637
Net cash settlements received (paid) on derivatives			157,000						(885,539)
Premiums paid for derivatives that settled during the period			(99,417)						(32,463)
Net marketing services and other			(5,861)						(11,903)
Adjusted operating revenues, a non-GAAP financial measure			$	1,887,941					$	1,568,622
Total sales volume (MMcfe)			458,805						492,275
Average realized price ($/Mcfe)			$	4.11					$	3.19

Sales Volume and Revenues

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

			Three Months Ended March 31,
			2023						2022						Change						% Change
			(Thousands, unless otherwise noted)
Sales volume by shale (MMcfe):
Marcellus			434,346						455,427						(21,081)						(4.6)
Ohio Utica			23,185						34,206						(11,021)						(32.2)
Other			1,274						2,642						(1,368)						(51.8)
Total sales volume			458,805						492,275						(33,470)						(6.8)
Average daily sales volume (MMcfe/d)			5,098						5,470						(372)						(6.8)
Operating revenues:
Sales of natural gas, NGLs and oil			$	1,830,358					$	2,486,624					$	(656,266)					(26.4)
Gain (loss) on derivatives			824,852						(3,077,637)						3,902,489						(126.8)
Net marketing services and other			5,861						11,903						(6,042)						(50.8)
Total operating revenues			$	2,661,071					$	(579,110)					$	3,240,181					(559.5)

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil decreased for the three months ended March 31, 2023 compared to the same period in 2022 due to decreased sales volume, partly offset by a higher average realized price.

Sales volume decreased for the three months ended March 31, 2023 primarily as a result of sales volume decreases from natural decline of producing wells and fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints. Supply chain constraints may continue to impact our future operating revenues. The assets which we intend to acquire in the pending Tug Hill and XcL Midstream Acquisition, which is subject to regulatory approvals, are currently producing approximately 800 MMcfe per day of sales volume, 20% of which is liquids sales volume.

Average realized price for the three months ended March 31, 2023 compared to the same period in 2022 increased due to favorable cash settled derivatives and favorable differential, partly offset by lower NYMEX and liquids prices. For the three months ended March 31, 2023, we received $157.0 million of net cash settlements on derivatives and for the same period in 2022, we paid $885.5 million of net cash settlements on derivatives, which are included in average realized price but may not be included in operating revenues. For the three months ended March 31, 2023 and 2022, we paid premiums for derivatives that settled during the period of $99.4 million and $32.5 million, respectively.

Gain (loss) on derivatives. For the three months ended March 31, 2023, we recognized a gain on derivatives of $824.9 million related primarily to increases in the fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices. For the same period in 2022, we recognized a loss on derivatives of $3,077.6 million related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Operating Expenses

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

			Three Months Ended March 31,
			2023						2022						Change						% Change
			(Thousands, unless otherwise noted)
Operating expenses:
Gathering			$	307,264					$	320,529					$	(13,265)					(4.1)
Transmission			153,927						147,106						6,821						4.6
Processing			53,793						48,469						5,324						11.0
Lease operating expenses (LOE)			28,464						39,829						(11,365)						(28.5)
Production taxes			19,476						31,183						(11,707)						(37.5)
Exploration			952						772						180						23.3
Selling, general and administrative			51,894						69,096						(17,202)						(24.9)
Production depletion			$	382,382					$	416,925					$	(34,543)					(8.3)
Other depreciation and depletion			5,303						5,173						130						2.5
Total depreciation and depletion			$	387,685					$	422,098					$	(34,413)					(8.2)
Per Unit ($/Mcfe):
Gathering			$	0.67					$	0.65					$	0.02					3.1
Transmission			0.34						0.30						0.04						13.3
Processing			0.12						0.10						0.02						20.0
LOE			0.06						0.08						(0.02)						(25.0)
Production taxes			0.04						0.06						(0.02)						(33.3)
Selling, general and administrative			0.11						0.14						(0.03)						(21.4)
Production depletion			0.83						0.85						(0.02)						(2.4)

Operating expenses on a per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 were negatively impacted by lower sales volume unless otherwise noted. Sales volume for the three months ended March 31, 2023 was negatively impacted by fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints. Supply chain constraints and inflationary pressures may continue to impact our future operating expenses.

