EQT delivers record Q1 2025 results, raises guidance amid $1.8bn Olympus Energy acquisition

Why Did EQT Corporation’s Q1 2025 Earnings Surprise the Market?

EQT Corporation has kicked off 2025 with a commanding performance, recording the strongest financial results in its recent history and setting a bold tone for the year ahead. In its first-quarter earnings release, the leading Appalachian Basin natural gas company not only beat key financial metrics but also revised its annual production guidance upward while unveiling a transformative $1.8 billion acquisition of Olympus Energy‘s upstream and midstream assets. This move further consolidates EQT’s position as a vertically integrated low-cost leader in the natural gas sector, particularly in the high-potential Marcellus and Utica shale plays.

How Did EQT Perform Financially in Q1 2025?

For the quarter ending March 31, 2025, EQT reported a net income attributable to the company of $242 million, up sharply from $103 million in the same quarter a year earlier. Adjusted net income surged to $713 million, reflecting a significant year-over-year increase from $364 million. The adjusted earnings per share stood at $1.18 compared to $0.82 last year.

Sales volumes reached 571 billion cubic feet equivalent (Bcfe), placing the company at the high end of its guidance. Notably, this performance came despite the winter season, thanks to robust well productivity and seamless midstream integration that minimized operational bottlenecks.

Adjusted EBITDA, a key measure of core profitability, rose to $1.78 billion, with $1.64 billion attributable to EQT after accounting for noncontrolling interests. Free cash flow attributable to EQT stood at $1.036 billion, a dramatic increase from $399 million in Q1 2024. Operating cash flow also rose to $1.74 billion, highlighting strong internal capital generation.

What Drove the Efficiency Gains and Cost Reductions?

EQT managed to keep total per-unit operating costs at $1.05 per Mcfe, approximately 8% below the midpoint of guidance. This was largely driven by lower lease operating expenses and gathering costs. The cost advantages stemmed directly from the strategic integration of Equitrans Midstream assets acquired in mid-2024. These efficiencies allowed EQT to reduce capital expenditures to $497 million, about 19% below guidance, as fewer completions and land-related spending were needed due to operational streamlining.

Gathering expenses plummeted to just $0.08 per Mcfe, down from $0.60 in the prior year, validating the company’s strategic control over its midstream infrastructure. While some costs such as transmission and processing increased slightly due to expanded capacity charges, these were largely offset by efficiency gains elsewhere in the portfolio.

Why Is the Olympus Energy Acquisition a Game-Changer?

The announcement of EQT’s acquisition of Olympus Energy for $1.8 billion represents a major bolt-on transaction that immediately scales up the company’s asset base. Olympus brings a vertically integrated position across 90,000 contiguous net acres in Southwest Pennsylvania with current net production of 500 MMcf/d.

This deal is highly accretive. EQT expects the acquired assets to generate $530 million in average annual adjusted EBITDA and approximately $270 million in unlevered free cash flow over the next three years, based on current strip pricing. These metrics translate into a 3.4x adjusted EBITDA multiple and an unlevered free cash flow yield of 15%, significantly strengthening EQT’s cash generation profile.

The Olympus acreage is adjacent to multiple proposed power generation projects, enhancing its future monetisation potential. The asset quality is also highlighted by its peer-competitive free cash flow breakeven price, aligning closely with EQT’s low-cost leadership.

How Is EQT Positioned for the Rest of 2025?

In response to its Q1 outperformance and operational momentum, EQT has raised its 2025 full-year production guidance by 25 Bcfe to a new range of 2,200 to 2,300 Bcfe. Concurrently, it has reduced the midpoint of its maintenance capital spending guidance by $25 million to reflect cost savings from well efficiencies and midstream synergies.

The company plans to turn in line 95 to 120 net wells over the course of the year, with 32 to 50 wells expected in the second quarter. Q2 production is forecasted at 520 to 570 Bcfe. EQT will maintain its strategic growth capital at $350 to $380 million, continuing to fund high-return initiatives such as pressure reduction systems and water infrastructure projects.

Liquidity remains robust. As of March 31, 2025, EQT reported $3.8 billion in available liquidity with no outstanding borrowings under its $3.5 billion credit facility. Total debt fell to $8.4 billion, with net debt reduced to $8.1 billion, positioning the company comfortably below its $7.5 billion target even post-acquisition.

What Does the Market Sentiment Say About EQT?

Investor sentiment around EQT appears increasingly positive, buoyed by the company’s free cash flow surge, disciplined capital allocation, and the strategic value of the Olympus acquisition. The deal’s structure—$500 million in cash and $1.3 billion in EQT stock—signals confidence in EQT’s equity strength while preserving balance sheet flexibility. Analysts are likely to view the transaction favourably, especially given the 10+ years of high-quality Marcellus inventory and additional Utica upside.

In recent trading, EQT Corporation shares have shown resilience amid a volatile energy market, supported by its consistent delivery against guidance and its value-accretive expansion strategy. The anticipated closing of the Olympus deal in Q3 2025, subject to regulatory approvals, is expected to be a catalyst for further institutional interest and re-rating potential.

Is EQT’s Hedging Strategy Still Effective?

As of mid-April, EQT had hedged significant natural gas volumes for Q2 through Q4 2025, including 336 MMDth in Q2 at an average swap price of $3.11 per Dth. This provides a protective floor and limits downside volatility from gas price fluctuations, enhancing earnings visibility.

Moreover, the company continues to deploy a mix of swaps, calls, and puts to balance exposure and optimise realisations based on market conditions. This conservative risk management approach supports stable cash flow generation even in turbulent commodity cycles.