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July 2015 Analyst Presentation – EQT Corp

EQT Corp · Jul 30, 2015 · 42 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. July 2015 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation July 30, 2015
  2. July 2015 Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 10.7 Tcfe Proved; 22 years R/P 42.8 Tcfe 3P; 87 years R/P 53 Tcfe Total Resource Potential; 108 years R/P Proven ability to profitably develop our reserves 25%…
  3. July 2015 Analyst Presentation – EQT Corp – slide 3
    Leading Appalachian E&P Company 2014 Operating Income of 853.4 million 9,100 pipeline miles 10.7 Tcfe proved reserves 3.4 MM acres As of 12/31/14 6
  4. July 2015 Analyst Presentation – EQT Corp – slide 4
    Production By Play Marcellus Shale drilling driving growth 1,800 Marcellus 1,600 Huron Other 1,400 1,200 Production MMcf/d 1,000 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010 2011 2012…
  5. July 2015 Analyst Presentation – EQT Corp – slide 5
    Reserves By Play Proved Reserve Growth 42.8 Tcfe 3P reserves (as of December 31, 2014) 12,000 Upper Devonian Other 10,739 455 10,000 Huron 760 Marcellus 8,348 1,240 215 8,000 861 Huron 11.9 Bcfe 1,316 6,004 6,000…
  6. July 2015 Analyst Presentation – EQT Corp – slide 6
    Marcellus Play Near term development focused in four areas Central PA 600,000 EQT acres 86% NRI / 80% HBP 28% wet 23.3 Tcfe 3P Southwestern PA 31 Tcfe total resource potential 140 wells in 2015 Northern WV (Dry) Northern…
  7. July 2015 Analyst Presentation – EQT Corp – slide 7
    Marcellus Play Southwestern PA Oliver West Pad 7 wells 3,986 Avg. Lateral Length per well 61.7 Bcfe Total Pad EUR 140,000 EQT acres Kevech Pad 6 wells 1,560 locations 2,970 Avg. Lateral Length per well 54.6 Bcfe Total Pad…
  8. July 2015 Analyst Presentation – EQT Corp – slide 8
    Marcellus Play Northern West Virginia Wet Gas Area BIG 190 Pad 8 wells 5,657 Avg. Lateral Length per well 100.0 Bcfe Total Pad EUR 90,000 EQT acres 940 locations 196 wells online* 45 wells in 2015 PEN 16 Pad 5 wells 5,400…
  9. July 2015 Analyst Presentation – EQT Corp – slide 9
    Marcellus Play Central Pennsylvania 80,000 EQT acres Frano Pad 3 wells 4,409 Avg. Lateral Length per well 620 locations 20.4 Bcfe Total Pad EUR 75 wells online* 9 wells in 2015 5,400 laterals 124 acre spacing 7.4 Bcfe EUR /…
  10. July 2015 Analyst Presentation – EQT Corp – slide 10
    Marcellus Play Northern West Virginia Dry Gas Area GRT 26 Pad 2 wells 3,270 Avg. Lateral Length per well 17.7 Bcfe Total Pad EUR 33,000 EQT acres 300 locations 52 wells online* 7 wells in 2015 5,400 laterals 109 acre…
  11. July 2015 Analyst Presentation – EQT Corp – slide 11
    Marcellus Economics IRR - Blended Marcellus Development Areas Wellhead After OpEx After Tax 400% PRICE ATAX IRR 350% 2.50 16% 3.00 34% 300% 3.50 57% 4.00 89% 250% 200% 150% 100% 50% 0% 2.50 3.00 3.50 4.00 Realized…
  12. July 2015 Analyst Presentation – EQT Corp – slide 12
    Dry Utica / Point Pleasant Potential Targeting deep, high pressure rock beneath existing development areas 400,000 EQT acres 3,000 locations 3 wells in 2015 13,500 deep 5,400 lateral 12.5 14.5 MM / well Scotts Run 591340 Pad…
  13. July 2015 Analyst Presentation – EQT Corp – slide 13
    Industry Leading Cost Structure 7 3-year F&D (all sources) 6 5 Mean = 2.66 4 0.73 /Mcfe 3 2 1 0 RICE SWN COG MDU WLL CNX AR RRC EOG CHK SM NBL EGN EQT QEP XCO…
  14. July 2015 Analyst Presentation – EQT Corp – slide 14
    EQT Corporation Midstream Overview Consolidated Transmission & Storage* 3.5 Bcf/d current capacity 47 Bcf gas storage capacity Gathering* 2 Bcf/d capacity Formed MLP in 2012 (NYSE: EQM) 600 700 EQT Corporation Adjusted EQT…
