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May 2014 Analyst Presentation – EQT Corp

EQT Corp · May 10, 2014 · 40 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. May 2014 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation May 2014
  2. May 2014 Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 8.3 Tcfe Proved; 23 years R/P 36.4 Tcfe 3P; 100 years R/P 44 Tcfe Total Resource Potential; 120 years R/P Proven ability to profitably develop our reserves 24%…
  3. May 2014 Analyst Presentation – EQT Corp – slide 3
    Leading Appalachian E&P Company 2013 Operating Income of 654.6 million 10,400 pipeline miles 8.3 Tcfe proved reserves 3.6 MM acres 6
  4. May 2014 Analyst Presentation – EQT Corp – slide 4
    Production By Play Marcellus Shale drilling driving growth 1,600 Marcellus 1,400 Huron horizontal CBM 1,200 Vertical 1,000 Production MMcf/d 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010…
  5. May 2014 Analyst Presentation – EQT Corp – slide 5
    Reserves By Play Proved Reserve Growth 36.4 Tcfe 3P reserves (as of December 31, 2013) 9,000 8,348 Upper Devonian 215 8,000 CBM/Other 861 Huron 7,000 Marcellus 1,316 6,004 6,000 5,220 5,365 761 Huron 11.5 Bcfe 5,000…
  6. May 2014 Analyst Presentation – EQT Corp – slide 6
    Marcellus Play Near term development focused in three areas Central PA 560,000 EQT acres 87% NRI / 85% HBP 18.5 Tcfe 3P 23.9 Tcfe total resource potential Southwestern PA 194 wells in 2014 70% YOY production growth 50% of…
  7. May 2014 Analyst Presentation – EQT Corp – slide 7
    Marcellus Play Southwestern PA Prolific dry gas region 110,000 EQT acres 1,260 locations 182 wells online* 102 wells in 2014 Kevech Pad 4,800 foot laterals 2 wells 2,762 Avg Lateral Length per well 87 acre spacing 10,112 Mcfe…
  8. May 2014 Analyst Presentation – EQT Corp – slide 8
    Marcellus Play Northern West Virginia Wet Gas Area Enhanced economics from liquids uplift Big 176 Pad 6 wells 3,688 Avg Lateral Length per well 90,000 EQT acres 8,103 Mcfe Avg 30-day IP per well 1,040 locations 158 wells…
  9. May 2014 Analyst Presentation – EQT Corp – slide 9
    Marcellus Play Central Pennsylvania Early stages of acreage delineation 80,000 EQT acres Frano Pad 2 wells 3,614 Avg Lateral Length per well 720 locations 7,970 Mcfe Avg 30-day IP per well 50 wells online* 20 wells in 2014…
  10. May 2014 Analyst Presentation – EQT Corp – slide 10
    Marcellus Economics IRR - Blended Marcellus Development Areas 250% Wellhead After OpEx After Tax 200% 150% 100% 50% PRICE ATAX IRR 4.00 58% 4.50 76% 5.00 96% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price See…
  11. May 2014 Analyst Presentation – EQT Corp – slide 11
    Upper Devonian Play 170,000 EQT acres 5 - 6 MM / well 43 wells in 2014 6.0 Bcfe EUR / well* 4,000 ft avg lateral length in 2014 2014 drilling program to delineate acreage position EQT acreage *Based on 4,800 lateral…
  12. May 2014 Analyst Presentation – EQT Corp – slide 12
    Huron Play Kentucky Targeting high-return, liquid-rich acreage 1.4 MM EQT acres 85 % Wet; 15 % Dry 10,000+ horizontal locations 889 horizontal wells online** 120 wells planned in 2014 6,000 foot laterals WV 1.4 Bcfe EUR /…
  13. May 2014 Analyst Presentation – EQT Corp – slide 13
    Pending Acquisition of Permian Basin Assets Texas Stacked Horizontal Potential 73,000 net acres 78% WI / 62% NRI 98% HBP Howard Mitchell Nolan 500 MMBOE of resource potential Stacked Play Opportunity Upper Wolfcamp Lower…
