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Buy EQT?

Add EQT to Cramer’s list of natural-gas stocks worth buying. He’s bullish on this low-cost producer and its “meaningful” 2% dividend yield.

EQT’s finding and development costs come in at just $1.14 per thousand cubic feet, which is significantly lower than its peers’ $2.16. The company has claimed that it could reduce those costs to $1 per thousand cubic feet in its Huron Shale reserves, in Virginia, and said that costs are down in Pennsylvania’s Marcellus Shale as well. Drilling days in the Marcellus fell to 17 from 35, and well costs there have dropped to $3.3 million per well from $5.5 million.

Beyond costs, though, Cramer’s big gauge for nat-gas stocks right now is the amount of production that’s already hedged. Companies that haven’t yet locked in prices for the rest of the year and 2010 will enjoy bigger revenues as prices trend higher. And Cramer thought they would, predicting a move to $6 or $7 from the present $4 level.

EQT is 31% hedged for 2009 and 41% for 2010. What does that strategy say about natural gas? How bright a future does this company have? Cramer asked CEO Murray Gerber for the answers. Watch the video for the full interview.

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