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March 2017 Analyst Presentation – EQT Corp

EQT Corp · Mar 27, 2017 · 26 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. March 2017 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation March 27, 2017
  2. March 2017 Analyst Presentation – EQT Corp – slide 2
    Updates Marcellus type curve update to 2.4 Bcfe / 1,000 ft. (14% Increase) 2017 Marcellus lateral lengths increased to 8,000 ft from 7,000 ft Service cost inflation of 15% added into economics 2017 sales volume guidance increased…
  3. March 2017 Analyst Presentation – EQT Corp – slide 3
    EQT Profile Largest Appalachian gas producer and 4th largest U.S. gas producer* NYSE Symbol EQT Market Cap 10.4 B Enterprise Value 11.9 B Net Marcellus Acres 810,000 Core Net Marcellus Acres 475,000 Core Marcellus Locations 3,500…
  4. March 2017 Analyst Presentation – EQT Corp – slide 4
    Key Investment Highlights Sustainable growth while delivering returns through full cycle Focus on development of Marcellus 12% projected production sales volume growth in 2017 2017 drilling sets up projected growth of 15-20% for…
  5. March 2017 Analyst Presentation – EQT Corp – slide 5
    Inventory Extensive undeveloped inventory 810,000 total net Marcellus acres OH 475,000 core net Marcellus acres Core Marcellus 3,500 core Marcellus locations* 83% of core Marcellus acres are undeveloped Core Upper Devonian…
  6. March 2017 Analyst Presentation – EQT Corp – slide 6
    Marcellus Inventory 2016/2017 acquisitions increased core by 67% Core Marcellus Undeveloped vs. Developed 2016 2017 600,000 EQT Core Marcellus Acres Acquisition Summary Undeveloped acres 500,000 Developed acres Net acres added…
  7. March 2017 Analyst Presentation – EQT Corp – slide 7
    Improving Economics Marcellus Longer laterals and more wells per pad reduce cost per foot 12,000 12.0 Beginning to see benefits 10,000 of consolidation 10.0 Lateral length (ft.) Avg. wells per pad 8,000 8.0 6,000 6.0…
  8. March 2017 Analyst Presentation – EQT Corp – slide 8
    Improving Economics Marcellus Drilling and completion costs per foot consistently decreasing 1,600 1,200 / foot 800 400 - 2013 2014 2015 2016 2017E Assumes 8,000 foot lateral for 2017; includes 2017 increase of…
  9. March 2017 Analyst Presentation – EQT Corp – slide 9
    Improving Economics Marcellus Larger frac jobs increase recoveries per foot 2013 2015 2017E Change Stage length ft 190 170 200 5% Proppant (lb / ft) 1,350 1,550 2,250 67% 3.0 Water (bbl / ft) 35 39 41 17% EUR / 1000 1.9 2.1 2.4 26%…
  10. March 2017 Analyst Presentation – EQT Corp – slide 10
    Improving Economics Marcellus Lower drilling and completion cost per foot + higher productivity, drive lower cost per Mcfe 0.80 Drilling & Completions Cost 0.60 ( / Mcfe) 0.40 0.20 - 2013 2014 2015 2016 2017E 10
  11. March 2017 Analyst Presentation – EQT Corp – slide 11
    Improving Economics Marcellus Lower cost per Mcfe, longer laterals, and increasing EURs increase returns 140% 3.00 122% 120% 2.50 101% 2.00 100% 75% 80% 68% ATAX IRR 62% 60% 52% 39% 40% 35% 25% 21% 15% 20% 13%…
  12. March 2017 Analyst Presentation – EQT Corp – slide 12
    Marcellus Capacity Firm capacity for 90% of produced volumes Diversified portfolio Northeast Pipe Project ISD DTH/D Improving prices Ohio/Midwest TETCO TEAM 14 Current 150,000 Pipe Project ISD DTH/D TETCO TEMAX Current 295,000…
  13. March 2017 Analyst Presentation – EQT Corp – slide 13
    2017 Capital and Development Plan Focus on core Marcellus development 2017 capital investments of 1.5 B* OH 1.3 B for well development Core Marcellus 207 wells in 2017 Average laterals of 8,000 ft PA Funding with…
  14. March 2017 Analyst Presentation – EQT Corp – slide 14
