EQT Corporation · NYSE:EQT
EQT — Merger or Acquisition (October 2020)
12 slides from EQT's merger presentation, Oct 27, 2020
Slide 1: Chevron Asset Acquisition
Chevron Asset Acquisition 10/27/2020 10/23/2 1 1 020
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts a
Slide 3: Chevron Asset Acquisition Consistent with EQT's Strategy
Chevron Asset Acquisition Consistent with EQT’s Strategy Deal highlights • Deal economics underwritten on proved-developed producing (PDP) value • Work-in-progress (WIP) inventory, undeveloped acreage and water assets provide ✓ Highly attractive valuation material upside • Extensive WIP inventory to
Slide 4: Overlapping Acreage in EQT's Core Development Area
Overlapping Acreage in EQT’s Core Development Area Asset overview(1) • 75% gas / 25% liquids ~450 mmcfe/d of net flowing • 55% PA / 45% WV production • Decline rate: year 1 = 30%, year 2 = 20% • Approximately 480 PA / 70 WV ~550 gross producing wells • ~505 Marcellus / ~35 Utica / ~10 Upper Devonian
Slide 5: Highly Attractive Valuations Anchored by PDP's
Highly Attractive Valuations Anchored by PDP’s Significant upside exists for future value Purchase Price: $735 MM = PDP PV17: ~$635 MM + Midstream: $100 MM(2) + Upside 450 mmcfe/d ~$15 MM LTM EBITDA(3) ~100 WIP wells to be ~$1,410 per flowing mcfe 6.5x multiple completed, driving capital PV10 = ~$83
Slide 6: Significant Value Upside
Significant Value Upside Option value of 250k+ Capital efficient net undeveloped WIP completions Marcellus & Utica acres Water infrastructure will drive more $ Economy's of scale efficient development and application of best practices Significant value Leverage existing FT upside Increase PDP to inc
Slide 7: Checks All Boxes for an Attractive M&A Deal
Checks All Boxes for an Attractive M&A Deal Accretive to key operational & financial metrics(1) PRODUCTION | Increases by ~10% annually OPERATING COSTS(2) / UNIT| Decrease by ~5% annually Base Case Pro-Forma Base Case Pro-Forma ($/Mcfe) (Bcfe) 2021 2022 2021 2022 CAPEX EFFICIENCY | Improves by ~
Slide 8: Checks All Boxes for an Attractive M&A Deal
Checks All Boxes for an Attractive M&A Deal Improves balance sheet metrics(1) NET DEBT(2) | Neutral by year-end 2022 ADJ. EBITDA(2) | Improves by 15%+ in 2021 and 2022 Base Case Pro-Forma Base Case Pro-Forma ($B) ($B) 2021 2022 2021 2022 LEVERAGE | Improves by 10%+ in 2021 and 2022 LIQUIDITY| Im
Slide 9: Checks All Boxes for an Attractive M&A Deal
Checks All Boxes for an Attractive M&A Deal ✓ Highly attractive, low-risk acquisition in our backyard ✓ Valuation underwritten by PDP value, with significant value upside ✓ Substantial work-in-progress well inventory enhances capital deployment efficiencies ✓ Favorable operating cost structure immed
Slide 10: 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 11: Non-GAAP Financial Measure
Non-GAAP Financial Measure 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 is a non-GAAP suppl
Slide 12: 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