Hello everybody, and welcome to the EQT second quarter 2021 quarterly results conference call. My name is Sam, and I'll be coordinating your call today. If you would like to ask a question during the presentation your may do so by pressing star followed by one in your telephone keypad. I will now hand you over to your host, Andrew Breese, Director of Investor Relations. To begin, Andrew, please go ahead. Good morning, thank you everyone for joining today's conference call. With me today are Toby Rice, President and Chief Executive Officer, and David Khani, Chief Financial Officer. A replay for today's call will be available on our website for a seven-day period beginning this evening. In a moment, Toby and David will present the prepared remarks, we'll open up the line for a question- and- answer session. On our website, we've posted an updated investor presentation, we may reference certain slides during today's discussion. I'd like to remind you that today's call may also contain forward-looking statements. Actual results and future events could materially differ from those forward-looking statements because of factors described in our second quarter 2021 earnings release, our investor presentation, in the Risk Factors section of our 2020 Form 10-K, in subsequent filings we make with the SEC. We do not undertake any duty to update forward-looking statements. Today's call may also contain non-GAAP financial measures. Please refer to our second quarter earnings release and our most recent investor presentation for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measure. Thank you. With that, I'll turn it over to Toby. Thanks, Andrew. Good morning, everyone. Before we recap the quarter, I would like to touch on the recently completed Alta acquisition, which was overwhelmingly approved by our shareholders. The accretive benefits of this acquisition are compelling. It bolsters our free cash flow per share trajectory, meaningfully reduces our leverage profile, adds substantial high-margin inventory, and accelerates our timeline to both reach investment-grade metrics and deliver on our shareholder return initiatives. Stepping back to the details of the deal and the integration process. We closed the deal on July 21st for an adjusted aggregate purchase price at closing of $1 billion in cash and approximately 98.8 million shares being issued directly to Alta's equity holders. As a reminder, no Alta equity holder received more than 5% of our common stock in the transaction. The key assets acquired include 300,000 net Marcellus acres, largely held by production, approximately 1 Bcf a day of high-margin net production, approximately 300 mi of midstream gathering systems, a 100 mi freshwater system, and an attractive FT portfolio to premium demand markets. On the Alta assets, we expect to utilize one operated rig and frac crew, and in combination with our non-operated development activity, we will execute a maintenance program on the assets going forward. For the remainder of 2021, we expect the Alta assets to increase total sales volumes by 155 Bcfe-175 Bcfe, contribute approximately $300 million-$325 million into adjusted EBITDA, require capital expenditures of between $100 million-$125 million, and finally, add approximately $150 million-$170 million in free cash flow. On the integration front, our proven framework is designed to provide high confidence, transparency, speed, and best practice identification as we fully integrate the Alta assets into our portfolio. Of the over 800 integration actions that were identified, approximately 25% of these actions have already been completed. We expect to complete the full operational integration by the end of the year. The efforts of our EQT crew, including our newly added Alta team members, as well as those serving on a transition basis, are instrumental in this effort, and I want to take a moment to thank them all for their hard work to date. The Alta acquisition represents another step forward in our pursuit of sustainable value creation. In 2022, under a maintenance program and at current strip pricing, our preliminary expectations are to generate total sales volumes of approximately 2 Tcfe, adjusted EBITDA of approximately $2.9 billion, realizing a 10% improvement in capital intensity, requiring total capital expenditures of approximately $1.3 billion and free cash flow generation of approximately $1.4 billion. Additionally, our revised long-term free cash flow projection through 2026 at current strip pricing now sits well above $7 billion or nearly $19 per share. As a result, the Alta deal both accelerates and enhances our ability to achieve investment-grade metrics and provide meaningful returns to our shareholders. The optimized financing structure and robust free cash flow profile accelerated our deleveraging strategy and established the necessary platform for sustainable shareholder returns. We are currently working through our thought process and mechanics, but our focus remains simple: maintaining our leadership in the sustainable shale era. We plan to roll out the detailed components of our shareholder return framework in conjunction with our fourth quarter earnings. Before passing the call over to Dave, I want to highlight our multilevel strategy on sustainable value creation in the long- term, which we believe will best position EQT to excel in a low-carbon future. We've entered a new era of sustainable shale that values free cash flow generation, balance sheet strength, emissions reduction, and returning capital to shareholders. Our three-pronged strategy to evolve, capture accretive consolidation, and explore new ventures sets us up