Company is pretty standard. They got rid of 80% of their engineering long ago. Just a token force of projects, geology, field engineers, etc. They rely on 3rd party vendors to do their work. So the have contractors doing their grunt work. They had about 2000 people working for them. Now about 1000 is at equitable and 1000 is at eqt. The layoff but 135 people. And is just the beginning. You will see about 300 more between the two companies. There is a layered system at eqt. Very top management, very top assistant management, mid management, then directors team leaders, then workers. There is no communication from the top management directly to the underlings. Middle management never bothers with too unless asked. It is verboten for lower management to directly talk to senior management. The main problem is that like a lot of companies EQT saved a quick buck by furlough. They are paying the price for the loss of experience. Costs are out of control, because they have no real experience in field and projects managenent. They were a provider for most of their existence. Now they are a producer, provider, storage and transportation company. They have an abundance of good people. However they come from soft industries i.e. Banking and finance. Good experience but not enough to stem the cash flow hemorrhage. They desperately need engineers, and support in procurement, project management, etc. But from an engineering and construction backround. They are wasting millions by not controlling the costs, and the current management does not have the real world experience in managing EPCM projects and field production. They waste a lot of money doing it the same way, just renewing contracts and procurement and sourcing on 3rd party vendors. Project costs are kept in check and schedules managed by the vendors not EQT. It is like building a house and having the contractor design engineer and furnish it. You lose a ton of money.
EQT and the Rice acquisition happened too fast and a great deal of money was wasted. EQT wanted to expand, and Rice need a bailout from their bad acquisitions and financing. Rice Energy is a good company (hard to deal with though). They suffer from arrogance and leadership issues. They made their money in small and quick development of the wells they owned. Never over reaching for development. When Rice started their major acquisition program, prices were rusing. After the acquisition the winters were mild and prices low. They were in financial trouble and several companies were eying them for takeover. EQT was looking to be a dominant force, and started their bid for Rice. Rice was always lean and had a very confusing infrastructure. They had new capacity with the newly acquired fields, but never did a thorough assessment of capacity, basically a lot of pie in the sky guessing. EQT relied on Rice and their assessments, and did not like rice do a thorough geotechnical survey. Most gas companies use a program which takes data points and makes a guess on the gas contained below ground, to predict capacity. If you worked the rock field services and engineering and construction you know it is not nearly 100% reliable. Rice forced every dollar from the acquisition and sold RE at a huge proffit. (Estimates place the brothers share at a billion dollars on top of the salary and bonus and stock options they made while running Rice Energy of about 3-3.5 million a year). EQT over paid but had good growth prospects and kept other Texas companies from grabbing Rice.
The issue is this Rice has a case of buyers seller's remorse. It is fun being the Wildman of the gas business, a role which the brothers spent a lot of time crafting(showing up in blazers Mickey mouse t-shirts and shorts, tie dye office paint jobs, weird office decor, etc.). They got themselves in financial trouble and had to merge with someone. Now they realize they liked driving the bus rather then riding the bus. What you need to realize is that they are a big part of the problem with the issues at EQT. Their greed orchestrated and put a strain on EQT's aging infrastructure. Rice makes it sound like they are riding to the rescue. Do not believe it! The problems that exist then exist now. Rice claims he knows his wells and will increase capacity and reduce cost. Basically with them in charge it will turn around. How are they going to do this? When you increase capacity you need to expand your infrastructure(transmission lines, monitoring, safety, compressor stations, pumps, valves, flanges, design engineering, etc). The further away from the main lines, the higher the costs. Rice and EQT lack the experience and expertise to accomplish this. Add the low pricing in the mix, and it becomes impossible to accomplish. The only sure way to save costs for Rice is to reduce overhead and spending. Basically, do very few projects and fire workers until the price goes up. This is a power grab nothing more. EQT has their distribution networks to offset production costs for the short term. All the Rice projects should be surveyed for true capacity.
I am not knocking The Rice brothers or EQT. I have done projects for both companies. Both companies have good and bad points. EQT is too heavy, too many people with too little real world experience across the board- just do it the way it was done before. Rice was too lean with arrogant leadership and not a lot of experience( trying for style over substance). Both companies are a pain to work with!
They need to straighten up and- EQT needs to lose the redundancy, ambitious one trick pony managers, and get some real engineers, project managers, procurement, support people with true EPCM experience. Rice needs to be an adult and play nice with others. Lose the caricature wild and crazy Gonzo bad boys image(too old, too annoying, like a Jim Carrey or bad SNL sketch,). Admit your mistakes and move on. Work with EAT to make it better, or the people who lose will be the workers and vendors.