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December 2012 Analyst Presentation – EQT Corp

EQT Corp · Dec 20, 2012 · 35 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. December 2012 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation December 20, 2012
  2. December 2012 Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 5.4 Tcfe Proved; 35 years R/P 21.4 Tcfe 3P; 150 years R/P 34 Tcfe Potential; 200 years R/P Proven ability to profitably develop our reserves 30% production sales volume…
  3. December 2012 Analyst Presentation – EQT Corp – slide 3
    Leading Appalachian E&P Company 2011 adjusted operating income* 658.4 million 5.4 Tcfe proved res. 11,000 pipeline miles 275,000 customers 3.5 MM acres *Excludes gain on dispositions; see slide for non-GAAP measures…
  4. December 2012 Analyst Presentation – EQT Corp – slide 4
    Reserves By Play December 31, 2011 5.4 Tcfe proved reserves 21.4 Tcfe 3P reserves Huron 1.1 Huron 7.7 Marcellus 3.4 Marcellus 12.7 Other 0.9 34 Tcfe Total Resource Potential www.eqt.com 8
  5. December 2012 Analyst Presentation – EQT Corp – slide 5
    Production By Play Marcellus Shale drilling driving growth 1,200 Marcellus Huron horizontal 1,000 CBM Vertical 800 Production MMcfd 600 Began horizontal drilling 400 200 0 2007 2009 2010 2011 2012E 2013E 2006 2008…
  6. December 2012 Analyst Presentation – EQT Corp – slide 6
    Marcellus Play 530,000 EQT acres 12.7 Tcfe 3P OH 17 20.8 Tcfe resource potential 6.1 MM / well* PA 52 7.3 Bcfe EUR / well* 153 wells in 2013 MD 84 4,500 ft average length in 2013 WV EQT Acreage * Based on standard well…
  7. December 2012 Analyst Presentation – EQT Corp – slide 7
    Marcellus Play 60-Foot cluster spacing 30-Foot cluster spacing Standard well design 134 of 153 wells in 2013 19 of 153 wells in 2013 40% higher IP 20-25% higher EUR 1.2 MM / well incremental cost Applicable to a third of EQT…
  8. December 2012 Analyst Presentation – EQT Corp – slide 8
    Upper Devonian Play 170,000 EQT acres 11 wells in 2013 4,200 avg lateral length in 2013 5 - 6 MM / well 2013 drilling program to delineate acreage position 12
  9. December 2012 Analyst Presentation – EQT Corp – slide 9
    Utica Play 16,000 gross acres 13,600 net acres Guernsey County, Ohio 1 or 2 wells in 2012 8 wells in 2013 6,000 avg lateral length in 2013 9.4 MM / well EQT CNX Chesapeake Enervest Anadarko Gulfport Range Eclipse XTO HG…
  10. December 2012 Analyst Presentation – EQT Corp – slide 10
    Industry Leading Cost Structure 7.50 3-year F&D (all sources) 5.00 Mean = 2.07 1.13 /Mcfe 2.50 0.00 PETD PXD NFX PVA HK CLR SWN EP SM PQ VQ SD WLL COG GDP EOG QEP…
  11. December 2012 Analyst Presentation – EQT Corp – slide 11
    Marcellus Economics 53% ATAX Return at 4.00 NYMEX 200% Wellhead IRR After Gathering, Transmission, LOE IRR After Tax IRR 150% 100% 50% 0% 3.00 3.50 4.00 4.50 5.00 NYMEX www.eqt.com 15
  12. December 2012 Analyst Presentation – EQT Corp – slide 12
    Midstream Overview Transmission & Storage Gathering Marketing EQT Midstream Total* Transmission capacity (BBtu/d) 1,700 Miles of transmission pipeline 700 Marcellus gathering capacity (BBtu/d) 1,115 Miles of Marcellus gathering…
  13. December 2012 Analyst Presentation – EQT Corp – slide 13
    Midstream Overview EQT Production sales drives Midstream EBITDA growth 70% of Midstream revenues from EQT Corporation Fixed fee contracts Transmission contracts with 10-year weighted average life* Minimal direct commodity exposure…
  14. December 2012 Analyst Presentation – EQT Corp – slide 14
    EQT Midstream Equitrans - Sunrise Project Owned by EQT Corp. Operated by EQT Midstream Partners 225 MM capital project 314 BBtu/d capacity Connects MarkWest processing plant to TETCO Expansion opportunity Incremental 470…
  15. December 2012 Analyst Presentation – EQT Corp – slide 15
    EQT Midstream Marcellus Gathering Total Tioga 2012 2013 capacity year-end capacity after 65 MMcf/d (MMcfd) capacity additions additions Pennsylvania 765 400 1,165 West Virginia 350 0 350 Longhorn 100 MMcf/d Total 1,115 400 1,515…
  16. December 2012 Analyst Presentation – EQT Corp – slide 16
    Strategically Located Marcellus Click to editAssets Master title style EQT Midstream Partners Asset Overview Assets Assets Overlay Marcellus Fairway Equitrans Transmission & Storage 1,400 BBtu/d capacity 397 BBtu/d throughput in…
  17. December 2012 Analyst Presentation – EQT Corp – slide 17
