Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2016

Risks and Uncertainties [Abstract]

Concentrations of Credit Risk

Concentrations of Credit Risk

Revenues and related accounts receivable from the EQT Production segment’s operations are generated primarily from the sale of produced natural gas, NGLs and crude oil to marketers, utility and industrial customers located mainly in the Appalachian Basin and northeastern United States and a gas processor in Kentucky and West Virginia. The Company’s current transportation portfolio also enables the Company to reach markets along the Gulf Coast and Midwestern portions of the United States. Additionally, a significant amount of revenues and related accounts receivable from EQT Gathering and EQT Transmission are generated from the transportation of natural gas in Pennsylvania and West Virginia.  No single customer accounted for more than 10% of the Company's revenues for 2016. One customer within the EQT Production segment accounted for approximately 10% and 12% of the Company's total operating revenues in 2015 and 2014, respectively.

Approximately 68% and 79% of the Company’s accounts receivable balance as of December 31, 2016 and 2015, respectively, represented amounts due from marketers.  The Company manages the credit risk of sales to marketers by limiting its dealings to those marketers that meet the Company’s criteria for credit and liquidity strength and by regularly monitoring these accounts.  The Company may require letters of credit, guarantees, performance bonds or other credit enhancements from a marketer in order for that marketer to meet the Company’s credit criteria.  As a result, the Company did not experience any significant defaults on sales of natural gas to marketers during the years ended December 31, 2016, 2015 or 2014.

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts.  This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. The Company’s OTC derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures.  These include monitoring current market conditions, counterparty credit fundamentals and credit default swap rates.  Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals.  To manage the level of credit risk, the Company enters into transactions primarily with financial counterparties that are of investment grade, enters into netting agreements whenever possible and may obtain collateral or other security.

As of December 31, 2016, the Company was not in default under any derivative contracts and had no knowledge of default by any counterparty to its derivative contracts. During the year ended December 31, 2016, the Company made no adjustments to the fair value of derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in the Company’s established fair value procedure. The Company monitors market conditions that may impact the fair value of derivative contracts reported in the Consolidated Balance Sheets.