Eqt Corporation · NYSE:EQT
Eqt — Q1 2021 Earnings Presentation
29 slides from Eqt's earnings presentation, May 6, 2021
Slide 1: Investor Presentation
Investor Presentation May 5, 2021 5/5/202 1 1 1
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: Continuing to Deliver Value to Stakeholders: First Quarter 2021 Highlights
Continuing to Deliver Value to Stakeholders First Quarter 2021 Highlights First Quarter 2021: • Sales volumes of 415 Bcfe, in-line with guidance • Received an average realized price of $2.61/Mcfe • Total per unit operating costs of $1.31/Mcfe, $0.04 below midpoint of annual guidance • Net cash provi
Slide 4: Unique Combination of Scale, Sustainability, and Vision
Unique Combination of Scale, Sustainability, and Vision Mission: Become the Operator of Choice for All Stakeholders • EQT is the largest producer of U.S. natural gas Large scale, big potential • Significant free cash flow generation capabilities • $3.5+ B in projected free cash flow(1) through 2026
Slide 5: Dominant Position in the Core of the Appalachian Basin
Dominant Position in the Core of the Appalachian Basin Reduced 2021 capital program by 7% UTICA EQT CORPORATE OVERVIEW MARCELLUS ASSET PROFILE Total Net Marcellus Acres(1) 1,300,000 Acres (1) Core Net Marcellus Acres 710,000 Acres (1,2) Core Net Undeveloped Marcellus Locations 1,660 Locations 1Q21 S
Slide 6: Base Plan Projected to Generate $3.5+ B in FCF Through 2026
Base Plan Projected to Generate $3.5+ B in FCF(1) Through 2026 Ongoing initiatives and commodity price improvements provide meaningful upside FCF(1,2) ($MM) vs. UNHEDGED NYMEX BREAKEVEN ($/MMBTU)(3) Base Plan $1,000 $3.00 • Renegotiated gathering rates Upside providing path for margin improvements •
Slide 7: 2021 Plan Highlights
2021 Plan Highlights Continuing our evolution Executing maintenance program Sales volumes of 1,620 – 1,700 Bcfe, roughly flat to pro-forma 2020 level Double digit free cash flow yield(1) Free cash flow(1) of $575 - $675 MM Combo-development on 75% of new 2021 wells Provides high confidence in well p
Slide 8: Carrying Positive Momentum into 2021
Carrying Positive Momentum into 2021 2021 Business Outlook 2021 GOALS FREE CASH FLOW(1) ($MM) ADJUSTED EBITDA(1) ($MM) • Execute base plan ~90% ~20% $625 • Continue to reduce emissions and $1,900 enhance ESG metrics $1,547 • Translate PA Marcellus well cost reductions to WV development $325 • Accele
Slide 9: 2021 Capital Program
2021 Capital Program Reduced capital program by $75 MM since original guidance(1) Reserve Development Capital Expenditures Capital Expenditures ($MM) ($MM / %) 2020 2021E 2021E PA 81% ~70% WV 7% ~25% OH 12% ~5% Reserve Development(2) $770 - $830 Reserve Development $839 $770 - $830 Production (Bcfe)
Slide 10: Our Modern Approach to Acquisitions
Our Modern Approach to Acquisitions Leveraging our modern integration framework to effectuate rapid, transparent and effective integration We have created an integration framework that will allow us to realize the maximum value of our acquisitions Goals: • Provide an integration template that allows
Slide 11: 2021E Detailed Guidance
2021E Detailed Guidance Reduced CAPEX by $75 MM, Increased FCF(2) by $75 MM PRODUCTION 2021E FINANCIAL GUIDANCE(1) Total Sales Volumes (Bcfe) 1,620 - 1,700 Btu uplift (MMbtu/Mcf) 1.050 - 1.060 Gas 94% Average Differential ($/Mcf) $(0.60) - $(0.40) Liquids 6% Adjusted EBITDA(2) ($MM) 1,850 - 1,950 Ad
Slide 12: Corporate Gathering Rates Decline Over Time
Corporate Gathering Rates Decline Over Time Impact of gas gathering agreement with ETRN CORPORATE GATHERING RATES ($/MCFE)(1,2,3) MINIMUM VOLUME COMMITMENT FOR ETRN GGA MVP ISD Base MVC $0.90 PRESENT SHORT-TERM LONG-TERM 5,000 RELIEF(4) SUSTAINABILITY Effective April 1, 2020 $535 MM in fee relief 4,
Slide 13: Firm Transportation Portfolio
Firm Transportation Portfolio Access to diverse markets provides flexibility and opportunity • Rationalizing our firm transportation portfolio to improve net-back pricing • Multiple counterparties have expressed interest in Midwest our MVP capacity which could result in further Local East rationaliz
Slide 14: Winter Storm Uri was a Short-Term Net Negative for Natural Gas
Macro Event: Winter Storm Uri was a Short-Term Net Negative for Natural Gas Natural gas price favorably responding as industrial demand recovers • Freezing temperatures along the Gulf in mid-February removed 115 Bcf(1) of production from the market, but was offset by 135 Bcf(2) of Map of Largest Ind
