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3Q 2019 Earnings Presentation – EQT Corp

EQT Corp · Oct 31, 2019 · 37 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. 3Q 2019 Earnings Presentation – EQT Corp – slide 1
    ANALYST PRESENTATION Q3 2019 October 31, 2019
  2. 3Q 2019 Earnings Presentation – EQT Corp – slide 2
    EQT CORPORATE OVERVIEW DOMINANT POSITION IN THE CORE OF THE APPALACHIAN BASIN C U M U L AT I V E P R O D U C T I O N H E AT M A P S : ASSET PROFILE UTICA Core Net Marcellus Acres 660,000 Acres Core Net OH Utica Acres 60,000 Acres…
  3. 3Q 2019 Earnings Presentation – EQT Corp – slide 3
    WHY INVEST IN EQT UNIQUELY POSITIONED TO DELIVER SHAREHOLDER VALUE Deepest Inventory of Tier I drilling locations in the lowest cost natural gas basin in the U.S. 1 World Class Asset Base Only Appalachian company with multi-year core…
  4. 3Q 2019 Earnings Presentation – EQT Corp – slide 4
    CORPORATE STRATEGY MAXIMIZE SHAREHOLDER VALUE BE THE LOW COST OPERATOR DE-LEVER THE BUSINESS THROUGH CAPITAL ALLOCATION Today: Basin-leading operating costs Reduce absolute debt by 30+% by Focused on generating near-term and…
  5. 3Q 2019 Earnings Presentation – EQT Corp – slide 5
    THE 100-DAY PLAN WAS A SUCCESS POSITIONING EQT FOR EFFICIENT EXECUTION OF LARGE -SCALE DEVELOPMENT PROJECTS Focus Area Initiative Goal 100-Day Accomplishments ORGANIZATION People Ensure we have the right people All Evolution Leaders are…
  6. 3Q 2019 Earnings Presentation – EQT Corp – slide 6
    100-DAY PLAN SPOTLIGHT: STEP CHANGE IN DRILLING EFFICIENCIES EXPERIENCED MANAGEMENT + FRESH EYES + LEVERAGING TECHNOLOGY MARCELLUS DRILLING SPEED (FT/HR) OHIO UTICA DRILLING SPEED (FT/HR) 250 100 90 200 80 70 150 60…
  7. 3Q 2019 Earnings Presentation – EQT Corp – slide 7
    BENEFITS OF COMBO-DEVELOPMENT BUILT INTO CURRENT SCHEDULE DEVELOPING MULTIPLE WELLS AND PADS SIMULTANEOUSLY Washington County, PA Greene County, PA Wetzel County, WV 13 wells, 185k lateral feet 14 wells, 175k lateral feet 25 wells, 315k…
  8. 3Q 2019 Earnings Presentation – EQT Corp – slide 8
    EXPECTED PACE OF WELL COST REDUCTIONS REDUCING WELL COSTS BY 25% FASTER THAN INITIAL EXPECTATIONS Successful completion of 100-day plan Execution stage underway Enhanced front line leaders pushing Large scale projects hit schedule…
  9. 3Q 2019 Earnings Presentation – EQT Corp – slide 9
    2020E CAPITAL EXPENDITURES RESERVE DEVELOPMENT 1,030 - 1,090 MM PA Marcellus: 685 MM OH Utica: 200 MM WV Marcellus: 175 MM LAND 140 - 160 MM Leasehold Maintenance: 100 MM TOTAL CAPEX In-fill Leasing: 50 MM 1.30 - 1.40 B OTHER…
  10. 3Q 2019 Earnings Presentation – EQT Corp – slide 10
    2020E DEVELOPMENT HIGHLIGHTS INCREASING LATERALS UNDER MASTER OPERATIONS SCHEDULE Spud lateral lengths increase 80%+ by 2021 vs. 2019E PA MARCELLUS ACTIVITY WV MARCELLUS ACTIVITY 100 14,000 100 14,000 of Net Wells Average Lateral…
  11. 3Q 2019 Earnings Presentation – EQT Corp – slide 11
    MEANINGFUL REDUCTION IN CONTROLLABLE COSTS IN 2020E DELIVERING ON CAMPAIGN PROMISES PA MARCELLUS WELL COSTS(1) GROSS G&A(2) LAND & OTHER(3) CAPEX 310 970 265 850 240 745 730 200 MM MM /ft. Legacy 3Q19 (6) FY 2020E 2H…
  12. 3Q 2019 Earnings Presentation – EQT Corp – slide 12
    2020E DETAILED GUIDANCE PRODUCTION 2020E FINANCIAL GUIDANCE Total Sales Volumes (Bcfe) 1,450 - 1,500 NYMEX (/MMbtu)(1) 2.42 Gas 95% Btu uplift (MMbtu/Mcf) 1.04 - 1.05 Liquids 5% Average Differential (/Mcf) (0.35) - (0.15) Adjusted…