Gathering. Gathering expense decreased on an absolute basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower sales volume and lower gathering rates on certain contracts indexed to price.

Transmission. Transmission expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to additional capacity acquired in November 2022 and lower credits received from the Texas Eastern Transmission Pipeline.

Processing. Processing expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to increased volumes that require processing as a result of increased development of liquids-rich areas throughout 2022 and inflation.

LOE. LOE decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower salt water disposal costs and increased recycling. Saltwater disposal costs and recycle rates were favorably impacted by increased usage of our internally developed produced water gathering and storage system which was placed into service during the fourth quarter of 2022.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Production taxes. Production taxes decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due to lower West Virginia severance taxes and Pennsylvania impact fees, which resulted primarily from lower prices.

Selling, general and administrative. Selling, general and administrative expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower long-term incentive compensation costs as a result of changes in the fair value of awards. Long-term incentive compensation may fluctuate with changes in our stock price and performance conditions.

Depreciation and depletion. Production depletion expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due to a lower annual depletion rate and decreased sales volume.

Loss (gain) on sale/exchange of long-lived assets. During the three months ended March 31, 2023, we recognized a loss on sale/exchange of long-lived assets of $16.5 million related to acreage trade agreements where the carrying value of the acres traded exceeded the fair value of the of the acres received.

Impairment of contract asset. During the three months ended March 31, 2022, we recognized impairment of our contract asset of $184.9 million. See Note 8 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases. During the three months ended March 31, 2023 and 2022, we recognized impairment and expiration of leases of $10.5 million and $30.0 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

Other operating expenses. Other operating expenses for the three months ended March 31, 2023 of $19.7 million were attributable primarily to changes in legal and environmental reserves including settlements and transaction costs associated with the pending Tug Hill and XcL Midstream Acquisition. Other operating expenses for the three months ended March 31, 2022 of $16.3 million were attributable primarily to changes in legal reserves including settlements.

Other Income Statement Items

(Income) loss from investments. For the three months ended March 31, 2023, we recognized income from investments due to a gain on our investment in the Investment Fund (defined in Note 4 to the Condensed Consolidated Financial Statements) and equity earnings on our equity method investments. For the three months ended March 31, 2022, we recognized a loss from investments due primarily to a loss on our investment in Equitrans Midstream, which resulted from a decrease in Equitrans Midstream's stock price, partly offset by a gain on our investment in the Investment Fund and equity earnings on our equity method investments.

(Gain) loss on debt extinguishment. During the three months ended March 31, 2023, we recognized a gain on debt extinguishment due to debt repayment and repurchases at a discount to par value. During the three months ended March 31, 2022, we recognized a loss on debt extinguishment due to debt repayment and repurchases. See Note 6 to the Condensed Consolidated Financial Statements.

Interest expense, net. Interest expense, net decreased for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to higher interest income earned as well as reduced interest expense due to a reduction of our letters of credit balances.

Income tax expense (benefit). See Note 5 to the Condensed Consolidated Financial Statements.

Capital Resources and Liquidity

Although we cannot provide any assurance, we believe cash flows from operating activities and availability under our credit facility should be sufficient to meet our cash requirements inclusive of, but not limited to, normal operating needs, debt service obligations, planned capital expenditures and commitments for at least the next twelve months and, based on current expectations, for the long term.

Planned Capital Expenditures and Sales Volume. In 2023, we expect to spend approximately $1.7 billion to $1.9 billion in total capital expenditures, excluding amounts attributable to noncontrolling interest and amounts attributable to the assets expected to

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

be acquired in the pending Tug Hill and XcL Midstream Acquisition. We expect to fund our capital expenditures with cash generated from operations and, if required, borrowings under our credit facility. Because we are the operator of a high percentage of our developed acreage, the amount and timing of these capital expenditures are largely discretionary. We could choose to defer a portion of these planned 2023 capital expenditures depending on a variety of factors, including prevailing and anticipated prices for natural gas, NGLs and oil; the availability of necessary equipment, infrastructure and capital; the receipt and timing of required regulatory permits and approvals; and drilling, completion and acquisition costs. In 2023, we expect our sales volume to be 1,900 Bcfe to 2,000 Bcfe, excluding amounts attributable to the assets expected to be acquired in the pending Tug Hill and XcL Midstream Acquisition.

