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Acquisitions | 12 Months Ended
--- | ---
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Tug Hill and XcL Midstream Acquisition On August 22, 2023, the Company completed its acquisition (the Tug Hill and XcL Midstream Acquisition) of the upstream assets from THQ Appalachia I, LLC (the Upstream Seller) and the gathering and processing assets from THQ-XcL Holdings I, LLC (the Midstream Seller) 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 pursuant to the Amended and Restated Purchase Agreement, dated December 23, 2022 (as amended, the Tug Hill and XcL Midstream Purchase Agreement), entered into by and among EQT Corporation, EQT Production Company (a wholly-owned indirect subsidiary of EQT Corporation), the Upstream Seller and the Midstream Seller. The purchase price for the Tug Hill and XcL Midstream Acquisition consisted of 49,599,796 shares of EQT Corporation common stock and approximately $2.4 billion in cash, subject to customary post-closing adjustments. The Company funded the cash portion of the consideration with $1.25 billion of borrowings under the Term Loan Facility, $1.0 billion of cash on hand and the $150 million cash deposit previously placed in escrow. The Tug Hill and XcL Midstream Purchase Agreement has an economic effective date of July 1, 2022. As a result of the Tug Hill and XcL Midstream Acquisition, the Company acquired approximately 90,000 net West Virginia acres, approximately 145 miles of midstream gathering pipeline, compression and gas processing assets and approximately 55 miles of connected water infrastructure with four centralized storage facilities. Allocation of Purchase Price. The Tug Hill and XcL Midstream Acquisition was accounted for as a business combination using the acquisition method. The table below summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of August 22, 2023. Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of assets acquired and liabilities assumed. The Company expects to complete the purchase price allocation once it has received all necessary information, at which time the value of the assets acquired and liabilities assumed will be revised if necessary.
|  | Preliminary Purchase Price Allocation
|  | (Thousands)
Consideration: |  |
Equity |  | $ | 2,152,631 |
Cash |  | 2,386,982 |
Settlement of pre-existing relationships |  | (31,754) |
Total consideration |  | $ | 4,507,859 |
Fair value of assets acquired: |  |
Cash and cash equivalents |  | $ | 100 |
Accounts receivable, net |  | 75,961 |
Derivative instruments, at fair value |  | 162,455 |
Prepaid expenses and other |  | 1,825 |
Property, plant and equipment |  | 4,522,561 |
Other assets |  | 9,463 |
Total amount attributable to assets acquired |  | $ | 4,772,365 |
Fair value of liabilities assumed: |  |
Accounts payable |  | $ | 151,433 |
Other current liabilities |  | 46,703 |
Other liabilities and credits |  | 66,370 |
Total amount attributable to liabilities assumed |  | $ | 264,506 |
The fair value of the acquired developed natural gas and oil properties was measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. 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 and operating costs and a weighted average cost of capital. The fair value of the acquired undeveloped properties was primarily measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. Significant inputs include timing and amount of future development from a market participant perspective. The fair value of the acquired midstream and water infrastructure assets was measured primarily using the cost approach based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. Significant inputs include replacement costs for similar assets, relative age of the acquired assets and any potential economic or functional obsolescence associated with the acquired assets. See Note 4 for a description of the fair value hierarchy. Post-Acquisition Operating Results. The table below summarizes amounts contributed by the upstream, gathering and processing assets acquired in the Tug Hill and XcL Midstream Acquisition to the Company's consolidated results for the period from August 22, 2023 through December 31, 2023.
|  | August 22, 2023 through December 31, 2023
|  | (Thousands)
Sales of natural gas, NGLs and oil |  | $ | 220,500 |
Loss on derivatives |  | (1,039) |
Net marketing services and other |  | 1,879 |
Total operating revenues |  | $ | 221,340 |
Net loss |  | $ | (26,988) |
Unaudited Pro Forma Information. The table below summarizes the Company's results as though the Tug Hill and XcL Midstream Acquisition had been completed on January 1, 2022. Certain of the Upstream Seller's and Midstream Seller's historical amounts were reclassified to conform to the Company's financial presentation of operations. Such unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Tug Hill and XcL Midstream Acquisition occurred on January 1, 2022 nor are they indicative of future consolidated results of operations.
