(Reuters) - Shares in EQT Corp, the biggest producer of natural gas in the United States, fell to an eight-year low on Thursday after the company reported third quarter earnings that missed analyst estimates.
The company reported adjusted earnings per share of 35 cents, which missed the 42 cents per share estimate, according to Thomson Reuters I/B/E/S.
EQT shares dropped by more than $6, or 16 percent, to around $34 in midday trade, their lowest since 2010. By mid-afternoon, they were down 13.7 percent.
Also on Thursday, the Pittsburgh-based driller announced the appointment of new directors on the completion of the separation of its upstream and midstream businesses.
EQT said its earnings in the quarter were hurt by higher operating costs, including a charge related to the sale of some assets, and higher interest expense.
The company also reduced guidance for the amount of gas it expects to sell in 2018 because some wells will enter service later than planned in the fourth quarter.
The company said it now expects to produce 1,460-1,480 billion cubic feet equivalent (bcfe) in 2018, down from 1,520-1,550 bcfe projected in its first quarter earnings release.
EQT boosted its estimated well development capital expenditures for 2018 by $300 million to $2.5 billion due to inefficiencies resulting from higher activity levels, the learning curve on ultra-long laterals and service cost increases.
In addition, the company boosted its hedging for 2019 and 2020 far above the amount it hedged for 2018 and 2019 at this time last year.
Just looking at swaps on the New York Mercantile Exchange (NYMEX) - where EQT did most of its hedging - the company said total volume hedged was 600 billion cubic feet (bcf) at an average price of $2.99 per thousand cubic feet (mcf) in 2019 and 393 bcf at $2.98 in 2020.
In the third quarter of 2017, EQT said total volume hedged using NYMEX swaps was 189 bcf at $3.18 for 2018 and just 19 bcf at $3.12 for 2019.
Reporting by Scott DiSavino; Editing by Marguerita Choy