EQT Corporation · NYSE:EQT
EQT — Investor Presentation (May 2016)
31 slides from EQT's investor presentation, May 3, 2016
Slide 1: Analyst Presentation
Analyst Presentation May 3, 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 19% production sales volume growth i
Slide 5: Leading Appalachian E&P Company
Leading Appalachian E&P Company 2015 Operating Income of $563.1 million 10.0 Tcfe proved reserves 9,100 pipeline miles 3.4 MM acres 5 As of 12/31/2015
Slide 6: Production By Play
Production By Play Marcellus Shale drilling driving growth 6 Huron reserves included in “Other”
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 7 As of 12/31/2015
Slide 8: Marcellus Play
Marcellus Play 660,000 EQT acres 86% NRI / 80% HBP 7.8 Tcfe proved reserves 31 Tcfe total resource potential 72 wells in 2016 Core Development Area 8 *As of 12/31/2015 and pro forma for the Statoil acquisition
Slide 9: Marcellus Core Development Area
Marcellus Core Development Area Near term development strategically focused on core 320,000 EQT acres* ~3,370 locations* 630 wells online* 72 wells in 2016: 51 PA wells 21 WV wells 7,000’ laterals $6.3 MM / well 14.5 Bcfe EUR / well 2,065 Mcfe EUR / ft. of lateral Core Development Area
Slide 10: Core Marcellus
Core Marcellus IRR Wellhead After OpEx After Tax 350% PRICE ATAX IRR $2.00 12% 300% $2.50 34% $3.00 69% 250% 200% 150% 100% 50% 0% $2.00 $2.50 $3.00 Realized Price 10
Slide 11: Utica Play
Utica Play 450,000 EQT acres* Shipman 593894 Pettit 593066 Greene County, PA ~3,400 locations* Greene County, PA 7,000’ lateral 5,200’ lateral 3 wells online 5-10 wells in 2016 13,000’ to 13,500’ deep Scotts Run 591340 Greene County, PA 30 Tcfe total resource 3,200’ lateral potential $12.5 – $
Slide 12: Scotts Run Utica Well Update
Scotts Run Utica Well Update Cumulative Production, Pressure and Rate vs. Time 12 Years on Production
Slide 13: Scotts Run – Utica Type Curve
Scotts Run – Utica Type Curve – 5,400’ lateral 35,000 30,000 Utica 6.0 MMcf/ft 25,000 Daily Production (Mcf/d) ATAX IRR ($2.00 Realized Price) Well Cost 6.0 MMcf/ft 20,000 $12.5 MM 85% $14.0 MM 65% 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) C
Slide 14: EQT Corporation Midstream Overview – Consolidated
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 ~$40 MM projected annual Terra 80 MMcf/d EBITDA Applegate Marcellus Gathering 150 MMcf/d Applegate Longhorn
Slide 16: EQT GP Holdings, LP (NYSE: EQGP)
EQT GP Holdings, LP (NYSE: EQGP) EQT owns 90% LP interest of EQGP EQGP owns in EQM* 28% limited partner interest 1.8% general partner interest incentive distribution rights EQGP Price Value of EQGP Units Value per per Unit held by EQT ($MM) EQT share $22 $5,274 $35 $24 $5,753 $38 $26 $6,23
Slide 17: 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 Marcellus Gathering System Jupiter Gathering System PA dry gas Northern West Virginia Gathering System Wet and dry gas
Slide 18: EQT Midstream Partners, LP 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 19% 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: Statoil Acreage Acquisition, May 2016
Statoil Acreage Acquisition, May 2016 62.5k Marcellus / 53k Utica net acres 500 new Marcellus locations of 5,600’ Stacked pay Existing Production 24 producing Marcellus wells 3 complete, not online 4 drilled, not complete 50 MMcfe/d* current Legend production EQT Synergies Statoil Exte
Slide 23: Acreage Acquisition Summary, May 2016
Acreage Acquisition Summary, May 2016 Acquisition Metrics Net Marcellus Acres 62,500 Net Utica Acres 53,000 Working Interest 100% Net Revenue Interest 84% Held by Production or Term 2018+ 87% Current Production* 50MMcfe/d Incremental Feet of Pay 3.1 MM feet Estimated Reserves** 950 Bcfe Estimated De
Slide 24: 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 $4.00 NYMEX 10,000 $3.16 $3.20 $3.00 $0.45 8,000 $0.53 $0.12 $/Mcf Mbbls 6,000 $2.00 4,000 $2.63 $2.63 $1.00 2,000 - $0.00 2011 2012 2013 2014 2015 201
Slide 25: Capital Investment Summary
Capital Investment Summary $1.9 2.0 $1.8 $1.6 1.5 $1.3 $1.0 $B 1.0 0.5 0.0 2012 2013 2014 2015 2016F Midstream Production 25 Excludes acquisitions and EQT Midstream Partners, LP
Slide 26: Core Marcellus vs Scotts Run – Utica Type Curve
Type Curve – 5,400’ lateral Core Marcellus vs Scotts Run – Utica 35,000 Utica 6.0 MMcf/ft 30,000 Core Marcellus 2.1 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) 26
Slide 27: 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) 27
Slide 28: 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% 28
Slide 29: Risk Management
Risk Management Hedge Position as of April 26, 2016 300 $4.00 $3.56 $3.29 $3.50 250 $3.10 $3.00 $2.96 $2.97 200 $2.50 $ / Mcf $2.50 Bcf 150 $2.00 $1.50 100 $1.00 50 $0.50 252 207 96 - $0.00 2016 2017 2018 Hedged Volume Average Hedge Price NYMEX Price (a)April through December. (b)For 2016 through 20
Slide 30: Ample Financial Flexibility to Execute Business Plan
Ample Financial Flexibility to Execute Business Plan EQT Debt ratings Moody’s Standard & Poor’s Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ($ MM, except net debt / capital) March 31, 2016 Short-term debt* $ 0 Long-term debt* 2,301 Cash and cash equivalents*
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