Operating Activities. Net cash provided by operating activities was $1,663 million for the three months ended March 31, 2023 compared to $1,021 million for the same period in 2022. The increase was due primarily to net cash settlements received on derivatives in the first quarter of 2023 compared to net cash settlements paid on derivatives in the first quarter of 2022, favorable changes in working capital and lower cash operating expenses, partly offset by lower cash operating revenues.

Our cash flows from operating activities are affected by movements in the market price for commodities. We are unable to predict such movements outside of the current market view as reflected in forward strip pricing. Refer to Item 1A., "Risk Factors – Natural gas, NGLs and oil price volatility, or a prolonged period of low natural gas, NGLs and oil prices, may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position" in our Annual Report on Form 10-K for the year ended December 31, 2022.

Investing Activities. Net cash used in investing activities was $498 million for the three months ended March 31, 2023 compared to $291 million for the same period in 2022. The increase was attributable to increased capital expenditures.

The following table summarizes our capital expenditures.

			Three Months Ended March 31,
			2023						2022
			(Millions)
Reserve development			$	393					$	229
Land and lease (a)			36						49
Capitalized overhead			14						12
Capitalized interest			10						6
Other production infrastructure			14						13
Other			2						1
Total capital expenditures			469						310
Add (deduct): Non-cash items (b)			26						(18)
Total cash capital expenditures			$	495					$	292

(a)Capital expenditures attributable to noncontrolling interest were $5.4 million and $1.9 million for the three months ended March 31, 2023 and 2022, respectively.

(b)Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures and capitalized share-based compensation costs. The impact of accrued capital expenditures includes the current period estimate, net of the reversal of the prior period accrual.

Financing Activities. Net cash used in financing activities was $496 million for the three months ended March 31, 2023 compared to net cash used in financing activities of $827 million for the same period in 2022. For the three months ended March 31, 2023, the primary uses of financing cash flows were repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends. For the three months ended March 31, 2022, the primary use of financing cash flows was repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends, and the primary source of financing cash flows was net proceeds from credit facility borrowings.

See Note 6 to the Condensed Consolidated Financial Statements for further discussion of our debt and borrowings under our credit facility.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

On April 19, 2023, our Board of Directors declared a quarterly cash dividend of $0.15 per share of EQT Corporation common stock, payable on June 1, 2023, to shareholders of record at the close of business on May 10, 2023.

Depending on our actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, we may from time to time seek to redeem or repurchase our outstanding debt or equity securities through tender offers or other cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material. See Note 6 to the Condensed Consolidated Financial Statements for discussion of redemptions and repurchases of debt.

Security Ratings and Financing Triggers

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of April 21, 2023. Our credit ratings and rating outlooks are subject to revision or withdrawal at any time by the assigning rating agency, and each rating should be evaluated independent from any other rating. We cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by a rating agency if, in the rating agency's judgment, circumstances so warrant. See Note 3 to the Condensed Consolidated Financial Statements for a description of what is deemed investment grade.

Rating agency						Senior notes						Outlook
Moody's Investors Service (Moody's)						Ba1						Positive
Standard & Poor's Ratings Service (S&P)						BBB–						Stable
Fitch Ratings Service (Fitch)						BBB–						Stable

Changes in credit ratings may affect our access to the capital markets, the cost of short-term debt through interest rates and fees under our credit facility, the interest rate on our Term Loan Facility (defined in Note 6 to the Condensed Consolidated Financial Statements) and senior notes with adjustable rates, the rates available on new long-term debt, our pool of investors and funding sources, the borrowing costs and margin deposit requirements on our over the counter (OTC) derivative instruments and credit assurance requirements, including collateral, in support of our midstream service contracts, joint venture arrangements or construction contracts. Margin deposits on our OTC derivative instruments are also subject to factors other than credit rating, such as natural gas prices and credit thresholds set forth in the agreements between us and our hedging counterparties.

