EQT Corporation · NYSE:EQT

EQT — Investor Presentation (September 2015)

45 slides from EQT's investor presentation, September 2015

  1. Slide 1: Analyst Presentation September 2015

    Analyst Presentation September 2015

  2. Slide 2: EQT Cautionary Statements

    EQT Cautionary Statements 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 (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only p

  3. Slide 3: Non-GAAP Measures

    Non-GAAP Measures The Company uses Adjusted EQT Midstream EBITDA as a financial measure in this presentation. Adjusted EQT Midstream EBITDA is defined as the Company’s EQT Midstream business segment’s operating income (loss) plus depreciation and amortization expense less gains on dispositions. Adju

  4. Slide 4: Calculations Within This Presentation

    Calculations Within This Presentation Finding and development costs (F&D costs) from all sources for peer companies presented in this presentation are calculated as the cost incurred, relating to natural gas and oil activities in accordance with Financial Accounting Standards Board Accounting Standa

  5. Slide 5: Key Investment Highlights

    Key Investment Highlights  Extensive reserves of natural gas*  10.7 Tcfe Proved; >22 years R/P  42.8 Tcfe 3P; >87 years R/P  53 Tcfe Total Resource Potential; >108 years R/P  Proven ability to profitably develop our reserves  >25% production sales volume growth forecasted in 2015  Industry le

  6. Slide 6: Leading Appalachian E&P Company

    Leading Appalachian E&P Company  2014 Operating Income of $853.4 million 9,100 pipeline miles 10.7 Tcfe proved reserves 3.4 MM acres As of 12/31/14 6

  7. Slide 7: Production By Play

    Production By Play  Marcellus Shale drilling driving growth 1,800 Marcellus 1,600 Huron Other 1,400 1,200 Production MMcf/d 1,000 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 7

  8. Slide 8: Reserves By Play

    Reserves By Play Proved Reserve Growth 42.8 Tcfe 3P reserves (as of December 31, 2014) 12,000 Upper Devonian Other 10,739 455 10,000 Huron 760 Marcellus 8,348 1,240 215 8,000 861 Huron 11.9 Bcfe 1,316 6,004 6,000 5,220 5,365 761 Marcellus 23.3 866 889 965 4,000 1,062 8,284 1,475 5,956 2,000 4,278 3,

  9. Slide 9: Marcellus Play

    Marcellus Play  Near term development focused in four areas Central PA 600,000 EQT acres 86% NRI / 80% HBP 28% “wet” 23.3 Tcfe 3P Southwestern PA 31 Tcfe total resource potential 140 wells in 2015 Northern WV (Dry) Northern WV (Wet) EQT acreage 9

  10. Slide 10: Marcellus Play Southwestern PA

    Marcellus Play Southwestern PA Oliver West Pad 7 wells 3,986’ Avg. Lateral Length per well 61.7 Bcfe Total Pad EUR 140,000 EQT acres Kevech Pad 6 wells 1,560 locations 2,970’ Avg. Lateral Length per well 54.6 Bcfe Total Pad EUR 281 wells online* 79 wells in 2015 5,400’ laterals 89 acre spacing Galla

  11. Slide 11: Northern West Virginia – Wet Gas Area

    Marcellus Play Northern West Virginia – Wet Gas Area BIG 190 Pad 8 wells 5,657’ Avg. Lateral Length per well 100.0 Bcfe Total Pad EUR 90,000 EQT acres 940 locations 196 wells online* 45 wells in 2015 PEN 16 Pad 5 wells 5,400’ laterals 3,562’ Avg. Lateral Length per well 39 Bcfe Total Pad EUR 94 acre

  12. Slide 12: Marcellus Play Central Pennsylvania

    Marcellus Play Central Pennsylvania 80,000 EQT acres Frano Pad 3 wells 4,409’ Avg. Lateral Length per well 620 locations 20.4 Bcfe Total Pad EUR 75 wells online* 9 wells in 2015 5,400’ laterals 124 acre spacing 7.4 Bcfe EUR / well 1,375 Mcfe EUR / ft. of lateral Rosborough Pad $5.7 MM / well 2 wells

