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Q2 2011 Earnings Call – EQT Corp

EQT Corp · Jul 28, 2011 · 29 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2011 Earnings Call – EQT Corp – slide 1
    Analyst Presentation July 28, 2011
  2. Q2 2011 Earnings Call – EQT Corp – slide 2
    Key Investment Highlights We have extensive reserves of natural gas* 5.2 Tcfe Proved; 35 years R/P 21.2 Tcfe 3P; 150 years R/P 32 Tcfe Potential; 200 years R/P We have proven ability to profitably develop our reserves Superior and…
  3. Q2 2011 Earnings Call – EQT Corp – slide 3
    2nd Quarter 2011 Highlights 43% organic production sales growth Announced the sale of the Big Sandy Pipeline for 390 million; closed on July 1, 2011 25% increase in EQT Midstream operating income www.eqt.com 4
  4. Q2 2011 Earnings Call – EQT Corp – slide 4
    Leading Appalachian E&P Company 2010 operating income 470.5 million 5.2 Tcfe proved res. 12,000 pipeline miles 275,000 customers 3.5 MM acres www.eqt.com 5
  5. Q2 2011 Earnings Call – EQT Corp – slide 5
    Reserves By Play As of December 31, 2010 5.2 Tcfe proved reserves 21.2 Tcfe 3P reserves Other 0.8 Marcellus 2.9 Huron 1.5 Marcellus 12.2 Huron 7.4 32 Tcfe Total Resource Potential www.eqt.com 6
  6. Q2 2011 Earnings Call – EQT Corp – slide 6
    Marcellus Play 520,000 EQT acres 10 wells 12.2 Tcfe 3P OH 20 Tcfe resource potential 6.0 MM / well* 57 wells PA 7.3 Bcfe EUR / well MD 5,300 ft average length 33 wells 100 wells in 2011 WV EQT Acreage Extended laterals…
  7. Q2 2011 Earnings Call – EQT Corp – slide 7
    Marcellus Economics 64% ATAX Return at 5.00 NYMEX 700% Wellhead IRR After Gathering, Transmission, LOE IRR 600% After Tax IRR 500% All-in returns 400% IRR 300% 200% 100% 0% 4.00 5.00 6.00 7.00 8.00 NYMEX…
  8. Q2 2011 Earnings Call – EQT Corp – slide 8
    Marcellus New Frac Design 9
  9. Q2 2011 Earnings Call – EQT Corp – slide 9
    Marcellus New Frac Design Illustrative Preliminary Results, 900 of horizontal wellbore Standard Design New Design 3 Stages 6 Stages Total number 677 1843 of events Average New Design events per 226 307 stage Area of…
  10. Q2 2011 Earnings Call – EQT Corp – slide 10
    Huron Play 2.7 MM EQT acres 7.4 Tcfe 3P WV 10 Tcfe resource potential 1.4 Bcfe EUR / well KY 1.4 MM / well 120 wells 5,200 ft. average length VA 120 wells in 2011 EQT Acreage High liquids content adds to return Focus…
  11. Q2 2011 Earnings Call – EQT Corp – slide 11
    Production By Play Marcellus Shale Drilling Driving Growth 800 Marcellus Huron horizontal CBM Vertical Production MMcfd 400 Began horizontal drilling 0 2006 2007 2008 2009 2010 2011 E 2012 E www.eqt.com 12
  12. Q2 2011 Earnings Call – EQT Corp – slide 12
    EQTs Performance Horizontal Shale Drilling Driving Growth Horizontal Marcellus Total Sales Volumes 200 600,000 120 500,000 100 Number of wells 150 400,000 80 Feet of pay 300,000 60 Bcfe 200,000 40 100 100,000…
  13. Q2 2011 Earnings Call – EQT Corp – slide 13
    Industry Leading Cost Structure 6.00 3-year F&D (all sources) Mean = 2.78 0.93 /Mcfe 3.00 0.00 APA PVA APC WLL SWN DVN WMB VQ UPL NBL BEXP QEP EP NFX GDP RRC…
  14. Q2 2011 Earnings Call – EQT Corp – slide 14
    EQT Midstream Gather and transport EQT Productions gas 11,000 miles of gathering pipe 256,000 HP compression 700 miles of FERC regulated pipelines Equitrans interconnects 5 interstate pipelines 63 Bcfe of underground storage 2011…
  15. Q2 2011 Earnings Call – EQT Corp – slide 15
