Slide 1: Investor Presentation
Investor Presentation July 27, 2020 7/26/20 1 1 20
Slide 2: Cautionary Statements
Cautionary Statements EQT Corporation (NYSE: EQT) EQT Plaza 625 Liberty Avenue, Suite 1700 Pittsburgh, PA 15222 Andrew Breese – Director, Investor Relations – 412.395.2555 The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only prov
Slide 3: Company Highlights
Company Highlights Second Quarter 2020 Highlights: • Delivered sales volumes of 346 Bcfe or 3.8 Bcfe per day, 21 Bcfe above midpoint of guidance for second quarter 2020 • Total operating revenues of $527 million; received average realized price of $2.36 per Mcfe, a $0.56 premium to NYMEX pricing tie
Slide 4: EQT Corporate Overview
EQT Corporate Overview Dominant position in the core of the Appalachian Basin UTICA ASSET PROFILE MARCELLUS Core Net Marcellus Acres(1) 630,000 Acres (1) Core Net OH Utica Acres 60,000 Acres (1,2) Core Net Undeveloped Marcellus Locations 1,565 Locations (1,2) Core Net Undeveloped OH Utica Locations
Slide 5: Why Invest in EQT?
Why Invest in EQT? Uniquely positioned to deliver shareholder value • Deepest inventory of Tier I drilling locations in the lowest cost natural World Class Asset Base gas basin in the U.S. (15+ years) • Only Appalachian company with multi-year core “combo inventory” • Lowering well cost and overhead
Slide 6: Corporate Strategy
Corporate Strategy Building a durable and sustainable business for long term value creation Maximize value from existing assets Become the operator of choice Responsible capital allocation Be the low cost operator • Building a culture that embraces what we do, how Disciplined approach we do it, and
Slide 7: Promises Made – Promises Delivered
Promises Made – Promises Delivered We have successfully transformed into a modern, technology-enabled energy producer Promise Milestone Delivery Achieve $730 per foot well costs by mid-year 2020 ✓ Well costs of $680 per foot in 2Q20 ✓ >80% of future development set for Combo Development OPERATIONS I
Slide 8: Going Beyond our Promises – A New Paradigm for the Shale Business
Going Beyond our Promises – A New Paradigm for the Shale Business EQT’s success plays an integral role in providing the U.S. with a clean, domestic energy source Success starts and continues with a strong balance sheet and financial position ✓ Reinvigorated hedging process has protected 2020 price v
Slide 9: Meaningful Reduction in Well Costs Being Realized
Meaningful Reduction in Well Costs Being Realized Achieved and exceeded second half 2020 well cost target of $730 per lateral foot PA MARCELLUS WELL COSTS(1) $/ft. $970 Target(2): $730 $850 $800 $745 $680 $50/ft. below target Legacy 3Q19 4Q19 1Q20 2Q20 (FY 2019E) 1. Includes pad construction and pro
Slide 10: EQT Continues to Push the Operational and Technical Boundaries
EQT Continues to Push the Operational and Technical Boundaries Setting records and driving value through improved drilling operations HORIZONTAL DRILLING SPEED (FT/HR) HORIZONTAL DAYS PER 1,000 FT. 200 1.00 180 160 0.80 140 120 0.60 100 80 0.40 60 40 0.20 20 0 0.00 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 1Q19
Slide 11: Next Generation Frac Technology Further Improves Operational and Environmental Performance
Next Generation Frac Technology Further Improves Operational and Environmental Performance PUMPING HOURS PER MONTH STAGES PER MONTH 400 200 180 300 160 200 140 3Q19 4Q19 1Q20 2Q20 3Q19 4Q19 1Q20 2Q20 11
Slide 12: New Technology Is Driving Efficiency Gains Complementing our ESG Focus
New Technology Is Driving Efficiency Gains Complementing our ESG Focus Evolving our operations to drive down costs and lessen environmental impact Electric Frac Fleet Hybrid Drilling Rigs • High automation capacity, improving cycle times & efficiencies • Reduces fuel consumption and lowers emissions