on a clear, easy-to-understand glide path that our stakeholders can not only get behind, but benefit from in this lower carbon future. Referencing Slide 13 in our investor presentation and starting with our evolve strategy, the goal is to realize the full potential of our assets. This should not be new to our stakeholders who have been following us since July 2019. Realizing the full potential of our assets was the mandate set by the shareholders who voted us in and why this management team is here today. Executing this element of our strategy maximizes free cash flow generation, lowers our cost structure, and strengthens our balance sheet. Second is our consolidation strategy. Our proven modern operating model has supported our ability to create meaningful value and ESG accretion. We have seen this strategy work to date with recent acquisitions checking all the boxes for accretion and strategic acceleration. Consolidation allows us to leverage our skill set and execution approach on a larger set of assets while also maximizing emission reduction efforts. This component of our strategy drives accretion to NAV per share, free cash flow per share, and ESG performance. Consolidation naturally leads to scale, which feeds into our third corporate strategy, new ventures. As the largest producer of natural gas in the U.S., we are able to forge new paths and open new markets to achieve sustainable growth. This affords us the ability to explore meaningful opportunities that smaller peers cannot, all while staying firmly tethered to our return of capital objectives. As previously announced, our board has approved an initial budget of $75 million to explore new venture opportunities. This seed capital allows us to initiate several pilot programs over the next few years in the pursuit of profitably lowering Scope 3 emissions. We have a clear set of guiding principles which we will embrace and believe can be capitalized upon in this changing environment. More detail regarding this strategy can be found via our 2020 ESG report and the corresponding ESG conference call recording and presentation, which are available on our website. I'll now pass the call over to Dave to discuss our second quarter results, third quarter guidance, an update on hedging and some thoughts on the macro landscape. I'll wrap it up at the end by covering some updates on our ESG initiatives. Thanks, Toby, and good morning, everyone. I'd like to briefly touch on our second quarter results before moving on to some other strategic updates. Sales volumes for the second quarter were 421 Bcfe, in line with our guidance range. Our adjusted operating revenues for the quarter were $997 million, and our total per-unit operating costs were $1.33 per Mcfe. During the second quarter 2021, NYMEX prices for the second half of 2021, full- year 2022 and 2023 rose by $0.86, $0.53, and $0.27 respectively. Although this price movement is positive for EQT and aligns with our bullish gas sentiment, the rapid increase in forward pricing resulted in a $1.3 billion loss on the mark-to-market of our forward derivative position. This non-cash accounting treatment has no impact on our financial positioning, business operations, and/or free cash flow projections that Toby just provided. Our second quarter capital expenditures were $246 million, approximately $20 million below the bottom end of our guidance range. This was primarily driven by operational timing and efforts to optimize the relationship between capital deployment, production delivery, and maximizing free cash flow. Our PA Marcellus well cost performance continues to meet or exceed expectations, with year-to-date costs averaging below our $6.75 per foot target. We are executing our West Virginia operations as planned and have high confidence in our ability to deliver well costs at or below our $7.75 per foot West Virginia target. During July, we placed into service a 50 mi section of our West Virginia mixed-use water system ahead of our schedule and under budget. This system is expected to further enhance development efficiencies, reduce environmental impacts, and improve lease operating expenses moving forward. To wrap up our second quarter financial results, we delivered adjusted operating cash flow of $397 million, ultimately resulting in a positive free cash flow of $155 million. The closing of our Alta transaction brings accretive financial implications across the spectrum. As such, we have updated our full- year 2021 guidance, while also providing detailed third quarter guidance to add more color on the pro forma production cadence and step change in our operating cost structure resulting from the acquisition. These details can be found in the earnings release filed yesterday. Specific to the third quarter 2021, at the midpoint, we expect a step-up in total sales volumes to be approximately 485 Bcfe and a drop in total operating costs to approximately $1.26 per Mcfe. Now I'll move on to a brief update on our hedging activity. As we all witnessed, NYMEX prices have risen sharply in the last several months, recovering from Storm Uri and benefiting from strong gas demand. As 2022 NYMEX prices rallied, we layered on slightly more than 30% to our total hedges between our base and Alta transaction hedges. We assumed hedges in the Alta transaction. Alta was hedged at approximately 50% for the balance of 2021 and 25% for 2022. In order to ensure our transaction returns, we added an additional 30% to the balance of 2021, 55% to 2022, and 50% in 2023. During the recent run-up, we have been adding collars with an average floor of approximately $3.05 and a ceiling of $3.35 to raise our overall 2022 