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December 2017 Analyst Presentation – EQT Corp

EQT Corp · Dec 13, 2017 · 28 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. December 2017 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation December 13, 2017
  2. December 2017 Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Unmatched combination of scale, growth, inventory, financial quality and cost structure Leading natural gas producer in the United States Focused on development of the Marcellus Shale Industry-leading cost…
  3. December 2017 Analyst Presentation – EQT Corp – slide 3
    EQT Profile Well-positioned to improve overall well economics and deliver stronger returns Market Cap(1) 15.8 B Enterprise Value(2) 21.4 B Net Marcellus Acres(3) 1,000,000 Core Net Marcellus Acres(3) 680,000 Core Marcellus…
  4. December 2017 Analyst Presentation – EQT Corp – slide 4
    2018 Capital and Development Plan Volume growth of 17% forecast within cash flow 2018 capital investments of 2.4 B* 2.2 B for well development 2018F Gross Average Spuds Length (ft) PA Marcellus 111 12,600 WV Marcellus 28…
  5. December 2017 Analyst Presentation – EQT Corp – slide 5
    Rice Acquisition Implementation Strategy Significant progress in synergies next year 2018 17% production growth with cash flow break-even Approve plan to address the sum-of-the-parts discount by end of March Begin to realize capital,…
  6. December 2017 Analyst Presentation – EQT Corp – slide 6
    Marcellus Play Development strategically focused on core 1,000,000 total net acres 680,000 core acres 2,500 core undeveloped locations* 139 wells in 2018 111 PA, 28 WV 12,000 average lateral length 11.0 MM / well…
  7. December 2017 Analyst Presentation – EQT Corp – slide 7
    Improving Economics Marcellus Longer laterals and more wells per pad reduce cost per foot 14,000 12.0 12,000 10.0 10,000 Avg. wells per pad Lateral length (ft.) 8.0 8,000 6.0 6,000 4.0 4,000 2,000 2.0 - 0.0…
  8. December 2017 Analyst Presentation – EQT Corp – slide 8
    Improving Economics Marcellus Larger frac jobs increase recoveries per foot 2013 2015 2018E Stage length ft 190 170 200 Proppant (lb / ft) 1,350 1,550 2,250 Water (bbl / ft) 35 39 40 3.0 EUR / 1000 1.9 2.1 2.4 2.5 EUR (Bcfe /…
  9. December 2017 Analyst Presentation – EQT Corp – slide 9
    Improving Economics Marcellus 0.38 per Mcfe in 2018 0.80 Drilling & Completions Cost 0.60 ( / Mcfe) 0.40 0.20 - 2013 2014 2015 2016 2017E 2018E Lower drilling and completion cost per foot + higher productivity,…
  10. December 2017 Analyst Presentation – EQT Corp – slide 10
    Improving Economics Marcellus SW PA laterals extend from 8,000 to 12,000 dramatically increasing returns 140% 5,500 6,000 8,000 12,000 2.00 12% 14% 19% 24% 2.50 33% 37% 47% 59% 120% 3.00 64% 72% 91% 114% 100% 80% 60% 40%…
  11. December 2017 Analyst Presentation – EQT Corp – slide 11
    Valuable Midstream Business Significant cash flow growth from EQT GP Holdings (NYSE: EQGP) ownership Midstream cash flows to double over next three years 2018 EQT distribution equates to 0.23 / Mcfe Publicly traded securities…
  12. December 2017 Analyst Presentation – EQT Corp – slide 12
    Cash Flows to EQT from Midstream Accelerating 350 million in 2018 700 Value of 600 EQGP units Distributions Earned (MM) EQGP price held by EQT Value per 500 per unit (B) EQT share 24 5.8 22 25 6.0 23 400 26 6.2 23 27 6.5…
  13. December 2017 Analyst Presentation – EQT Corp – slide 13
    MLPs EQM and RMP Strategically located assets connecting supply to demand markets EQT Midstream Partners (NYSE: EQM) 2.3 Bcf per day firm gathering capacity, including 600 MMcf per day high pressure header pipeline for Range…
  14. December 2017 Analyst Presentation – EQT Corp – slide 14
    EQT Midstream Partners 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 3.5 B total…