Slide 13: 2020E Capital Expenditures Budget
2020E Capital Expenditures Budget Evolution towards more efficient capital deployment 2020E CAPITAL EXPENDITURES(1) ($B) $1.6 2020 Capital Expenditure Budget: • Reserve Development: $815 - $875 MM $1.4 • PA Marcellus: ~$645 MM $1.2 • OH Utica: ~$130 MM • WV Marcellus: ~$70 MM $1.0 • Land: $140 - $16
Slide 14: 2020E Detailed Guidance
2020E Detailed Guidance PRODUCTION 2020E FINANCIAL GUIDANCE(1) Total Sales Volumes (Bcfe) 1,450 - 1,500 Btu uplift (MMbtu/Mcf) 1.045 - 1.055 Gas 95% Average Differential ($/Mcf) $(0.40) - $(0.20) Liquids 5% Adjusted EBITDA(2,3) ($MM) 1,500 - 1,600 Adjusted Operating Cash Flow(2,3) ($MM) 1,350 - 1,45
Slide 15: Market Update: Natural Gas Fundamentals
Market Update: Natural Gas Fundamentals Natural gas supply indicators suggest an undersupplied market in 2021 Rig Counts(1) Jan-20 Jul-20 450 900 U.S. rigs down 67%, reducing well inventory & 400 350 800 affecting future gas supply 700 300 600 • Rapid decline in oil-directed activity reduces a mater
Slide 16: Debt and Capitalization Summary
Debt and Capitalization Summary As of June 30, 2020 • $4.6 B in total debt $B 6/30/20 3/31/20 • Equity settlement of the convertible senior notes could Cash & Cash Equivalents $0.0 $0.0 reduce long-term debt by ~$0.3 B Current Portion of Debt $0.0 $0.0 • $2.5 B unsecured revolving credit facility No
Slide 17: Effectively Managing Maturity Schedule
Effectively Managing Maturity Schedule Multiple levers can be pulled to manage upcoming maturities CLEAR LINE OF SIGHT AMPLE COVERAGE AND OPTIONALITY Does not include 2021+ FCF Next substantial debt maturity not until 2025 $750 Maturity: 10/22 $280 Remaining Remaining Maturities Selective Divestitur
Slide 18: Meaningful Progress Made Towards Net Debt Target
Meaningful Progress Made Towards Net Debt Target Path to less than 2.0x net debt to EBITDA(1) NET DEBT(1,2,3) ($B) $5.0 $5.3 $4.6 $4.0 > $1.5 B reduction target 2021+ FCF $3.0 $2.0 $1.0 $- 12/31/2019 1Q20 Net Debt 2Q20 Net Debt 6/30/2020 Remaining Remaining Tax Selective Divestiture Reduction Reduct
Slide 19: Actively Managing Liquidity
Actively Managing Liquidity Ample liquidity to cover midstream letters of credit (“LC”) • Successfully placed $0.1 B in surety bonds during LIQUIDITY(1) 2Q20, replacing letters of credit to improve liquidity • Excess surety capacity exists for future liquidity improvement $2.5 $0.8 • Current liquidi
Slide 20: Firm Transportation Portfolio
Firm Transportation Portfolio Accesses diverse markets and provides flexibility and opportunity • Rationalizing our firm transportation portfolio to improve net-back pricing • 2Q20: Have executed several small FT trades with positive impacts to realized pricing and decreased Market Mix - Price Point
Slide 21: Commitment to ESG Transparency
Commitment to ESG Transparency EQT leads in environmental, social & governance (ESG) disclosure Bloomberg ESG Disclosure: scores above 40 demonstrate good transparency; scores 50-70 demonstrate excellent transparency CURRENT OVERALL ESG DISCLOSURE SCORES* 60.0 56.0 In peer set EQT is: 52.7 • #1 in o
Slide 22: Set up for EQT is Compelling
Set up for EQT is Compelling Promise big, deliver big Improving the balance sheet & de-risking near-term debt maturities 2021 natural gas commodity set up compelling for EQT Ability to generate significant free cash flow Radically reducing costs & methodically allocating capital Reinvigora
Slide 23: Appendix
Appendix 23 23
Slide 24: Second Quarter 2020 Results
Second Quarter 2020 Results OPERATIONAL AND FINANCIAL RESULTS 2Q 2020 CAPITAL EXPENDITURES ($mm) 2Q 2020 Marcellus Bcfe 306 Reserve development $ 235 Ohio Utica Bcfe 38 Land and lease $ 28 Other Bcfe 2 Capitalized overhead $ 13 Total Sales Volumes Bcfe 346 Capitalized interest $ 4 Other production i