As of April 21, 2023, we had sufficient unused borrowing capacity, net of letters of credit, under our credit facility to satisfy any requests for margin deposit or other collateral that our counterparties are permitted to request of us pursuant to our OTC derivative instruments, midstream services contracts and other contracts. As of April 21, 2023, such assurances could be up to approximately $0.6 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.2 billion in the aggregate. See Notes 3 and 6 to the Condensed Consolidated Financial Statements for further information.

Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under our credit facility and Term Loan Facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions. The most significant covenants and events of default under the debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. Our credit facility and Term Loan Facility contain financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%. As of March 31, 2023, we were in compliance with all debt provisions and covenants under our debt agreements.

See Note 6 to the Condensed Consolidated Financial Statements for a discussion of borrowings under our credit facility. As of March 31, 2023, we had not yet borrowed, and thus, had no borrowings, under the Term Loan Facility.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Commodity Risk Management

The substantial majority of our commodity risk management program is related to hedging sales of our produced natural gas. The overall objective of our hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices. The derivative commodity instruments that we use are primarily swap, collar and option agreements. The following table summarizes the approximate volume and prices of our NYMEX hedge positions as of April 21, 2023. The difference between the fixed price and NYMEX price is included in average differential presented in our price reconciliation in "Average Realized Price Reconciliation." The fixed price natural gas sales agreements can be physically or financially settled.

			Q2 2023 (a)						Q3 2023						Q4 2023																														2024
Hedged Volume (MMDth)			306						299						293																														206
Hedged Volume (MMDth/d)			3.3						3.3						3.2																														0.6
Swaps – Long
Volume (MMDth)			44						43						14																														—
Avg. Price ($/Dth)			$	4.65					$	4.72					$	4.77																													$	—
Swaps – Short
Volume (MMDth)			50						43						42																														2
Avg. Price ($/Dth)			$	2.57					$	2.54					$	2.53																													$	2.67
Calls – Long
Volume (MMDth)			40						40						40																														51
Avg. Strike ($/Dth)			$	2.72					$	2.72					$	2.72																													$	3.20
Calls – Short
Volume (MMDth)			300						303						197																														255
Avg. Strike ($/Dth)			$	4.85					$	4.85					$	4.69																													$	5.07
Puts – Long
Volume (MMDth)			299						298						265																														204
Avg. Strike ($/Dth)			$	3.40					$	3.41					$	3.53																													$	4.21
Fixed Price Sales
Volume (MMDth)			1						1						—																														—
Avg. Price ($/Dth)			$	2.38					$	2.38					$	—																													$	—
Option Premiums
Cash Settlement of Deferred Premiums (millions)			$	(70)					$	(70)					$	(92)																													$	(10)

(a)April 1 through June 30.

We have also entered into derivative instruments to hedge basis. We may use other contractual agreements to implement our commodity hedging strategy from time to time.

See Item 3., "Quantitative and Qualitative Disclosures About Market Risk" and Note 3 to the Condensed Consolidated Financial Statements for further discussion of our hedging program.

Commitments and Contingencies

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We evaluate our legal proceedings, including litigation and regulatory and governmental investigations and inquiries, on a regular basis and accrue a liability for such matters when we believe that a loss is probable and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. In the event we determine that (i) a loss is probable but the amount of the loss cannot be reasonably estimated, or (ii) a loss is less likely than probable but is reasonably possible, then we are required to disclose the matter in our Annual Report on Form 10-K or this Quarterly Report on Form 10-Q, as applicable, although we are not required to accrue such loss.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

When able, we determine an estimate of reasonably possible losses or ranges of reasonably possible losses, whether in excess of any related accrued liability or where there is no accrued liability, for legal proceedings. In instances where such estimates can be made, any such estimates are based on our analysis of currently available information and are subject to significant judgment and a variety of assumptions and uncertainties and may change as new information is obtained. See Note 13 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our commitments and contingencies, including certain pending legal and regulatory proceedings and other contingent matters. As of March 31, 2023, there have been no material changes to such matters as disclosed therein. See also Part II. "Other Information", Item 1. "Legal Proceedings", for a description of certain other pending environmental matters for which we have accrued contingent liabilities.