  14. May 2014 Analyst Presentation – EQT Corp – slide 14
    Industry Leading Cost Structure 3-year F&D (all sources) 6.00 Mean = 2.74 4.00 0.88 /Mcfe 2.00 0.00 SM SWN CHK RRC EQT EOG EGN AR STR COG NFG NFX XEC RICE WLL CXO…
  15. May 2014 Analyst Presentation – EQT Corp – slide 15
    Liquids Volume Growth and Marcellus Price Uplift 35% of EQTs Marcellus acreage is wet Marcellus Liquids Price Uplift NGL Volume Growth (1200 Btu Gas) 7,000 8.00 NGLs (1.8 Gal/Mcf) 6,000 7.00 BTU Premium 6.76 NYMEX (1) 6.00…
  16. May 2014 Analyst Presentation – EQT Corp – slide 16
    Midstream Overview Transmission & Storage Legend Transmission Gathering Gathering EQT Leases Marketing Storage Pool Marcellus Huron EQT Utica Midstream Total Transmission capacity (BBtu/d) 2,700 Miles of transmission…
  17. May 2014 Analyst Presentation – EQT Corp – slide 17
    Midstream Overview EQT Production sales drive EQT Midstream EBITDA growth 70% of Midstream revenues from EQT Corporation Fixed fee contracts Transmission contracts with 15-year weighted average life* Minimal direct commodity…
  18. May 2014 Analyst Presentation – EQT Corp – slide 18
    EQT Midstream Partners, LP (NYSE: EQM) Transmission and storage 2.25 Tbtu/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of working gas storage Gathering System Jupiter Gathering System Highlights market…
  19. May 2014 Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Partners, LP Jupiter Gathering System EQT sold to EQT Midstream Partners on May 7, 2014 1.18 billion 35 mile gathering system in Greene and Washington Counties in Pennsylvania 10-year firm transportation agreement…
  20. May 2014 Analyst Presentation – EQT Corp – slide 20
    EQT Midstream Marcellus Gathering Total Tioga 2013 2014 capacity 65 MMcf/d year-end capacity after (MMcf/d) capacity additions additions Pennsylvania 1,150 120 1,270 Longhorn West Virginia 350 320 670 130 MMcf/d Total 1,500 440…
  21. May 2014 Analyst Presentation – EQT Corp – slide 21
    EQT Midstream Transmission Allegheny Valley Connector EQT acquired December 2013 200 mile FERC-regulated interstate pipeline 450 BBtu/d capacity 15 Bcf working gas storage 90 MM CAPEX in 2014 40 MM annual EBITDA in 2014…
  22. May 2014 Analyst Presentation – EQT Corp – slide 22
    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…
  23. May 2014 Analyst Presentation – EQT Corp – slide 23
    Drilling and Hydraulic Fracturing 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…
  24. May 2014 Analyst Presentation – EQT Corp – slide 24
    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…
  25. May 2014 Analyst Presentation – EQT Corp – slide 25
    Appendix 28
  26. May 2014 Analyst Presentation – EQT Corp – slide 26
    Capital Investment Summary 3.0 2.4 2.5 1.8 2.0 1.4 B 1.5 1.2 1.1 1.0 0.5 0.0 2010 2011 2012 2013 2014F Midstream Production Distribution Excludes acquisitions and EQT Midstream Partners, LP 29
  27. May 2014 Analyst Presentation – EQT Corp – slide 27
    Marcellus Play Type Curves by Area - 4,800 lateral 12,000 Southwestern PA 11,000 10,000 Northern WV - Wet 9,000 Central PA 8,000 Daily Production (Mcfed) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 11 21…
  28. May 2014 Analyst Presentation – EQT Corp – slide 28