  15. July 2015 Analyst Presentation – EQT Corp – slide 15
    EQT Corporation Midstream Marcellus Midstream Assets Allegheny Valley Allegheny Tioga Valley 65 MMcf/d Connector Connector 200-mile FERC pipeline Longhorn 130 MMcf/d 450 MMcf/d capacity 30MM CAPEX in 2015 Terra 80 MMcf/d 40 MM…
  16. July 2015 Analyst Presentation – EQT Corp – slide 16
    EQT GP Holdings, LP (NYSE: EQGP) EQT owns 90% LP interest of EQGP EQGP owns in EQM 30% limited partner interest 2% general partner interest incentive distribution rights EQGP Price Value of EQGP Units Value per per Unit held…
  17. July 2015 Analyst Presentation – EQT Corp – slide 17
    EQT Midstream Partners, LP (NYSE: EQM) Transmission & Storage 3.1 Bcf/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of gas storage capacity Gathering System Jupiter Gathering System Supports EQT PA dry…
  18. July 2015 Analyst Presentation – EQT Corp – slide 18
    EQT Midstream Partners, LP Growth Projects Ohio Valley Connector 36-mile FERC regulated pipeline to connect transmission in West Virginia to Clarington, OH Mid-2016 in-service 1 Bcf/d capacity 650 MMcf/d contracted under firm…
  19. July 2015 Analyst Presentation – 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. July 2015 Analyst Presentation – EQT Corp – slide 20
    Drilling and Hydraulic Fracturing Committed to operate in accordance with federal, state and local regulations Industry leading spill prevention plans and results Supports the disclosure of frac fluid additives Utilize multiple…
  21. July 2015 Analyst Presentation – EQT Corp – slide 21
    Investment Summary Extensive reserves of natural gas Proven ability to profitably develop our reserves 25% production sales volume growth forecasted in 2015 Strong liquidity position Committed to maximize shareholder value by:…
  22. July 2015 Analyst Presentation – EQT Corp – slide 22
    Appendix 25
  23. July 2015 Analyst Presentation – EQT Corp – slide 23
    Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) 10,000 NGLs (1.6 Gal/Mcf) 6.00 Btu Premium 9,000 NYMEX 8,000 5.00 7,000 /Mcf 6,000 4.00 3.66 3.66 0.61 0.48…
  24. July 2015 Analyst Presentation – EQT Corp – slide 24
    Capital Investment Summary 3.0 2.5 1.9 1.8 2.0 1.6 1.3 B 1.5 1.2 1.0 0.5 0.0 2011 2012 2013 2014 2015F Midstream Production Distribution Excludes acquisitions and EQT Midstream Partners, LP 27
  25. July 2015 Analyst Presentation – EQT Corp – slide 25
    Marcellus Play Acres Within Each Core Development Area EQT has 600,000 total Marcellus acres Expect to develop in four areas for several years Active areas represent 343,000 acres and 3,420 locations EQT has 123,000 additional acres…
  26. July 2015 Analyst Presentation – EQT Corp – slide 26
    Marcellus Play Type Curves by Area 5,400 lateral 17,000 Central PA 16,000 Northern WV - Wet 15,000 14,000 Northern WV - Dry 13,000 Southwestern PA 12,000 Daily Production (MCFED) 11,000 10,000 9,000 8,000 7,000…
  27. July 2015 Analyst Presentation – EQT Corp – slide 27
    Marcellus Economics IRR Southwestern PA Wellhead After OpEx After Tax 600% PRICE ATAX IRR 2.50 23% 500% 3.00 49% 3.50 87% 4.00 143% 400% 300% 200% 100% 0% 2.50 3.00 3.50 4.00 Realized Price 30
  28. July 2015 Analyst Presentation – EQT Corp – slide 28
    Marcellus Economics IRR Northern WV Wet Gas Area Wellhead After OpEx After Tax 400% NGL PRICE (/bbl) 15.00 20.00 25.00 350% 2.50 13% 19% 25% GAS PRICE 3.00 28% 35% 42% (/MMbtu) 3.50 47% 56% 65% 300% 4.00 70% 81% 93% 250% 200%…
  29. July 2015 Analyst Presentation – EQT Corp – slide 29
    Marcellus Economics IRR Central PA Wellhead After OpEx After Tax 140% PRICE ATAX IRR 120% 2.50 10% 3.00 19% 3.50 32% 100% 4.00 49% 80% 60% 40% 20% 0% 2.50 3.00 3.50 4.00 Realized Price 32