    Click to edit Master title style Organic Growth Opportunities Completed in 2012 Project Locations Blacksville Compression Expansion 200 BBtu/d incremental firm capacity Total cost 30 million 2013 Expansion Projects Low Pressure…
  18. December 2012 Analyst Presentation – EQT Corp – slide 18
    Dropdown Growth Opportunities Click to edit Master title style Transmission and Gathering Sponsor has growing inventory of midstream assets Tioga 65 MMcf/d Jupiter Sunrise 530 MMcf/d 314 BBtu/d Mercury 100 MMcf/d Pluto…
  19. December 2012 Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Partners, LP EQT Alignment EQT received 231 MM cash from IPO (NYSE: EQM) Maintain control of important complementary asset EQT is general partner Aligns sponsor with EQT Midstream Partners Establish a source of ongoing…
  20. December 2012 Analyst Presentation – EQT Corp – slide 20
    Distribution Pending Transaction Sale of Equitable Gas to Peoples Natural Gas Expected approval by year-end 2013 720MM cash + midstream assets Marcellus midstream assets 40 MM annual EBITDA 200 miles of transmission pipe 15 Bcf…
  21. December 2012 Analyst Presentation – EQT Corp – slide 21
    Pittsburghs Strip District NGV Station 1.6 million Equitable Gas Company investment Break-even = 200,000 gal/yr. 12% return = 450,000 gal/yr. Vehicles have the potential to use 20 25 Bcf / year in the U.S. Expect break-even in…
  22. December 2012 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. December 2012 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. December 2012 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. December 2012 Analyst Presentation – EQT Corp – slide 25
    Appendix www.eqt.com 29
  26. December 2012 Analyst Presentation – EQT Corp – slide 26
    Capital Investment Summary 1,800 1,515 1,600 1,400 1,258 1,300 1,124 1,200 MM 933 889 1,000 800 600 400 200 0 2008 2009 2010 2011 2012F 2013F Midstream Production Distribution *Excludes acquisitions and EQT Midstream…
  27. December 2012 Analyst Presentation – EQT Corp – slide 27
    Interstate Capacity Contracts Access to downstream markets TGP: 350,000 Dth/d to NJ/NY TETCO: 150,000 Dth/d to NJ, 350 MDth/d year-end 2014 300 MDth/d Backhaul to Gulf Coast 150 MDth/d TGP: 300,000 Dth/d TETCO: 200,000 Dth/d to…
  28. December 2012 Analyst Presentation – EQT Corp – slide 28
    Liquids Marcellus Wet Gas Economics 35% of EQTs Marcellus acreage is wet 120 MMcfe / day incremental processing capacity by YE 2012 Additional 100 MMcfe / day capacity by YE 2013 Liquids Fractionation NGLs 2.15 / Mcf(1) (C3+)…
  29. December 2012 Analyst Presentation – EQT Corp – slide 29
    Ample Financial Flexibility to Execute Business Plan Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa2 BBB BBB Outlook Negative Stable Negative Commercial paper P-2 A-2 F2 Strong balance sheet As of September 30,…
  30. December 2012 Analyst Presentation – EQT Corp – slide 30
    Risk Management Hedging 2012** 2013 2014 2015 Swaps Total Volume (Bcf) 32 108 62 51 Average Price per Mcf (NYMEX)* 4.71 4.75 4.61 4.70 Collars Total Volume (Bcf) 5 25 24 23 Average Floor Price per Mcf (NYMEX)* 6.51 4.95 5.05…
  31. December 2012 Analyst Presentation – EQT Corp – slide 31
    Price Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Revenues ( / Mcfe) Average NYMEX price 2.81 4.19 2.59 4.21 Hedge impact 1.10 0.44 1.30 0.42 Average basis (0.03) 0.08 (0.01)…
  32. December 2012 Analyst Presentation – EQT Corp – slide 32
    Per Unit Operating Expenses Three Months Nine Months Ended Ended September 30, September 30, 2012 2011 2012 2011 Production segment costs: ( / Mcfe) LOE 0.18 0.22 0.19 0.21 Production taxes 0.16 0.25 0.17* 0.21 SG&A 0.35 0.30…
  33. December 2012 Analyst Presentation – EQT Corp – slide 33
    Appendix Non-GAAP Reconciliation Adjusted Midstream EBITDA (millions) 2008 2009 2010 2011 Midstream operating income 120 154 179 417 Add: depreciation and amortization 35 53 62 57 Less: gains on dispositions 203 Less: Big Sandy…
  34. December 2012 Analyst Presentation – EQT Corp – slide 34
    Marcellus Play Type Curves by Area, 5,300 lateral Curve 3 : 6.4 Bcf Curve 2 : 7.4 Bcf 9.0 Bcf 7.4 Bcf 6.4 Bcf Curve 1: 9.0 Bcf www.eqt.com 38
  35. December 2012 Analyst Presentation – EQT Corp – slide 35
    Marcellus Play Acres Within Each Type Curve Area Curve Acres, PA Acres Wet, PA Acres Dry, PA % Wet Locations 9.0 112,500 1,900 110,600 2% 922 7.4 89,600 600 89,000 1% 734 6.4 51,500 27,000 24,500 52% 422 253,600 29,500 224,100 12%…

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