-$1.24
$58.19
bear -$1.24
base $32.20
bull $58.19
margin of safety $13.00
market price* $54.30
EQT is the largest natural gas producer in the United States, drilling the Marcellus and Utica shale in Pennsylvania, West Virginia and Ohio. It sold 2,382 billion cubic feet equivalent (Bcfe) in 2025, up 6.9% from 2,228 Bcfe in 2024, at an average realized price of $3.19 per Mcfe including cash hedge settlements. Since the Equitrans Midstream merger on July 22, 2024 it also owns the pipelines that gather and transport its gas, so it no longer pays a third party for most of that service. It is a price taker: what the shares are worth depends mostly on the gas price, which the company does not control. What changed since our last look (August 2026: bear $1.10, base $15.68, bull $33.87). We now discount every business at a flat 6% rather than the 11 to 12% used before, which by itself raises the base and bull values a great deal. We also now value the whole business first, then subtract what is owed to lenders and to the outside investor in the midstream joint venture, and the earlier version handled that investor's claim with only a rough 12% haircut. The bear case moves the other way, from $1.10 to below zero, because the debt and that claim are subtracted in full from a weak-price cash flow. How we measure earnings. Owner earnings are operating cash flow, less the cash effect of working-capital swings (receivables, payables, taxes, other current assets), less stock compensation, less capital spending. We treated all drilling and completion spending as maintenance and credited no growth capital, because EQT's revenue moves with gas prices rather than capacity, and 2025 additions from new drilling (2,445 Bcfe) only just exceeded production (2,382 Bcfe). Cash paid for acquisitions ($484 million in 2025, $874 million in 2024, $2.27 billion in 2023) is excluded, and gas hedge settlements stay in operating cash flow because they are real cash: EQT received $1.22 billion from hedges in 2024 and $0.90 billion in 2023, and paid $5.93 billion in 2022 and $83 million in 2025. Owner earnings per share were $(2.36), $(1.91), $(2.61), $0.75, $1.10, $2.85, $4.82, $1.34, $1.37 and $4.56 for 2016 through 2025. 2017 and 2018 include the pipeline business spun off in 2018, so they are not comparable. One item could not be broken out from the filing: a $202 million outflow labelled "other items, net" in 2025 operating cash flow, which we left in. The level we value. Because lenders are paid separately, we work with cash before interest: owner earnings plus cash interest paid. Per share that was $3.72 (2021), $5.40 (2022), $1.86 (2023), $2.15 (2024) and $5.29 (2025). We use the median of 2021 through 2025, $3.72 per share, or about $2.34 billion a year on 629 million shares. This window covers a full price cycle: a year of hedge losses, the 2022 spike, two low-price years and the most recent year. Earlier years describe a much smaller company, and owner earnings were negative in 2016 through 2018. We did not use first-half 2026 results, when operating cash flow was $4.10 billion against $2.98 billion a year earlier, to lift this level, because one strong winter half does not change what a full cycle looks like. Growth check: owner earnings per share rose from $1.37 in 2024 to $4.56 in 2025, but year one of the base case assumes no growth from the median level, which is below the trailing actual. Growth we did not credit: volume gains from acquisitions such as Olympus Energy in 2025, new pipeline capacity, higher demand from LNG exports or power generation, cost savings beyond what 2025 already shows, and any recovery in gas prices. None of these is secured or a steady repeatable process, so each is worth zero here. Base case: about $2.34 billion a year of cash before lenders for 20 years, fading in a straight line to zero by year 30. The support is the company's statement of roughly 4,000 undeveloped locations, more than 30 years of drilling at the current pace, proved reserves of 28,046 Bcfe (about 12 years of production), and new drilling that has just replaced annual production. We fade the last ten years because the filing shows a pattern of proved undeveloped bookings being pushed out of the five-year window (560 Bcfe in 2025), and we cannot evidence the quality of the furthest locations. The business is worth about $29.5 billion. It owes $5.54 billion net (debt of $5,656 million less cash of $113 million at June 30, 2026) plus about $3.7 billion to the outside owner of the midstream venture, $9.24 billion in all. The difference, $20.3 billion, is $32.20 per share. Bull case: $3.33 billion a year ($5.29 per share), the actual 2025 result under today's cost structure, held for the full 30 years of drilling inventory the company describes, then nothing. First-half 2026 cash flow is consistent with it. The business is worth about $45.8 billion, less $9.24 billion owed, leaving $36.6 billion, or $58.19 per share. Bear case: $0.9 billion a year for 10 years, fading to zero by year 20. This is what 2023 and 2024 gas prices would produce with today's cost structure, repeated far longer than the two years they lasted, and with the development pushouts noted above shortening the life. The business is worth about $8.5 billion against $9.24 billion owed, so the company appears to owe more than it is worth, by roughly $0.8 billion, or $1.24 per share. This case can still pay its way: $0.9 billion covers roughly $0.45 billion of annual cash interest and roughly $0.35 billion of annual payments to the outside investor, but leaves almost nothing for shareholders. Debt and the midstream investor. EQT's notes were rated Baa3 by Moody's and BBB by S&P and Fitch as of February 2026, and its credit facility requires debt of no more than 65% of total capital. Coupons on the notes run from 3.125% to 7.5%, spread around 6%, so we made no adjustment for above- or below-market interest. Debt fell from $7.8 billion at year-end 2025 to $5.66 billion at June 30, 2026, helped by that unusually strong half. In December 2024 an affiliate of Blackstone put $3.5 billion into the midstream joint venture. Until it earns its agreed return, it receives 60% of that venture's available cash, and $3.41 billion of return remained at December 31, 2025, after $355 million was paid in 2025. Then EQT receives all distributions until December 2032 and at least 95% after. These payments do not appear in operating cash flow, so we treat the claim like debt at about $3.7 billion, which includes a small allowance for a return above 6% and for the 40% outside interest in the Eureka gathering system. A purchase of a further 3.94% of the Mountain Valley Pipeline for about $200.7 million (exercised in January 2026) is funded by the venture's members and was not adjusted. Testing the case. The base rests on drilling inventory and replacement of production. Against it: 560 Bcfe of proved undeveloped reserves were dropped from the five-year window in 2025, and 925 Bcfe and 755 Bcfe in the two prior years. That is timing rather than lost gas, but it is why the last ten years fade. Depletion and amortization of $2.60 billion exceeds capital spending of $2.29 billion, so the depleting asset is carried through the fade in the base case and the shorter life in the bear case rather than by lowering the earnings level. The margin-of-safety price is around $13 per share, about 60% below the base case. The reasons are the wide gap between bear and bull, the dependence on gas prices, $9.24 billion of claims ahead of shareholders, and a bear case worth roughly nothing. The base case would prove too high if gas prices stay near 2023 and 2024 levels for a decade, and too low if 2025 economics hold.