hedge position to just over 70%, with a floor price of approximately $2.08. With our open position and collars, we will participate in the upside while providing the appropriate level of protection to achieve our strategic goals. To be more specific, our 2022 hedge position will keep our leverage closer to 1.5x, enabling us to retire debt, institute shareholder-friendly actions, and allow us to be more flexible in how we hedge in 2023 and beyond. We've also been active in hedging various basis points and mitigated exposure to fluctuations in Appalachian Basin pricing, as experienced in the second quarter with the TETCO outage. Currently, our exposure to local pricing sits at approximately 15% for the remainder of 2021, while we hold nearly no exposure to local pricing for calendar year 2022, assuming a midyear MVP start date. Full details of our current hedge position can be found in our earnings release. Our hedging efforts have solidified our balance sheet, positioned us to achieve investment-grade metrics, locked in attractive free cash flow profile, and accretion from our consolidation, and protect our portfolio from near-term pricing risk. The fundamental setup for natural gas began with producers running at maintenance of capital mode, setting up for a strong 2Q recovery in industrial demand post-storm Uri. The front-month NYMEX contract rallied from $2.64- $3.65 per Mcf during the quarter, driven initially by the TETCO outage, followed by a much warmer than normal weather in June that saw natural gas supply being rationed between domestic and export demand. The TETCO outage starved the Gulf Coast of approximately 650 million a day, while the warmer weather in June increased gas power demand by about 3 Bcf per day. The TETCO outage also added pricing pressure for in-basin gas. Up till the outage, TETCO M-2 basis was averaging $0.62 for April and May. While the outage occurred, cash basis fell sub $1. However, even with the outage, strong cooling demand and less gas to coal switching in the region helped support cash basis, pulling it back to the mid-$0.60s before the end of the quarter. Looking forward, we expect 2021 and 2022 forward natural gas price curve to remain very sensitive to weather. We see significant upside to the 2023 and 2025 curve from rising exports, increasing power demand from accelerating coal, and modest nuclear retirements. On top of this bullish long-term gas view, we see opportunities for further pricing differentiation within the sector as the responsibly sourced gas market matures. The demand for differentiated product exists, we're seeing in our conversations with end users, both domestic and international buyers, who are looking for ways to reduce their carbon footprint. We've already entered into a couple of RSG contracts at premium pricing. We see the opportunity for premiums to expand as we optimize the RSG framework through the standardization of technology adoption and improved transparency. I'll now pass the call over to Toby to wrap things up. Thanks, Dave. As the RSG topic highlights, we see growing opportunities to connect value creation with ESG accretion. Our comprehensive ESG report, published in June, provides a detailed review of how we approach sustainable value creation. A key area for us is differentiation. Before we close, I'd like to highlight the emissions targets that we announced in June, which we believe are truly differentiating in the industry. First, we established targets to achieve net zero Scope 1 and Scope 2 GHG emissions by or before 2025. This is an important commitment and one that we have high confidence in meeting or exceeding. Second, we plan to reduce our production segment Scope 1 GHG emissions intensity by 70% to a level below 160 metric tons CO2 per Bcfe by or before 2025. Finally, we plan to reduce our production segment Scope 1 methane emissions intensity by 65%, below 0.02% by or before 2025. These targets are meaningful first steps, and we will continue to push ourselves as we aim to be the operator of choice for all of our stakeholders. We are a values-driven organization that operates with vision and purpose. To conclude today's call, I'd like to point you to Slide five of our investor presentation, which highlights our unique investment opportunity to our shareholders. In short, we are a differentiated energy investment opportunity. Starting with scale. We are the largest producer of natural gas in the United States. This is important not only because we are responsible for providing the U.S. and other countries globally with low cost, low emissions natural gas, but because when done correctly, scale affords us the chance to operate more efficiently. Second, we have a robust free cash flow profile, most notably driven by contractually locked-in declining gathering rates with Equitrans, improved maintenance capital intensity, and a shallow and base production decline. Aside from upward price movements, upsides to our $7+ billion free cash flow projection through 2026 will come through the release of certain MVP capacity, credit rating upgrades, premiums for RSG gas, participation in new ventures, and continued operational efficiencies. We have a peer-leading credit profile with a clear path to regain our investment-grade rating. As shown on slide 8, you'll see that our five-year notes trade nearly 150 basis points better than comparable peers, while only 50-75 basis points wide of investment-grade producers. On the left-hand side of the slide, you'll see the impact of the strategic actions taken, which have significantly reduced our leverage profile, which is expected to fall by nearly one turn from year-end 