Eqt Corporation · NYSE:EQT

Eqt — Investor Presentation (January 2016)

35 slides from Eqt's investor presentation, January 2016

  1. Slide 1: Analyst Presentation January 2016

    Analyst Presentation January 2016

  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 in 2015  >18% production sales

  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 12/31/2014 6

  7. Slide 7: Production By Play

    Production By Play  Marcellus Shale drilling driving growth 2,200 Marcellus / Deep Utica 2,000 Huron Other 1,800 1,600 1,400 Production MMcf/d 1,200 1,000 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 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 600,000 EQT acres • 86% NRI / 80% HBP 23.3 Tcfe 3P 31 Tcfe total resource potential Core 72 wells in 2016 Development Area 9

  10. Slide 10: Marcellus Core Development Area

    Marcellus Core Development Area  Near term development strategically focused on core 260,000 EQT acres ~2,840 locations • 526 wells online* 72 wells in 2016: • 51 PA wells • 21 WV wells • 7,000’ laterals • $6.6 MM / well Core • 14.5 Bcfe EUR / well Development Area • 2,065 Mcfe EUR / ft. of lateral

  11. Slide 11: Core Marcellus

    Core Marcellus IRR Wellhead After OpEx After Tax 450% 400% PRICE ATAX IRR $2.50 26% $3.00 54% 350% $3.50 95% 300% 250% 200% 150% 100% 50% 0% $2.50 $3.00 $3.50 Realized Price 11

  12. Slide 12: Utica Play

    Utica Play 400,000 EQT acres ~3,000 locations 1 well online* 2 wells in progress 5-10 wells in 2016 13,000’ deep 5,200’ laterals $12.5 – $14.0 MM / well** Scotts Run 591340 Pettit 593066 (2015) Greene County, PA Greene County, PA 3,221’ treated interval 13,400’ vertical depth 24 hr. IP: 72.9 MMcf 5,

  13. Slide 13: Utica Play Type Curves

    Utica Play Type Curves - 5,400’ lateral 35,000 Utica 5.9 MMcf/ft Utica 4.3 MMcf/ft 30,000 ATAX IRR ($2.00 Realized Price) Well Cost 4.3 MMcf/ft 5.9 MMcf/ft $12.5 MM 34% 53% 25,000 $14.0 MM 21% 37% 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 (

  14. Slide 14: Scotts Run Utica Well Update

    Scotts Run Utica Well Update Cumulative Production, Pressure and Rate vs. Time 3,500 3,000 EUR: 5.9 Bcf / 1,000’ 2.3 Bcf / 1,000’ recovered by day 254 Cumulative Production 2,500 (MMcf / 1,000’ Lateral) EUR: 4.3 Bcf / 1,000’ 2,000 1,500 1,000 30 MMcf/d 500 - 0 30 60 90 120 150 180 210 240 270 300 33

  15. Slide 15: 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

  16. Slide 16: EQT Corporation Midstream Overview

    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

  17. Slide 17: 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  ~$40 MM projected annual Terra 80 MMcf/d EBITDA Applegate 150 MMcf/d 17

  18. Slide 18: 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 EQGP Price Value of EQGP Units Value per per Unit held by EQT ($MM) EQT share $16 $3,835 $25 $18 $4,315 $28 $20 $4,79

  19. Slide 19: 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

  20. Slide 20: EQM 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  Year-end 2016 in-service  ~1 Bcf/d capacity  650 MMcf/d contracted under firm 20-year term  Mountain Valley Pipeline  300-mile FERC-re

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: Investment Summary

    Investment Summary  Extensive reserves of natural gas  Proven ability to profitably develop our reserves  >25% production sales volume growth in 2015  >18% production sales volume growth in 2016  Strong liquidity position  Committed to maximize shareholder value by:  Accelerating the monetiza

  24. Slide 24: Appendix

    Appendix 24

  25. Slide 25: Liquids Volume Growth and Marcellus Impact

    Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact $5.00 (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 12,000 Btu Premium NYMEX $4.00 10,000 $3.27 $3.23 $3.00 $0.54 $0.39 8,000 $/Mcf $0.12 6,000 Mbbls $2.00 4,000 $2.72 $2.72 $1.00 2,000 - $0.00 2011 2012 2013 2014 20

  26. Slide 26: Capital Investment Summary

    Capital Investment Summary $1.9 2.0 $1.8 $1.6 1.5 $1.3 $B 1.0 $1.0 0.5 0.0 2012 2013 2014 2015F 2016F Midstream Production Distribution Excludes acquisitions and EQT Midstream Partners, LP 26

  27. Slide 27: Marcellus Play Development Areas

    Marcellus Play Development Areas Undeveloped Acres Undeveveloped Total Locations Locations PA Core 145,000 116,000 1,610 1,300 WV Core 115,000 92,000 1,230 980 PA Tier 2 200,000 189,000 1,600 1,520 WV Tier 2 140,000 136,000 1,120 1,100 TOTAL 600,000 533,000 5,560 4,900 Type curve and well cost data

  28. Slide 28: Type Curves: Core Marcellus vs Utica

    Type Curves - 5,400’ lateral Core Marcellus vs Utica 35,000 Utica 5.9 MMcf/ft Utica 4.3 MMcf/ft Core Marcellus 2.1 MMcf/ft 30,000 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) 28

  29. Slide 29: Marcellus 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) 29

  30. Slide 30: Marcellus Capacity

    Marcellus Capacity EQT Capacity & Firm Sales Market Mix Q4 2015 2016E 2017E TETCO M2 29-31% 19-21% 14-16% TETCO M3 34-36% 31-33% 28-30% TCO 10-11% 9-10% 6-8% Midwest 10-11% 23-25% 32-34% NYMEX 14-16% 12-14% 15-17% 30

  31. Slide 31: Risk Management

    Risk Management Hedge Position as of October 21, 2015 300 $4.50 $4.14 $3.85 $3.64 $4.00 250 $3.50 200 $3.16 $3.00 $2.94 $ / Mcf $2.50 Bcf $2.70 150 $2.00 100 $1.50 $1.00 50 $0.50 84 248 110 - $0.00 2015 2016 2017 (3) Hedged Volume Average Hedge Price NYMEX Price 2015(3) 2016(4) 2017(4) NYMEX Price (

  32. Slide 32: 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) Sept. 30, 2015 Short-term debt* $ 0 Long-term debt* 2,478 Cash and cash equivalents*

  33. Slide 33: Price Reconciliation

    Price Reconciliation Three Months Ended Nine Months Ended September 30, September 30, in thousands (unless noted) 2015 2014 2015 2014 LIQUIDS NGLs: Sales volume (MMcfe) (a) 13,827 12,047 39,552 27,768 Sales volume (Mbbls) 2,304 2,008 6,592 4,628 Gross price ($/Bbl) $ 8.10 $ 42.27 $ 15.17 $ 46.46 Gro

  34. Slide 34: Price Reconciliation (continued)

    Price Reconciliation (continued) Three Months Ended Nine Months Ended September 30, September 30, in thousands (unless noted) 2015 2014 2015 2014 Midstream Deductions ($/Mcfe) Gathering to EQT Midstream $ (0.72) $ (0.74) $ (0.74) $ (0.74) Transmission to EQT Midstream (0.19) (0.20) (0.19) (0.20) Thi

  35. Slide 35: Non-GAAP Reconciliation

    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 – – – Adjusted Mi

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