Slide 1: The New EQT Company: New Leadership, New Focus
The New New EQT Company, New Leadership, New Focus Q4 volumes exceed guidance midpoint by ~20 Bcfe Q4 development CapEx in-line with prior guidance MM(1) Forecasted Q4 Free Cash Flow of ~$100 ~$350MM of Adjusted Free Cash Flow(1) in Transition from growth mode to manufacturing mode 2019 Focus on opt
Slide 2: EQT's Transformation Into the Leading U.S. Natural Gas Producer
EQT’s Transformation Into the Leading U.S. Natural Gas Producer Our leadership transition and complex transformation is now behind us 1 3 5 7 9 the Board named Rob President and CEO June 2017 November 2017 February 2018 March 2018 April 2018 July 2018 August 2018 November 2018 December 2018 6 8 2 4
Slide 3: The New EQT: Strong Fundamentals to Deliver Shareholder Value
The New EQT: Strong Fundamentals to Deliver Shareholder Value World-class asset base, sustainable free cash flow and financial strength Low leverage of 2.2x Net Debt / Adjusted EBITDA (1)Assumes 1,000’ spacing and 12,000’ lateral (2)Non-GAAP financial measure, see appendix for definition (3)Based on
Slide 4: Substantial Position in the Core of the Core
Substantial Position Well-positioned to deliver in the Core of the Core sustainable free cash flow from our world-class asset base EQT Acreage Overlays the SW Marcellus Core Market Cap(1) $ 4.8 B Data sets include >4,000 wells in the Marcellus and >1,000 wells in the Utica Utica Cumulative Productio
Slide 5: Consolidated Core Position
Consolidated Core Position Top-tier dry, wet and rich gas Marcellus assets SW Marcellus Heat Map / Core Acreage EQT’s core acreage consistently yields average EURs(1) Data sets include >4,000 wells in the Marcellus of 2.4 Bcfe / 1,000’ Best rock yields EURs > 3.0 Bcfe / 1,000’ Strong results from ne
Slide 6: The New EQT: The Next Phase of Our Transformation
The New EQT: The Next Phase of Our Transformation Our plan to generate sustainable free cash flow and shareholder value Action Item Measure Timeline Implement plan to reduce capital costs by 10% (“Target 10%” Initiative) Q4 2019 1 and years of oil and gas operating experience 2 Q1 2019 and well deve
Slide 7: 2019 Plan Supports Near-Term Free Cash Flow
2019 Plan Supports Near-Term Free Cash Flow 1 Flow in 2019(1) Approximately $350 MM of Adjusted Free Cash Net Development Activity (Turned in Line) Sales Volumes (Bcfe) 1,470 – 1,510 Adjusted Operating Cash Flow ($B)(1) $ 2.2 – 2.3 Adjusted Free Cash Flow ($B)(1) $ 0.3 – 0.4 Reserve Development $ 1.
Slide 8: Improvements in Capital Efficiency: 2018E vs. 2019E
Improvements in Capital Efficiency: 2018E vs. 2019E Reserve Development 1 Stabilized scheduling and focus on operational efficiencies drive 2019 improvements Total D&C CapEx Cost per Foot ($/ft.)(1) Spud and Turned-in-line Average Lateral Length (ft.)(1) Spud TIL 12,100 $1,125 11,600 $934 $150 2018
Slide 9: Detailed 2019 Development and CapEx Plan
Detailed Enhanced 2019 Development and CapEx Plan 1 transparency, accountability and results 160 140 120 100 80 60 40 20 - 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 PA Marcellus WV Marcellus OH Utica Total Program Spud Well Count TIL Well Count Spud Avg. Lateral Length T
Slide 10: Development Efficiencies and Optimization
Development Efficiencies and Optimization 1 Increasing lateral lengths and optimizing spacing generates higher single-well returns Increasing lateral well spacing optimizes reservoir development Higher well costs resulting from larger completion jobs Cost increases offset by enhanced EURs and return
Slide 11: 5-Year Financial and Operating Plan
5-Year Financial and Operating Plan 1 B(1) Generates cumulative Adjusted Free Cash Flow of ~$2.7 160 15,000 140 14,000 120 100 13,000 12,000 80 11,000 60 40 10,000 9,000 20 0 8,000 2019 2020 2021 2022 2023 TIL Avg. Lateral Length Spud Well Count TIL Well Count Spud Avg. Lateral Length increase cumul
Slide 12: The Next Wave of Savings – Target 10% Initiative