2021 to year-end 2022. We have an evolved modern operating model and peer-leading inventory. As peers continue to drill up their remaining core inventory, we have minimal infill risks comparatively and have decades of core long lateral combo development inventory. Finally, we believe that Appalachian natural gas will play a critical role in replacing baseload electricity generation as coal plants retirements accelerate, providing a tailwind for our business as the world becomes more electrified. Further, low emissions natural gas produced here in the U.S. is a critical tool to mitigate energy poverty and improve human flourishing on a global scale, all while positively influencing climate enhancing the long-term tailwinds for this business. We look forward to continuing to execute on our strategy, demonstrating ESG leadership and being a champion for the commodity. Thank you for your interest and support. I'd now like to open the call for questions. Operator, will you prompt for questions, please? My apologies there. I was muted locally. If you'd like to ask a question and please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask a question, please ensure your line is unmuted locally. First question comes from Nitin Kumar from Wells Fargo. Nitin, your line is now open. Please proceed with your question. Hi. Good morning, gentlemen, and thanks for taking my question. I guess I'll start first with hedging, which is I think a little bit on everybody's mind. David, you talked about the benefits of hedging a little bit, but if you could give us a little bit more insight. There was almost a doubling up of your swaps at prices that are still quite a bit below strip. I know you mentioned some floating rate hedges, but that increase wasn't as much. Could you talk a little bit about why did you choose to hedge at the levels you did and the instruments that you used to do that? Yeah. This is Toby. I can walk through the hedging and our thought process behind it. You'll see we've added approximately 650 Bcf of swaps. If you take the Alta volumes that we inherited, that was about 150 Bcf. You got about 500 Bcf that we're really thinking through what's the best way to get our hedges and meet our strategic goals that allow us to strengthen our balance sheet, reach our leverage targets and be able to start returning capital to shareholders. We have a view that we take when we make these decisions, and our view was closer to $3. I think when you look at the swaps that we did for that period, it was closer to $3, which aligned with our view. The question is: why not collars? The use of swaps really solidifies the free cash flow from those hedges, which has the effect of improving our floor. Very helpful with the rating agencies to underwrite the free cash flow that we have to assist in us regaining our investment-grade balance sheet. The next question is: well, why not just do puts? We looked at that, and at that price, at around $3 NYMEX, to put a put in place, the premium would be anywhere from $0.25-$0.45. To put a put in place and give exposure to upside, you're really taking a view that gas prices will be $3.35 and $3.40. That was not in line with our view at the time. We did not account for the weather events there. That was the thought process behind the decision that we made on the hedging. Great. That's really helpful, Toby. I guess the follow-up, and you alluded to this, if you prepare your remarks on this now, shareholder cash return. I know you said fourth quarter 2021 earnings, any early thoughts on the form of that? Are you leaning towards dividends, variable dividends, buybacks? There are different ways. I just want part B would be, you talked about consolidation and scale. How compatible are your goals to be a consolidator with meaningful cash return? If you can address that as well. We're going to take a balanced and flexible approach with our capital allocation or return of capital strategy. I'm looking forward to putting that out in the fourth quarter. As far as consolidation and how we think about allocating capital there and performing, tackling any consolidation opportunities we see within our footprint, I think one thing that's very clear is if you look at our track record, we've always been very disciplined in our consolidation efforts. I think the track record we've laid with Chevron and Alta support that. It's even more important for us to be even more disciplined and only do deals that are going to be really accretive on a NAV per share and free cash flow per share basis. The de-leveraging nature obviously is helpful, but we're sitting with a really good place with our balance sheet right now. I think, when we have the ability now to start returning capital to shareholders, just enhances the importance of continuing to be disciplined on the consolidation front. Yeah. Great. Thanks, David. We have $1.4 billion of free cash flow next year. We'll figure out what percentage, but we have the ability to do a big percentage of return to shareholders next year. Thanks, David. You're welcome. Our next question comes from Josh Silverstein from Wolfe Research. Josh, your line is now open. Please go ahead. Yeah. Thanks. Morning, guys. I was going to go right on the same topic as well. You mentioned the $1.4 billion of free cash flow. I imagine you probably want to pay the $570 million of maturities for next year as well. What are the limiting factors to how much you could return? Do you want to make your balance sheet one and a half times levered, and then we can think about the return profile from there, or is there some other limiting factor to what you guys may be able to return back