EQT Corporation · NYSE:EQT
EQT — Investor Presentation (February 2016)
31 slides from EQT's investor presentation, February 2016
Slide 1: Analyst Presentation
Analyst Presentation February 2016
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
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
Slide 4: Key Investment Highlights
Key Investment Highlights Extensive reserves of natural gas 10.0 Tcfe proved; >16 years R/P 6.3 Tcfe proved developed 78 Tcfe total resource potential Proven ability to profitably develop our reserves Six consecutive years of >25% production growth 18% production sales volume growth in
Slide 5: Leading Appalachian E&P Company
Leading Appalachian E&P Company 2015 Operating Income of $563.1 million 3.4 MM acres As of 12/31/2015 5
Slide 6: Production By Play
Production By Play Marcellus Shale drilling driving growth 2,200 Marcellus 2,000 Other 1,800 1,600 1,400 Production MMcf/d 1,200 1,000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E Huron reserves included in “Other” 6
Slide 7: Proved Reserves
Proved Reserves 12.0 10.0 8.0 3.7 5.9 Tcfe 6.0 4.4 2.4 3.2 4.0 6.3 4.8 2.0 4.0 3.0 2.8 0.0 2011 2012 2013 2014 2015 Proved Developed Proved Undeveloped 78 Tcfe Total Resource Potential As of 12/31/2015 7
Slide 8: Marcellus Play
Marcellus Play 600,000 EQT acres • 86% NRI / 80% HBP 7.8 Tcfe proved reserves 31 Tcfe total resource potential 72 wells in 2016 Core Development Area 8
Slide 9: Marcellus Core Development Area
Marcellus Core Development Area Near term development strategically focused on core 260,000 EQT acres ~2,840 locations • 573 wells online* 72 wells in 2016: • 51 PA wells • 21 WV wells • 7,000’ laterals • $6.3 MM / well Core • 14.5 Bcfe EUR / well Development Area • 2,065 Mcfe EUR / ft. of lateral
Slide 10: Core Marcellus
Core Marcellus IRR Wellhead After OpEx After Tax 350% PRICE ATAX IRR $2.00 11% 300% $2.50 33% $3.00 67% 250% 200% 150% 100% 50% 0% $2.00 $2.50 $3.00 Realized Price 10
Slide 11: Utica Play
Utica Play 400,000 EQT acres ~3,000 locations 2 wells online* 2 wells in progress 5-10 wells in 2016 Scotts Run 591340 Greene County, PA 13,000’ to 13,500’ deep 3,221’ treated interval 24 hr. IP: 72.9 MMcf 5,200’ laterals 22.6 MMcf / 1000’ 8,641 psi flowing casing pressure 25 Tcfe total resource 0.9
Slide 12: Scotts Run Utica Well Update
Scotts Run Utica Well Update Cumulative Production, Pressure and Rate vs. Time 4,000 EUR: 5.9 Bcf / 1,000’ 3,500 Cumulative Production 3,000 EUR: 5.1 Bcf / 1,000’ (MMcf / 1,000’ Lateral) 2,500 2.6 Bcf / 1,000’ recovered 2,000 by day 282 1,500 1,000 500 30 MMcf/d - mid-April 0- 365 1 730 2 1095 3 201
Slide 13: Scott's Run – Utica Type Curves
Scott’s Run – Utica Type Curves - 5,400’ lateral 35,000 30,000 Utica 5.9 MMcf/ft Utica 5.1 MMcf/ft 25,000 Daily Production (Mcf/d) 20,000 15,000 10,000 5,000 0 0 10 20 30 40 50 60 70 80 90 100 Time in Months (First 100 Months Represented) 13
Slide 14: EQT Corporation Midstream Overview
EQT Corporation Midstream Overview – Consolidated Transmission & Storage* 3.6 Bcf/d current capacity 47 Bcf gas storage capacity Gathering* 2 Bcf/d capacity Formed MLP in 2012 (NYSE: EQM) EQT Corporation Adjusted EQT Midstream EBITDA** $700 800 EQT Midstream $600 700 EQT Midstream Partne
Slide 15: EQT Corporation Midstream Assets
EQT Corporation Midstream Midstream Assets Allegheny Valley Allegheny Tioga Valley 65 MMcf/d Connector Connector 200-mile FERC pipeline Longhorn 130 MMcf/d 450 MMcf/d capacity ~$40 MM projected annual Terra 80 MMcf/d EBITDA Applegate Marcellus Gathering 150 MMcf/d Applegate Longhorn
Slide 16: EQT GP Holdings, LP (NYSE: EQGP)