Slide 25: Impact of Gas Gathering Agreement
Impact of Gas Gathering Agreement Significant short-term fee relief & long-term low cost fee structure CORPORATE GATHERING RATES ($/MCFE)(1,2,3) MINIMUM VOLUME COMMITMENT FOR ETRN GGA PRESENT SHORT-TERM LONG-TERM MVC Agreement Status Quo RELIEF SUSTAINABILITY 4,500 $1.00 $535 MM in fee relief over 3
Slide 26: Risk Management
Risk Management As of July 22, 2020 Philosophy: 2020(1) 2021 2022 2023 2024 Swaps Volume (MMDth) 575 467 - 2 2 • Risk mitigation tool to de-risk cash flow and manage leverage Average Price ($/dth) $2.74 $2.50 - $2.67 $2.67 Calls - Net Short • Directionally more aggressive Volume (MMDth) 200 219 284
Slide 27: Experienced, Diverse Board to Oversee EQT’s Initiatives
Experienced, Diverse Board to Oversee EQT’s Initiatives DIRECTOR PRINCIPAL EXPERIENCE UNIQUE CONTRIBUTIONS ▪ Expertise in public company governance in the context of the energy industry LYDIA BEEBE* Former Corp Secretary, Chevron ▪ Commitment to shareholder engagement and transparency Former SVP, Wo
Slide 28: ESG Underpins EQT’s Success
ESG Underpins EQT’s Success • As a ONE Future Coalition member, EQT exceeded the methane intensity sector level target of 0.28% with a rate of 0.15% (methane emissions per gross COLLABORATIONS production) • Joined API’s Environmental Partnership methane management program • Conduct leak detection an
Slide 29: Non-GAAP Financial Measure
Non-GAAP Financial Measure Adjusted Net (Loss) Income Adjusted net (loss) income is defined as net (loss) income, excluding impairments, transaction, proxy and reorganization costs, the revenue impact of changes in the fair value of derivative instruments prior to settlement and certain other items
Slide 30: Reconciliation of Adjusted Net (Loss) Income
Non-GAAP Financial Measure Reconciliation of Adjusted Net (Loss) Income The table below reconciles adjusted net (loss) income with net (loss) income, the most comparable financial measure calculated in accordance with GAAP, as derived from the Statements of Condensed Consolidated Operations included
Slide 31: Non-GAAP Financial Measure: Adjusted EBITDA
Non-GAAP Financial Measure Adjusted EBITDA Adjusted EBITDA is defined as net (loss) income, excluding interest expense, income tax (benefit) expense, depreciation and depletion, amortization of intangible assets, impairments, transaction, proxy and reorganization costs, the revenue impact of changes
Slide 32: Reconciliation of Adjusted EBITDA
Non-GAAP Financial Measure Reconciliation of Adjusted EBITDA The table below reconciles adjusted EBITDA with net (loss) income, the most comparable financial measure as calculated in accordance with GAAP, as reported in the Statements of Condensed Consolidated Operations included in the Company's Qu
Slide 33: Adjusted Operating Cash Flow and Free Cash Flow
Non-GAAP Financial Measure Adjusted Operating Cash Flow and Free Cash Flow Adjusted operating cash flow is defined as net cash provided by operating activities less changes in other assets and liabilities. Free cash flow is defined as adjusted operating cash flow less accrual-based capital expenditu
Slide 34: Reconciliation of Net Debt
Non-GAAP Financial Measure Reconciliation of Net Debt Net debt is defined as total debt less cash and cash equivalents. Total debt includes the Company's current portion of debt, credit facility borrowings, term loan borrowings, senior notes and note payable to EQM Midstream Partners, LP. Net debt i
Slide 35: Adjusted Interest Expense Per Unit
Non-GAAP Financial Measure Adjusted Interest Expense Per Unit Adjusted interest expense per unit is defined as interest expense less non-cash interest expense (amortization) of debt discounts and issuance costs divided by total sales volume. Adjusted interest expense per unit is a non-GAAP supplemen