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1Q 2019 Earnings Presentation – EQT Corp

EQT Corp · Apr 25, 2019 · 38 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. 1Q 2019 Earnings Presentation – EQT Corp – slide 1
    EQT Corporation New Company, New Leadership, New Focus First Quarter 2019 Earnings Update April 25, 2019
  2. 1Q 2019 Earnings Presentation – EQT Corp – slide 2
    First Quarter 2019 Highlights Strong financial and operational performance Financial Highlights Drilling Operations Adjusted free cash flow(1) of 171 MM 95% of horizontal drilling activity at or below budget 306 MM over the last 2…
  3. 1Q 2019 Earnings Presentation – EQT Corp – slide 3
    EQT Has Transformed Into the Leading U.S. Pure Play Natural Gas Producer New company, new leadership, new focus 2018 Transformation 2019 and Beyond d Reconstituted World Class 15 to 20 Year Drilling Inventory Management and Board…
  4. 1Q 2019 Earnings Presentation – EQT Corp – slide 4
    Measurable and Transparent Progress in Executing Our Plan Action Item Measure Timeline Board Added four new independent directors Q4 2018 Enhancements Created Operating & Capital Efficiency Board Committee Reconstituted New…
  5. 1Q 2019 Earnings Presentation – EQT Corp – slide 5
    Delivering Results and Sustainable Free Cash Flow Q4 2018 Q1 2019 Q1 2019 Delivering 134 MM 171 MM 150 MM Results Adjusted Adjusted Annual cost savings identified Free Cash Flow(1) Free Cash Flow(1) Realizing Efficiencies +…
  6. 1Q 2019 Earnings Presentation – EQT Corp – slide 6
    Announced Industry Veteran Chief Operating Officer Career driving strong results at leading shale-focused upstream energy companies Proven track record of enhancing well productivity, driving down costs, and increasing efficiencies…
  7. 1Q 2019 Earnings Presentation – EQT Corp – slide 7
    Management and Board Aligned to Deliver Efficiencies and Free Cash Flow Focused on driving cost reductions and free cash flow from our world-class asset base Transparency Accountability Senior Management focused on cost reductions,…
  8. 1Q 2019 Earnings Presentation – EQT Corp – slide 8
    World-Class Asset Base Large-scale position in the core of the Appalachian Basin EQT Acreage Overlays the SW Marcellus Core Market Cap(1) 5.3 B Utica Cumulative SW Marcellus (2) Production Heat Map Enterprise Value 10.3 B…
  9. 1Q 2019 Earnings Presentation – EQT Corp – slide 9
    2019 Plan Supports Continued Free Cash Flow Growth Approximately 300 400 MM of adjusted free cash flow in 2019(1) Net Development Activity (Turned in Line) Operational and Financial Detail 2019E Sales Volumes (Bcfe) 1,480…
  10. 1Q 2019 Earnings Presentation – EQT Corp – slide 10
    Detailed 2019 Development and Capital Plan Transparency, accountability and results 140 14,000 140 13,000 Average Lateral Length (ft.) 120 12,000 100 111 11,000 Net Well Count 101 80 10,000 83 9,000 60 8,000 40…
  11. 1Q 2019 Earnings Presentation – EQT Corp – slide 11
    5-Year Financial and Operating Plan Generates cumulative adjusted free cash flow of 2.9 B(1) 160 15,000 140 Average Lateral Length (ft.) 14,000 120 Net Well Count 13,000 100 12,000 80 11,000 60 10,000 40 20 9,000 0…
  12. 1Q 2019 Earnings Presentation – EQT Corp – slide 12
    Compelling Free Cash Flow Story Early 2019 cost reductions positively impact 5-Year cumulative adjusted free cash flow(1) Adjusted Free Cash Flow(1) and Adjusted Free Cash Flow Yield(1,2) 2019-2023 Cumulative Adjusted FCF…
  13. 1Q 2019 Earnings Presentation – EQT Corp – slide 13