to us? Yeah. We'll be able to retire the 2022 debt this year. I think you can look at the free cash flow next year, really about how much incremental debt do we want to retire and how much shareholder friendly we want to do. I think we'll set a specific target, but we don't need to get to any specific target in any 1 year. We can do a glide path. Got it. Okay. Just as far as the longer-term strategy that you guys outlined in there, it's pretty clear, or at least it's outlined in here, that there's no plans for growth going forward. I just wanted to see if that was the case and you guys are just going to be holding maintenance volumes roughly flat for the next three or four years or so. Yeah. Consistent with what we've seen in the past, when we get the question, what would it take for EQT to grow? We've consistently said it would require a strip that's got some length to it, probably 2- 3 years out at a gas price that's north of $3.00. That situation is still there today. Even if we did see the opportunity, if that opportunity presented itself, it would still be very modest, zero to low to single-digit growth, less than 5%. For us, that's really just taking the throttle or taking the brakes off the operations team to run a little bit. It'd be a very natural couple percent increase. I think this is an interesting situation that a lot of people in the industry are looking at right now. While you do see short-term price signal, which is encouraging, and people can look in adding activity levels to maybe get a little bit better return on an incremental small amount of dollars. I think that people know how that plays out when you chase shorter-term price signals. I think you compare that versus the long-term value opportunity is getting our assets valued at a gas price that's north of $3.00. When you compare the short-term gains you can get from accelerated activity or compared to the alternative, we'll choose the alternative. We think that it'd be encouraging to see others in the industry remain disciplined, because I think they recognize the era that we're in and what's the best way to return capital to shareholders and also maximize the value creation of our assets. Thanks, guys. Thank you. Our next question comes from Neal Dingmann from Truist Securities. Neal, your line is now open. Please go ahead. Neal, are you there? Sorry about that, guys. First question, Toby, for you. Just on the massive footprint you have, what's your thought? I know you have not a ton of areas, but the thought about maybe pivoting a little bit, given what's going on with NGLs, and are there some pads that you could tie in either this year, early next year, and have a bit more NGL focus? Yeah, Neal, I think you hit it up front. From a percentage basis, we're not really going to be able to move the needle just given our scale on the dry gas side of things. The Chevron asset that we have does give us an opportunity to steer some activity to the wet side of our program. Okay. Probably more for next year. Go ahead, Dave. Okay. No, I was just going to say it's probably more for next year than this. Okay. Just Toby, on M&A, still on opportunities. Your strategy on M&A has been a bit different than others we've seen in the past. Given the huge sort of, as you said, the acreage now that you control. You kind of alluded to this earlier, but other than just sort of continuing to acquire this, would the plan be continue to not only acquire but continue to have just kind of a slow, steady, meaning I kind of look at the Chevron deal, look at the Alta deal? Certainly didn't add any rigs there. Could you just talk about not only potentially doing more M&A, but your thought about when you would acquire something, is the thought just to continue very much on the maintenance on anything you would do? Yeah. Neal, our strategy coming in here was to fix EQT, solidify the balance sheet, and grow free cash flow per share. In the past, consolidation was a great tool for us to grow free cash flow per share and also deleverage the business to get our balance sheet to where it's at today. Now we're in a position where with the balance sheet where it's at, and now having the ability to start beginning returning capital to shareholders, we now have another way that we can increase our free cash flow per share, whether that's through doing share buybacks. We're certainly going to weigh this new tool that we have in the mix and finding out the best way that we can grow our free cash flow per share. Agree. If I can sneak one last one in. Toby, for you, Dave, do you think on the hedges that it seems like with the reaction today, was it the Alta hedges rolling off? It just feels like some investors are not fully understanding the hedge program. Maybe, Dave, if you could just expand on that one last time. I know you talked about the sort of collars you have in there, but I'm still getting a lot of questions on that. I just don't think people are fully understanding between what you put on and what the Alta has rolling off. Right. We basically inherited, we will call it between 7% and 10% of our hedges that Alta had in place. They were at a hedge price, I am going to average between 2021 and 2022, about $2.60. We added, I will call it Alta hedges to protect the returns of that transaction of about another, we will call it 6%. We added hedges at about $3.50 in 2021 and $2.80 in 2022. We added an incremental wedge of hedges between 2021 and 2022 that Toby talked about that had a $3 number on it, and there was a piece of that which were collars. The Alta pieces were the protection for the transaction and the inherited piece, and the incremental piece that