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June 2018 Corporate Presentation – Diversified Gas & Oil

Diversified Gas & Oil · Jul 30, 2018 · 34 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. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 1
    Rusty Hutson Chief Executive Officer Brad Gray Chief Operating Officer EQT CONVENTIONAL Eric Williams A P PA L A C H I A A C Q U I S I T I O N Chief Financial Officer June 2018
  2. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 2
    EQT ACQUISITION HIGHLIGHTS S Immediately Accretive to Shareholders Production (Mboed) 2017 EBITDA (mm)(a) 237 60 Unparalleled Scale in Conventional Gas Space 114% 225% 28 < 5% Low-Decline, Predictable Production Profile…
  3. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 3
    TRANSFORMATIVE AND SYNERGISTIC ACQUISITION IN APPALACHIA Overview Location Map 2.7mm gross (2.5mm net) contiguous acres and 11,350 gross Legend producing wellbores in Appalachia (across Kentucky, West Virginia, and DGO Assets…
  4. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 4
    EXPANSIVE ACREAGE FOOTPRINT AND OPERATED PRODUCTION 0.4 mboed Production(a) 1% Northern West Virginia 6.4mboed Production(a) Kentucky 20% Southern 23.4 mboed Production(a) West Virginia 7 4 %73% 1.9 mboed…
  5. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 5
    SIGNIFICANT MIDSTREAM INFRASTRUCTURE Legend EQT Upstream Assets EQT Compressor Stations Langley Plant EQT Gathering Pipeline Owned infrastructure includes Interstate Pipeline 6,400 miles of pipe and 59 Ohio compressor stations…
  6. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 6
    WITH 3RD PARTY VOLUMES ENHANCING ECONOMICS Commentary 2017 average 3rd party volumes of 37MDthd, generating 9 million in annual revenue Multiple active 3rd party gathering and compression contracts in place 12-month average historical…
  7. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 7
    NGL STREAM PROVIDES OIL EXPOSURE AND INCREASES MARGINS Unprocessed Kentucky Gas Processed Kentucky Gas (In /mcfe) Processing creates a 1.52/mcfe 9 benefit compared to unprocessed wet gas 0.28 0.40 0.63 0.09 4.23 2.08…
  8. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 8
    CONTINUES A TRACK RECORD OF ACCRETIVE ACQUISITIONS DGO Acquisitions Selected Public Companies 32,000 14.5x Daily Production (Net Boed) EV / EBITDA Transformative Acquisition (includes acquired G&A expenses) Public Company 11.3x…
  9. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 9
    WHILE LOWERING COSTS AND INCREASING MARGINS LOE / BOE (a) Expanding Strong Margins (c) 9.59 (/boe) LOE G&T Prod. Taxes G&A Revenue (/boe) DGO DGO/APC/CNX DGO/APC/CNX/EQT 19.72 6.50 41% 17.41 17.00 5.50 15.64 3.81 38%…
  10. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 10
    HAS DRIVEN CONTINUING SHAREHOLDER VALUE CREATION Past: What We Have Accomplished Present: Accretive EQT Acquisition Historical DGO Share Price Performance Adj. FCFPS Accretion(a,b) Latest trading 1.00 +20% price GBP 0.96 (14 Jun…
  11. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 11
    DIVERSIFIED GAS & OIL OVERVIEW Q1 2018 Highlights Announced Q1 2018 dividend of 0.01725/share (0.069/share annualised) DGO Focus Area Closed on two previously announced acquisitions Alliance Petroleum (95mm), March 2018 CNX…
  12. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 12
    DGOS GROWTH ENGINE: STRICT ADHERENCE TO CORPORATE STRATEGY Leverage S 2.5x Net Debt / EBITDA on a long-term basis with suitable flexibility for accretive acquisitions De-lever through cash flow from operations to maintain sufficient…
  13. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 13
    WHERE WE HAVE BEEN Gross 78,000 Boed(a) 186% Gross 18 Production CAGR from 2014 to 2018 Gross January: 18,000 Boed Raised 180mm net equity proceeds to fully fund two, transformative 17 acquisitions in March February: Floated…
  14. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 14
    WHERE WE ARE GOING: CAPITAL EFFICIENT RESERVE GROWTH 100% Proved Developed Reserves Large Portfolio Eliminates Concentration Wells(b) Top 100 11% 100-500 2017 Reserve Replacement (a) All Others 1,388 18.0x FY2017 Production 17%…
  15. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 15
    BUSINESS MODEL: ACQUIRE, PRODUCE, OPTIMISE, DRILL Acquire and manage producing natural gas and oil properties to generate cash flows, providing stability and growth for our stakeholders Inorganic Ongoing Organic Result 1 2 3 4…
  16. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 16
    SEVERAL PDP WEIGHTED DEALS IN PLAY DEMONSTRATE 1 OPPORTUNITY FOR GROWTH 2 Fayetteville Assets 1 3 Est. E&P EBITDA: 220mm(b) Virginia CBM Mature Assets Est. Midstream EBITDA: 180mm(b) Net Acres: 270,000 Acres(a) Latest PV10%:…
  17. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 17
    2 TRACK RECORD OF REALISING SYNERGIES Acquisition Synergies Implications for EQT Assets Onboard EQT workforce to retain Renegotiated firm transportation contract institutional knowledge on assets making the previously unprofitable…