Additionally, in the normal course of business, we are subject to various other pending and threatened legal proceedings in which claims for monetary damages or other relief are asserted. We do not anticipate, at the present time, that the ultimate aggregate liability, if any, arising out of such other legal proceedings will have a material adverse effect on our financial position, results of operations or liquidity.

Critical Accounting Policies and Estimates

Our critical accounting policies, including a discussion regarding the estimation uncertainty and the impact that our critical accounting estimates have had, or are reasonably likely to have, on our financial condition or results of operations, are described in Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022. The application of our critical accounting policies may require us to make judgments and estimates about the amounts reflected in the Condensed Consolidated Financial Statements. We use historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

Commodity Price Risk and Derivative Instruments. Our primary market risk exposure is the volatility of future prices for natural gas and NGLs. Due to the volatility of commodity prices, we are unable to predict future potential movements in the market prices for natural gas and NGLs at our ultimate sales points and, thus, cannot predict the ultimate impact of prices on our operations. Prolonged low, or significant, extended declines in, natural gas and NGLs prices could adversely affect, among other things, our development plans, which would decrease the pace of development and the level of our proved reserves. Increases in natural gas and NGLs prices may be accompanied by, or result in, increased well drilling costs, increased production taxes, increased LOE, increased volatility in seasonal gas price spreads for our storage assets and increased end-user conservation or conversion to alternative fuels. In addition, to the extent we have hedged our production at prices below the current market price, we will not benefit fully from an increase in the price of natural gas, and, depending on our then-current credit ratings and the terms of our hedging contracts, we may be required to post additional margin with our hedging counterparties.

The overall objective of our hedging program is to protect our cash flows from undue exposure to the risk of changing commodity prices. Our use of derivatives is further described in Note 3 to the Condensed Consolidated Financial Statements and "Commodity Risk Management" under "Capital Resources and Liquidity" in Item 2., "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our OTC derivative commodity instruments are placed primarily with financial institutions and the creditworthiness of those institutions is regularly monitored. We primarily enter into derivative instruments to hedge forecasted sales of production. We also enter into derivative instruments to hedge basis. Our use of derivative instruments is implemented under a set of policies approved by our management-level Hedge and Financial Risk Committee and is reviewed by our Board of Directors.

For derivative commodity instruments used to hedge our forecasted sales of production, which are at, for the most part, NYMEX natural gas prices, we set policy limits relative to the expected production and sales levels that are exposed to price risk. We have an insignificant amount of financial natural gas derivative commodity instruments for trading purposes.

The derivative commodity instruments we use are primarily swap, collar and option agreements. These agreements may require payments to, or receipt of payments from, counterparties based on the differential between two prices for the commodity. We use these agreements to hedge our NYMEX and basis exposure. We may also use other contractual agreements when executing our commodity hedging strategy.

We monitor price and production levels on a continuous basis and make adjustments to quantities hedged as warranted.

A hypothetical decrease of 10% in the NYMEX natural gas price on March 31, 2023 and December 31, 2022 would increase the fair value of our natural gas derivative commodity instruments by approximately $287 million and $727 million, respectively. A hypothetical increase of 10% in the NYMEX natural gas price on March 31, 2023 and December 31, 2022 would decrease the fair value of our natural gas derivative commodity instruments by approximately $208 million and $333 million, respectively. For purposes of this analysis, we applied the 10% change in the NYMEX natural gas price on March 31, 2023 and December 31, 2022 to our natural gas derivative commodity instruments as of March 31, 2023 and December 31, 2022 to calculate the hypothetical change in fair value. The change in fair value was determined using a method similar to our normal process for determining derivative commodity instrument fair value described in Note 4 to the Condensed Consolidated Financial Statements.