we added to go towards our price view was that $3 piece, of which a portion of it is in collars, if that helps. Very helpful. Thank you, guys. You're welcome. Our next question come from David Deckelbaum from Cowen. David, your line is now open. Please go ahead. David, are you there? I think David may have just withdrawn his question. We'll go with Holly Stewart. Holly, your line is now open. Please go ahead. Good morning, gentlemen. Maybe, Dave, I'll start with you. Just thinking about the acquisition integration and how that impacts the investment-grade rating. I presume that you are in close contact with the rating agencies, and you're getting very close. Maybe my first question on that is just, what are your thoughts on just how the timing has changed there? Maybe the second question around that, how do you incorporate the sort of return of capital strategy into that conversation? Yeah. I would say there's probably two events that impacted the timing. One has been the acquisition, and we got the upgrades just the other day. Now we're sitting at one notch away. The acquisition probably helped accelerate the transition back to investment grade by, let's call it maybe six months or so. The second event is really the commodity price move and how it's moved and up. I think now the rating agencies are kind of thinking through what should the commodity price be. That'll obviously have a big impact on timing as well. I think we can think about investment grade as probably a 2022 event, whether it's the beginning or the middle. The second part on return of capital and how the rating agencies are thinking about that. Yeah. The agencies would like us to continue to pay down debt. I think that's important. I think, we will integrate that into our return on capital strategy. I think now with the fact that we have a multiyear view, we'll call it of well over $1 billion a year of free cash flow, approaching $1.5 billion. We can create a strategy that retires debt over time as well as provide shareholder returns. We can accomplish both, having investment grade, having a strong balance sheet, also returning cash to shareholders. Okay, great. Then, Toby, I know in your prepared remarks within the release, you mentioned no real cost acceleration in the second quarter. What are you all seeing, I guess, here currently in terms of inflation? Then, as you think about kind of the 2022 element, how do you see that playing out? Yeah. We spend a lot of time with the teams thinking about service costs and making sure that we get the most accurate view baked into our well costs that obviously makes up our CapEx forecast for the future. Where we're seeing inflation is on things like steel, obviously things like diesel. One of the benefits of running a large-scale dependable program is that we can leverage our procurement team to acquire the materials we need in advance. That's been a very helpful tool for us. The other thing we've seen is just reducing our reliance on things like diesel. I mean, the move to electrify our frac equipment, in addition to the ESG benefits, it takes us away from being large diesel consumers. That's over 25 million gallons of diesel that we've not needed to consume as a result of that. Operational efficiencies play into reducing service cost inflation as well. All of these numbers are sort of baked into what our costs are, but I do see that our costs will continue to stay at the level that we're at today. Then we've got the benefit of the teams continuing to ground the operational efficiencies, high-grade the schedule with longer laterals. Those two things historically, they've allowed us to beat even in the face of service cost increases, and I expect that to continue in the future. That's great. Thank you, guys. You're welcome. Our next question comes from Arun Jayaram from JPMorgan Chase. Arun, your line is now open. Please go ahead. Good morning. I wanted to first just talk about your outlook for basis differentials. I know you're assuming a mid-year 2022 start-up date for MVP. First, I was wondering to see if you could talk about what basis differential is embedded in your 2022 guide for the $1.4 billion of free cash flow, and how do you expect basis differentials to move in a post-MVP world? Yeah. Basis differentials are narrowing by about $0.20 year-over-year from 2021- 2022. We see nice improvement, and we locked in a big chunk of that. When MVP comes online, we're assuming, I'll call it, a very conservative view of what the endpoint where MVP drops gas off, and we're also assuming not a material benefit in basin. There'll probably be some movement there that'll probably help make those numbers get better, but we're not assuming that. Got it. It sounds like, Dave, you're assuming about a $0.20 year-over-year improvement in basis relative to 2021 actuals. Is that fair? Right. Okay. Fair. Great. Toby, I was wondering if you could maybe elaborate on how the market for responsibly sourced gas is kind of developing. You talked about maybe a couple of marketing agreements where you're getting some premium pricing. I was wondering if you could maybe elaborate that and maybe touch upon some of the new venture investments that you plan to make and maybe a timeline for that $75 million. Yeah. First on the market for RSG, it starts with demand. A lot of customers have reached out to us about this product. There's a lot of interest there, so that's very encouraging. Two is, what is that market going to translate to in price? I'd say in the single- digits right now. The real part that we're looking for is to really establish the certification framework that really will help solidify exactly