EQT Corporation · NYSE:EQT

EQT — Investor Presentation (May 2015)

43 slides from EQT's investor presentation, May 2015

  1. Slide 1: Analyst Presentation

    Analyst Presentation May 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  >23% 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 141 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  Prolific dry gas region 7 wells 3,986’ Avg. Lateral Length per well 61.7 Bcfe Total Pad EUR 140,000 EQT acres Kevech Pad 6 wells 1,800 locations 2,970’ Avg. Lateral Length per well 54.6 Bcfe Total Pad EUR 260 wells online* 79 wells in 2015 4,800 foot

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

    Marcellus Play Northern West Virginia – Wet Gas Area  Enhanced economics from liquids uplift BIG 190 Pad 8 wells 5,657’ Avg. Lateral Length per well 100.0 Bcfe Total Pad EUR 90,000 EQT acres 1,070 locations 178 wells online** 45 wells in 2015 PEN 16 Pad 5 wells 4,800 foot laterals 3,562’ Avg. Later

  12. Slide 12: Marcellus Play Central Pennsylvania

    Marcellus Play Central Pennsylvania  Early stages of acreage delineation 80,000 EQT acres Frano Pad 3 wells 4,409’ Avg. Lateral Length per well 730 locations 20.4 Bcfe Total Pad EUR 72 wells online* 9 wells in 2015 4,800 foot laterals 110 acre spacing 6.6 Bcfe EUR / well 1,375 Mcfe EUR / ft. of lat

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

    Marcellus Play Northern West Virginia – Dry Gas Area  EQT’s newest development area GRT 26 Pad 2 wells 3,270’ Avg. Lateral Length per well 17.7 Bcfe Total Pad EUR 32,000 EQT acres 335 locations 50 wells online* 8 wells in 2015 4,800 ft laterals 97 acre spacing 8.4 Bcfe EUR / well 1,741 Mcfe EUR / f

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

    Marcellus Economics IRR - Blended Marcellus Development Areas 250% Wellhead After OpEx After Tax 200% PRICE ATAX IRR $2.50 12% $3.00 25% $3.50 42% $4.00 63% 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: Upper Devonian Play

    Upper Devonian Play  Developed in conjunction with Marcellus 170,000 near-term testing & development EQT acres 2,000 locations 32 wells online* 40 wells in 2015 4,800 foot laterals 83 acre spacing 6.1 Bcfe EUR / well 1,274 Mcfe EUR / ft. of lateral $4.9 MM / well Upper Devonian development area EQT

  16. Slide 16: 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 5 wells in 2015 13,500 feet deep $12 - $17 MM / well EQT acreage 16

  17. Slide 17: 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

  18. Slide 18: 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

  19. Slide 19: EQT Corporation Midstream 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

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

    EQT Midstream Partners, LP (NYSE: EQM)  Transmission & Storage  3.0 Bcf/d current capacity  700 mile FERC-regulated interstate pipeline  32 Bcf of gas storage capacity  Gathering System  Jupiter Gathering System  Northern West Virginia Marcellus Gathering System  Highlights market valuation

  21. Slide 21: EQT Midstream Partners Northern WV Marcellus Gathering System

    EQT Midstream Partners, LP Northern WV Marcellus Gathering System  EQM acquired in March 2015  Assets Wet Gas Header  70 miles of gathering pipe Pipeline (WG-100)  Nine compressor units Mercury  25,000 HP of compression  30-mile wet gas header pipeline  Growth opportunity Pandora Pluto  $370

  22. Slide 22: 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

  23. Slide 23: 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

  24. Slide 24: 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

  25. Slide 25: Investment Summary

    Investment Summary  Extensive reserves of natural gas  Proven ability to profitably develop our reserves  >23% production sales volume growth forecasted in 2015  Strong liquidity position  Committed to maximize shareholder value by:  Accelerating the monetization of our vast reserves  Operati

  26. Slide 26: Appendix

    Appendix 26

  27. Slide 27: Liquids Volume Growth and Marcellus Liquids Price Impact

    Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 10,000 Btu Premium $6.00 9,000 NYMEX 8,000 $5.00 7,000 $4.00 $3.61 6,000 $/Mcf $3.38 5,000 $0.67 $0.56 Mbbls $3.00 $0.12 4,000 3,000 $2.00 $2.81 $2.81 2,000 $1.00 1,000 -

  28. Slide 28: Capital Investment Summary

    Capital Investment Summary 3.0 2.5 $1.9 $1.9 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 28

  29. Slide 29: 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 342,000 acres and 3,935 locations  EQT has 123,000 additional acres in PA & 135,000 additional acres in WV  Estimated 1,200 Mc

