U.S. natural gas producer EQT Corp. said Jan. 13 it would take a non-cash impairment charge of up to $1.8 billion in the fourth quarter, as it writes down the value of some assets due to lower commodity prices, sending shares down 6%.
U.S. natural gas prices are trading at near two-decade lows due to oversupply. That forced oil major Chevron Corp. to warn in December that it would have to write down up to $11 billion in the fourth quarter, mainly due to losses at its shale gas operation in Appalachia.
Smaller rival Range Resources Corp. had warned a week earlier that it expects to take a significant charge.
EQT said in a filing it plans to cut debt by about 30%, or about $1.5 billion, by mid-2020 as oil and gas companies face investor pressure to focus more on higher returns and debt reduction by cutting back on spending.
The company said it expects to spend $50 million less in 2020 compared to its prior outlook and estimated capital expenditure to be between $1.25 billion and $1.35 billion.
It now expects net sales volumes to be between 370 billion cubic feet equivalent (Bcfe) and 375 Bcfe in the fourth quarter, at the high end of its prior forecast of between 355 Bcfe and 375 Bcfe.
Per-acre prices varied widely between $15 an acre and $11,353 an acre.
The Austin Chalk assessment, which includes the Tokio and Eutaw formations, is believed to also hold about 41.5 trillion cubic feet of natural gas, the report shows.
The wells were drilled by the Transocean Barents semisubmersible rig this summer in the Flemish Pass Basin.