the product that people are buying. What that will allow us to do is quantify the emissions reduction you're getting by getting really low intensity responsibly certified gas. That will help define the price for our customers, and I think that that will lend itself, if you're going to apply some type of carbon pricing to that, to a more constructive price and a more realistic premium that's actually based on data. We've joined the OGMP 2.0. That is specifically designed to help assist in creating that framework and also the technology that we use to do the onsite monitoring. I will be part of it. As far as our new ventures is concerned, one of the things that we're doing there that will facilitate our RSG efforts is by investing in our ESG initiative, which one of them is the $20 million to replace our pneumatic devices. That's going to cut our emissions in half. That's going to take what is already a peer-leading emissions intensity rating and only make that better, which will have the impact of allowing us to get more credit for the quality of the gas that we produce to customers. That's sort of the holistic view on RSG and what we're doing to position ourselves to benefit from and promote that market. Great. Thanks a lot. Thank you. Our next question comes from John Abbott from Bank of America. John, your line is now open. Please go ahead. Good morning. Thank you for taking our questions. Our first question is for you, David. You did a good job explaining the working capital draw during the quarter is mainly non-cash. Just thinking to 4Q, how should we think about the trajectory of working capital? Yeah. The issues with working capital really are tied to the margins for our hedges. As you think about as time rolls, those margins go away. As our credit improves, those margins go away. Then if prices go up, those margins can increase on what's left. Those are the moving targets to think about. I think just know that I'll call it by the end of the year, all that margin effectively will go away. You could think about this from a trend standpoint over the next six months. That margin will go away because effectively the biggest part of that margin impact is really tied to 2021 hedges. All right. For the second question, it's on the topic of NGLs and also on hedging, which have already been discussed. If not everything, NGLs don't really sort of really move the needle for you that much, but you don't provide a lot of disclosure on your NGL hedging position. We do have an uplift in the NGL curve towards in the second half of the year. Can you just sort of discuss, relatively speaking, the amount of, maybe while you may can't give specifics on contracts, but the amount of percentage of hedging on NGLs and whether or not you continue to hedge into 2022 on NGLs? Yeah. We're 75% hedged on 2021. We're 0% hedged on 2022. A portion of those hedges that we have in place for our NGLs are tied to our Chevron acquisition. Just like we did with Alta, we added hedges in place. We added only 2021 hedges. We didn't add 2022 or 2023. We have virtually wide open for 2022 and 2023 for NGL. Again, it's about 5% of our production. It's probably about, I'll call it 6% or 7% of our revenue. If I could possibly sneak in one more. Just given the upward move in the gas strip, David, what are your latest thoughts about when you might pay cash taxes? It'll be several years before we pay cash taxes. Again, that will be a function. We have $1.4 billion of NOLs. That really will be a function of what commodity prices do. Right now, we have, we'll call it several years out before we pay cash taxes. Thank you very much for taking our questions. You're welcome. Our next question comes from David Heikkinen from Pickering Energy Partners. David, your line is now open. Please go ahead. Good morning, everybody. Just thinking about your Alta deal. Appreciate you providing the splits on the hedges for that, so we can roll it into our look-back economics. Can you talk about how much of the increase in differential guidance was tied to the Alta assets, or was it not? Do they just have similar differentials to the rest of the portfolio? No, David. They're about $0.15 wider than our in-basin differentials. It did add a piece of that. I would say about half was from the acquisition, and half of it was from wider differentials that occurred within the basin, probably because of TETCO being down. Yeah. No, it's purely in our own look-backs on what you paid and what we thought. That's helpful just to dial that in a little bit. We'll put the cost of hedges in and the little wider differential into the purchase price adjustment. That's awesome. That's helpful. Okay, great. Our next question comes from David Deckelbaum from Cowen. David, your line is now open. Please go ahead. Thanks, guys. Can you hear me? Yes. Hello? Yeah. All right, perfect. Sorry about that before. Just curious on two things. One is on the Alta deal. The incremental CapEx that you guided to today for 2021. I think, one, I just wanted to revisit that longer-term outlook of just running one rig line on those assets. Two, is that capital higher than the original deal thoughts? Are you accelerating any of the DUCs that you acquired with that, or should we think of this as apples to apples with the original purchase guidance? It's in line with what we put out for the original deal guidance. Just to remind you, the Alta transaction to run that asset in maintenance mode is going to require around 200,000 horizontal feet per year, declining to around 150,000 horizontal feet longer- term. We applied the well cost that we used on the Rice deal to translate to a CapEx. Got