| Years Ended December 31,
| 2023 |  | 2022
| (Thousands, except per share amounts)
Pro forma sales of natural gas, NGLs and oil | $ | 5,509,497 |  |  | $ | 13,802,833 |
Pro forma gain (loss) on derivatives | 1,996,570 |  |  | (4,528,821) |
Pro forma net marketing services and other | 27,720 |  |  | 35,472 |
Pro forma total operating revenues | $ | 7,533,787 |  |  | $ | 9,309,484 |
Pro forma net income | $ | 1,911,706 |  |  | $ | 2,575,008 |
Less: Pro forma net (loss) income attributable to noncontrolling interests | (688) |  |  | 9,977 |
Pro forma net income attributable to EQT Corporation | $ | 1,912,394 |  |  | $ | 2,565,031 |
Pro forma income per share of common stock attributable to EQT Corporation: |  |  |
Pro forma net income attributable to EQT Corporation – Basic | $ | 5.02 |  |  | $ | 6.93 |
Pro forma net income attributable to EQT Corporation – Diluted | $ | 4.65 |  |  | $ | 6.33 |
NEPA Gathering System Acquisition The Company operates and owns a 50% interest in a gathering system in northeast Pennsylvania (the NEPA Gathering System). On February 12, 2024, the Company entered into an agreement to acquire from a minority equity partner an additional 33.75% interest in the NEPA Gathering System for a purchase price of $205 million (the NEPA Gathering System Acquisition), subject to customary post-closing adjustments, including in relation to certain preferential purchase rights of a third party pursuant to a separate construction, ownership and operation agreement between the parties thereto, which, if exercised, would reduce the Company's acquired interests to approximately 25% for a purchase price of approximately $155 million. The closing of the NEPA Gathering System Acquisition is subject to satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. 2022 Asset Acquisition In the fourth quarter of 2022, the Company closed on the acquisition of approximately 4,600 net Marcellus acres in northeast Pennsylvania (the 2022 Asset Acquisition). The total purchase price for the acquisition was approximately $56 million. The 2022 Asset Acquisition was accounted for as an asset acquisition and, as such, the purchase price was allocated to property, plant and equipment. 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 EQT Corporation, EQT Acquisition HoldCo LLC (a wholly-owned indirect subsidiary of EQT Corporation), 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 Corporation common stock, subject to customary post-closing adjustments. The Alta Purchase Agreement has an economic effective date of January 1, 2021. As a result of the Alta Acquisition, the Company acquired approximately 300,000 net Marcellus acres in northeast Pennsylvania, approximately 1.0 Bcfe per day of net production at the time of acquisition, approximately 300 miles of midstream gathering systems, approximately 100 miles of a freshwater system and a firm transportation portfolio to premium demand markets. Allocation of Purchase Price. The Alta Acquisition was accounted for as a business combination using the acquisition method. The following table summarizes the purchase price and fair values of assets acquired and liabilities assumed as of July 21, 2021. The Company completed the purchase price allocation 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.
|  | Purchase Price Allocation
|  | (Thousands)
Consideration: |  |
Equity |  | $ | 1,925,405 |
Cash |  | 1,000,000 |
Total consideration |  | $ | 2,925,405 |
Fair value of assets acquired: |  |
Cash and cash equivalents |  | $ | 43,199 |
Accounts receivable, net |  | 159,539 |
Property, plant and equipment |  | 3,145,630 |
Other assets |  | 6,309 |
Amount attributable to assets acquired |  | $ | 3,354,677 |
Fair value of liabilities assumed: |  |
Accounts payable |  | $ | 131,214 |
Derivative instruments, at fair value |  | 169,744 |
Other current liabilities |  | 10,127 |
Other liabilities and credits |  | 118,187 |
Amount attributable to liabilities assumed |  | $ | 429,272 |
The fair value of the acquired natural gas and oil properties was measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. 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 and operating costs and a weighted average cost of capital. The fair value of the acquired undeveloped properties was primarily measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. Significant inputs include timing and amount of future development from a market participant perspective. The fair value of the acquired midstream gathering systems was measured primarily using the cost approach based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements. Significant inputs include replacement costs for similar assets, relative age of the acquired assets and any potential economic or functional obsolescence associated with the acquired assets. See Note 4 for a description of the fair value hierarchy. Reliance Asset Acquisition On April 1, 2021, the Company closed on the acquisition of certain oil and gas assets (the Reliance Asset Acquisition) from Reliance Marcellus, LLC (Reliance), pursuant to the Company's exercise of a preferential purchase right that was triggered by Northern Oil and Gas, Inc.'s acquisition of Reliance's Marcellus assets. The total purchase price for the acquisition was approximately $69 million, and the assets acquired consisted of approximately 40 MMcfe per day of production at the time of acquisition and 4,100 net acres located in southwest Pennsylvania. The Reliance Asset Acquisition was accounted for as an asset acquisition and, as such, the purchase price was allocated to property, plant and equipment.

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