  13. Slide 13: Northern West Virginia – Dry Gas Area

    Marcellus Play Northern West Virginia – Dry Gas Area GRT 26 Pad 2 wells 3,270’ Avg. Lateral Length per well 17.7 Bcfe Total Pad EUR 33,000 EQT acres 300 locations 52 wells online* 7 wells in 2015 5,400’ laterals 109 acre spacing 9.4 Bcfe EUR / well 1,741 Mcfe EUR / ft. of lateral $5.7 MM / well Flan

  14. Slide 14: Marcellus Economics IRR - Blended Development Areas

    Marcellus Economics IRR - Blended Marcellus Development Areas Wellhead After OpEx After Tax 400% PRICE ATAX IRR 350% $2.50 16% $3.00 34% 300% $3.50 57% $4.00 89% 250% 200% 150% 100% 50% 0% $2.50 $3.00 $3.50 $4.00 Realized Price See appendix for IRR by development area 14

  15. Slide 15: Dry Utica / Point Pleasant Potential

    Dry Utica / Point Pleasant Potential  Targeting deep, high pressure rock beneath existing development areas 400,000 EQT acres 3,000 locations Scotts Run 591340 3,221’ treated interval 3 wells in 2015 24 hr. IP: 72.9 MMcf ~13,000’ deep 22.6 MMcf / 1000’ 5,400’ lateral 8,641 psi flowing casing pressu

  16. Slide 16: Industry Leading Cost Structure

    Industry Leading Cost Structure $7 3-year F&D (all sources) $6 $5 Mean = $2.66 $4 $0.73 $/Mcfe $3 $2 $1 $0 RICE SWN COG MDU WLL CNX AR RRC EOG CHK SM NBL EGN EQT QEP XCO UPL CXO NFG XEC NFX For the three years ended 12/31/2014 Per Unit Operating Expenses $4 Mean = $1.69 $3 $0.47 $/Mcfe $2 $1 $0 RICE

  17. Slide 17: EQT Corporation Midstream Overview – Consolidated

    EQT Corporation Midstream Overview – Consolidated  Transmission & Storage*  3.5 Bcf/d current capacity  47 Bcf gas storage capacity  Gathering*  2 Bcf/d capacity  Formed MLP in 2012 (NYSE: EQM) $600 700 EQT Corporation Adjusted EQT Midstream EBITDA** EQT Midstream EQT Midstream Partners, LP 60

  18. Slide 18: Marcellus Midstream Assets

    EQT Corporation Midstream Marcellus Midstream Assets  Allegheny Valley Allegheny Tioga Valley 65 MMcf/d Connector Connector  200-mile FERC pipeline Longhorn 130 MMcf/d  450 MMcf/d capacity  ~$30MM CAPEX in 2015 Terra 80 MMcf/d  ~$40 MM projected annual EBITDA Applegate 150 MMcf/d  2015 Gatheri

  19. Slide 19: EQT GP Holdings, LP (NYSE: EQGP)

    EQT GP Holdings, LP (NYSE: EQGP)  EQT owns 90% LP interest of EQGP  EQGP owns in EQM  30% limited partner interest  2% general partner interest  incentive distribution rights EQGP Price Value of EQGP Units Value per per Unit held by EQT ($MM) EQT share $29 $6,951 $46 $30 $7,191 $47 $31 $7,431 $

  20. Slide 20: EQT Midstream Partners, LP (NYSE: EQM)

    EQT Midstream Partners, LP (NYSE: EQM)  Transmission & Storage  3.1 Bcf/d current capacity  700 mile FERC-regulated interstate pipeline  32 Bcf of gas storage capacity  Gathering System  Jupiter Gathering System  Supports EQT PA dry gas production  Northern West Virginia Marcellus Gathering

  21. Slide 21: EQT Midstream Partners Growth Projects

    EQT Midstream Partners, LP Growth Projects  Ohio Valley Connector  36-mile FERC regulated pipeline to connect transmission in West Virginia to Clarington, OH  Mid-2016 in-service  ~1 Bcf/d capacity  650 MMcf/d contracted under firm 20-year term  Mountain Valley Pipeline  300-mile FERC-regulat

  22. Slide 22: Corporate Citizenship

    Corporate Citizenship  Safety – Our first priority  All accidents are preventable  Company goal = zero incidents  Committed to:  The environment  Our employees and contractors  The communities where we drill and work  EQT Foundation charitable giving of >$4 million / year  More than $20 mil

