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Investing.com -- Moody’s Ratings has changed EQT Corporation’s outlook to stable from negative while affirming its Baa3 senior unsecured notes rating, the rating agency announced Wednesday.
The outlook revision reflects improved cash flow generation prospects for 2025 due to a more favorable natural gas price environment and progress toward EQT’s year-end 2025 debt target of $7.5 billion. As of June 30, 2025, the company’s outstanding debt stood at $8.3 billion, or $7.8 billion on a net basis.
Moody’s cited EQT’s scale as one of North America’s largest natural gas producers, advantaged cost structure, and benefits from vertical integration following its July 2024 acquisition of Equitrans Midstream Corporation as key rating strengths.
The rating agency noted that EQT’s control over much of its gathering, processing, and transportation costs enables the company to generate free cash flow in a $2/mcf NYMEX natural gas price environment, which is well below its peers’ breakeven points.
These strengths are balanced against EQT’s high debt level and cash flow burden from distributions to its midstream joint venture partner, Blackstone Credit & Insurance, which receives a 60% share of distributions.
EQT has announced several projects to expand takeaway capacity or create additional demand within the basin, which are expected to generate attractive returns and create 2.5 Bcf/day of new demand for Appalachian natural gas.
The company maintains strong liquidity with almost $4 billion in combined revolving credit facility availability and cash on hand as of June 30, 2025, after accounting for its $93 million redemption of remaining EQM notes on July 31.
According to Moody’s, EQT’s rating could be upgraded if it reaches its long-term $5 billion debt target and consistently demonstrates a leveraged full-cycle ratio above 2.5x and retained cash flow to debt above 60% in a $3/mcf natural gas price environment.
Conversely, a downgrade could occur if EQT fails to maintain retained cash flow to debt above 40% in a $3/mcf environment or if its leveraged full-cycle ratio falls below 1.5x.
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