Eqt Corporation · NYSE:EQT
Eqt — Merger or Acquisition (May 2021)
21 slides from Eqt's merger presentation, May 6, 2021
Slide 1: Transformative Acquisition of Alta Resources
1 5/6/202 1 1 Transformative Acquisition May 6, 2021 Alta Resources
Slide 2: Strategic Consolidation of Core, High Margin NE Marcellus Assets
2 Strategic Consolidation of Core, High Margin NE Marcellus Assets Acquisition accelerates all of EQT’s financial and strategic objectives PRO FORMA ACREAGE POSITION Best of SW Marcellus + Best of NE Marcellus Net Marcellus Acres : SW MRC: >1,300,000 NE MRC: >300,000 Total Net Acres: >1,600,000 1. N
Slide 3: Pro Forma Plan Projected to Generate ~$5.5 B in FCF Through 2026
3 $2.00 $2.10 $2.20 $2.30 $2.40 $2.50 $- $500 $1,000 $1,500 2020 2021E 2022E 2026E Breakeven ($/MMBtu) FCF ($MM) FCF (1,2) ($MM) vs. UNHEDGED NYMEX BREAKEVEN (3) ($/MMBTU) Status Quo FCF 1Q Update to FCF Acquired FCF Status Quo Breakeven Pro-Forma Breakeven Pro Forma Plan Projected to Generate ~$5.5
Slide 4: Transaction Strengthens EQT's Position as Premier Appalachian Core Operator
4 Transaction Strengthens EQT’s Position as the Premier Appalachian - Core Operator Preliminary Estimates EQT Alta Pro Forma Net Production Bcfe /d 4.6 1.0 ~5.6 2022E OPEX (1) $/ Mcfe $1.45 $0.45 ~$1.25 2022E ADJ. EBITDA (2) $B $1.9 $0.6 ~$2.5 2022E CAPEX $B $1.1 $0.2 ~$1.3 2022E Free Cash Flow (2)
Slide 5: Acquisition Summary
5 Acquisition Summary Core rock + low royalty burden + mineral ownership + integrated gathering system = superior returns and FCF Transaction • On May 6, 2021, EQT announced the acquisition of Alta Resources’ Marcellus assets for $2.925 B, subject to customary closing adjustments • $1.0 B of cash co
Slide 6: Alta Acquisition Checks All the Boxes for Attractive Consolidation
6 Alta Acquisition Checks All the Boxes for Attractive Consolidation The right deal, the right price, deleveraging and highly accretive x Attractive Value and Robust Accretion • Cumulative FCF/share (1) accretion through 2026E: >15% • NAV/share accretion • Free cash flow yield (1,2) of ~18% • Integr
Slide 7: Consolidating the Core of Appalachia
7 – 25% 50% 75% 100% Alta Operated - Tier 1 CHK Operated Core Alta Operated - Tier 2 CHK Operated - Tier 1 BTAX IRR 2.7 2.2 1.9 0.0 1.0 2.0 3.0 NEPA Marcellus SWPA Marcellus Haynesville Bcfe /1000’ • Assets complement EQT’s leading SWPA position and already deep combo - development inventory • Chesa
Slide 8: Core Upstream Assets
8 Core Upstream Assets Position provides direct exposure to the best remaining inventory in core NEPA Lower Marcellus Operated Position • ~222,000 net acres, 0.5 Bcfe /d, 96% HBP • 381 operated wells, 93 operated pads, 6 current DUCs • Low 14% average royalty burden; as low as 11% in the most prolif
Slide 9: Integrated Midstream Assets
9 Integrated Midstream Assets Built - out, integrated business model expands the commercial core and increases operational efficiencies • Owned and operated midstream and water systems provide increased operational efficiencies and flexibility • Drives a material reduction in cost structure and dura
Slide 10: Firm Transportation Portfolio
10 Firm Transportation Portfolio Access to diverse markets provides flexibility and opportunity • Attractive firm transportation portfolio diversifies EQT’s sales markets • ‘In the money’ contracts enhance margins and access winter price premiums • Current PV10 mark to market > $235 MM (1) • Weighte
Slide 11: Applying EQT's Operational Successes in Northeast Marcellus Core
11 • Execute maintenance mode of ~1 Bcf /d • ~225,000 net horizontal feet per year (op + non - op) • 1 rig program on operated assets easily integrates into EQT’s master operations schedule • Leasehold largely held by production, increasing schedule flexibility • Integrated midstream assets allow fo
Slide 12: Applying Proven Integration Processes
12 Full Admin. Integration Applying Proven Integration Processes Deal Signing Date Deal Announced May 5, 2021 May 6, 2021 Target Deal Close Q3 2021 Full Ops. Integration 90 - 120 days after close 6 - 9 months after close Our Integration Leadership Team has proven their ability to rapidly integrate a
Slide 13: Checks All Boxes for Attractive M&A
13 25% 50% 75% 2021 - 2026 Average 25% 50% 75% 2021E 2022E Checks All Boxes for Attractive M&A Accretive to key financial metrics (1) PRODUCTION | (Tcfe) OPERATING COSTS (2) / UNIT | ($/ Mcfe ) CAPITAL EXPENDITURES | ($B) 1. Projections based on Management expectations , subject to further revision.
Slide 14: Checks All Boxes for Attractive M&A: Leverage
14 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 2021 - 2026 Avg. 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 2021E 2022E Checks All Boxes for Attractive M&A Accretive to key financial metrics (1) LEVERAGE (4) | (Net Debt / LTM Adj. EBITDA) 1. Projections based on Management expectations , subject to further revision.
Slide 15: Compelling Attributes of Transformational Transaction
15 15 Compelling Attributes of Transformational Transaction Conservative Underwriting | Significant Value Upside Attractive Valuation for Core Assets | Attractive Entry Point Optimized Financing Structure | Accelerates Deleveraging Robust Free Cash Flow and Highly Accretive | Accelerates Shareholder
Slide 16: Cautionary Statements, Information About Proxy Solicitation, and Non-GAAP
16 16 Cautionary Statements, Information About Proxy Solicitation, and Non - GAAP
Slide 17: Cautionary Statements
17 Cautionary Statements EQT Corporation (NYSE: EQT) EQT Plaza 625 Liberty Avenue, Suite 1700 Pittsburgh, PA 15222 Andrew Breese – Director, Investor Relations – 412.395.2555 This presentation contains certain forward - looking statements within the meaning of the Private Securities Litigation Refor
Slide 18: Information About Proxy Solicitation
18 Information About Proxy Solicitation Important Additional Information will be Filed with the SEC This presentation is being made in respect of the proposed transaction involving EQT Corporation (EQT) and Alta Resources, LLC (Alta) and their respective subsidiaries . The issuance of the stock cons
Slide 19: Adjusted EBITDA Definition
19 Adjusted EBITDA is defined as net loss, excluding interest expense, income tax (benefit) expense, depreciation and depletion, am ortization of intangible assets, (gain) loss on sale/exchange of long - lived assets, impairments, the revenue impact of changes in the fair value of derivative instrum
Slide 20: Free Cash Flow Definitions
20 Adjusted operating cash flow is defined as net cash provided by operating activities less changes in other assets and liabili tie s. Free cash flow is defined as adjusted operating cash flow, less accrual - based capital expenditures excluding capital expenditures attributable to noncontrolling i
Slide 21: Net Debt Definition
21 Net debt is defined as total debt less cash and cash equivalents. Total debt includes the Company's current portion of debt, cre dit facility borrowings, senior notes and note payable to EQM Midstream Partners, LP. Net debt is a non - GAAP supplemental financial measure used by the Company’s mana