The above analysis of our derivative commodity instruments does not include the offsetting impact that the same hypothetical price movement may have on our physical sales of natural gas. The portfolio of derivative commodity instruments held to hedge our forecasted produced natural gas approximates a portion of our expected physical sales of natural gas; therefore, an adverse impact to the fair value of the portfolio of derivative commodity instruments held to hedge our forecasted production associated with the hypothetical changes in commodity prices referenced above should be offset by a favorable impact on our physical sales of natural gas, assuming that the derivative commodity instruments are not closed in advance of their expected term and the derivative commodity instruments continue to function effectively as hedges of the underlying risk.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or maturity date, whichever comes first.

Interest Rate Risk. Changes in market interest rates affect the amount of interest we earn on cash, cash equivalents and short-term investments and the interest rate we pay on borrowings under our credit facility and Term Loan Facility. None of the interest we pay on our senior notes fluctuates based on changes to market interest rates. There were no borrowings for the three months ended March 31, 2023 under our credit facility or Term Loan Facility.

Interest rates on our 6.125% senior notes due 2025 and 7.00% senior notes due 2030 fluctuate based on changes to the credit ratings assigned to our senior notes by Moody's, S&P and Fitch. Interest rates on our other outstanding senior notes do not fluctuate based on changes to the credit ratings assigned to our senior notes by Moody's, S&P and Fitch. For a discussion of credit rating downgrade risk, see Item 1A., "Risk Factors – Our exploration and production operations have substantial capital requirements, and we may not be able to obtain needed capital or financing on satisfactory terms" in our Annual Report on Form 10-K for the year ended December 31, 2022. Changes in interest rates affect the fair value of our fixed rate debt. See Note 6 to the Condensed Consolidated Financial Statements for further discussion of our debt and Note 4 to the Condensed Consolidated Financial Statements for a discussion of fair value measurements, including the fair value measurement of our debt.

Other Market Risks. We are exposed to credit loss in the event of nonperformance by counterparties to our derivative contracts. This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. Our OTC derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as the financial industry as a whole. We use various processes and analyses to monitor and evaluate our credit risk exposures, including monitoring current market conditions and counterparty credit fundamentals. Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, we enter into transactions primarily with financial counterparties that are of investment grade, enter into netting agreements whenever possible and may obtain collateral or other security.

Approximately 60%, or $938 million, of our OTC derivative contracts outstanding at March 31, 2023 had a positive fair value. Approximately 36%, or $710 million, of our OTC derivative contracts outstanding at December 31, 2022 had a positive fair value.

As of March 31, 2023, we were not in default under any derivative contracts and had no knowledge of default by any counterparty to our derivative contracts. During the three months ended March 31, 2023, we made no adjustments to the fair value of our derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in our established fair value procedure. We monitor market conditions that may impact the fair value of our derivative contracts.

We are exposed to the risk of nonperformance by credit customers on physical sales of natural gas, NGLs and oil. Revenues and related accounts receivable from our operations are generated primarily from the sale of our produced natural gas, NGLs and oil to marketers, utilities and industrial customers located in the Appalachian Basin and in markets that are accessible through our transportation portfolio, which includes markets in the Gulf Coast, Midwest and Northeast United States and Canada. We also contract with certain processors to market a portion of our NGLs on our behalf.

No one lender of the large group of financial institutions in the syndicate for our credit facility holds more than 10% of the financial commitments under such facility. The large syndicate group and relatively low percentage of participation by each lender are expected to limit our exposure to disruption or consolidation in the banking industry.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the first quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We accrue legal and other direct costs related to loss contingencies when actually incurred. We have established reserves in amounts that we believe to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, we believe that the ultimate outcome of any pending matter involving us will not materially affect our financial position, results of operations or liquidity.

Except as noted below, there are no material updates to the matters previously disclosed in Item 3, "Legal Proceedings" of our Annual Report on Form 10-K for the year ended December 31, 2022.

Environmental Proceedings

GPU Consent Order Inaccuracies, PADEP. On December 16, 2020, EQT Production Company, a wholly-owned indirect subsidiary of EQT Corporation, entered into a Consent Order and Agreement (the GPU COA) with the Pennsylvania Department of Environmental Protection (the PADEP), pursuant to which EQT Production Company agreed to install secondary containment around Gas Production Units (GPUs) located at wells that were drilled between October 8, 2016 and February 4, 2019. In January 2022, we discovered that the list of GPUs disclosed in the GPU COA was incomplete, and we promptly notified the PADEP of the inaccuracies. We are currently negotiating a settlement with the PADEP related to the inaccuracies in the GPU COA, and we anticipate that this matter will be resolved through a settlement in the near future; however, no assurance can be given that a final settlement will be reached. While we anticipate that the payment related to this matter will exceed $300,000, we expect that the resolution of this matter will not have a material impact on our financial condition, results of operations or liquidity.