  23. Slide 23: Drilling and Hydraulic Fracturing

    Drilling and Hydraulic Fracturing  Committed to operate in accordance with federal, state and local regulations  Industry leading spill prevention plans and results  Supports the disclosure of frac fluid additives  Utilize multiple barriers to protect drinking water supplies  Pre-drilling water

  24. Slide 24: Investment Summary

    Investment Summary  Extensive reserves of natural gas  Proven ability to profitably develop our reserves  >25% production sales volume growth forecasted in 2015  Strong liquidity position  Committed to maximize shareholder value by:  Accelerating the monetization of our vast reserves  Operati

  25. Slide 25: Appendix

    Appendix 25

  26. Slide 26: Liquids Volume Growth and Marcellus Impact

    Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) 10,000 NGLs (1.6 Gal/Mcf) $6.00 Btu Premium 9,000 NYMEX 8,000 $5.00 7,000 $/Mcf 6,000 $4.00 $3.66 $3.66 $0.61 $0.48 5,000 $0.13 Mbbls $3.00 4,000 3,000 $2.00 $3.05 $3.05 2,000 $1.00 1,000 -

  27. Slide 27: Capital Investment Summary

    Capital Investment Summary 3.0 2.5 $1.9 $1.8 2.0 $1.6 $1.3 $B 1.5 $1.2 1.0 0.5 0.0 2011 2012 2013 2014 2015F Midstream Production Distribution Excludes acquisitions and EQT Midstream Partners, LP 27

  28. Slide 28: Marcellus Play Acres Within Each Core Development Area

    Marcellus Play Acres Within Each Core Development Area  EQT has 600,000 total Marcellus acres  Expect to develop in four areas for several years  Active areas represent 343,000 acres and 3,420 locations  EQT has 123,000 additional acres in PA & 134,000 additional acres in WV  Estimated 1,200 Mc

  29. Slide 29: Marcellus Type Curves by Area

    Marcellus Play Type Curves by Area – 5,400’ lateral 17,000 Central PA 16,000 Northern WV - Wet 15,000 14,000 Northern WV - Dry 13,000 Southwestern PA 12,000 Daily Production (MCFED) 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 11 21 31 41 51 61 71 81 91 Time in Months (Fir

  30. Slide 30: IRR – Southwestern PA

    Marcellus Economics IRR – Southwestern PA Wellhead After OpEx After Tax 600% PRICE ATAX IRR $2.50 23% 500% $3.00 49% $3.50 87% $4.00 143% 400% 300% 200% 100% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 30

  31. Slide 31: IRR – Northern WV – Wet Gas Area

    Marcellus Economics IRR – Northern WV – Wet Gas Area Wellhead After OpEx After Tax 400% NGL PRICE ($/bbl) $15.00 $20.00 $25.00 350% $2.50 13% 19% 25% GAS PRICE $3.00 28% 35% 42% (/MMbtu) $3.50 47% 56% 65% 300% $4.00 70% 81% 93% 250% 200% 150% 100% 50% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 31

  32. Slide 32: IRR – Central PA

    Marcellus Economics IRR – Central PA Wellhead After OpEx After Tax 140% PRICE ATAX IRR 120% $2.50 10% $3.00 19% $3.50 32% 100% $4.00 49% 80% 60% 40% 20% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 32

  33. Slide 33: IRR – Northern WV – Dry Gas Area

    Marcellus Economics IRR – Northern WV – Dry Gas Area Wellhead After OpEx After Tax 140% PRICE ATAX IRR 120% $2.50 7% $3.00 15% $3.50 26% 100% $4.00 41% 80% 60% 40% 20% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 33

  34. Slide 34: Scotts Run: Utica Well Update

    Scotts Run: Utica Well Update Rate and Pressure vs. Time  Record Utica IP of 22.6 MMcf / 1000’  3,221’ Lateral Length 24 Hour Test Period IP: 72.9 MMcfd 7 Day Test Period Average: 27 MMcfd with 9,563 CFP Shut in for production tie in 34 *Updated as of 09/04/2015 6:00 AM

  35. Slide 35: Scotts Run: Utica Well Results

    Scotts Run: Utica Well Results Cumulative Production vs. Time 35 *Updated as of 09/04/2015 6:00 AM