    Marcellus Play Acres Within Each Core Development Area EQT has 560,000 total Marcellus acres Expect to develop in three areas for several years Active areas represent 280,000 acres and 3,020 locations EQT has 130,000 additional…
  29. May 2014 Analyst Presentation – EQT Corp – slide 29
    Marcellus Economics IRR - Southwestern PA 300% Wellhead After OpEx After Tax 250% 200% 150% 100% PRICE ATAX IRR 50% 4.00 63% 4.50 88% 5.00 119% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price Oil price held constant at…
  30. May 2014 Analyst Presentation – EQT Corp – slide 30
    Marcellus Economics IRR - Northern WV Wet Gas Area 300% Wellhead After OpEx After Tax 250% 200% 150% 100% PRICE ATAX IRR 50% 4.00 82% 4.50 99% 5.00 118% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price Oil price held…
  31. May 2014 Analyst Presentation – EQT Corp – slide 31
    Marcellus Economics IRR - Central PA 80% Wellhead After OpEx After Tax 70% 60% 50% 40% 30% 20% PRICE ATAX IRR 4.00 20% 10% 4.50 28% 5.00 37% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price Oil price held constant…
  32. May 2014 Analyst Presentation – EQT Corp – slide 32
    Upper Devonian IRR 160% Wellhead Wellhead After OpEx ATAX 140% 120% 100% 80% 60% 40% NYMEX ATAX IRR 4.00 44% 20% 4.50 55% 5.00 66% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 35
  33. May 2014 Analyst Presentation – EQT Corp – slide 33
    Huron Play IRR 120% Wellhead Wellhead After OpEx ATAX 100% 80% 60% 40% PRICE ATAX IRR 20% 4.00 35% 4.50 42% 5.00 50% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 36
  34. May 2014 Analyst Presentation – EQT Corp – slide 34
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix* NYMEX 11% 12% TCO 11% 12% Tetco M2 48% 50% Tetco M3 26% 28% *2014 forecast 37
  35. May 2014 Analyst Presentation – EQT Corp – slide 35
    Pittsburghs Strip District NGV Station Sales Volumes 1.6 million investment 12% return = 450,000 gal/yr. Vehicles have the potential to use 15% 20 25 Tcf / year in the U.S. 20% 45% 20% EQT Fleet Refuse Taxi & Shuttle…
  36. May 2014 Analyst Presentation – EQT Corp – slide 36
    Ample Financial Flexibility to Execute Business Plan Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ( thousands, except net debt / capital) March 31,…
  37. May 2014 Analyst Presentation – EQT Corp – slide 37
    Risk Management Hedging 2014** 2015 2016*** Fixed Price Total Volume (Bcf) 171 131 60 Average Price per Mcf (NYMEX)* 4.36 4.37 4.45 Collars Total Volume (Bcf) 18 23 Average Floor Price per Mcf (NYMEX)* 5.05 5.03 Average Cap…
  38. May 2014 Analyst Presentation – EQT Corp – slide 38
    Price Reconciliation Three Months Ended March 31, in thousands (unless noted) 2014 2013 LIQUIDS NGLs: Gross NGL Revenue 72,114 51,423 Oil: Net Oil Revenue 4,214 4,986 Total Liquids Revenue 76,328 56,409 GAS Gas Revenue 516,636 270,427…
  39. May 2014 Analyst Presentation – EQT Corp – slide 39
    Per Unit Operating Expenses Three Months Ended UNIT COSTS March 31, 2014 2013 Production segment costs: ( / Mcfe) LOE 0.14 0.16 Production taxes 0.16 0.15 SG&A 0.24 0.28 0.54 0.59 Midstream segment costs: ( / Mcfe) Gathering…
  40. May 2014 Analyst Presentation – EQT Corp – slide 40
    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted Midstream EBITDA (millions) 2008 2009 2010 2011 2012 2013 Midstream operating income 120 154 179 417 237 329 Add: depreciation and amortization 35 53 62 57 65 75 Less: gains on…

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