Americas Energy Oil & Gas E&P Balancing Near Term Gas Macro Softness with Robust Long Term Demand Potential

Equity Research 28 July 2026 | 4:18PM EDT AMERICAS ENERGY: OIL & GAS - E&P

Balancing Near-Term Gas Macro Softness with Robust Long-Term Demand Potential; Buy on EQT, Neutral on RRC at $3.50 MMBtu Mid-Cycle

The Positives. EQT reported 2Q26 production of 6.97 Bcfe/d above consensus Neil Mehta | estimates as the company continues to see strong results from its ongoing Goldman Sachs & Co. LLC

compression projects in lowering base declines. We also note EQT’s incremental Jack Cavanagh | power and LNG agreements, which help provide the potential for longer-dated Goldman Sachs & Co. LLC upside to realized natural gas pricing. For RRC, we highlight the company’s raised guidance range for FY2026 NGL and natural gas differentials, and we seek Jerry Speicher | incremental clarity on the outlook for continued realized NGL premiums to Mont Goldman Sachs & Co. LLC Belvieu pricing in 2027+.

The Challenges. With 2027 strip Henry Hub pricing declining by 14% since the start of this year, we see the potential for macro headwinds to near-term cash flow generation and seek further clarity on both companies’ outlook for cost optimization and return of capital through any continued periods of pressure on natural gas pricing.

What is Our View? We reiterate our Buy rating on EQT and raise our price target to $62, implying 19% upside to shares at current levels given EQT’s low cost of supply from pure-play Appalachian operations and a vertically integrated business model. We also highlight EQT’s commercial and marketing efforts to improve natural gas realizations long-term and source new demand opportunities. We maintain our Neutral rating on RRC and see shares trading at a 9% FCF yield on 2027/2028 average estimates at current levels.

Operational Updates. EQT provided incremental detail on the progress of the company’s compression projects alongside 2Q26 earnings, as EQT reported production above consensus estimates for the quarter. Given the increase in productivity EQT is seeing across its operations, the company raised FY2026 production guidance by 0.25 Bcf/d at the midpoint while lowering FY2026 guidance for maintenance capital expenditures by $25 mn at the midpoint. Alongside this, management announced EQT is pulling forward the construction of MVP Southgate for an anticipated completion by YE2026, which includes the acceleration of $85 mn in additional capital contributions into FY2026 versus FY2027 prior. As a result,

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management noted an in-service date for MVP Southgate in 2027 is not baked into current expectations, although commercial conversations are ongoing given the expedited construction timelines. Management noted that any in-service date sooner than the previously discussed timeline of 2028 would serve as upside in 2027. Management also highlighted the $77 mn acquisition of Blackline Midstream to bolt-on additional propane storage and terminal infrastructure.

Marketing Outlook. EQT highlighted the potential for Appalachia to see 20 Bcf/d of demand growth derived from the projects that management is seeing either under construction or in evaluation in the region. Additionally, EQT announced two incremental commercial agreements alongside 2Q26 earnings, which we view as a continuation of the company’s strategic approach to position the business around longer-dated power and LNG demand themes and improve natural gas price realizations over time. First, we highlight EQT’s 5-year agreement with an undisclosed Asian integrated energy company for 0.5 MTPA of LNG offtake with a projected start-up in 2028. EQT noted an expectation for a $45 mn uplift to FCF in 2028 at recent…