    Equitrans Expansion Existing capacity 700 MMcfd Current expansion opportunities: 2011 2012 Capacity Addition 130 430 (MMcfd) Capital 110 120 (MM) Future expansion opportunities: 470 MMcfd for 50 MM Legend Existing…
  16. Q2 2011 Earnings Call – EQT Corp – slide 16
    Interstate Capacity Contract with El Paso TGP Northeast Expansion Project Links EQT Production to northeast and southeast markets 350,000 Dth/d capacity to New York 300,000 Dth/d capacity to Henry Hub Expected completion YE…
  17. Q2 2011 Earnings Call – EQT Corp – slide 17
    Regional Distributor . PA, WV, KY 275,000 customers Natural Gas Vehicles (NGV) Built refueling station in Pittsburgh Targeting return to base fleets www.eqt.com 18
  18. Q2 2011 Earnings Call – EQT Corp – slide 18
    Pittsburghs Strip District NGV Station 1.6 million Equitable Gas Company investment 0.7 million Pennsylvania state grant Break-even = 20 vehicles 12% return = 45 vehicles Targeting 1,500 return to base vehicles within 5 miles…
  19. Q2 2011 Earnings Call – EQT Corp – slide 19
    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…
  20. Q2 2011 Earnings Call – EQT Corp – slide 20
    Drilling and Fracing EQT meets or exceeds all federal, state and local regulations Industry leading spill prevention plans and results Supports the disclosure of frac fluid additives Utilize multiple barriers to protect drinking…
  21. Q2 2011 Earnings Call – EQT Corp – slide 21
    Investment Summary Extensive reserves of natural gas Proven ability to profitably develop our reserves Committed to maximize shareholder value by: Accelerating the monetization of our vast reserves Operating in a safe and…
  22. Q2 2011 Earnings Call – EQT Corp – slide 22
    Appendix www.eqt.com 23
  23. Q2 2011 Earnings Call – EQT Corp – slide 23
    Capital Investment Summary Midstream 1,258 1,270 Production Distribution 933 889 777 MM *Excludes acquisitions www.eqt.com 25
  24. Q2 2011 Earnings Call – EQT Corp – slide 24
    Ample Financial Flexibility to Execute Business Plan Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa1 BBB BBB Outlook Negative Negative Stable Commercial paper P-2 A-3 F2 Strong balance sheet Manageable debt…
  25. Q2 2011 Earnings Call – EQT Corp – slide 25
    Risk Management Hedging 2011** 2012 2013 Swaps Total Volume (Bcf) 45 80 29 Average Price per Mcf (NYMEX)* 4.88 5.31 5.64 Puts Total Volume (Bcf) 1 Average Floor Price per Mcf (NYMEX)* 7.35 Collars Total Volume (Bcf) 11 21…
  26. Q2 2011 Earnings Call – EQT Corp – slide 26
    Price Reconciliation Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 Revenues ( / Mcfe) Average NYMEX price 4.31 4.09 4.21 4.70 Hedge impact 0.38 0.55 0.42 0.39 Average basis 0.18 0.13 0.19 0.18 Average…
  27. Q2 2011 Earnings Call – EQT Corp – slide 27
    Per Unit Operating Expenses www.eqt.com 29
  28. Q2 2011 Earnings Call – EQT Corp – slide 28
    2010 Operational Review Top Marcellus Wells Flow (MMcfd) Operator Well County, State 23.0* EQT Corp 590036 Phillips Greene, PA 22.2* EQT Corp. 590384 Cooper Greene, PA 21.0 Atlas Energy Resources Unknown Westmoreland, PA 20.0 Cabot…
  29. Q2 2011 Earnings Call – EQT Corp – slide 29
    Marcellus Horizontal Decline Curve 1,400 1,200 EUR / well 7.3 Bcfe Cost / well 6.0 million 1,000 Unit development cost / Mcfe 0.82 ATAX IRR 5 NYMEX 64% 800 MMcfe / Yr 600 400 200 - 1 3 5 7 9 11 13 15 17 19 21…

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