The Next Wave of Savings – “Target 10%” Initiative Transition to Manufacturing Mode 1 Q1 2019 – Evaluation 2019 – Execution 2020 – Full Realization Measures and Metrics in Place to Track Progress Savings Opportunities Identified and Quantified Realization Timeline and Milestones Adjusted Free Cash F
Slide 13: Committed to Mitigating Curtailments
Committed to Mitigating Curtailments 1 Full realization of benefits expected by year-end 2020 Example: Single Well Wellhead Constraints(1) Minimize adjacent operations and resulting operational reductions 1,400 1,200 1,000 800 600 400 200 - ~5% of volumes deferred to subsequent months through 18 mon
Slide 14: New Chief Operating Officer and Board Committee
New Chief Operating Officer and Board Committee Focus on capital efficiency and operational excellence 1 Chief Operating Officer Search underway for new external COO Identifying shortlist of highly qualified candidates Expect to have new COO in-place by the end of Q1 2019 Will work with CEO and Seni
Slide 15: Restructuring and Early Cost Reductions
Restructuring and Early Cost Reductions Annual administrative and development cost reductions of ~$100 MM 2 Performed intensive internal review of corporate overhead and identified quick win development cost efficiencies Approximately $50 MM of annual cash savings related to workforce reductions, re
Slide 16: Reduce Leverage and Return Capital to Shareholders
Reduce Leverage and Return Capital to Shareholders 3 B(1) 19.9% equity stake in Equitrans Midstream (ETRN) worth $1.0 Adjusted Free Cash Flow(5) Yield – EQT vs. Marcellus Peers(2,3) Monetization of ETRN stake could reduce leverage(4) from 2.2x to 1.8x at current ETRN share price(1) 20 % 15 % 10 % Mo
Slide 17: Rice Claims vs. The Facts
Rice Claims vs. The Facts No incremental free cash flow EQT to drill 91 PA Marcellus wells at 13,200’ average service market capitalized by EQT, artificially deflating $ / foot metric 18 The Facts Not practical given capacity and acreage portfolio; lateral length Ignores their own historical results
Slide 18: The New EQT: Strong Fundamentals to Deliver Shareholder Value
The New EQT: Strong Fundamentals to Deliver Shareholder Value World-class asset base, sustainable free cash flow and financial strength (1)Assumes 1,000’ spacing and 12,000’ lateral (2)Non-GAAP financial measure, see appendix for definition (3)Based on EQT’s estimated 12/31/2018 Net Debt divided by
Slide 19: EQT Has Conducted a Deep Dive Analysis
EQT Has Conducted a Deep Dive Analysis We disagree with the Rice assertions The Rice Claims After careful analysis, the Rice claims… Ignore current market conditions Are built on a small subset of wells Neglect asset specific operational dynamics Fail to account for key well cost components Lack a d
Slide 20: Reconciling the Rice Headline Free Cash Flow Claims to EQT's Plan
Reconciling the Rice ‘Headline’ Free Cash Flow Claims to EQT’s Plan Rice vs. EQT free cash flow profiles are similar when adjusted on a directly comparable basis 1 2 3 4 Rice Incremental Free Cash Flow Claim vs. EQT Plan Incremental Free Cash Flow vs. EQT Plan 1 2 3 4 5 22 Rice Claims The Facts All
Slide 21: Digging into the Rice $750/ft. Well Cost Claim
Digging into the Rice $750 / ft. Well Cost Claim 2 Ignores rapid service cost inflation and assumes 100% fresh water delivery 3 Costs (All-In) $755 $750 ~$870/ft. for 13,200’ 100% fresh water delivery 2019 PA period were $695/ ft. of $875/ft. for FY 2017 — Geographic footprint Adjusted by $40/ft. la
Slide 22: Comparing the Rice $750/ft. Well Cost Claim to EQT
Comparing the Rice $750 / ft. Well Cost Claim to EQT 2 comparison(1) EQT vs. Rice: PA Marcellus $ / foot well costs $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Average: $775535/ /Fft. Average: $669945 / Fftt. Well Name Well Name 24
Slide 23: Oil Field Service Cost Inflation Accelerated in 2H 2017
Oil Field Service Cost Inflation Accelerated in 2H 2017 2 Service costs were on the rise and widely accepted US Rig Count and Drilling and Completion Service (DCS) Cost Inflation(1,2) Snapshot of Rice Energy February 2017 Analyst Presentation 120 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
Slide 24: Why Is Fresh and Produced Water Usage Important?
