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Q1 2014 Earnings Call – EQT Corp

EQT Corp · Apr 24, 2014 · 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. Q1 2014 Earnings Call – EQT Corp – slide 1
    Analyst Presentation April 24, 2014
  2. Q1 2014 Earnings Call – 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 44.1 Tcfe Total Resource Potential; 120 years R/P Proven ability to profitably develop our reserves 24%…
  3. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – EQT Corp – slide 5
    Reserves By Play Proved Reserve Growth 36.4 Tcfe 3P reserves 9,000 (as of December 31, 2013) Upper Devonian 8,348 215 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. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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 2 wells 4,800 foot laterals 2,762 Avg Lateral Length per well 10,112 Mcfe Avg 30-day IP per…
  8. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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. Q1 2014 Earnings Call – 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 WV 6,000 foot laterals 1.4 Bcfe EUR /…
  13. Q1 2014 Earnings Call – EQT Corp – slide 13
    Industry Leading Cost Structure 3-year F&D (all sources) 6.00 Mean = 2.74 4.00 1.30 /Mcfe 2.00 0.00 SM SWN CHK RRC EQT EOG EGN AR STR COG NFG NFX XEC RICE WLL CXO…
  14. Q1 2014 Earnings Call – EQT Corp – slide 14
    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…
  15. Q1 2014 Earnings Call – EQT Corp – slide 15
    Midstream Overview Transmission & Storage Legend Transmission Gathering Gathering EQT Leases Storage Pool Marketing Marcellus Huron EQT Utica Midstream Total Transmission capacity (BBtu/d) 2,700 Miles of transmission…
  16. Q1 2014 Earnings Call – EQT Corp – slide 16
    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…
  17. Q1 2014 Earnings Call – EQT Corp – slide 17
    EQT Midstream Partners, LP (NYSE: EQM) Equitrans transmission and storage 2.25 Tbtu/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of working gas storage Highlights market valuation of midstream assets…
  18. Q1 2014 Earnings Call – EQT Corp – slide 18
    EQT Midstream Marcellus Gathering Total 2013 2014 capacity year-end capacity after Tioga (MMcf/d) capacity additions additions 65 MMcf/d Pennsylvania 1,150 120 1,270 West Virginia 350 320 670 Longhorn Total 1,500 440 1,940 130…
  19. Q1 2014 Earnings Call – EQT Corp – slide 19
    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…
  20. Q1 2014 Earnings Call – EQT Corp – slide 20
    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…
  21. Q1 2014 Earnings Call – EQT Corp – slide 21
    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 protect…
  22. Q1 2014 Earnings Call – EQT Corp – slide 22
    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…
  23. Q1 2014 Earnings Call – EQT Corp – slide 23
    Appendix 26
  24. Q1 2014 Earnings Call – EQT Corp – slide 24
    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 27
  25. Q1 2014 Earnings Call – EQT Corp – slide 25
    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…
  26. Q1 2014 Earnings Call – EQT Corp – slide 26
    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…
  27. Q1 2014 Earnings Call – EQT Corp – slide 27
    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…
  28. Q1 2014 Earnings Call – EQT Corp – slide 28
    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…
  29. Q1 2014 Earnings Call – EQT Corp – slide 29
    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…
  30. Q1 2014 Earnings Call – EQT Corp – slide 30
    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 33
  31. Q1 2014 Earnings Call – EQT Corp – slide 31
    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 34
  32. Q1 2014 Earnings Call – EQT Corp – slide 32
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix* *2014 forecast 35
  33. Q1 2014 Earnings Call – EQT Corp – slide 33
    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 All…
  34. Q1 2014 Earnings Call – EQT Corp – slide 34
    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,…
  35. Q1 2014 Earnings Call – EQT Corp – slide 35
    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…
  36. Q1 2014 Earnings Call – EQT Corp – slide 36
    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…
  37. Q1 2014 Earnings Call – EQT Corp – slide 37
    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…
  38. Q1 2014 Earnings Call – EQT Corp – slide 38
    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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