Slide 1: Common Stock Offering Investor Presentation March 2010
Common Stock Offering Investor Presentation March 2010
Slide 2: Contact Us and Cautionary Statements
Contact Us EQT Corporation (NYSE: EQT) EQT Plaza 625 Liberty Avenue, Suite 1700 Pittsburgh, PA 15222 Pat Kane ~ Chief Investor Relations Officer (412) 553-7833 The Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, pr
Slide 3: Equity Offering Summary
Equity Offering Summary Bookrunners: Expected Pricing: Form of offering: Use of proceeds: Overallotment option: Offering size: Issuer: J.P. Morgan Barclays Capital Credit Suisse Deutsche Bank March 10, 2010 Registered offering Acceleration of reserve development 15% or 1,875,000 shares 12,500,000 sh
Slide 4: EQT Presentation Team
EQT Presentation Team Murry Gerber – Chairman & CEO Dave Porges – President & Chief Operating Officer Phil Conti – Senior Vice President & Chief Financial Officer Pat Kane – Chief Investor Relations Officer
Slide 5: Rationale for Production Growth Acceleration
Accelerating development of Marcellus & Huron / Berea plays Increased 2010 production growth guidance to 26% from 20% Increased 2010 CAPEX estimate to $1.2 billion from $850 million* Capable of 26% production growth in 2011 for 20% less CAPEX Drilling and completion improvements Marcellus EUR per we
Slide 6: Key Investment Highlights
Key Investment Highlights Low-risk resource plays on 3.4 million firmly-held acres Extensive, multi-year inventory of drilling locations Marcellus Huron / Berea CBM Industry leading cost structure Low 3-year F&D of $0.91 per Mcfe Low per unit operating expenses of $1.03 per Mcfe Extensive midstream
Slide 7: Largest Appalachian E&P Company
Largest Appalachian E&P Company 19% of ‘09 op. inc. 275,000 customers 3.4 MM acres 36% of ‘09 op. inc. 4.1 Tcfe proved res. 45% of ‘09 op. inc. 11,000 pipeline miles
Slide 8: Reserves By Play
Reserves By Play 28 Tcfe Total Resource Potential** * As of 12/31/09 ** Includes pending acquisition of 58,000 net acres Huron/Berea 6.7 Marcellus 4.0 CBM/Other 1.8 Huron/Berea 2.0 Marcellus 1.1 CBM/Other 1.0 4.1 Tcfe proved reserves* 12.5 Tcfe 3P reserves*
Slide 9: EQT's Performance
EQT’s Performance Horizontal Huron / Berea Wells Horizontal Marcellus Wells Total Sales Volumes Proved Reserves Bcfe Tcfe Wells Wells Extended laterals 278 100 126 4.1
Slide 10: Marcellus Play
Marcellus Play 44 wells 53 wells 3 wells *Includes pending acquisition of 58,000 net acres ~500,000 EQT acres* 4.0 Tcfe 3P 13.5 Tcfe resource potential* ~$3 MM / well 4 – 4.5 Bcfe EUR / well EQT Acreage PA MD WV OH 40 wells (2010 base plan) +60 wells (2010 accelerated plan) 100 TOTAL wells in 2010
Slide 11: Huron / Berea Play
Huron / Berea Play Horizontal 179 wells 26 wells 73 wells Standard length lateral: 129 wells (2010 base plan) +50 wells (2010 accelerated plan) 179 TOTAL wells in 2010 EQT Acreage VA WV KY Extended length lateral: 25 wells (2010 base plan) +74 wells (2010 accelerated plan) 99 TOTAL wells in 2010
Slide 12: Incremental Marcellus Infrastructure Capital
Incremental Marcellus Infrastructure Capital Capital: $50 MM $15 MM in 2010 West Virginia 6,140 HP compression 20 miles gathering pipe Incremental capacity: 50 MMcfd Total capacity: 115 MMcfd Pennsylvania – Jupiter 9,600 HP compression Incremental capacity: 80 MMcfd Total capacity: 130 MMcfd Transmi
Slide 13: Industry Leading Cost Structure
Industry Leading Cost Structure $/Mcfe $/Mcfe 3-year F&D (all sources) Per Unit Operating Expenses Mean = $2.00 Mean = $3.90 $0.91 $1.03 Source: JPMorgan; year-end 12/31/08, except EQT at 12/31/09 Source: JPMorgan; year-end 12/31/08, except EQT at 12/31/09
