Slide 1: Investor Presentation
Investor Presentation October 22, 2020 10/21/2 1 1 020
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 Third Quarter 2020 Highlights: • Sales volumes of 366 Bcfe, in-line with guidance, despite 15 Bcf of volume curtailments • Received an average realized price of $2.33/Mcfe, a $0.25 premium to NYMEX pricing • Net cash provided by operating activities of $184 MM; free cash flow(1) o
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 • Deep inventory of Tier I drilling locations in the lowest cost natural gas basin in the World Class Asset Base U.S. (15+ years) • Multi-year core “combo inventory” to drive superior results • Lowering well cost and overhead by 30%
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, Disciplined approach how 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 ✓ $660 per foot in 3Q; Two consecutive quarters of sub-$700 per foot Implement Combo-Development ✓ >80% o
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, reliable, domestic energy source Success starts and continues with a strong balance sheet and financial position • Hedging strategy has protected 2020, while pro
Slide 9: Meaningful Reduction in Well Costs Being Realized
Meaningful Reduction in Well Costs Being Realized Meeting and exceeding 2020 well cost expectations PA MARCELLUS WELL COSTS(1) Target(2): $730 $/ft. $970 $850 $800 $745 $680 $660 Legacy 3Q19 4Q19 1Q20 2Q20 3Q20 (FY 2019E) Validating well costs below target 1. Includes pad construction and production
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. 250 1.00 200 0.80 150 0.60 100 0.40 50 0.20 0 0.00 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2Q19 3Q19 4Q19 1Q20 2
Slide 11: Frac Technology Enhancing Operational and Environmental Performance
Frac Technology Enhancing Operational and Environmental Performance PUMPING HOURS PER MONTH PER CREW STAGES PER MONTH PER CREW 450 240 220 400 200 350 180 160 300 140 250 120 200 100 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 3Q20: Utilization of next generation frac technology and a centrali
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 Have reduced full-year CAPEX guidance four times while maintaining full-year production guidance 2020E CAPITAL EXPENDITURES & PRODUCTION $1.6 1,500 $1.4 $1.2 1,400 $1.0 Bcfe $B $0.8 $0.6 1,300 $0.4 $0.2 $- 1,200 Oct 2019 Jan 2020 Update Feb 2020 Update Mar 2020 Upda
Slide 14: 2020E Detailed Guidance
2020E Detailed Guidance PRODUCTION 2020E FINANCIAL GUIDANCE(1) Total Sales Volumes (Bcfe) 1,480 - 1,500 Btu uplift (MMbtu/Mcf) 1.045 - 1.055 Gas 95% Average Differential ($/Mcf) $(0.45) - $(0.35) Liquids 5% Adjusted EBITDA(2,3) ($MM) 1,550 - 1,600 Adjusted Operating Cash Flow(2,3) ($MM) 1,375 - 1,42
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 Oct-20 450 900 Rapid decline in oil-directed activity materially reduces 400 800 associated gas supply 350 700 300 600 • U.S. rigs down ~65%, reducing well inventory & a
Slide 16: Debt and Capitalization Summary
Debt and Capitalization Summary As of September 30, 2020 • $4.7 B in total debt(1) $B 9/30/20 6/30/20 • Equity settlement of the convertible senior notes could reduce Cash & Cash Equivalents $0.0 $0.0 long-term debt by ~$0.35 B • $2.5 B unsecured revolving credit facility Current Portion of Debt $0.