Slide 15: Fulfilling Campaign Promises: Realizing the Full Potential of Our People
Fulfilling Campaign Promises: Realizing the Full Potential of Our People We are driving a massive cultural revolution to boost engagement and evolve into a values-driven organization We have skyrocketed employee engagement We have cultivated a “values-driven” mentality ENGAGEMENT SURVEY “DESCRIBE TH
Slide 16: Marcellus' Leading Emissions Intensity Translates to Lower Cost of Carbon
Marcellus’ Leading Emissions Intensity Translates to Lower “Cost of Carbon” As the largest producer of natural gas, EQT is playing a leading role Appalachian natural gas is the clear low-cost, low-emitting energy source “Cost of Carbon” 2019 PRODUCTION(1) (BOE/D) EMISSIONS(1) (KG CO2e/BOE) COST PER
Slide 17: Hedge Position as of April 30, 2021
Hedge Position as of April 30, 2021 Protecting the balance sheet 2021(1) 2022 2023 2024 Philosophy: Swaps: • Risk mitigation tool to de-risk cash flow and manage leverage Volume (MMDth) 863 618 115 2 • Large scale combo-development strategy Average Price ($/Dth) $ 2.73 $ 2.67 $ 2.51 $ 2.67 allows us
Slide 18: Actively Managing Liquidity
Actively Managing Liquidity Ample liquidity to cover midstream letters of credit (“LC”) LIQUIDITY(1) • Liquidity is $1.4 B(1) • $2.5 B unsecured revolver: • April 23, 2021: Entered into a one-year extension $2.5 agreement $0.8 • Commercial terms remain relatively unchanged • Demonstrates banks’ comf
Slide 19: Debt and Capitalization Summary as of March 31, 2021
Debt and Capitalization Summary as of March 31, 2021 Significant FCF generation strengthens the balance sheet • $4.8 B in total debt(1) $B 3/31/21 12/31/20 Cash & Cash Equivalents $0.0 $0.0 • Equity settlement of the convertible senior notes could reduce long-term debt by ~$365 MM Current Portion of
Slide 20: Why Invest in EQT?
Why Invest in EQT? Uniquely positioned to sustainably deliver shareholder value Long Runway with • Deep inventory of Tier I core Marcellus locations in the lowest cost natural gas basin in the U.S. (15+ years) Attractive Development • Low risk, multi-year core inventory to drive superior results: se
Slide 21: Appendix
* Pees | _ 12 ” fs fi Wong? noglese. te = ees = (= \e « = a. x pera oo 1c es, ie
Slide 22: Future Focused Calendar Year 2019 ESG Highlights
Future Focused Calendar Year 2019 ESG Highlights 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 23: Corporate Decline Rate
Corporate Decline Rate Shallowing declines to improve maintenance capital 2020 BASE EXIT-TO-EXIT DECLINE(1) 30% 28% 25% 22% 20% 16% Under maintenance scenario, Year 1 decline 15% rate is expected to shallow over the next five 13% years 11% 10% 5% Year 1 Year 2 Year 3 Year 4 Year 5 1. Reflects all pr
Slide 24: Year-over-year Reserve Report Changes
Year-over-year Reserve Report Changes • Year-end 2020 total proved reserves increased by 2.3 Tcfe, or 13%, compared to year-end Proved Reserves by Play (Bcfe)(1) Year Ended December 31, 2019 2020 2019 • Driven by efficiencies realized from the execution of Proved developed reserves Marcellus 11,943
Slide 25: Non-GAAP Financial Measure
Non-GAAP Financial Measure Adjusted EBITDA Adjusted EBITDA is defined as net loss, excluding interest expense, income tax (benefit) expense, depreciation and depletion, amortization of intangible assets, (gain) loss on sale/exchange of long-lived assets, impairments, the revenue impact of changes in
Slide 26: Reconciliation of Adjusted EBITDA
Non-GAAP Financial Measure Reconciliation of Adjusted EBITDA The table below reconciles adjusted EBITDA with net loss, the most comparable financial measure as calculated in accordance with GAAP, as reported in the Statements of Condensed Consolidated Operations to be included in the Company's Quart
Slide 27: Adjusted Operating Cash Flow, Free Cash Flow, and Free Cash Flow Yield
Non-GAAP Financial Measure Adjusted Operating Cash Flow, Free Cash Flow, and Free Cash Flow Yield 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-
Slide 28: Reconciliation of Net Debt
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, senior notes and note payable to EQM Midstream Partners, LP. Net debt is a non-GAAP supplemen
Slide 29: Adjusted Interest Expense Per Unit
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