  13. 3Q 2019 Earnings Presentation – EQT Corp – slide 13
    WELL COST REDUCTIONS FULLY REALIZED IN 2021 ILLUSTRATIVE MAINTENANCE PROGRAM THROUGH 2022 Reserve Development Land Other (1) Capitalized Overhead 1.6 1.2 Capital Expenditures (B) 0.8 Reflects a 0.4 full-year of target…
  14. 3Q 2019 Earnings Presentation – EQT Corp – slide 14
    COMMITMENT TO INVESTMENT GRADE METRICS 5.2 B in total long-term debt B 9/30/19 Cash & Cash Equivalents 0.0 2.5 B unsecured revolving credit facility Current Portion of Debt 0.0 Largely undrawn (161 MM) as of 9/30/19 Note Payable to…
  15. 3Q 2019 Earnings Presentation – EQT Corp – slide 15
    COMMITMENT TO REDUCE DEBT BY 30% BY MID-YEAR 2020 MULTIPLE LEVERS TO PULL IN ADDITION TO FREE CASH FLOW GENERATION GOAL: 1.5 B+ IN ASSET MONETIZATIONS + ADJ. FCF BY MID-YEAR 2020 FREE CASH FLOW ETRN STAKE MINERALS E&P ASSETS…
  16. 3Q 2019 Earnings Presentation – EQT Corp – slide 16
    EQT HAS OPTIONALITY IN DOWNSIDE RATING CASE AMPLE LIQUIDITY TO COVER MIDSTREAM LETTERS OF CREDIT (LC) 2.5 B unsecured revolver: 161 MM drawn as of 9/30/19 2.50 Will remain unsecured even in a downside ratings case Not subject to…
  17. 3Q 2019 Earnings Presentation – EQT Corp – slide 17
    FIRM TRANSPORTATION PORTFOLIO PROVIDES ACCESS, STABILITY AND OPPORTUNITY Current Gross Throughput Diversity of delivered markets provides significant commercial 5,000,000 dth/d optionality Midwest EQT Portfolio offers price stability…
  18. 3Q 2019 Earnings Presentation – EQT Corp – slide 18
    APPENDIX
  19. 3Q 2019 Earnings Presentation – EQT Corp – slide 19
    THIRD QUARTER 2019 HIGHLIGHTS OPERATIONAL AND FINANCIAL HIGHLIGHTS 3Q 2019 3Q 2018 CAPITAL EXPENDITURES (mm) 3Q 2019 3Q 2018 Marcellus Bcfe 315 317 Reserve development 380 731 Ohio Utica Bcfe 65 52 Land and lease 49 61 Other Bcfe 1 5…
  20. 3Q 2019 Earnings Presentation – EQT Corp – slide 20
    2019E GUIDANCE PRICING AS OF 9/30/19 2019E GUIDANCE 4Q 2019 FY 2019 Production Total production sales volume Bcfe 355 - 375 1,490 - 1,510 Liquids sales volume, excluding ethane Mbbls 1,795 - 1,895 8,165 - 8,265 Ethane sales volume…
  21. 3Q 2019 Earnings Presentation – EQT Corp – slide 21
    RISK MANAGEMENT AS OF OCTOBER 25, 2019 Philosophy: 2019(1) 2020 2021 2022 2023 Swaps Risk mitigation tool to de-risk cash flow Volume (MMDth) 272 1,096 166 3 2 and manage leverage Average Price (/dth) 2.80 2.75 2.42 2.72 2.67…
  22. 3Q 2019 Earnings Presentation – EQT Corp – slide 22
    BALANCED CAPITAL ALLOCATION FRAMEWORK 1 DE-LEVER BALANCE SHEET Manage business to < 2.0x net debt / adjusted EBITDA(1) GOAL: MAXIMIZE FCF Maintain investment grade balance sheet metrics Solve numerator rather than grow into…
  23. 3Q 2019 Earnings Presentation – EQT Corp – slide 23
    DECLINE RATES INCLUDES ALL WELLS EXPECTED TO BE TURNED -IN-LINE BY YE 2019 STANDARDIZED WELL DESIGNS AND CHOKE-MANAGEMENT PROGRAM DRIVE LOWER BASE DECLINE ANNUAL 2019 BASE PRODUCTION DECLINE(1) EXIT TO EXIT BASE DECLINE 1,600 13%…
  24. 3Q 2019 Earnings Presentation – EQT Corp – slide 24
    EXPERIENCED, DIVERSE BOARD TO OVERSEE EQTS TRANSFORMATION DIRECTOR PRINCIPAL EXPERIENCE UNIQUE CONTRIBUTIONS Expertise in public company governance in the context of the energy industry LYDIA BEEBE Former Corp Secretary, Chevron…
  25. 3Q 2019 Earnings Presentation – EQT Corp – slide 25