  18. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 18
    3 SIGNIFICANT ORGANIC OPPORTUNITY SET Infill Drilling Opportunities Single Conventional Gas & Oil Well IRRs 6.5 million+ acre position creates substantial infill drilling opportunity 45% 40% - Current development on 117 acre spacing…
  19. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 19
    RETURN OF EXCESS CASH TO SHAREHOLDERS = 4 DEMONSTRATED VALUE CREATION(A,B,C) 2017 Free Cash Flow (per share) / Price (50%) (40%) (30%) (20%) (10%) 10% 20% 30% Total Shareholder Return Since DGO IPO Represents dividend payers…
  20. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 20
    4 INCREASING SHAREHOLDER RETURNS THROUGH DIVIDENDS Mature, low-decline and well-hedged producing assets generate stable cash flow Recently announced decision to shift to quarterly dividends vs. semi-annual Commitment to pre-share…
  21. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 21
    KENTUCKY ASSET OVERVIEW Asset Map Historical Production Profile 100,000 Gross Production (Boed) West 10,000 Virginia Kentucky 1,000 Location Virginia Kentucky Total EQT Assets 100 2010 2011 2012 2013 2014 2015 2016…
  22. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 22
    SOUTHERN WEST VIRGINIA ASSET OVERVIEW Asset Map Historical Production Profile 100,000 Ohio Gross Production (Boed) 10,000 West Virginia 1,000 Virginia Location Kentucky Southern West Virginia Total EQT Assets 100 2010…
  23. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 23
    NORTHERN WEST VIRGINIA ASSET OVERVIEW Asset Map Historical Production Profile(c) 100,000 Ohio Gross Production (Boed) 10,000 1,000 Location West Virginia Northern West Virginia Total EQT Assets 100 2010 2011 2012…
  24. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 24
    VIRGINIA ASSET OVERVIEW Asset Map Historical Production Profile 100,000 West Virginia Gross Production (Boed) Kentucky 10,000 1,000 Virginia Location Virginia Total EQT Assets 100 2010 2011 2012 2013 2014 2015…
  25. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 25
    ADVANTAGEOUS GAS TAKEAWAY OPTIONALITY AND PRICING 90% of Volumes Market Spreads for EQT Assets at 0.33 / mmBtu Volume % of Total 2017 Basis Price Index Ohio % per area Volume (/mmBtu)(a) TCO 25% 16% 0.31 Kentucky Low High TGP…
  26. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 26
    AMPLE GAS PROCESSING CAPACITY AVAILABLE Processing Plant Location Map Processing Plant Capacity and Utilization Processing Facility Operator Design Capacity Utilization Facility Type 7 Processing Ohio 1 Langley MarkWest plant…
  27. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 27
    EQT ASSETS GET GULF COAST PRICING FOR NGLS Commentary NGL Blend (2017 Average)(a) EQT processes the majority of the NGLs from this asset at the Langley Plant in Pike County, Kentucky 63.66/bbl Natural Gasoline (C5+): 9% NGLs…
  28. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 28
    HEDGED TO PROTECT CASH FLOW & DIVIDEND Natural Gas Financial Hedges Hedge Mix(a) 120,000 4.00 2.88 2.88 2.88 2.78 2.67 2.65 2.61 2.64 2.64 3.00 80,000 2.00 40,000 1.00 - 0.00 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 FY20 FY21…
  29. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 29
    NATURAL GAS HEDGE DETAIL Financial Contracts Natural Gas (mmBtu, /mmBtu) 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 NYMEX NG Swaps 1,770,000 1,770,000 1,680,000 2,680,000 3,320,000 3,340,000 3,340,000 3,320,000…
  30. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 30
    OIL HEDGES Combined Contracts Crude Oil (bbl, /bbl) 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 NYMEX WTI Swaps 12,000 19,500 19,500 12,000 12,000 12,000 12,000 - - - - 33,000 Swap Price 63.35 59.79 59.79 58.55 58.55…
  31. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 31
    NON-IFRS & OTHER RECONCILIATIONS (AS REPORTED) YE16 1Q17 2Q17 1H17 3Q17 4Q17 2H17 YE17 Hedged Revenue Reconciliation Natural gas 10,671 4,045 3,635 7,680 10,474 12,309 22,783 30,463 Oil 4,207 1,221 1,267 2,488 2,696 2,863 5,559 8,047…
  32. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 32
    NON-IFRS & OTHER RECONCILIATIONS (AS REPORTED) YE16 1Q17 2Q17 1H17 3Q17 4Q17 2H17 YE17 LOE Reconciliation Controllable LOE 10,470 2,286 2,205 4,491 5,109 5,991 11,100 15,591 Production taxes 833 437 519 956 1,030 1,406 2,436 3,392…
  33. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 33
    NON-IFRS & OTHER RECONCILIATIONS (AS REPORTED) YE16 1Q17 2Q17 1H17 3Q17 4Q17 2H17 YE17 Adjusted EBITDA Reconciliation Operating profit 22,450 1,205 8,533 9,738 3,346 3,110 6,456 16,194 Adjustments Depreciation and depletion 4,039…
  34. June 2018 Corporate Presentation – Diversified Gas & Oil – slide 34
    Contact Information Company Brokers Diversified Mirabaud Stifel PO BOX 381087 MIRABAUD SECURITIES LIMITED STIFEL NICOLAUS EUROPE LTD BIRMINGHAM, ALABAMA 10 BRESSENDEN PLACE 150 CHEAPSIDE 35238-1087 (USA) LONDON SW1E 5DH LONDON EC2V…

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