  15. December 2017 Analyst Presentation – EQT Corp – slide 15
    Key Investment Highlights Unmatched combination of scale, growth, inventory, financial quality and cost structure Leading natural gas producer in the United States Focused on development of the Marcellus Shale Industry-leading cost…
  16. December 2017 Analyst Presentation – EQT Corp – slide 16
    Appendix
  17. December 2017 Analyst Presentation – EQT Corp – slide 17
    Ohio Utica Play 65,000 total net acres 190 undeveloped locations* 38 gross (25 net) wells in 2018 11,300 average lateral length 13.6 MM / well 2.1 Bcfe EUR / 1,000 66% working interest 80% NRI Development area Ohio…
  18. December 2017 Analyst Presentation – EQT Corp – slide 18
    Upper Devonian Play Developed in conjunction with Core Marcellus 149,000 total net acres 500 undeveloped locations* 19 wells in 2018 15,600 ft. average laterals 10.8 MM / well 1.5 Bcfe EUR / well 100% working interest 84% NRI…
  19. December 2017 Analyst Presentation – EQT Corp – slide 19
    2018 Guidance PRODUCTION Q3 2017 2018 Difference Total production sales volume (Bcfe) 1,520 1,560 Liquids sales volume, excluding ethane (Mbbls) 13,400 13,800 Ethane sales volume (Mbbls) 4,900 5,200 Marcellus / Upper Devonian Rigs…
  20. December 2017 Analyst Presentation – EQT Corp – slide 20
    Corporate Structure Legacy Rice Shareholders EQT Non- Public economic GP Unitholders Rice 90% LP Retained Interest 10% LP 100% Midstream Interest interest EQGP Public Rice GP Public Unitholders 2% GP Interest…
  21. December 2017 Analyst Presentation – EQT Corp – slide 21
    Synergy Potential Present value of economic savings for Rice acquisition (B) Capital Efficiencies* G&A* Base Synergies Contiguous acreage leads to: Reduction of G&A for 10 years Longer laterals (12,000 ft) Fewer wells Lower…
  22. December 2017 Analyst Presentation – EQT Corp – slide 22
    Rice Acquisition 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…
  23. December 2017 Analyst Presentation – EQT Corp – slide 23
    Risk Management Hedge Position 600 3.25 3.18 3.20 2018 2019 2020 500 NYMEX Price (/Mcf) as of 12/7/2017 2.93 2.95 2.94 3.15 NYMEX Swaps 3.09 400 3.10 Total Volume (Bcf) 439 174 211 3.06 Average Price per Mcf (NYMEX) 3.16…
  24. December 2017 Analyst Presentation – EQT Corp – slide 24
    Marcellus Capacity Diversified portfolio targeting premium markets Ohio/Midwest Significant exposure Pipe REX Project ISD DTH/D E2W/Z3 En Current 550,000 to growing Gulf TETCO REX/TETCO - U2GC Current 47,000 490,000 ML-7…
  25. December 2017 Analyst Presentation – EQT Corp – slide 25
    Marcellus Capacity Pricing details Market Mix Dec 2017 2018E 2019E Basis Dec 2017 2018E 2019E TETCO M2 15% 33% 16% TETCO M2 (0.56) (0.55) (0.57) TETCO M3 14% 11% 10% TETCO M3 0.13 0.04 (0.01) TCO 5% 4% 4% TCO (0.16) (0.26)…
  26. December 2017 Analyst Presentation – EQT Corp – slide 26
    Liquids Volume growth and Marcellus impact Liquids Volume Growth Marcellus Liquids Price Impact 24,000 (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 20,000 Btu Premium 5.00 NYMEX 16,000 4.00 3.89 3.36 0.97 /Mcf 12,000 3.00 0.56…
  27. December 2017 Analyst Presentation – EQT Corp – slide 27
    Balance Sheet Strength Strength in the numbers Benefits of investment grade Strong liquidity Supports consolidation strategy 2.5 billion revolver at EQT Assures operational flexibility through cycles 1.0 billion revolver at EQM…
  28. December 2017 Analyst Presentation – EQT Corp – slide 28
    Building Long Laterals in Appalachia The process Base EQT Acreage + Acquisitions + Trades/Leasing = Full Development 12 new wells with 4,000 ft 8 new wells with 4,900 ft 5 new wells with 14,500 ft 8 new wells with 16,200 ft average…

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