(Reuters) - EQT Corp, the biggest U.S. natural gas producer, said on Wednesday it expects to spend $2.4 billion next year, the majority of which will be to develop more wells in two key shale formations in the Appalachian region.
EQT’s shares were up 2.6 percent at $57.47 in afternoon trading.
The company recently completed its $6.7 billion acquisition of Rice Energy, a deal that combined two of the largest players in the Marcellus and Utica shale formations.
EQT’s budget is 60 percent more than its forecast for 2017 as its looks to boost its production of natural gas, which is expected to be the main source of power generation in the United States in 2018.
The Pittsburgh, Pennsylvania-based company has earmarked $2.2 billion of its overall 2018 budget to develop wells – 139 in Marcellus and 25 net wells in Utica.
The company said it expects total production sales volume of 1,520-1,560 billion cubic feet equivalent (Bcfe) in 2018 and sales volume to increase 15 percent in 2019.
The 2018 sales volume forecast is lower than 1,569 Bcfe RBC Capital Markets analyst Scott Hanold was expecting.
EQT had said in March it expected $1.5 billion in capital expenditure this year. That was two months before it announced the deal to buy Rice Energy.
In July, EQT forecast sales volumes of 825-840 Bcfe for 2017.
Up to Tuesday’s close, EQT shares had fallen 4.7 percent since it announced the Rice Energy deal, while the broader S&P 500 energy index has risen 4.7 percent in that same period.
Reporting by Anirban Paul and Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza, Bernard Orr