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July 2017 Analyst Presentation – EQT Corp

EQT Corp · Jul 27, 2017 · 32 slides

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Slides

  1. July 2017 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation July 27, 2017
  2. July 2017 Analyst Presentation – EQT Corp – slide 2
    EQT Profile Announced Rice Energy acquisition on June 19, 2017 Pro forma Current for Rice Market Cap 10.2 B 16.8 B Enterprise Value 11.9 B 19.4 B Net Marcellus Acres 813,000 1,000,000 Core Net Marcellus Acres 483,000…
  3. July 2017 Analyst Presentation – EQT Corp – slide 3
    EQT Today Key Investment Highlights Positioned to generate sustainable growth through full cycle World-class inventory at bottom of the cost curve Basin consolidation drives best-in-class economics Significant cash flow and NAV…
  4. July 2017 Analyst Presentation – EQT Corp – slide 4
    Rice Energy Acquisition 9
  5. July 2017 Analyst Presentation – EQT Corp – slide 5
    EQT and Rice: Creating the Largest Natural Gas Producer in the U.S. EQT acquiring Rice Energy for 6.7 B Consideration 0.37x shares of EQT stock per Rice share 5.30 in cash per Rice share Rice PA and OH acreage and production…
  6. July 2017 Analyst Presentation – EQT Corp – slide 6
    Sizable Transaction of High-Quality Core Acreage Immediately accretive Immediately accretive to cash flow per share in excess of 20% in 2018 and 30% in 2019 Accretive to NAV per share 2018 expense synergies 100 MM Upstream…
  7. July 2017 Analyst Presentation – EQT Corp – slide 7
    Transaction is Highly Strategic to Becoming the Lowest Cost Natural Gas Producer Improves returns and increases upstream and midstream scale Upstream Benefits Significantly improved well returns in Greene & Washington Counties Before…
  8. July 2017 Analyst Presentation – EQT Corp – slide 8
    Synergy Potential Present value of economic savings pro forma for Rice acquisition (B) Capital Efficiencies* G&A Base Synergies Upside Synergies Contiguous acreage leads to: Reduction of G&A for 10 years Potentially additional value…
  9. July 2017 Analyst Presentation – EQT Corp – slide 9
    Upside Synergy Potential Up to PV Synergy Metric (B)* Drilling and completion best practices EUR improvements of 0 5% 2.5 Buying power 0 5% reduction in capital 1.4 Marketing optimization 0.00 - 0.05 / Mcfe improvement in realized…
  10. July 2017 Analyst Presentation – EQT Corp – slide 10
    Improving Economics - Marcellus SW PA laterals extend from 8,000 to 12,000 dramatically increasing returns 160% 3.00 137% 140% 2.50 120% 2.00 101% 100% ATAX IRR 75% 80% 68% 70% 60% 52% 39% 35% 40% 28% 21% 13% 15%…
  11. July 2017 Analyst Presentation – EQT Corp – slide 11
    Committed to Addressing Sum-of-the-Parts Board focused on long-term shareholder value creation Post-Merger Committed to developing a plan to address sum-of-the-parts discount by the end of 2018 The Rice transaction does not impair…
  12. July 2017 Analyst Presentation – EQT Corp – slide 12
    EQT Implementation Strategy 2017 Expected activity levels and production guidance unchanged Pro forma sales volume guidance unchanged estimated at 1.3 Tcfe Optimize long-term development plans focused on realizing higher returns by…
  13. July 2017 Analyst Presentation – EQT Corp – slide 13
    Timing Update on Merger with Rice Pathway to closing Syndicated 1.4 B bridge loan Hart Scott Rodino clearance EQT to file Form S-4 (which will include proxy statements for both companies) SEC review of Form S-4 Shareholder votes…
  14. July 2017 Analyst Presentation – EQT Corp – slide 14
    Development Plan 19
  15. July 2017 Analyst Presentation – EQT Corp – slide 15
    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 178 wells in 2017 Average laterals of 8,400 ft PA Funding with operating…
