EQT Corporation · NYSE:EQT

EQT — Investor Presentation (April 2017)

30 slides from EQT's investor presentation, April 2017

  1. Slide 1: Analyst Presentation April 2017

    Analyst Presentation April 2017

  2. Slide 2: EQT Profile

    EQT Profile Largest Appalachian gas producer and 4th largest U.S. gas producer* NYSE Symbol EQT Market Cap $ 10.6 B Enterprise Value $ 12.0 B Net Marcellus Acres 810,000 Core Net Marcellus Acres 475,000 Core Marcellus Locations 3,500 2016 Sales Volume 759 Bcfe 2016 Proved Reserves 13.5 Tcfe 2016 Pro

  3. Slide 3: Key Investment Highlights

    Key Investment Highlights Sustainable growth while delivering returns through full cycle  Focus on development of Marcellus  12% projected production sales volume growth in 2017  2017 drilling sets up projected growth of 15-20% for 2018-2020+  Industry leading cost structure  Consolidation impr

  4. Slide 4: Inventory

    Inventory Extensive undeveloped inventory  810,000 total net Marcellus acres OH  475,000 core net Marcellus acres Core Marcellus  3,500 core Marcellus locations*  83% of core Marcellus acres are undeveloped Core Upper Devonian  2,700 undeveloped core locations*  56% dry; 44% wet PA  $7.4 MM p

  5. Slide 5: Marcellus Inventory

    Marcellus Inventory 2016/2017 acquisitions increased core by 88% Core Marcellus Undeveloped vs. Developed 2016 – 2017 600,000 EQT Core Marcellus Acres Acquisition Summary Undeveloped acres 500,000 Developed acres Net acres added 220,000 400,000 300,000 Undeveloped acres 200,000 added 200,000 100,000

  6. Slide 6: Improving Economics – Marcellus: Longer laterals and more wells per pad

    Improving Economics – Marcellus Longer laterals and more wells per pad reduce cost per foot 12,000 12.0 Beginning to see benefits 10,000 of consolidation 10.0 Lateral length (ft.) Avg. wells per pad 8,000 8.0 6,000 6.0 4,000 4.0 2,000 2.0 - 0.0 2013 2014 2015 2016 2017E 2018E Target Lateral length W

  7. Slide 7: Improving Economics – Marcellus: Drilling and completion costs per foot

    Improving Economics – Marcellus Drilling and completion costs per foot consistently decreasing $1,600 $1,200 $ / foot $800 $400 $- 2013 2014 2015 2016 2017E Assumes 8,000 foot lateral for 2017; includes 2017 increase of $75K per well for larger frac jobs and $40K per well of completion cost inflatio

  8. Slide 8: Improving Economics – Marcellus: Larger frac jobs

    Improving Economics – Marcellus Larger frac jobs increase recoveries per foot 2013 2015 2017E Change Stage length ft 190 170 200 5% Proppant (lb / ft) 1,350 1,550 2,250 67% 3.0 Water (bbl / ft) 35 39 41 17% EUR / 1000’ 1.9 2.1 2.4 26% 2.5 EUR (Bcfe / 1,000 ft) 2.0 1.5 1.0 0.5 - 1200 2013 1350 2015 2

  9. Slide 9: Improving Economics – Marcellus: Lower cost per Mcfe

    Improving Economics – Marcellus Lower drilling and completion cost per foot + higher productivity, drive lower cost per Mcfe $0.80 Drilling & Completions Cost $0.60 ($ / Mcfe) $0.40 $0.20 $- 2013 2014 2015 2016 2017E 9

  10. Slide 10: Improving Economics – Marcellus: Returns

    Improving Economics – Marcellus Lower cost per Mcfe, longer laterals, and increasing EURs increase returns 140% $3.00 122% 120% $2.50 101% $2.00 100% 75% 80% 68% ATAX IRR 62% 60% 52% 39% 40% 35% 25% 21% 15% 20% 13% 0% 5 Well Pad 6 Well Pad 8 Well Pad Target 5,500' Lateral 6,000' Lateral 8,000' Later

  11. Slide 11: Marcellus Capacity

    Marcellus Capacity Firm capacity for >90% of produced volumes  Diversified portfolio Northeast Pipe Project ISD DTH/D  Improving prices Ohio/Midwest TETCO TEAM 14 Current 150,000 Pipe Project ISD DTH/D TETCO TEMAX Current 295,000 REX E2W Current 300,000 TGP 300L Current 40,000 TETCO U2GC Current 4

  12. Slide 12: 2017 Capital and Development Plan

    2017 Capital and Development Plan Focus on core Marcellus development  2017 capital investments of $1.5 B* OH  $1.3 B for well development Core Marcellus  207 wells in 2017  Average laterals of 8,000 ft PA  Funding with operating cash flow of $1.3 billion, plus Core Upper Devonian cash-on-hand*

  13. Slide 13: Proven and Sustainable Growth

    Proven and Sustainable Growth 15-20% growth 2018 through 2020+ 1,600 1,400 1,200 1,000 Bcfe 800 600 400 200 - 2013 2014 2015 2016 2017P 2018F 2019F 2020F 26% CAGR for years 2013-2016; 18% CAGR 2017P-2020F 13

  14. Slide 14: Utica Upside Possibility

    Utica Upside Possibility Improve EUR to 3.0 – 3.5 Bcfe per 1,000 feet in 2017  500,000 EQT net acres 2016 wells 2017 wells  3,000 locations*  6 wells online  6 – 8 wells in 2017  30 Tcfe total resource potential**  Goal EUR of 3.0-3.5 Bcfe per 1,000 feet to match Marcellus returns  $12-$14 MM