    Target 10% Initiative Tracking progress and line-of-sight to further cost savings Cost Reduction Initiatives Progress on Target 10% Initiative Jan 2019: 100 MM identified 800 (Million) and implemented (included in base plan) 600…
  14. 1Q 2019 Earnings Presentation – EQT Corp – slide 14
    Target 10% Initiative: Water Case Study EQTs water dynamics are complex and unique to our operations 70,000 barrels per day of produced water Producing Well Footprint and Water Dynamics Produced Water Mix by State 2019 PA MRC Water…
  15. 1Q 2019 Earnings Presentation – EQT Corp – slide 15
    Target 10% Initiative: Water Case Study Water scheduling and optimization model implementation Integrated Data Communication Mathematical Programming Algorithm Optimized Logistics Scheduling Resource Requirements Forward Looking…
  16. 1Q 2019 Earnings Presentation – EQT Corp – slide 16
    Delivering Development Efficiencies and Optimization Increasing lateral lengths and optimizing spacing generates higher single-well returns Increasing lateral well spacing optimizes Core PA Marcellus - 13,000' Lateral reservoir…
  17. 1Q 2019 Earnings Presentation – EQT Corp – slide 17
    The Evolution of Well Spacing and Asset Development Empirical data and deterministic modeling drive design modifications Empirical Evidence Deterministic Modeling Double-bounded Single-bounded Unbounded EUR (MMcf/ft) Statistical…
  18. 1Q 2019 Earnings Presentation – EQT Corp – slide 18
    Test Results Support Development Strategy Wider spacing and larger fracs optimize development Testing has been performed across our core acreage portfolio, supporting model predictions Results demonstrate the value of optimizing…
  19. 1Q 2019 Earnings Presentation – EQT Corp – slide 19
    Technology Platform Driving Performance Efficiencies Transforming the way we operate to drive efficiencies and maximize asset value Functions Benefits 24/7 monitoring of Provides consistency and operational activities operational…
  20. 1Q 2019 Earnings Presentation – EQT Corp – slide 20
    Technology Platform Driving Performance Efficiencies Using data, science and analytics to make better, faster decisions Functions Benefits Water Advanced logistics and resource Streamlines EQTs complex water Scheduling scheduling…
  21. 1Q 2019 Earnings Presentation – EQT Corp – slide 21
    Financial Strength Flexibility to further reduce leverage and return capital to shareholders Leverage EQT vs. Marcellus Peers(1,4) Monetization of ETRN stake 3.2x Can reduce leverage(1,2) from 2.1x to 1.6x 2.5x 2.4x 2.1x 2.2x…
  22. 1Q 2019 Earnings Presentation – EQT Corp – slide 22
    Environmental, Health and Safety The right thing to do Environmental Stewardship(1) Safety In the Community Founding partner of the Center for Employees participated in 13,000 hours of EQT and the EQT Foundation a Responsible…
  23. 1Q 2019 Earnings Presentation – EQT Corp – slide 23
    Strong Fundamentals In Place to Deliver Exceptional Value to Shareholders World-class asset base, sustainable free cash flow and financial strength Leading U.S. natural gas producer at 4.0 Bcfe per day World-Class 15 to 20 years…
  24. 1Q 2019 Earnings Presentation – EQT Corp – slide 24
    Appendix
  25. 1Q 2019 Earnings Presentation – EQT Corp – slide 25
    EQT as a Leading Environmental Steward Long-term, sustainable environmental practices aligned with investors and stakeholders Board and Environmental Methane Water Management Oversight Collaborations Emissions Initiatives…
  26. 1Q 2019 Earnings Presentation – EQT Corp – slide 26
    Detailed 2019E Activity 2019 /ft Details 2019 Total CapEx Details PA WV OH Total / Total Reserve Development PA WV OH 2019E Total Marcellus Marcellus Utica Average CapEx (MM) Marcellus Marcellus Utica of Net Wells Total Spud 55 7…
