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Call sheet · Q2'26

EQT (EQT)

Q2'26 earnings call · held July 22, 2026 · compared with the Q1'26 call · management-credibility review
10/12
Disclosure score
1 high, 4 medium, 3 low flags
Financial quality
Bottom line
The sleeper story is compression turning EQT into a manufacturing marvel, with base declines flattening and well productivity jumping 8% in ways management admits they can't even model anymore. The market sees record demand deals, but I see a company hoarding cash for a downcycle while taking massive unhedged bets on spark spreads through power-linked gas contracts. The binding constraint isn't demand, it's their willingness to grow: with 70% spot exposure and 'multiple Bcf/d' of opportunities, they're choosing to wait for better prices rather than lock in volumes. Management's key tell: 'We're not opposed to accumulating up to a few billion dollars of cash.' My view changes if they actually deploy that cash at these valuations rather than waiting for the perfect setup.

The 30-second version

  • Compression projects are secretly transforming EQT into a different business: base decline flattening AND new well productivity up 8%
  • Record $330M FCF in $2.89 gas environment shows structural cost advantage, but management's aggressive cash accumulation signals they expect a downcycle
  • CPV power deal links gas pricing to PJM electricity prices, not gas indices: this is either genius or reckless

What changed this quarter

MetricQ1'26Q2'26Change
Sales Volumes (Bcfe)540 (Q1 '26)Above high-end guidance+90 Bcfe full-year raise
Free Cash Flow$1.8B (Q1 '26)$330MNormalized from winter surge
Net Debt$5.7B (Q1 '26)Targeting $5B by year-endOn track for target
Production Guidance 2026Original guidanceRaised 90 Bcfe at midpoint+4% uplift
CapEx 2026Original guidanceLowered $25MBetter efficiency
MVP Southgate Capital$0 (2026 plan)$85M pulled forwardAccelerated from 2027
Base Production DeclineNormal declinesShallowing from compressionStructural improvement
Well Performance vs Type CurveNot disclosed+8% outperformanceCompression-driven beat
Appalachia Demand PipelineNot quantified45 projects, 20 Bcf/d potentialFirst comprehensive disclosure
LNG Portfolio Value at Strip$500M annual (2030)Would be $6B FCF if online today12x potential with spreads

Accountability tracked

6 new promises made4 narrative shifts flagged5 prior promises scored
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The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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