  30. July 2015 Analyst Presentation – EQT Corp – slide 30
    Marcellus Economics IRR Northern WV Dry Gas Area Wellhead After OpEx After Tax 140% PRICE ATAX IRR 120% 2.50 7% 3.00 15% 3.50 26% 100% 4.00 41% 80% 60% 40% 20% 0% 2.50 3.00 3.50 4.00 Realized Price 33
  31. July 2015 Analyst Presentation – EQT Corp – slide 31
    Dry Utica Well Update: Scotts Run 591340 Rate and Pressure vs. Time Record Utica IP of 22.6 MMcf / 1000 3,221 Lateral Length 24 Hour 7 Day Test Period Test Period Average: 27 MMcfd IP: 72.9 with 9,563 CFP MMcfd 15,000 110,000…
  32. July 2015 Analyst Presentation – EQT Corp – slide 32
    Dry Utica Well Results: Scotts Run 591340 Cumulative Production vs. Time 300,000 280,000 260,000 240,000 Cumulative Production 220,000 Cumulative Production/1000 ft 200,000 Cumulative Production (Mcf) 180,000…
  33. July 2015 Analyst Presentation – EQT Corp – slide 33
    Upper Devonian Play Developed in conjunction with Marcellus 170,000 EQT acres 1,560 locations 36 wells online* 24 wells in 2015 6,300 laterals 109 acre spacing 8.7 Bcfe EUR / well 1,388 Mcfe EUR / ft. of lateral 5.9 MM /…
  34. July 2015 Analyst Presentation – EQT Corp – slide 34
    Upper Devonian Play Type Curve 6,300 lateral 11,000 10,000 9,000 8,000 Daily Production (MCFED) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 11 21 31 41 51 61 71 81 91 Time in Months (First 100…
  35. July 2015 Analyst Presentation – EQT Corp – slide 35
    Upper Devonian IRR Wellhead After OpEx After Tax 200% 180% PRICE ATAX IRR 2.50 11% 160% 3.00 26% 3.50 45% 140% 4.00 70% 120% 100% 80% 60% 40% 20% 0% 2.50 3.00 3.50 4.00 Realized Price 38
  36. July 2015 Analyst Presentation – EQT Corp – slide 36
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix MDth/D 2,500 2015E 2016E FIRM SALES (LONG-TERM) TETCO M2 31-33% 19-21% 2,000 FIRM SALES (SHORT-TERM) TETCO M3 34-36% 31-33% TCO 9-10% 9-10% 1,500 FIRM MIDWEST Midwest…
  37. July 2015 Analyst Presentation – EQT Corp – slide 37
    Ample Financial Flexibility to Execute Business Plan EQT Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ( MM, except net debt / capital) June 30, 2015…
  38. July 2015 Analyst Presentation – EQT Corp – slide 38
    Risk Management Hedging 2015** 2016*** 2017*** Fixed Price Total Volume (Bcf) 158 201 74 Average Price per Mcf (NYMEX)* 3.97 4.00 3.84 Collars Total Volume (Bcf) 0.19 7 Average Floor Price per Mcf (NYMEX)* 4.55 3.15 Average…
  39. July 2015 Analyst Presentation – EQT Corp – slide 39
    Price Reconciliation Three Months Ended Six Months Ended June 30, June 30, in thousands (unless noted) 2015 2014 2015 2014 LIQUIDS NGLs: Sales volume (MMcfe) (a) 12,444 7,954 25,725 15,721 Sales volume (Mbbls) 2,074 1,326 4,288…
  40. July 2015 Analyst Presentation – EQT Corp – slide 40
    Price Reconciliation (continued) TOTAL PRODUCTION Total net natural gas & liquids sales, including cash settled derivatives 410,960 492,341 1,013,501 1,134,554 Total sales volume (MMcfe) 147,051 110,136 292,249 216,259 Net natural gas &…
  41. July 2015 Analyst Presentation – EQT Corp – slide 41
    Per Unit Operating Expenses Three Months Ended Six Months Ended UNIT COSTS June 30, June 30, 2015 2014 2015 2014 Production segment costs: (/Mcfe) LOE 0.12 0.14 0.12 0.14 Production taxes 0.09 0.15 0.10 0.15 SG&A 0.21 0.30 0.25…
  42. July 2015 Analyst Presentation – EQT Corp – slide 42
    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted EQT Midstream EBITDA (millions) 2010 2011 2012 2013 2014 Midstream operating income 179 417 237 329 384 Add: depreciation and amortization 62 57 65 75 87 Less: gains on…

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