UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 3, 2020 (February 26, 2020)
EQT CORPORATION
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-3551 | 25-0464690 | ||
|
(State or Other Jurisdiction
of Incorporation) |
(Commission File Number) |
(IRS Employer
Identification Number) |
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices, including zip code)
(412) 553-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 1.01. Entry Into a Material Definitive Agreement
On February 26, 2020 (the Effective Date), EQT Corporation, a Pennsylvania Corporation (EQT), EQT Production Company, a Pennsylvania corporation and wholly owned subsidiary of EQT (EQT Production), Rice Drilling B LLC, a Delaware limited liability company and wholly owned subsidiary of EQT (Rice Drilling), and EQT Energy, LLC, a Delaware limited liability company and wholly owned subsidiary of EQT (EQT Energy and, together with EQT, EQT Production and Rice Drilling, the Producer), entered into a Gas Gathering and Compression Agreement (the Global GGA) with EQM Gathering Opco, LLC, a Delaware limited liability company (EQM Opco) and a wholly owned subsidiary of EQM Midstream Partners, LP, a Delaware limited partnership (EQM), for the provision by EQM Opco of gas gathering services to the Producer in the Marcellus and Utica Shales of Pennsylvania and West Virginia. Effective as of the Effective Date, the Producer will be subject to an initial annual minimum volume commitment of 3.0 billion cubic feet of natural gas per day. The Global GGA runs from the Effective Date through December 31, 2035, and will renew year-to-year thereafter unless terminated by the Producer or EQM Opco. Pursuant to the Global GGA, EQM Opco will have certain obligations to build additional connections to connect additional wells of the Producer within the dedicated area in Pennsylvania and West Virginia to the gathering system, subject to certain geographical limitations in relation to the distance to the then-existing gathering system and other criteria relating to the Producer’s interest in the wells.
In addition to the fees related to gathering services, the Global GGA provides for potential cash bonus payments payable by EQT to EQM during the period beginning on the first day of the quarter in which the in-service date of the Mountain Valley Pipeline (the MVP) occurs until the earlier of (i) 36 months following the first day of the quarter in which in-service date of the MVP occurs or (ii) December 31, 2024. The potential cash bonus payments are conditioned upon the quarterly average of the NYMEX Henry Hub Natural Gas Spot Price exceeding certain price thresholds.
Following the MVP in-service date, the gathering fees payable by EQT to EQM (or its affiliates) set forth in the Global GGA are subject to potential reductions for certain contract years set forth in the Global GGA, conditioned upon the in-service date of the MVP, which provide for estimated aggregate fee relief of $270 million in the first year after the in-service date of the MVP, $230 million in the second year after the in-service date of the MVP, and $35 million in the third year after the in-service date of the MVP. In addition, if the MVP in-service date has not occurred by January 1, 2022, EQT has an option, exercisable for a period of twelve months, to forgo $145 million of the gathering fee relief in the first year after the MVP in-service date and $90 million of the gathering fee relief in the second year after the MVP in-service date in exchange for a cash payment from EQM to EQT in the amount of $196 million.
In the ordinary course of business, EQT and its subsidiaries engage in transactions with EQM and its affiliates, including, but not limited to, transportation service and precedent agreements, storage agreements and water services agreements. These agreements have terms ranging from month-to-month up to 20 years.
The foregoing description of the Global GGA is not complete and is qualified in its entirety by reference to the text of the Global GGA, which will be filed as an exhibit to EQT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Global GGA and is not intended to provide any other factual information about EQT or its subsidiaries.
Item 8.01. Other Events.
On March 3, 2020, EQT issued a press release announcing the early results and upsizing of its previously announced tender offer (the Tender Offer) to purchase for cash up to an amended Maximum Tender Amount (as defined herein) of its outstanding 4.875% Senior Notes due 2021 (the Notes). EQT has amended the Tender Offer to increase the aggregate principal amount of Notes subject to the Tender Offer from $400 million to $500 million (the Maximum Tender Amount). A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press Release dated March 3, 2020 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
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 hereunto duly authorized.
| EQT CORPORATION | ||
| Date: March 3, 2020 | By: | /s/ William E. Jordan |
| Name: | William E. Jordan | |
| Title: | Executive Vice President and General Counsel | |
Exhibit 99.1
News release
EQT ANNOUNCES EARLY RESULTS and upsizing OF ITS Debt Tender offer
PITTSBURGH – (mARCH 3, 2020) – EQT Corporation (the “Company” or “EQT”) (nyse: eqt) announced today the early results and upsizing of its previously announced tender offer (the “Tender Offer”) to purchase for cash up to an amended Maximum Tender Amount (as defined below) of its 4.875% Senior Notes due 2021 (the “Notes”). The Company has amended the Tender Offer to increase the aggregate principal amount of Notes subject to the Tender Offer (the “Maximum Tender Amount”) from $400 million to $500 million. All other terms of the Tender Offer remain unchanged.
