E-Q-T Corporation (NYSE: E-Q-T) recently declared that it has released a shareholder presentation outlining its ongoing planned plan to drive cost reductions across the business and generate sustainable free cash flow development.
E-Q-T has substantially reconstituted its Board of Directors and administration team
Refreshed Board: E-Q-T designated four new independent directors in November of 2K18. The Board established an Operating and Capital Efficiency Committee in December; Committee members have strong reputations as efficient operators and substantial financial expertise.
New Team: E-Q-T’s administration team includes a new Chief Executive Officer, Chief Financial Officer, General Counsel and Head of IR. COO Gary Gould will assume his role in April.
E-Q-T is committed to realizing efficiencies and driving down costs
Operational Achievements: E-Q-T is achieving the operational targets set out for the 1st quarter of 2K19. The Company has made noteworthy progress across drilling and completion operations. Highlights include about 90 percent of wells drilled over 12,000 feet on-time and on-budget and a 35 percent improvement in stages per crew per month. Stabilized operations and sustained focus on operational efficiencies are expected to continue driving improvements throughout 2K19.
Cost reductions: E-Q-T has already implemented cost-saving actions that decline annual cash costs by about $150M. This includes about $50M of annual cost savings under E-Q-T’s “Target 10 percent Program,” which aims to reduce cash costs by 10 percent. Continued successful execution of this program is expected to yield cost savings of $800M over the next 5 years, $250M of which has already been identified.
E-Q-T’s team is demonstrating its ability to achieve and exceed financial objectives
4th Quarter 2K18: E-Q-T delivered about $134M of adjusted free cash flow (a non-GAAP measure) in the 4th quarter of 2K18, above prior guidance. These strong results underscore E-Q-T’s focus on enhancing operational efficiency to drive accelerated cash flow development and shareholder value creation.
Building on Strong Performance: E-Q-T’s strong operational performance underpins the Company’s confidence in its financial forecast. E-Q-T anticipates generating adjusted free cash flow (a non-GAAP measure) of about $300 to $400M in 2K19 and $2.9 billion over the next 5 years, up from the $2.7 billion declared in January – with the Company’s ongoing Target 10 percent Program providing incremental upside.
1st Quarter 2K19 In-Line with Expectations: E-Q-T anticipates 1st quarter 2K19 sales volumes to come in at the high-end of the guidance range of 360 to 380 Bcfe while anticipating 1st quarter 2K19 capital expenditures in-line with expectations. This supports the ongoing operational and capital efficiency efforts implemented by senior administration.
“The new team at E-Q-T is energized by our noteworthy progress and the opportunities forward of us, and we are working with urgency to unlock the enormous potential of the new E-Q-T,” said Rob McNally, E-Q-T’s president and chief executive officer. “We are turning E-Q-T into a free cash flow machine and remain on track to deliver another quarter of strong financial and operational performance.
The operating efficiencies we have implemented across E-Q-T are allowing us to do more with less, counting raising lateral lengths across our program and raising production. We are confident we will achieve our targets for 2K19 and beyond. With world-class assets, a sound plan and a strong team committed to operational excellence, we look forward to building on our progress and delivering noteworthy value to shareholders.”