Why Is Fresh and Produced Water Usage Important? 3 Critical implications for well costs and trickle-down effect on operations The Rice publicized results are based on a small subset of EQT produces ~70,000 bbls a day of produced water – ~$4.00/bbl PA Marcellus Completion Operations Geographic proxim
Slide 25: Optimizing Well Spacing to Maximize Reservoir Development and Efficiency
Optimizing Well Spacing to Maximize Reservoir Development and Efficiency 4 Rice claims that they can achieve 10% production uplift compared to EQT’s current plan Cumulative Gas Production – Dry Marcellus Curve The Rice plan contemplates moving from 750’ to 1,000’ spacing without increasing frac size
Slide 26: Analysis Fails to Consider Both Sides of the Equation
Analysis Fails to Consider Both Sides of the Equation 5 LOE vs. Capital Costs - differing treatment of well cost components Rice captured various well LOE that EQT capitalizes Flowback operations Land projects Construction projects related costs in 1,600 1,400 1,200 1,000 800 600 400 200 - 1,490 $12
Slide 27: Historical Drilling Performance in the Marcellus and Upper Devonian
Historical Drilling Performance in the Marcellus and Upper Devonian Economic optimization and geologic variation across asset drive EQT’s drilling program Historical EQT MRC/UD Horizontal Drilling Performance(1) EQT’s rig program has multiple considerations: 400k SW Peer Avg. (2) FOP/Rig/Year ms com
Slide 28: Rice vs. EQT Free Cash Flow Profile
Rice vs. EQT Free Cash Flow Profile Bridging the gap planned 2019 Adjusted Incremental FCF $ 329 Reduction to Claim $ (166) 1 D&C $/ft. # of Wells Length (ft) ($MM) EQT $ 950 13,200 91 $ 1,141 Adjusted Incremental FCF $ 286 Reduction to Claim $ (43) 2 Length (ft) ($MM) Adjusted Incremental FCF $ 162
Slide 29: Rice vs. EQT Free Cash Flow Profile
Rice vs. EQT Free Cash Flow Profile Bridging the gap Lateral 4 o¢Wellg CaPEX Length (ft) (SMM) 12,000 150 $= 1,710 12,000,135 $1,215 Rice Claimed Incremental FCF $495 Decreased well costs + 1,000" spacing = »$1.0bn of annual free cath low generation (© Wt cand Mra al cota $70 per merge wth (© tomes
Slide 30: 2019 Guidance
2019 Guidance Flow(1) ~$350 MM of Adjusted Free Cash 32 (1)Non-GAAP financial measure, see appendix for definitions Full-Year 2019 Production Total production sales volume (Bcfe) Liquids sales volume, excluding ethane (Mbbls) Ethane sales volume (Mbbls) Total liquids sales volume (Mbbls) 1,470-1,510
Slide 31: Detailed 2019E Activity
Detailed 2019E Activity 2019 $/ft Details 2019 Total CapEx Details CapEx ($MM) 33 (1)Other Non-D&C CapEx includes pad construction and pad facility costs Total Reserve DevelopmentPAWVOH CapEx ($MM)MarcellusMarcellusUtica Total Spud$60$10$30 Horizontally Drilled$275$40$30 Completed$585$105$180 Turned
Slide 32: Long Term Value Creation
Long Term Value Creation 5-year Annual Volumes and Decline Rates 5-year Adjusted Free Cash Flow(1) and Adjusted EBITDA(1) Adj. FCF Adj. EBITDA 2,000 35% $3.0 30% 1,600 $2.5 25% $2.0 1,200 20% $1.5 15% 800 $1.0 10% 400 $0.5 5% - 0% $0.0 2018 2019 2020 2021 2022 2023 2019(2) 2020 2021 2022 2023 (1)Non
Slide 33: Firm Transportation Portfolio
Firm Transportation Portfolio Provides access, stability and opportunity Diversity of delivered markets provides significant commercial optionality Portfolio offers price stability by accessing highly liquid markets Assets directly access markets which represent ~85% of expected U.S. natural gas dem
Slide 34: Risk Management
Risk Management NYMEX Hedge position as of December 31, 2018 Volume (MMDth) Average Price ($/dth) 699 2.96 452 2.82 303 2.78 136 2.75 61 2.74 $ $ $ $ $ Volume (MMDth) Average Short Strike Price ($/dth) 304 3.43 89 3.29 55 3.23 40 3.19 26 3.17 $ $ $ $ $ Volume (MMDth) Average Long Strike Price ($/dth
Slide 35: YTD Unit Cost Comparison – Q3 2018
YTD(1) Unit Cost Comparison – Q3 2018 Peer-leading unit costs for LOE, G&A Lease Operating Expense ($/Mcfe)(2) General & Administrative ($/Mcfe) Peer Mean (excl Peer 5): $0.16 $0.93 $0.26 EQT Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 EQT Peer 1 Peer 5 Peer 2 Peer 4 Peer 3 (1)Peers include AR, CNX, COG, RRC
Slide 36: Cautionary Statements
Cautionary Statements EQT Corporation (NYSE: EQT) EQT Plaza 625 Liberty Avenue, Suite 1700 Pittsburgh, PA 15222 Blake McLean – Senior Vice President, Investor Relations and Strategy – 412.395.3561 The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the S
Slide 37: Non-GAAP Financial Measure
Non-GAAP Financial Measure Adjusted Operating Cash Flow, Free Cash Flow and Adjusted Free Cash Flow As used in this presentation, Adjusted Operating Cash Flow is defined as EQT’s net cash provided by operating activities less changes in other assets and liabilities plus dividends received from Equit
Slide 38: Non-GAAP Financial Measure: Adjusted EBITDA
Non-GAAP Financial Measure Adjusted EBITDA As used in this presentation, Adjusted EBITDA is defined as net income plus interest expense, income tax expense, depreciation depletion and amortization expense, amortization of intangible assets, long-lived asset and goodwill impairments, lease impairment
Slide 39: Non-GAAP Financial Measure: Adjusted EBITDA
Non-GAAP Financial Measure Adjusted EBITDA As used in this presentation, Adjusted EBITDA is defined as net income plus interest expense, income tax expense, depreciation depletion and amortization expense, amortization of intangible assets, long-lived asset and goodwill impairments, lease impairment