EQT GP Holdings, LP (NYSE: EQGP) EQT owns 90% LP interest of EQGP EQGP owns in EQM* 28% limited partner interest 1.8% general partner interest incentive distribution rights *As of 12/31/2015 16
Slide 17: EQT Midstream Partners, LP
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 Marcellus Gathering System Jupiter Gathering System PA dry gas Northern West Virginia Gathering System Wet and dry gas
Slide 18: EQT Midstream Partners Growth Projects
EQT Midstream Partners, LP Growth Projects Ohio Valley Connector 37-mile FERC regulated pipeline to connect transmission in West Virginia to Clarington, OH Year-end 2016 in-service ~1 Bcf/d capacity 650 BBtu/d contracted under firm 20-year term Mountain Valley Pipeline 300-mile FERC-re
Slide 19: 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
Slide 20: Investment Summary
Investment Summary Extensive reserves of natural gas Proven ability to profitably develop our reserves Six consecutive years of >25% production growth 18% production sales volume growth in 2016 Extensive and growing midstream business Strong liquidity position Committed to maximize sha
Slide 21: Appendix
Appendix 21
Slide 22: Liquids Volume Growth and Marcellus Impact
Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 12,000 Btu Premium NYMEX $4.00 10,000 8,000 $3.00 $2.85 $2.70 $/Mcf $0.48 $0.22 $0.10 6,000 Mbbls $2.00 4,000 $2.38 $2.38 $1.00 2,000 - $0.00 2011 2012 2013 2014 2015 201
Slide 23: Capital Investment Summary
Capital Investment Summary Excludes acquisitions and EQT Midstream Partners, LP 23
Slide 24: Type Curves - 5,400' lateral
Type Curves - 5,400’ lateral Core Marcellus vs Scott’s Run – Utica 24
Slide 25: Marcellus Play Core Type Curve
Marcellus Play Core Type Curve - 5,400’ lateral 15,000 14,000 13,000 12,000 11,000 Daily Production (Mcf/d) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 0 10 20 30 40 50 60 70 80 90 100 Time in Months (First 100 Months Represented) 25
Slide 26: Marcellus Capacity
Marcellus Capacity EQT Capacity & Firm Sales Market Mix 2016E 2017E TETCO M2 20-22% 12-14% TETCO M3 35-37% 31-33% TCO 8-10% 6-8% Midwest 19-21% 30-32% NYMEX 13-15% 15-17% 26
Slide 27: Risk Management
Risk Management Hedge Position as of December 31, 2015 350 $4.00 $3.59 $3.41 300 $3.50 $3.16 $3.00 250 $2.91 $2.79 $2.50 $ / Mcf 200 $2.49 Bcf $2.00 150 $1.50 100 $1.00 50 $0.50 324 172 71 - $0.00 2016 2017 2018 Hedged Volume Average Hedge Price NYMEX Price 2016 2017 2018 NYMEX Price ($/Mcf) as of 2
Slide 28: 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 Under review Stable Stable Strong balance sheet ($ MM, except net debt / capital) Dec. 31, 2015 Short-term debt* $ 0 Long-term debt* 2,300 Cash and cash equivale
Slide 29: Price Reconciliation
Price Reconciliation Three Months Ended Year Ended December 31, December 31, in thousands (unless noted) 2015 2014 2015 2014 LIQUIDS NGLs: Sales volume (MMcfe) (a) 11,978 12,819 51,530 40,587 Sales volume (Mbbls) 1,996 2,135 8,588 6,764 Gross price ($/Bbl) $ 21.23 $ 32.16 $ 18.84 $ 41.94 Gross NGL s
Slide 30: Price Reconciliation (continued)
Price Reconciliation (continued) Three Months Ended Year Ended December 31, December 31, in thousands (unless noted) 2015 2014 2015 2014 TOTAL PRODUCTION Total net natural gas & liquids sales, including cash settled derivatives $ 480,330 $ 579,748 $1,901,095 $ 2,217,314 Total sales volume (MMcfe) 15
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation EQT Corporation Adjusted EQT Midstream EBITDA (millions) 2011 2012 2013 2014 2015 Midstream operating income $417 $237 $329 $384 $473 Add: depreciation and amortization 57 65 75 87 95 Less: gains on dispositions 203 – 20 7 – Less: Big Sandy and Langley 14 – – – – Adjusted Mid