it. Thanks, Toby. My only second question here is obviously heading into some of the issues that you all are experiencing right now with basis, several of your peers as well with TETCO. Last year things were much more dire because the cash prices were much lower. I would presume that we're not in the situation where we're looking at sort of managing near-term production in terms of curtailments or shut-ins or moving volumes off of M-2 or M-3, at least through the end of summer? Yeah. David, if you looked at what happened last year, you had lack of winter, you had high storage, you had a little bit of COVID impact, and then you had, we'll call it 1.5 Bcf per day or more of pipe outages. As you headed into September, October, and then you also had about 2 Bcf per day of shut-ins that came online in October. You had high storage, you had the pipes out, and then you had producers come back online, all hitting in, we'll call them that October, November time period. That created the recipe for basis widening really sharply. You look this year and storage inside the basin is about 150 Bcf less year-over-year. We'll call it normal 900 Bcf, 950 Bcf as you start the winter here. We're in much better storage position. There's really a lot less shut-in of production going on. You're running kind of more at full capacity. You do have the TETCO outage, which was about 650 Bcf, so we'll call it about half to about a third of what was out at times. I think the setup is in a much better position. If you have normal weather into the winter, and where you probably will not see any producers shut in the September-October time period. I think it's a much probably different setup. Yeah, indeed. Just wanted to confirm that. Thanks, David. You're welcome. Our next question comes from Noel Parks from Tuohy Brothers Investment Research. Noel, your line is now open. Please proceed with your question. Hi, good morning. Good morning. Morning. I was wondering, now that Alta is closed and you're a couple of months even more familiar with it, I was wondering, did you have any updated thoughts on in-basin gas opportunities now with your sort of combined portfolio? Well, I think that the opportunities were known even before we picked up the Alta transaction. I wouldn't say our view has changed on any new opportunities coming on the horizon. I think one thing that has changed is our balance sheet has really strengthened. The discipline that we had, the reason to do any M&A or consolidation to improve the leverage situation here at EQT, I think is less of a desire there. It really comes back to the focus on what's the best way for us to grow our free cash flow per share, and also growing our NAV per share as well, which we have the ability to do that ourselves with our return on capital strategy that we've accelerated our ability to get to that point. Our mentality on M&A is still going to be something that we look at. It's part of our jobs to make sure that we're looking at every opportunity, but that discipline is only strengthened. Got you. Thanks. We had on the call today a lot of good discussion about gas markets and what we might see going forward. The volatility we've seen last few months has all been on the upside. I guess I'm not quite sure how to frame this, but on your price view, and we talked about, of course, the backwardation in the curve, the expense of trying to lay in puts, as far as the premiums being high. When you look at the curve going into 2023, it's back into the twos. Do you sort of think that the market is assuming that there is going to be sort of a delayed but significant rebound in rig count so that supply is going to ease considerably? Do you think there's a sense that there's some sort of plateau ahead out there on the demand side? I'm just wondering, as you talk about future scenarios, just which you would think is more likely? I think for a strip to be under $3, I think you have to take a view that people are going to break discipline and start adding production. This period of pricing right here is going to be really important to watch because it's easier to stay disciplined in a $2.70 strip. It's another proposition when you're looking at a $3 strip. Like I said before, these are short-term pricing, and I think people understand how that's going to end up and realize that the real value opportunity is for us to bring some sustainability to gas supply and ultimately to a more sustainable price. Over the long- term, that will create more value. I think these next six months will be important to watch and I think help show the discipline that this industry has. I think after that, you'll start to see the strip reflect what we think is a more constructive gas price long- term. Great. Thanks a lot. You're welcome. There are no further questions on the line. I would now like to hand back to Toby Rice for any closing remarks. Yeah. Thanks everybody for participating today. I think just stepping back and realizing the situation that we've been in, that we're in today, the gas markets are very strong. I think we realize that gas isn't a $2 commodity. It's more like a $3 commodity. While that does present some headwinds with our hedge book, the fact is EQT is a stronger company today, and we've got a really bright future. We've got a really robust free cash flow profile and a really strong balance sheet, and that's going to give us the tools needed to correct any market imbalances in the short- term, and reward our shareholders for their patience. We're really excited to continue to deliver on that strategy. Thank you. This concludes today's call. Thank you for joining. You may now disconnect your lines.