    Proven and Sustainable Growth 15-20% growth 2018 through 2020+ 1,600 1,400 1,200 1,000 Bcfe 800 600 400 200 - 2013 2014 2015 2016 2017P 2018F 2019F 2020F 26% CAGR for years 2013-2016; 18% CAGR 2017P-2020F 14
  15. March 2017 Analyst Presentation – EQT Corp – slide 15
    Utica Upside Possibility Improve EUR to 3.0 3.5 Bcfe per 1,000 feet in 2017 500,000 EQT net acres 2016 wells 2017 wells 3,000 locations 6 wells online 6 8 wells in 2017 30 Tcfe total resource potential* Goal EUR of 3.0-3.5…
  16. March 2017 Analyst Presentation – EQT Corp – slide 16
    Balance Sheet Strength Strength in the numbers Benefits of investment grade Strong liquidity Supports consolidation strategy 1.5 billion undrawn revolver Assures operational flexibility through cycles 774 million cash* Minimizes…
  17. March 2017 Analyst Presentation – EQT Corp – slide 17
    Benefits from Midstream Ownership EQT owns 90% interest in EQT GP Holdings, LP (NYSE: EQGP) Significant cash flow growth from EQGP EQT 239.7 million EQGP Common Units ownership EQGP Non-economic GP Midstream cash flows to double…
  18. March 2017 Analyst Presentation – EQT Corp – slide 18
    Benefits from Midstream Ownership Cash flows to EQT from EQGP accelerating 500 400 300 Value of EQGP EQGP price units held by Value per MM 200 per unit EQT (B) EQT share 26 6.2 36 28 6.7 39 100 30 7.2 42 32 7.7 44 -…
  19. March 2017 Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Partners, LP (NYSE: EQM) Appalachian Hub connecting supply to demand markets Marcellus Gathering 1.8 Bcf per day firm capacity 600 MMcf per day high pressure header pipeline for Range Resources expected Q2 2017…
  20. March 2017 Analyst Presentation – EQT Corp – slide 20
    EQT Midstream Partners, LP (NYSE: EQM) Mountain Valley Pipeline connects supply hub to southeast power generation markets JV with NextEra, ConEd, WGL, RGC Resources 45.5% EQM ownership interest EQM to construct and operate pipeline…
  21. March 2017 Analyst Presentation – EQT Corp – slide 21
    Why EQT Largest natural gas producer in Appalachian Basin; 4th largest in U.S.* 15-20% sales volume growth 2018 through 2020+ Accelerating midstream cash flows Basin consolidation drives best-in-class economics Regional pipeline…
  22. March 2017 Analyst Presentation – EQT Corp – slide 22
    Co-development Improves returns per acre Fracs Grow Toward Low Pressure Benefits of co-development of Marcellus Co-development and Upper Devonian Co-development increases value per acre by 36% Shared infrastructure improves IRR…
  23. March 2017 Analyst Presentation – EQT Corp – slide 23
    Risk Management Hedge position as of March 21, 2017 400 3.50 3.44 350 3.40 3.35 300 3.30 366 2017 2018 2019 3.20 NYMEX Price (/Mcf) as of 3/21/2017 3.44 3.20 3.01 250 3.20 3.12 NYMEX Swaps / Mcf Bcf Total Volume…
  24. March 2017 Analyst Presentation – EQT Corp – slide 24
    Liquids Volume growth and Marcellus impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) 16,000 NGLs (1.6 Gal/Mcf) 6.00 Btu Premium 14,000 NYMEX 12,000 5.00 10,000 3.96 4.00 3.83 /Mcf 0.64 0.63…
  25. March 2017 Analyst Presentation – EQT Corp – slide 25
    Marcellus Capacity Pricing details Market Mix 2017E 2018E 2019E Basis 2017E 2018E 2019E TETCO M2 10% 25% 10% TETCO M2 (0.60) (0.46) (0.56) TETCO M3 35% 29% 21% TCO 5% 4% 3% TETCO M3 (0.20) 0.09 0.01 Midwest 30% 26% 19% TCO (0.21)…
  26. March 2017 Analyst Presentation – EQT Corp – slide 26
    2017 Guidance Q1 2017 2017 PRODUCTION Total Production Sales Volume (Bcfe) 190 - 195 835 - 855 Liquids Sales Volume, excluding Ethane (Mbbls) 3,150 - 3,170 13,050 - 13,450 Ethane Sales Volume (Mbbls) 1,155 - 1,165 4,925 - 5,125…

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