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August 2018 Analyst Presentation – EQT Corp

EQT Corp · Aug 6, 2018 · 30 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. August 2018 Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation August 6, 2018
  2. August 2018 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. August 2018 Analyst Presentation – EQT Corp – slide 3
    EQT Profile Well-positioned to improve overall well economics and deliver stronger returns Market Cap(1) 14.6 B Enterprise Value(2) 19.4 B Net Marcellus Acres(3) 1,000,000 Core Net Marcellus Acres(3) 675,000 Core Marcellus…
  4. August 2018 Analyst Presentation – EQT Corp – slide 4
    2018 Capital and Development Plan Volume growth of 18% forecast within cash flow 2018 capital investments of 2.4 B* 2.2 B for well development 2018F Average Spuds Length (ft) PA Marcellus 109 14,200 WV Marcellus 10 7,600…
  5. August 2018 Analyst Presentation – EQT Corp – slide 5
    Rice Acquisition Implementation Strategy Significant progress in synergies this year 2018 18% production growth with cash flow breakeven Approved plan to address the sum-of-the-parts discount Begin to realize capital, operational and…
  6. August 2018 Analyst Presentation – EQT Corp – slide 6
    EQT Plans to Separate Midstream Business Creating Two Premier, Independent Energy Companies EQT Production (Upstream) Benefits Leading natural gas producer in the United States 2018E sales volume of 1,490 1,510 Bcfe Distinct…
  7. August 2018 Analyst Presentation – EQT Corp – slide 7
    EQT Plans to Separate Midstream Business Separation and Midstream Streamlining Timelines Separation Timeline Key Milestones Start Date Anticipated Completion Date Establish Management, BOD, and Separation Plan Underway By End of Q3…
  8. August 2018 Analyst Presentation – EQT Corp – slide 8
    Marcellus Play Development strategically focused on core 1,000,000 total net acres 675,000 core acres 2,500 core undeveloped locations* 119 wells in 2018 109 PA, 10 WV 13,600 ft. average lateral length 12.1 MM / well…
  9. August 2018 Analyst Presentation – EQT Corp – slide 9
    Improving Economics Marcellus Longer laterals reduce cost per foot 14,000 12,000 10,000 Lateral length (ft.) 8,000 6,000 4,000 2,000 - 2013 2014 2015 2016 2017 2018E 10 Includes Upper Devonian
  10. August 2018 Analyst Presentation – EQT Corp – slide 10
    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 /…
  11. August 2018 Analyst Presentation – EQT Corp – slide 11
    Improving Economics Marcellus 0.37 per Mcfe in 2018 0.80 Drilling & Completions Cost 0.60 ( / Mcfe) 0.40 0.20 - 2013 2014 2015 2016 2017 2018E Lower drilling and completion cost per foot + higher productivity, drive…
  12. August 2018 Analyst Presentation – EQT Corp – slide 12
    Improving Economics Marcellus SW PA laterals extend from 8,000 to 14,200 dramatically increasing returns 160% 6,000 8,000 12,000 14,000 2.00 14% 19% 25% 29% 140% 2.50 38% 49% 62% 71% 3.00 74% 96% 120% 140% 120% 100% 80%…
  13. August 2018 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. August 2018 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 3.5-3.7 B total…
  15. August 2018 Analyst Presentation – EQT Corp – slide 15
    SpinCo (Midstream Corp) Announced Plan to Separate Midstream Business on February 21, 2018 Pro Forma Midstream Structure SpinCo Profile 900 800 Cash Flows from EQGP/EQM Ownership SpinCo Corp. 700 618 600 Millions 510 276…
  16. August 2018 Analyst Presentation – EQT Corp – slide 16
    Cash Flows to EQT from Midstream Accelerating 350 million in 2018 700 Value of EQGP EQGP price units held by Value per Distributions Earned (MM) per unit EQT (B) EQT share 600 22 6.1 23 24 6.6 25 26 7.2 27 500 28 7.7 29…