Slide 14: Production By Play
Production By Play Production MMcf / d Began horizontal drilling E
Slide 15: Rates of Returns by Major Plays
Rates of Returns by Major Plays IRR 5-year strip ~$6.00 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% $5.00 $6.00 $7.00 $8.00 Marcellus CBM Huron / Berea
Slide 16: Capital Investment Summary
Capital Investment Summary *Excludes acquisitions 0 200 400 600 800 1,000 1,200 1,400 2006 2007 2008 2009 2010E Midstream Production Distribution $ MM 403 777 1,344 964 1,200* 0 200 400 600 800 1,000 1,200 1,400 2006 2007 2008 2009 2010E Midstream Production Distribution $ MM 403 777 1,344 964 1,200
Slide 17: Investment Summary
Investment Summary Equity facilitates acceleration of reserve development Marcellus and Huron / Berea offer BEST economics Superior production sales growth of 26% Increase in net asset value / share of >10%
Slide 18: Appendix
ee EQT Appendix
Slide 19: Finding and Development Cost Definitions
Finding and development costs (F&D costs) from all sources for peer companies presented in this presentation is calculated as the cost incurred, relating to natural gas and oil activities per the company’s Financial Accounting Standard’s Board Accounting Standards Codification 932 (ASC 932) disclosu
Slide 20: Ample Financial Flexibility to Execute Business Plan
Ample Financial Flexibility to Execute Business Plan F2 A-3 P-2 Commercial paper Stable Negative Negative Outlook BBB+ BBB Baa1 Long-term debt Fitch Standard & Poor’s Moody’s Debt ratings Strong balance sheet Manageable debt maturities 115 10 24 700 11 708 160 5 200 6 10 - 150 300 450 600 750 2011 2
Slide 21: Risk Management Hedging
Risk Management Hedging * The above price is based on a conversion rate of 1.05 MMBtu/Mcf Hedge Volumes (Bcfe) 2010 2011 2012 2013 Swaps 23 19 - - Collars 17 14 14 8 Puts 3 3 - - Total 43 36 14 8 Swaps 5.12 $ 5.10 $ - $ - $ Collars - Avg Floor 7.28 $ 7.11 $ 7.11 $ 6.83 $ Collars - Avg Cap 14.05 $ 14
Slide 22: Price Reconciliation
Price Reconciliation Three Months Ended December 31, Year Ended December 31, 2009 2008 2009 2008 Average NYMEX price ($ / MMBtu) $ 4.17 $ 6.94 $ 3.99 $ 9.03 Average Btu premium 0.40 0.69 0.38 0.94 Average NYMEX price ($ / Mcfe) $ 4.57 $ 7.63 $ 4.37 $ 9.97 Average basis 0.12 0.08 0.11 0.19 Hedge impa
Slide 23: Per Unit Operating Expenses
Per Unit Operating Expenses Three Months Ended December 31, Year Ended December 31, 2009 2008 2009 2008 Production segment costs: ($ / Mcfe) LOE $ 0.33 $ 0.42 $ 0.30 $ 0.35 Production taxes 0.25 0.38 0.29 0.52 SG&A 0.27 0.35 0.35 0.42 $ 0.85 $ 1.15 $ 0.94 $ 1.29 Midstream segment costs: ($ / Mcfe) G
Slide 24: Major Plays: Huron / Berea, Marcellus, CBM
Major Plays Huron / Berea, Marcellus, CBM Devonian Miss. Huron / Berea Play 30’ – 2,700’ (low pressure) Marcellus Play 40’ – 300’ (high pressure) Big Lime Berea Sand Cleveland Shale Lower Huron Siltstone Lower Huron Shale Rhinestreet Shale Geneseo Shale Marcellus Shale Onondaga Limestone CBM Play 2,
Slide 25: Marcellus Play Equitrans
Marcellus Play Equitrans Current capacity 600,000 Dth/day Transportation to Pittsburgh Expansion / re-engineering Transportation to 5 interstate pipelines Successful open season, October 2009 1.1 MMDth / day Phase I – 2010 100,000 Dth/day Total investment potential: $450 – $500 million Equitrans Tra
Slide 26: Regional Distributor
Regional Distributor PA, WV, KY 275,000 customers
Slide 27: TGPL Trading & Storage Hub
TGPL Major market areas Trading & Storage Hub TGPL Expansion Market Access TGPL Northeast Expansion Project 350,000 Dth/d capacity Gulf coast to New York Links EQT Production to northeast and southeast markets