Produced Water Release, Washington County, Pennsylvania. In December 2021, we discovered a produced water leak associated with a GPU disposal line at one of our well pad sites located in Washington County, Pennsylvania. We self-reported the release to the PADEP spill hotline on December 4, 2021, and initiated cleanup of the released produced water. The initial release was determined to be in excess of one barrel and we entered the remediation project into the PADEP's Land Recycling and Environmental Remediation Act 2 Program (Act 2) for voluntary cleanup. In January 2022, we determined the release was larger than initially discovered and we disclosed this information to the PADEP on January 14, 2022. We submitted our Site

Characterization Report to the PADEP on January 16, 2023, and we intend to initiate remediation of the impacted area according to the PADEP’s Act 2 guidelines. We are currently negotiating a settlement with the PADEP including this matter, as well as the Plugging Consent Order Non-Compliance matter described below. We anticipate that this matter will be resolved through a settlement in the near future; however, no assurance can be given that a final settlement will be reached. While we anticipate that payment related to this matter will exceed $300,000, we expect that the resolution of this matter will not have a material impact on our financial condition, results of operations or liquidity.

Plugging Consent Order Non-Compliance, PADEP. In November 2016, we voluntarily entered into a Consent Order and Agreement with the PADEP to plug a certain number of our abandoned wells on an annual basis, and to remit Well Site Restoration Reports and Well Plugging Certificates to the PADEP in connection with such efforts. In August 2022, the PADEP sent us a notification alleging that, although we had met or exceeded the requirements to plug the requisite abandoned wells within the agreed upon schedule, we had not met all of the administrative requirements for remitting Well Site Restoration Reports and Well Plugging Certificates. We resolved the administrative omissions in January 2023, and we are currently negotiating a settlement with the PADEP including this matter, as well as the Produced Water Release matter described above. We anticipate that this matter will be resolved through a settlement in the near future; however, no assurance can be given that a final settlement will be reached. While we anticipate that payment related to this matter will exceed $300,000, we expect that the resolution of this matter will not have a material impact on our financial condition, results of operations or liquidity.

There are no material changes to the risk factors previously disclosed in Item 1A., "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Conversion of Certain Convertible Notes. During the first quarter of 2023, we settled conversion notices submitted by holders of Convertible Notes (defined and described in Note 6 to the Condensed Consolidated Financial Statements) requesting the conversion of the aggregate principal of certain Convertible Notes (the Converted Notes) by issuing to such converting holders shares of EQT Corporation common stock as stated in the below table. Such shares were issued in transactions exempt from registration under the Securities Act by virtue of Section 3(a)(9) thereof, because no commission or other remuneration was paid in connection with conversion of the Converted Notes.

Settlement Date						Principal Converted						Shares Issued						Fair Market Value
						(Thousands)												(Thousands)
January 4, 2023						$	7					473						$	16
February 15, 2023						8						541						17
March 3, 2023						1						68						2
March 10, 2023						2						136						4
March 20, 2023						1						68						2
March 23, 2023						2						136						4

Repurchases of Equity Securities. The following table sets forth our repurchases of equity securities registered under Section 12 of the Exchange Act that occurred during the three months ended March 31, 2023.

			Total number of shares purchased						Average price paid per share (a)						Total number of shares purchased as part of publicly announced plans or programs (b)						Approximate dollar value of shares that may yet be purchased under the plans or programs (b)
January 1, 2023 – January 31, 2023			5,906,159						$	33.86					5,906,159						$	1,377,882,867
February 1, 2023 – February 28, 2023			—						—						—						1,377,882,867
March 1, 2023 – March 31, 2023			—						—						—						1,377,882,867
Total			5,906,159												5,906,159

(a)Excludes any fees, commissions or other expenses associated with the share repurchases.