  17. August 2018 Analyst Presentation – EQT Corp – slide 17
    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…
  18. August 2018 Analyst Presentation – EQT Corp – slide 18
    Appendix
  19. August 2018 Analyst Presentation – EQT Corp – slide 19
    Non-GAAP Financial Measure Free Cash Flow As used in this presentation, free cash flow is defined as EQTs net cash provided by operating activities plus changes in other assets and liabilities less capital expenditures pro forma for the…
  20. August 2018 Analyst Presentation – EQT Corp – slide 20
    Non-GAAP Financial Measure SpinCo EBITDA As used in this presentation, earnings before interest, taxes, depreciation and amortization (EBITDA) means the earnings before interest, taxes and depreciation of the SpinCo pro forma for the…
  21. August 2018 Analyst Presentation – EQT Corp – slide 21
    Upper Devonian Play Developed in conjunction with Core Marcellus 149,000 total net acres 500 undeveloped locations* 5 wells in 2018 14,400 ft. average laterals 10.1 MM / well 1.5 Bcfe EUR / 1,000 100% working interest 84%…
  22. August 2018 Analyst Presentation – EQT Corp – slide 22
    Ohio Utica Play 65,000 total net acres 170 undeveloped locations* 41 gross (25 net) wells in 2018 11,700 ft. average lateral length 13.5 MM / well 2.1 Bcfe EUR / 1,000 66% working interest 80% NRI 60% IRR Development…
  23. August 2018 Analyst Presentation – EQT Corp – slide 23
    2018 Guidance PRODUCTION Q3 2018 2nd half 2018 Total production sales volume (Bcfe) 370 380 770 790 Liquids sales volume, excluding ethane (Mbbls) 2,580 2,700 5,125 5,275 Ethane sales volume (Mbbls) 1,220 1,320 2,500 2,650 Total…
  24. August 2018 Analyst Presentation – EQT Corp – slide 24
    Rice Acquisition Synergy Summary Base Synergy Metric Up to PV (B)* Capital efficiencies Laterals extended to 12,000 feet 1.9 G&A savings 100 million per year 0.6 Upside Synergy Metric Up to PV (B)* Drilling and completion best…
  25. August 2018 Analyst Presentation – EQT Corp – slide 25
    Corporate Structure Announced separation of midstream business Current Structure and Post-Separation and Midstream Streamlining Transactions Midstream Streamlining Transactions EQT EQT 19.9% SpinCo Corp. EQT stock Production…
  26. August 2018 Analyst Presentation – EQT Corp – slide 26
    Risk Management Hedge Position as of July 23, 2018 600 3.30 2018 2019 2020 3.20 500 3.10 NYMEX Price (/Mcf) as of 7/23/2018 2.94 2.84 2.75 3.10 NYMEX Swaps 400 3.00 2.99 Total Volume (Bcf) 368 471 365 3.00 Average Price per…
  27. August 2018 Analyst Presentation – EQT Corp – slide 27
    Marcellus Capacity Diversified portfolio targeting premium markets Significant exposure Ohio/Midwest Pipe Project ISD DTH/D to growing Gulf REX REX E2W Z3 En. Current Current 350,000 200,000 490,000 markets TETCO U2GC…
  28. August 2018 Analyst Presentation – EQT Corp – slide 28
    Marcellus Capacity Pricing details Bal Bal Market Mix 2018E 2019E 2020E Basis 2018E 2019E 2020E TETCO M2 34% 16% 27% TETCO M2 (0.43) (0.48) (0.53) TETCO M3 11% 10% 8% TCO 4% 4% 3% TETCO M3 (0.16) 0.20 0.08 Midwest 21% 18% 16%…
  29. August 2018 Analyst Presentation – EQT Corp – slide 29
    Liquids Volume growth and Marcellus impact Liquids Volume Growth Marcellus Liquids Price Impact 20,000 (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 6.00 Btu Premium 16,000 NYMEX 5.00 12,000 4.07 4.00 3.41 1.10 Mbbls /Mcf 3.00…
  30. August 2018 Analyst Presentation – EQT Corp – slide 30
    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…

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