  15. Slide 15: Balance Sheet Strength

    Balance Sheet Strength Strength in the numbers  Benefits of investment grade  Strong liquidity  Supports consolidation strategy  $1.5 billion undrawn revolver  Assures operational flexibility through cycles  $899 million cash*  Minimizes counterparty letter of credit  $750 million undrawn re

  16. Slide 16: Benefits from Midstream Ownership

    Benefits from Midstream Ownership EQT owns 90% interest in EQT GP Holdings, LP (NYSE: EQGP)  Significant cash flow growth from EQGP EQT 239.7 million EQGP Common Units ownership EQGP Non-economic GP  Midstream cash flows to double over next three years  2017 EQT distribution equates to $0.24 / Mc

  17. Slide 17: Benefits from Midstream Ownership

    Benefits from Midstream Ownership Cash flows to EQT from EQGP accelerating $500 $400 $300 Value of EQGP EQGP price units held by Value per $MM $200 per unit EQT ($B) EQT share $26 $6.2 $36 $28 $6.7 $39 $100 $30 $7.2 $42 $32 $7.7 $44 $- 2014 2015 2016 2017F 2018F 2019F 2020F 20% EQM distribution grow

  18. Slide 18: EQT Midstream Partners, LP

    EQT Midstream Partners, LP (NYSE: EQM) Appalachian Hub – connecting supply to demand markets  Marcellus Gathering  1.8 Bcf per day firm capacity  600 MMcf per day high pressure header pipeline for Range Resources expected Q2 2017 in-service  10-year fixed-fee contracts  Equitrans Transmission &

  19. Slide 19: Mountain Valley Pipeline

    EQT Midstream Partners, LP (NYSE: EQM) Mountain Valley Pipeline connects supply hub to southeast power generation markets  JV with NextEra, ConEd, WGL, RGC Resources  45.5% EQM ownership interest  EQM to construct and operate pipeline  $3.0 B - $3.5 B total project cost  ~$1.5 billion EQM inves

  20. Slide 20: Why EQT?

    Why EQT?  Largest natural gas producer in Appalachian Basin; 4th largest in U.S.*  15-20% sales volume growth 2018 through 2020+  Accelerating midstream cash flows  Basin consolidation drives best-in-class economics  Regional pipeline hub with access to premium markets  Continue to improve ret

  21. Slide 21: Cautionary Statements

    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 prove

  22. Slide 22: Non-GAAP Financial Measures

    Non-GAAP Financial Measures Adjusted Operating Cash Flow Attributable to EQT and Adjusted Operating Cash Flow Attributable to EQT Production Adjusted operating cash flow attributable to EQT and adjusted operating cash flow attributable to EQT Production are non-GAAP supplemental financial measures t

  23. Slide 23: Non-GAAP Financial Measures

    Non-GAAP Financial Measures EQT Midstream Partners Adjusted EBITDA EQT Midstream Partners adjusted EBITDA means EQM’s net income plus EQM’s net interest expense, depreciation and amortization expense, income tax expense (if applicable), preferred interest payments received post-conversion, and non-c

  24. Slide 24: Appendix

    Appendix

  25. Slide 25: Co-development

    Co-development Improves returns per acre Fracs Grow Toward Low Pressure  Benefits of co-development of Co-development Marcellus and Upper Devonian  Co-development increases value per acre by 38%  Shared infrastructure improves IRR per well  Upper Devonian: use-it or lose-it investment Upper Devo

  26. Slide 26: Risk Management

    Risk Management Hedge position as of April 25, 2017 400 $3.50 $3.43 350 $3.40 $3.35 300 2017 2018 2019 $3.27 $3.30 353 NYMEX Price ($/Mcf) as of 4/25/2017 $3.43 $3.27 $3.06 250 NYMEX Swaps $3.18 $ / Mcf $3.20 Total Volume (Bcf) 335 178 19 Bcf 200 $3.12 Average Price per Mcf (NYMEX) $3.35 $3.17 $3.12

  27. Slide 27: Liquids

    Liquids Volume growth and Marcellus impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) 20,000 NGLs (1.6 Gal/Mcf) 18,000 $6.00 Btu Premium NYMEX 16,000 $5.00 14,000 $3.96 $4.10 12,000 $4.00 $/Mcf $0.66 $0.66 10,000 $0.15 Mbbls $3.00 8,000 6,000 $2.00 $3.30 $3.30 4,000 $1.00 2,

  28. Slide 28: Marcellus Capacity

    Marcellus Capacity Pricing details Market Mix 2017E 2018E 2019E Basis 2017E 2018E 2019E TETCO M2 24% 36% 10% TETCO M2 $(0.56) $(0.45) $(0.53) TETCO M3 21% 18% 14% TCO 5% 4% 3% TETCO M3 $(0.16) $0.10 $0.01 Midwest 30% 26% 21% TCO $(0.20) $(0.25) $(0.35) NYMEX 20% 16% 13% Midwest $(0.20) $(0.27) $(0.3

  29. Slide 29: 2017 Guidance

    2017 Guidance Q2 2017 2017 PRODUCTION Total Production Sales Volume (Bcfe) 190 - 195 835 - 855 Liquids Sales Volume, excluding Ethane (Mbbls) 2,955 - 2,975 12,060 - 12,460 Ethane Sales Volume (Mbbls) 1,670 - 1,680 6,000 - 6,200 Total Liquids Sales Volume (Mbbls) 4,625 -- 4,655 18,060 -- 18,660 Unit

  30. Slide 30: Where energy meets innovation.

    QT Where energy meets innovation.

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