Slide 17: Effectively Managing Maturity Schedule
Effectively Managing Maturity Schedule Multiple levers can be pulled to manage upcoming maturities CLEAR LINE OF SIGHT AMPLE COVERAGE AND OPTIONALITY Does not include 2021+ FCF Next substantial debt maturity not until 2025 Remaining Maturities Selective Divestiture Opportunities 2022 Maturity 2020E
Slide 18: Meaningful Progress Made Towards Net Debt Target
Meaningful Progress Made Towards Net Debt Target Path to less than 2.0x net debt to adjusted EBITDA(1) NET DEBT(1,2) ($B) $5.3 $4.5 2021+ FCF > $1.5 B reduction target 12/31/2019 1Q20 Net Debt 2Q20 Net Debt 3Q20 Net Debt 9/30/2020 (3) Remaining Selective Divestiture Reduction Reduction Reduction 202
Slide 19: Debt Trades In-Line with Investment Grade Peers
Debt Trades In-Line with Investment Grade Peers Strong Investor Sentiment • EQT bond performance better than HY peers; recently on par with low investment grade peers CREDIT SPREADS FROM JAN 2020 TO PRESENT LOW IG OVV 5.375% 01/01/26 1800 CVECN 4.25% 04/15/27 MRO 4.4% 7/15/27 EQT 3.9% 2027 1600 HES
Slide 20: Actively Managing Liquidity
Actively Managing Liquidity Ample liquidity to cover midstream letters of credit (“LC”) • Current liquidity is $1.46 B(1) LIQUIDITY(1) • $2.5 B unsecured revolver: • Not subject to semi-annual borrowing base $2.50 $0.79 redeterminations • $0.79 B of letters of credit posted $0.25 $1.46 • ~$0.25 B dr
Slide 21: Firm Transportation Portfolio
Firm Transportation Portfolio Access to diverse markets provides flexibility and opportunity • Rationalizing our firm transportation portfolio to improve net-back pricing • Multiple counterparties have expressed interest in Market Mix - Price Points 4Q 2020E FY 2021E our MVP capacity which could res
Slide 22: 2019 ESG Report: Future Focused
2019 ESG Report: Future Focused • ESG Report, published October 21, 2020, provides a detailed framework on how we think about our business, and how all of the pieces – from how we manage human capital to how we empower our employees with technological capital – are aligned to execute a cohesive oper
Slide 23: Future Focused Highlights
Future Focused Highlights For calendar year 2019 Environmental Economic Stewardship Community Impact Safety Investment EQT’s methane intensity is ~78% EQT’s 2019 activities generated lower than the 2025 target set Zero Tier 1 Process Safety events EQT and EQT Foundation nearly $375 million in state
Slide 24: The Marcellus Shale – Heavy on Production, Low on Emissions
The Marcellus Shale – Heavy on Production, Low on Emissions 2018 UPSTREAM EMISSIONS INTENSITY BY ANONYMIZED OIL AND GAS TOP 10 PRODUCTION & EMISSION BREAKDOWN BY PLAY IN 2018(1) PRODUCER (kg CO2e/boe)(1,2) Global 2 100% EQT 3 Northeastern U.S. 3 90% Northeastern U.S. 3 Northeastern U.S. 3 Northeaste
Slide 25: Focus on Gas – Appalachian Top Producers Have Lowest Emissions Intensity
Focus on Gas – Appalachian Top 10 Producers Have Lowest Emissions Intensity PRODUCTION(1) VS. EMISSIONS INTENSITY(2)- BY PEER(3) PRODUCTION(1) VS. EMISSIONS INTENSITY(2)- APPALACHIAN TOP 10 VS. NON- APPALACHIAN TOP 10 App Top 10 App Top 10 4.5 Non-App Top 10 16 16 Non-App Top 10 12 Emissions Emissio
Slide 26: Commitment to ESG Transparency
Commitment to ESG Transparency EQT leads in environmental, social & governance (ESG) disclosure Bloomberg ESG Disclosure: scores above 40 demonstrate good In peer set EQT is: transparency; scores 50-70 demonstrate excellent transparency • #1 in overall disclosures (56.0) • #1 in social disclosures (
Slide 27: Set up for EQT is Compelling
Set up for EQT is Compelling Promise big, deliver big Improving the balance sheet & de-risking near-term debt maturities 2021 natural gas commodity set up compelling for EQT Ability to generate significant free cash flow Radically reducing costs & methodically allocating capital Reinvigora
Slide 28: Appendix
Appendix 28 28
Slide 29: Third Quarter 2020 Results
Third Quarter 2020 Results OPERATIONAL AND FINANCIAL RESULTS 3Q 2020 CAPITAL EXPENDITURES ($mm) 3Q 2020 Marcellus Bcfe 319 Reserve development $ 176 Ohio Utica Bcfe 46 Land and lease $ 38 Other Bcfe 1 Capitalized overhead $ 15 Total Sales Volumes Bcfe 366 Capitalized interest $ 5 Other production in
Slide 30: 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 $535 MM in fee relief over 3
Slide 31: Risk Management
Risk Management As of October 16, 2020 Philosophy: 2020(1) 2021 2022 2023 2024 Swaps Volume (MMDth) 288 817 240 61 2 • Risk mitigation tool to de-risk cash flow and manage leverage Average Price ($/dth) $2.75 $2.66 $2.62 $2.48 $2.67 Calls - Net Short • Directionally more aggressive Volume (MMDth) 79
Slide 32: 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 33: 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 34: Non-GAAP Financial Measure
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 35: Non-GAAP Financial Measure
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 36: Non-GAAP Financial Measure
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 37: Non-GAAP Financial Measure
Non-GAAP Financial Measure Reconciliation of LTM 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’
Slide 38: Non-GAAP Financial Measure
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 39: Non-GAAP Financial Measure
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 40: Non-GAAP Financial Measure
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