As of 5:00 p.m., New York City time, on March 2, 2020 (the “Early Tender Deadline”), approximately $649.3 million aggregate principal amount of Notes were validly tendered and not validly withdrawn. Because the aggregate principal amount of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline exceeded the Maximum Tender Amount, the Company will accept the Notes for purchase on a pro rata basis based on the proration factor described in the Offer to Purchase dated February 12, 2020 (the “Offer to Purchase”). Withdrawal rights for the Tender Offer expired at 5:00 p.m., New York City time, on March 2, 2020. As a result, tendered Notes may no longer be withdrawn.
The following table sets forth some of the terms of the Tender Offer, including the aggregate principal amount of Notes that were validly tendered and not withdrawn as of the Early Tender Deadline, the aggregate principal amount of Notes that the Company expects to accept for purchase on the Early Settlement Date (as defined below) and the approximate proration factor:
| Title of Notes |
CUSIP
Number |
Principal
Amount Outstanding |
Maximum
Tender Amount |
Principal
Amount Tendered |
Principal
Amount Accepted |
Tender
Offer
|
Early
|
Total
|
Approximate
|
|||||||||||||||||||||||||||
| 4.875% Senior Notes due 2021 | 26884LAB5 | $ | 750,000,000 | $ | 500,000,000 | $ | 649,292,000 | $ | 500,000,000 | $ | 990.00 | $ | 30.00 | $ | 1,020.00 | 77.0 | % | |||||||||||||||||||
(1) Per $1,000 principal amount of Notes accepted for purchase.
(2) Does not include accrued and unpaid interest, which will also be paid.
(3) Includes the Early Tender Premium.
(4) The proration factor has been rounded to the nearest tenth of a percentage point for presentation purposes.
Payment for Notes accepted for purchase is expected to be made on March 4, 2020 (the “Early Settlement Date”). The Company’s obligation to accept for payment and to pay for the Notes validly tendered in the Tender Offer is subject to the satisfaction or waiver of a number of conditions described in the Offer to Purchase.
Although the Tender Offer is scheduled to expire at 11:59 p.m., New York City time, on March 16, 2020, because holders of Notes subject to the Tender Offer validly tendered and did not validly withdraw Notes on or before the Early Tender Deadline in an aggregate principal amount that exceeds the Maximum Tender Amount, the Company does not expect to accept for purchase any tenders of Notes after the Early Tender Deadline. The Company reserves the right, subject to applicable law, to: (i) waive any and all conditions to the Tender Offer; (ii) extend, terminate or withdraw the Tender Offer; (iii) increase or decrease the Maximum Tender Amount; or (iv) otherwise amend the Tender Offer in any respect.
BofA Securities is acting as Dealer Manager for the Tender Offer. The Information Agent and Tender Agent is Global Bondholder Services Corporation. Copies of the Offer to Purchase, Letter of Transmittal and related offering materials are available by contacting the Information Agent at (866) 470-4500 (toll-free) or (212) 430-3774 (collect) or email contact@gbsc-usa.com. Questions regarding the Tender Offer should be directed to BofA Securities at (888) 292-0070 (toll-free) or (980) 386-6026 (collect).
This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Tender Offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.
News release
About EQT Corporation
EQT Corporation is a natural gas production company with emphasis in the Appalachian Basin and operations throughout Pennsylvania, West Virginia and Ohio. With 130 years of experience and a long-standing history of good corporate citizenship, EQT is the largest producer of natural gas in the United States. As a leader in the use of advanced horizontal drilling technology, EQT is committed to minimizing the impact of drilling-related activities and reducing its overall environmental footprint. Through safe and responsible operations, EQT is helping to meet our nation’s demand for clean-burning energy, while continuing to provide a rewarding workplace and support for activities that enrich the communities where its employees live and work.
Cautionary Statements
This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking. These forward-looking statements 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. The Company has based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently available to the Company. While the Company considers 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 the Company’s control. The risks and uncertainties that may affect the forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission, and those set forth in the other documents the Company files from time to time with the SEC.
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Investor contact:
Andrew Breese – Director, Investor Relations
412.395.2555
ABreese@eqt.com
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