(b)On December 13, 2021, we announced that our Board of Directors approved a share repurchase program (the Share Repurchase Program) authorizing us to repurchase shares of our outstanding common stock for an aggregate purchase price of up to $1 billion, excluding fees, commissions and expenses. On September 6, 2022, we announced that our Board of Directors approved a $1 billion increase to the Share Repurchase Program, pursuant to which approval we are authorized to repurchase shares of our outstanding common stock for an aggregate purchase price of up to $2 billion, excluding fees, commissions and expenses. Repurchases under the Share Repurchase Program may be made from time to time in amounts and at prices we deem appropriate and will be subject to a variety of factors, including the market price of our common stock, general market and economic conditions, applicable legal requirements and other considerations. The Share Repurchase Program was originally scheduled to expire on December 31, 2023; however, on April 26, 2023, we announced that our Board of Directors approved a one-year extension of the Share Repurchase Program. As a result of such extension, the Share Repurchase Program will expire on December 31, 2024, but it may be suspended, modified or discontinued at any time without prior notice. As of March 31, 2023, we had purchased shares for an aggregate purchase price of $622.1 million, excluding fees, commissions and expenses, under the Share Repurchase Program since its inception. The total number of shares purchased and the approximate dollar value of shares that may yet be purchased under the Share Repurchase Program reported in this table reflect shares purchased in each month based on the trade date; however, certain purchases may not have settled until the following month.

Exhibit No.						Description						Method of Filing
3.01(a)						Restated Articles of Incorporation of EQT Corporation (as amended through November 13, 2017).						Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on November 14, 2017.
3.01(b)						Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective May 1, 2020).						Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on May 4, 2020.
3.01(c)						Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective July 23, 2020).						Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on July 23, 2020.
3.02						Amended and Restated Bylaws of EQT Corporation (as amended through May 1, 2020).						Incorporated herein by reference to Exhibit 3.4 to Form 8-K (#001-3551) filed on May 4, 2020.
10.01*						Transition Agreement and General Release, dated February 11, 2023, between EQT Corporation and David M. Khani.						Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on February 13, 2023.
10.02(a)**						Letter Agreement (Construction and Development), dated January 23, 2023, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering Opco, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.						Incorporated herein by reference to Exhibit 10.03(r)** to Form 10-K (#001-3551) for the year ended December 31, 2022.
10.02(b)**						Fourth Amendment to Gas Gathering and Compression Agreement, dated January 23, 2023 and made effective December 31, 2022, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC.						Incorporated herein by reference to Exhibit 10.03(s)** to Form 10-K (#001-3551) for the year ended December 31, 2022.
10.02(c)**						Letter Agreement (Franklin Denny Gas), dated January 27, 2023, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering Opco, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.						Incorporated herein by reference to Exhibit 10.03(t)** to Form 10-K (#001-3551) for the year ended December 31, 2022.
10.03						Second Amendment to Credit Agreement, dated April 25, 2023, among EQT Corporation, PNC Bank, National Association, as administrative agent, and the other lenders party thereto.						Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on April 26, 2023.
31.01						Rule 13(a)-14(a) Certification of Principal Executive Officer.						Filed herewith as Exhibit 31.01.
31.02						Rule 13(a)-14(a) Certification of Principal Financial Officer.						Filed herewith as Exhibit 31.02.
32						Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.						Furnished herewith as Exhibit 32.
101						Interactive Data File.						Filed herewith as Exhibit 101.
104						Cover Page Interactive Data File.						Formatted as Inline XBRL and contained in Exhibit 101.

*Management contract or compensatory arrangement.

**Certain schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) and/or Item 601(b)(10(iv)), as applicable, of Regulation S-K. EQT Corporation agrees to furnish an unredacted, supplemental copy (including any omitted schedule or attachment) to the Securities Exchange Commission upon request. Redactions and omissions are designated with brackets containing asterisks.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						EQT CORPORATION
						(Registrant)
			By:			/s/ David M. Khani
						David M. Khani
						Chief Financial Officer

Date: April 27, 2023