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Q4 2012 Earnings Call – EQT Corp

EQT Corp · Jan 24, 2013 · 38 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. Q4 2012 Earnings Call – EQT Corp – slide 1
    Analyst Presentation January 24, 2013
  2. Q4 2012 Earnings Call – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 6.0 Tcfe Proved; 23 years R/P 25.9 Tcfe 3P; 100 years R/P 35.4 Tcfe Potential; 135 years R/P Proven ability to profitably develop our reserves 30% production sales…
  3. Q4 2012 Earnings Call – EQT Corp – slide 3
    Leading Appalachian E&P Company 2012 operating income 470.5 million 6.0 Tcfe proved res. 11,000 pipeline miles 275,000 customers 3.5 MM acres www.eqt.com 6
  4. Q4 2012 Earnings Call – EQT Corp – slide 4
    Reserves By Play December 31, 2012 6.0 Tcfe proved reserves 25.9 Tcfe 3P reserves Huron 0.9 Huron 7.4 Other 0.8 Marcellus 4.3 Marcellus 15.0 35.4 Tcfe Total Resource Potential www.eqt.com 7
  5. Q4 2012 Earnings Call – 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 2012 2013E 2006 2007 2008 2009 2010 2011…
  6. Q4 2012 Earnings Call – EQT Corp – slide 6
    Marcellus Play 530,000 EQT acres 15.0 Tcfe 3P OH 17 19.5 Tcfe resource potential 6.1 MM / well* PA 153 wells in 2013 52 7.3 Bcfe EUR / well* MD 84 4,500 ft average length in 2013 WV EQT Acreage * Based on standard well…
  7. Q4 2012 Earnings Call – 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. Q4 2012 Earnings Call – EQT Corp – slide 8
    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 11
  9. Q4 2012 Earnings Call – EQT Corp – slide 9
    Upper Devonian Play 170,000 EQT acres 5 - 6 MM / well 11 wells in 2013 4,200 avg lateral length in 2013 2013 drilling program to delineate acreage position 12
  10. Q4 2012 Earnings Call – EQT Corp – slide 10
    Utica Play 16,000 gross acres 13,600 net acres Guernsey County, Ohio 9.4 MM / well 1 or 2 wells in 2012 8 wells in 2013 6,000 avg lateral length in 2013 EQT CNX Chesapeake Range Enervest Eclipse Anadarko XTO Gulfport HG Energy…
  11. Q4 2012 Earnings Call – EQT Corp – slide 11
    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…
  12. Q4 2012 Earnings Call – EQT Corp – slide 12
    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+)…
  13. Q4 2012 Earnings Call – EQT Corp – slide 13
    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…
  14. Q4 2012 Earnings Call – EQT Corp – slide 14
    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…
  15. Q4 2012 Earnings Call – EQT Corp – slide 15
    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…
  16. Q4 2012 Earnings Call – EQT Corp – slide 16
    EQT Midstream Marcellus Gathering Total 2012 2013 capacity year-end capacity after (MMcfd) capacity additions additions Pennsylvania 765 400 1,165 West Virginia 350 0 350 Total 1,115 400 1,515 2013 CAPEX 190 MM 2013…
  17. Q4 2012 Earnings Call – EQT Corp – slide 17
    Click to edit Master title style EQT Midstream Partners, LP 20
  18. Q4 2012 Earnings Call – EQT Corp – slide 18
    Strategically Located Marcellus Click to editAssets Master title style EQT Midstream Partners Asset Overview Assets Assets Overlay Marcellus Fairway Equitrans Transmission & Storage 1.4 TBtu/d capacity 606 BBtu/d throughput in…
  19. Q4 2012 Earnings Call – EQT Corp – slide 19
    Organic Growth Opportunities Click to edit Master title style Completed in 2012 Projects Relieve Bottlenecks Blacksville Compression Expansion 200 BBtu/d incremental capacity Total cost 30 million 2013 Expansion Projects Low…
  20. Q4 2012 Earnings Call – EQT Corp – slide 20
    Dropdown Growth Opportunities Click to edit Master title style Transmission EQT Sunrise Pipeline Project Project Location Completed in 2012 42 miles of 24-inch diameter pipe Connects MarkWest processing plant to TETCO 314…
  21. Q4 2012 Earnings Call – EQT Corp – slide 21
    Dropdown Growth Opportunities Click to edit Master title style Gathering EQT Marcellus Gathering Systems* Tioga 65 MMcf/d Longhorn 100 MMcf/d Terra Mercury 80 MMcf/d 135 MMcf/d Applegate 150 MMcf/d Saturn 120 MMcf/d…
  22. Q4 2012 Earnings Call – EQT Corp – slide 22
  23. Q4 2012 Earnings Call – EQT Corp – slide 23
    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…
  24. Q4 2012 Earnings Call – EQT Corp – slide 24
    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…
  25. Q4 2012 Earnings Call – EQT Corp – slide 25
    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…
  26. Q4 2012 Earnings Call – EQT Corp – slide 26
    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…
  27. Q4 2012 Earnings Call – EQT Corp – slide 27
    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…
  28. Q4 2012 Earnings Call – EQT Corp – slide 28
    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…
  29. Q4 2012 Earnings Call – EQT Corp – slide 29
    Appendix www.eqt.com 32
  30. Q4 2012 Earnings Call – EQT Corp – slide 30
    Capital Investment Summary 1,800 1,515 1,600 1,400 1,124 1,097 1,200 MM 933 889 1,000 800 600 400 200 0 2009 2010 2011 2012 2013F Midstream Production Distribution *Excludes acquisitions and EQT Midstream Partners,…
  31. Q4 2012 Earnings Call – EQT Corp – slide 31
    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…
  32. Q4 2012 Earnings Call – EQT Corp – slide 32
    Ample Financial Flexibility to Execute Business Plan Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa2 BBB BBB- Outlook Under review for downgrade Stable Stable Commercial paper P-2 A-2 F3 Strong balance sheet…
  33. Q4 2012 Earnings Call – EQT Corp – slide 33
    Risk Management Hedging 2013 2014 2015 Swaps Total Volume (Bcfe) 121 79 65 Average Price per Mcf (NYMEX)* 4.70 4.53 4.60 Collars Total Volume (Bcfe) 25 24 23 Average Floor Price per Mcf (NYMEX)* 4.95 5.05 5.03 Average Cap…
  34. Q4 2012 Earnings Call – EQT Corp – slide 34
    Price Reconciliation *Due to the sale of unused capacity on the El Paso 300 line that was not under long-term resale agreements at prices below the capacity charge, third-party gathering and transmission rates increased by 0.04 per…
  35. Q4 2012 Earnings Call – EQT Corp – slide 35
    Per Unit Operating Costs Three Months Ended Year Ended December 31, December 31, 2012 2011 2012 2011 Production segment costs: ( / Mcfe) LOE 0.15 0.20 0.18 0.20 Production taxes* 0.16 0.18 0.16 0.20 SG&A 0.29 0.29 0.31 0.31…
  36. Q4 2012 Earnings Call – EQT Corp – slide 36
    Appendix Non-GAAP Reconciliation Adjusted Midstream EBITDA (millions) 2008 2009 2010 2011 2012 Midstream operating income 120 154 179 417 237 Add: depreciation and amortization 35 53 62 57 65 Less: gains on dispositions 203 0…
  37. Q4 2012 Earnings Call – EQT Corp – slide 37
    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 40
  38. Q4 2012 Earnings Call – EQT Corp – slide 38
    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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