    ENVIRONMENTAL, HEALTH AND SAFETY E N V I R O N M E N TA L S T E WA R D S H I P SAFETY IN THE COMMUNITY Founding partner of the Center for Employees participated in 13,000 EQT and the EQT Foundation a Responsible Shale Development…
  26. 3Q 2019 Earnings Presentation – EQT Corp – slide 26
    EQT AS A LEADING ENVIRONMENTAL STEWARD MORE THAN A LICENSE TO OPERATE BOARD & MANAGEMENT E N V I R O N M E N TA L METHANE EMISSIONS WAT E R M A N A G E M E N T OVERSIGHT C O L L A B O R AT I O N S I N I T I AT I V E S Strong water…
  27. 3Q 2019 Earnings Presentation – EQT Corp – slide 27
    NON-GAAP FINANCIAL MEASURE ADJUSTED NET (LOSS) INCOME FROM CONTINUING OPERATIONS Adjusted net (loss) income from continuing operations is a non-GAAP supplemental financial measure that is presented because it is an important measure used…
  28. 3Q 2019 Earnings Presentation – EQT Corp – slide 28
    NON-GAAP FINANCIAL MEASURE RECONCILIATION OF ADJUSTED NET (LOSS) INCOME FROM CONTINUING OPERATIONS The table below reconciles adjusted net (loss) income from continuing operations and adjusted EPS from continuing operations with loss…
  29. 3Q 2019 Earnings Presentation – EQT Corp – slide 29
    NON-GAAP FINANCIAL MEASURE ADJUSTED EBITDA Adjusted EBITDA is defined as loss from continuing operations, plus interest expense, income tax benefit, depreciation and depletion, amortization of intangible assets, impairment/loss on the…
  30. 3Q 2019 Earnings Presentation – EQT Corp – slide 30
    NON-GAAP FINANCIAL MEASURE RECONCILIATION OF ADJUSTED EBITDA The table below reconciles adjusted EBITDA with loss from continuing operations, the most comparable financial measure as calculated in accordance with GAAP, as reported in the…
  31. 3Q 2019 Earnings Presentation – EQT Corp – slide 31
    NON-GAAP FINANCIAL MEASURE ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW Adjusted operating cash flow is defined as the Companys net cash provided by operating activities less changes in other assets and liabilities, less…
  32. 3Q 2019 Earnings Presentation – EQT Corp – slide 32
    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, the…
  33. 3Q 2019 Earnings Presentation – EQT Corp – slide 33
    NON-GAAP FINANCIAL MEASURE EBITDA ATTRIBUTABLE TO DISCONTINUED OPERATIONS EBITDA attributable to discontinued operations is a non-GAAP supplemental financial measure defined as income from discontinued operations, net of tax plus…
  34. 3Q 2019 Earnings Presentation – EQT Corp – slide 34
    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 the Company's management to evaluate period-to-period…
  35. 3Q 2019 Earnings Presentation – EQT Corp – slide 35
    NON-GAAP FINANCIAL MEASURE RECONCILIATION OF ADJUSTED SG&A PER UNIT The table below reconciles adjusted SG&A per unit with SG&A, the most comparable financial measure calculated in accordance with GAAP, as derived from the Statements of…
  36. 3Q 2019 Earnings Presentation – EQT Corp – slide 36
    NON-GAAP FINANCIAL MEASURE NET DEBT Net debt is a non-GAAP supplemental financial measure that is presented because it is an important measure used by the Company's management to determine the Company's outstanding debt obligations that…
  37. 3Q 2019 Earnings Presentation – EQT Corp – slide 37
    NON-GAAP FINANCIAL MEASURE LAST TWELVE MONTHS (LTM) ADJUSTED EBITDA BY QUARTER The table below reconciles adjusted EBITDA with loss from continuing operations, the most comparable financial measure as calculated in accordance with GAAP,…

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