  36. Slide 36: Upper Devonian Play

    Upper Devonian Play  Developed in conjunction with Marcellus 170,000 EQT acres 1,560 locations 36 wells online* 24 wells in 2015 6,300’ laterals 109 acre spacing 8.7 Bcfe EUR / well 1,388 Mcfe EUR / ft. of lateral $5.9 MM / well Upper Devonian development area EQT acreage *As of 06/30/2015 36

  37. Slide 37: Upper Devonian Type Curve

    Upper Devonian Play Type Curve – 6,300’ lateral 11,000 10,000 9,000 8,000 Daily Production (MCFED) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 11 21 31 41 51 61 71 81 91 Time in Months (First 100 Months Represented) Type curve and well cost data posted on www.eqt.com under investor relations 37

  38. Slide 38: Upper Devonian IRR

    Upper Devonian IRR Wellhead After OpEx After Tax 200% 180% PRICE ATAX IRR $2.50 11% 160% $3.00 26% $3.50 45% 140% $4.00 70% 120% 100% 80% 60% 40% 20% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 38

  39. Slide 39: Marcellus Capacity

    Marcellus Capacity EQT Capacity & Firm Sales Market Mix MDth/D 2,500 2015E 2016E FIRM SALES (LONG-TERM) TETCO M2 31-33% 19-21% 2,000 FIRM SALES (SHORT-TERM) TETCO M3 34-36% 31-33% TCO 9-10% 9-10% 1,500 FIRM MIDWEST Midwest 9-10% 23-25% NYMEX 14-16% 12-14% FIRM GULF 1,000 500 FIRM NORTHEAST - Q3 2015

  40. Slide 40: Ample Financial Flexibility to Execute Business Plan

    Ample Financial Flexibility to Execute Business Plan EQT Debt ratings Moody’s Standard & Poor’s Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ($ MM, except net debt / capital) June 30, 2015 Short-term debt* $ - Long-term debt* 2,478 Cash and cash equivalents* (

  41. Slide 41: Risk Management Hedging

    Risk Management Hedging 2015** 2016*** 2017*** Fixed Price Total Volume (Bcf) 158 201 74 Average Price per Mcf (NYMEX)* $ 3.97 $ 4.00 $ 3.84 Collars Total Volume (Bcf) 0.19 – 7 Average Floor Price per Mcf (NYMEX)* $ 4.55 $ – $ 3.15 Average Cap Price per Mcf (NYMEX)* $ 7.21 $ – $ 4.03 *The average pr

  42. Slide 42: Price Reconciliation

    Price Reconciliation Three Months Ended Six Months Ended June 30, June 30, in thousands (unless noted) 2015 2014 2015 2014 LIQUIDS NGLs: Sales volume (MMcfe) (a) 12,444 7,954 25,725 15,721 Sales volume (Mbbls) 2,074 1,326 4,288 2,620 Gross price ($/Bbl) $ 15.58 $ 43.78 $ 18.97 $ 49.67 Gross NGL sale

  43. Slide 43: Price Reconciliation (continued)

    Price Reconciliation (continued) TOTAL PRODUCTION Total net natural gas & liquids sales, including cash settled derivatives $ 410,960 $ 492,341 $ 1,013,501 $ 1,134,554 Total sales volume (MMcfe) 147,051 110,136 292,249 216,259 Net natural gas & liquids price, including cash settled derivatives ($/Mc

  44. Slide 44: Per Unit Operating Expenses

    Per Unit Operating Expenses Three Months Ended Six Months Ended UNIT COSTS June 30, June 30, 2015 2014 2015 2014 Production segment costs: ($/Mcfe) LOE $ 0.12 $ 0.14 $ 0.12 $ 0.14 Production taxes 0.09 0.15 0.10 0.15 SG&A 0.21 0.30 0.25 0.27 $ 0.42 $ 0.59 $ 0.47 $ 0.56 Midstream segment costs: ($/Mc

  45. Slide 45: Non-GAAP Reconciliation

    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted EQT Midstream EBITDA (millions) 2010 2011 2012 2013 2014 Midstream operating income $179 $417 $237 $329 $384 Add: depreciation and amortization 62 57 65 75 87 Less: gains on dispositions – 203 – 20 7 Less: Big Sandy and Langley 31 14 – – – Ad

EQT — Investor Presentation (September 2015) on 6ix