  30. Slide 30: Type Curves by Area - 4,800' lateral

    Marcellus Play Type Curves by Area - 4,800’ lateral Type curve and well cost data posted on www.eqt.com under investor relations 30

  31. Slide 31: Marcellus Economics IRR - Southwestern PA

    Marcellus Economics IRR - Southwestern PA 400% Wellhead After OpEx After Tax 350% PRICE ATAX IRR 300% $2.50 18% $3.00 38% $3.50 67% 250% $4.00 109% 200% 150% 100% 50% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 31

  32. Slide 32: IRR - Northern WV – Wet Gas Area

    Marcellus Economics IRR - Northern WV – Wet Gas Area 350% Wellhead After OpEx After Tax 300% PRICE ATAX IRR $2.50 24% 250% $3.00 40% $3.50 59% $4.00 82% 200% 150% 100% 50% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 32

  33. Slide 33: Marcellus Economics IRR - Central PA

    Marcellus Economics IRR - Central PA 70% Wellhead After OpEx After Tax 60% PRICE ATAX IRR $2.50 4% 50% $3.00 10% $3.50 17% $4.00 26% 40% 30% 20% 10% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 33

  34. Slide 34: IRR - Northern WV – Dry Gas Area

    Marcellus Economics IRR - Northern WV – Dry Gas Area 120% Wellhead After OpEx After Tax 100% PRICE ATAX IRR $2.50 5% $3.00 12% 80% $3.50 21% $4.00 32% 60% 40% 20% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 34

  35. Slide 35: Upper Devonian Blended Type Curve - 4,800' lateral

    Upper Devonian Play Blended Type Curve - 4,800’ lateral Type curve and well cost data posted on www.eqt.com under investor relations 35

  36. Slide 36: Upper Devonian IRR

    Upper Devonian IRR 120% Wellhead After OpEx After Tax 100% PRICE ATAX IRR $2.50 6% $3.00 14% 80% $3.50 24% $4.00 37% 60% 40% 20% 0% $2.50 $3.00 $3.50 $4.00 Realized Price 36

  37. Slide 37: Marcellus Capacity

    Marcellus Capacity EQT Capacity & Firm Sales Market Mix MDth/D 2,500 2015E 2016E TETCO M2 31-33% 19-21% 2,000 FIRM SALES (SHORT-TERM) TETCO M3 34-36% 31-33% FIRM SALES (LONG-TERM) TCO 9-10% 9-10% FIRM MIDWEST Midwest 9-10% 23-25% 1,500 NYMEX 14-16% 12-14% FIRM GULF 1,000 500 FIRM NORTHEAST - Q2 2015

  38. Slide 38: 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) March 31, 2015 Short-term debt* $ - Long-term debt* 2,485 Cash and cash equivalents*

  39. Slide 39: Risk Management Hedging

    Risk Management Hedging 2015** 2016*** 2017*** Fixed Price Total Volume (Bcf) 234 167 31 Average Price per Mcf* $ 4.00 $ 4.14 $ 4.27 Collars Total Volume (Bcf) 30 - - Average Floor Price per Mcf * $ 4.57 $ - $ - Average Cap Price per Mcf * $ 7.21 $ - $ - *The average price is based on a conversion r

  40. Slide 40: Price Reconciliation

    Price Reconciliation Three Months Ended March 31, in thousands (unless noted) 2015 2014 LIQUIDS NGLs: Sales volume (MMcfe) (a) 13,281 7,767 Sales volume (Mbbls) 2,214 1,295 Gross price ($/Bbl) $ 22.14 $ 55.71 Gross NGL sales $ 49,014 $ 72,114 Third-party processing (18,381) (11,818) Net NGL sales $

  41. Slide 41: Price Reconciliation (continued)

    Price Reconciliation (continued) TOTAL PRODUCTION Total net natural gas & liquids sales, including cash settled derivatives $ 602,541 $ 642,213 Total sales volume (MMcfe) 145,198 106,123 Net natural gas & liquids price, including cash settled derivatives ($/Mcfe) $ 4.15 $ 6.05 Midstream Deductions (

  42. Slide 42: Per Unit Operating Expenses

    Per Unit Operating Expenses Three Months Ended UNIT COSTS March 31, 2015 2014 Production segment costs: ($/Mcfe) LOE $ 0.11 $ 0.14 Production taxes 0.10 0.16 SG&A 0.28 0.24 $ 0.49 $ 0.54 Midstream segment costs: ($/Mcfe) Gathering and transmission $ 0.16 $ 0.20 SG&A 0.14 0.14 $ 0.30 $ 0.34 Total ($/

  43. Slide 43: Non-GAAP Reconciliation

    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted 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 – – – Adjust

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