  16. July 2017 Analyst Presentation – EQT Corp – slide 16
    EQT Midstream 21
  17. July 2017 Analyst Presentation – EQT Corp – slide 17
    Valuable Midstream Business 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 over next…
  18. July 2017 Analyst Presentation – EQT Corp – slide 18
    Benefits from Midstream Ownership Cash flows to EQT from EQGP accelerating 500 400 Value of EQGP 300 EQGP price units held by Value per per unit EQT (B) EQT share MM 24 5.8 33 200 25 6.0 35 26 6.2 36 100 28 6.7 39 30…
  19. July 2017 Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Partners, LP (NYSE: EQM) Appalachian Hub connecting supply to demand markets Marcellus Gathering 2.3 Bcf per day firm capacity, including 600 MMcf per day high pressure header pipeline for Range Resources 10-year…
  20. July 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. July 2017 Analyst Presentation – EQT Corp – slide 21
    EQT Today Key Investment Highlights Positioned to generate sustainable growth through full cycle World-class inventory at bottom of the cost curve Basin consolidation drives best-in-class economics Significant cash flow and NAV…
  22. July 2017 Analyst Presentation – EQT Corp – slide 22
    Appendix 27
  23. July 2017 Analyst Presentation – EQT Corp – slide 23
    2017 Guidance Q3 2017 2017 PRODUCTION Total production sales volume (Bcfe) 205 - 210 825 - 840 Liquids Sales Volume, excluding Ethane (Mbbls) 3,240 - 3,260 13,200 - 13,600 Ethane sales volume (Mbbls) 1,565 - 1,575 5,850 - 6,050…
  24. July 2017 Analyst Presentation – EQT Corp – slide 24
    Marcellus Capacity Rice acquisition triples capacity to Gulf Increased exposure Ohio/Midwest Pipe Project ISD DTH/D to growing Gulf REX TETCO E2W U2GC Current Current 300,000 47,000 485,000 ETP Rover Q4 17 150,000…
  25. July 2017 Analyst Presentation – EQT Corp – slide 25
    Marcellus Capacity Pricing details Market Mix 2017E 2018E 2019E Basis 2017E 2018E 2019E TETCO M2 19% 34% 28% TETCO M2 (0.86) (0.48) (0.52) TETCO M3 14% 11% 8% TCO 5% 4% 3% TETCO M3 (0.58) 0.12 0.07 Midwest 24% 20% 15% TCO…
  26. July 2017 Analyst Presentation – EQT Corp – slide 26
    Risk Management Hedge Position July 25, 2017 300 3.40 3.34 3.30 250 2017 2018 2019 3.18 NYMEX Price (/Mcf) as of 7/25/2017 3.17 3.12 2.94 3.20 200 3.12 NYMEX Swaps 3.17 Total Volume (Bcf) 249 189 19 / Mcf 3.10 Average…
  27. July 2017 Analyst Presentation – EQT Corp – slide 27
    Liquids Volume growth and Marcellus impact Liquids Volume Growth Marcellus Liquids Price Impact 20,000 (1200 Btu Gas) 18,000 NGLs (1.6 Gal/Mcf) Btu Premium 16,000 5.00 NYMEX 14,000 4.00 3.75 12,000 3.58 0.64 0.60…
  28. July 2017 Analyst Presentation – EQT Corp – slide 28
    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 561 million cash* Minimizes…
  29. July 2017 Analyst Presentation – EQT Corp – slide 29
    Upper Devonian Co-Development Improves returns per acre Fracs Grow Toward Low Pressure Benefits of co-development of Co-development Marcellus and Upper Devonian Co-development increases value per acre by 38% Shared…
  30. July 2017 Analyst Presentation – EQT Corp – slide 30
    Transaction Details Rice Energy Overview Upstream Assets Retained Midstream Assets General Partner EIG Managed Funds 91.75% 8.25% GP Holdings 28% LP Units 100% IDRs 187,000 core PA Marcellus net acres Attractive…
  31. July 2017 Analyst Presentation – EQT Corp – slide 31
    Corporate Structure Following Merger Legacy Rice Legacy EQT Shareholders Shareholders 35% 65% EQT Non- Public economic GP Unitholders EIG Rice 90% LP Retained Interest 10% LP 91.75% Midstream interest Interest 8.25%…
  32. July 2017 Analyst Presentation – EQT Corp – slide 32

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