  27. 1Q 2019 Earnings Presentation – EQT Corp – slide 27
    5-Year Annual Volumes and Decline Rates 2,000 35% 32% 30% 1,600 Annual Volumes (Bcfe) YE 2018 Exit Rate Decline 25% 22% 1,200 20% 17% 16% 14% 15% 800 11% 28% 10% 20% 400 15% 12% 5% - 0% 2018 2019 2020…
  28. 1Q 2019 Earnings Presentation – EQT Corp – slide 28
    Unit Cost Comparison(1) Peer-leading unit costs for LOE and G&A Lease Operating Expense (/Mcfe)(2) Selling, General & Administrative (/Mcfe) Peer Mean (excl Peer 5): 0.15 0.19 0.93 0.17 0.14 0.09 0.06 (3) EQT Peer 1…
  29. 1Q 2019 Earnings Presentation – EQT Corp – slide 29
    2019 Guidance Approximately 300 - 400 MM of adjusted free cash flow(1) Q2 2019 Full-Year 2019 Production Total production sales volume (Bcfe) 355 - 375 1,480 - 1,520 Liquids sales volume, excluding ethane (Mbbls) 2,015 - 2,115…
  30. 1Q 2019 Earnings Presentation – EQT Corp – slide 30
    Firm Transportation Portfolio Provides access, stability and opportunity Diversity of delivered markets provides significant commercial optionality Portfolio offers price stability by accessing 933,000 933,000 Dth/d Dth/d EQT…
  31. 1Q 2019 Earnings Presentation – EQT Corp – slide 31
    Risk Management NYMEX Hedge position as of April 22, 2019 2019* 2020 2021 2022 2023 Swaps Volume (MMDth) 591 553 306 136 61 Average Price (/dth) 2.91 2.82 2.78 2.75 2.74 Calls - Net Short Volume (MMDth) 261 187 37 22 7 Average…
  32. 1Q 2019 Earnings Presentation – EQT Corp – slide 32
    Non-GAAP Financial Measure Adjusted EBITDA As used in this presentation, adjusted EBITDA is defined as net income from continuing operations, plus interest expense, income tax expense (benefit), depreciation and depletion, amortization…
  33. 1Q 2019 Earnings Presentation – EQT Corp – slide 33
    Non-GAAP Financial Measure Reconciliation of Adjusted EBITDA The table below reconciles adjusted EBITDA with income (loss) from continuing operations, the most comparable financial measure as calculated in accordance with GAAP, as…
  34. 1Q 2019 Earnings Presentation – EQT Corp – slide 34
    Non-GAAP Financial Measure Adjusted Operating Cash Flow and Adjusted Free Cash Flow As used in this presentation, adjusted operating cash flow is defined as EQTs net cash provided by operating activities less changes in other assets…
  35. 1Q 2019 Earnings Presentation – EQT Corp – slide 35
    Non-GAAP Financial Measure Reconciliation of Adjusted Operating Cash Flow and Adjusted Free Cash Flow The table below reconciles adjusted operating cash flow and adjusted free cash flow with net cash provided by operating activities,…
  36. 1Q 2019 Earnings Presentation – EQT Corp – slide 36
    Non-GAAP Financial Measure Reconciliation of Adjusted Operating Cash Flow and Adjusted Free Cash Flow The table below reconciles adjusted operating cash flow and adjusted free cash flow with net cash provided by operating activities,…
  37. 1Q 2019 Earnings Presentation – EQT Corp – slide 37
    Non-GAAP Financial Measure EBITDA Attributable to Discontinued Operations The table below reconciles EBITDA attributable to discontinued operations with income from discontinued operations, net of tax, the most comparable financial…
  38. 1Q 2019 Earnings Presentation – EQT Corp – slide 38
    Non-GAAP Financial Measure Adjusted SG&A per unit Adjusted SG&A per unit is a non-GAAP supplemental financial measure that is presented because it is an important measure used by EQTs management to evaluate period-to-period comparisons…

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