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2Q 2020 Earnings Presentation – EQT Corp

EQT Corp · Jul 28, 2020 · 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. 2Q 2020 Earnings Presentation – EQT Corp – slide 1
    Investor Presentation July 27, 2020 7/26/20 1 1 20
  2. 2Q 2020 Earnings Presentation – EQT Corp – slide 2
    Company Highlights Second Quarter 2020 Highlights: Delivered sales volumes of 346 Bcfe or 3.8 Bcfe per day, 21 Bcfe above midpoint of guidance for second quarter 2020 Total operating revenues of 527 million; received average…
  3. 2Q 2020 Earnings Presentation – EQT Corp – slide 3
    EQT Corporate Overview Dominant position in the core of the Appalachian Basin UTICA ASSET PROFILE MARCELLUS Core Net Marcellus Acres(1) 630,000 Acres (1) Core Net OH Utica Acres 60,000 Acres (1,2) Core Net Undeveloped Marcellus…
  4. 2Q 2020 Earnings Presentation – EQT Corp – slide 4
    Why Invest in EQT Uniquely positioned to deliver shareholder value Deepest inventory of Tier I drilling locations in the lowest cost natural World Class Asset Base gas basin in the U.S. (15+ years) Only Appalachian company with…
  5. 2Q 2020 Earnings Presentation – EQT Corp – slide 5
    Corporate Strategy Building a durable and sustainable business for long term value creation Maximize value from existing assets Become the operator of choice Responsible capital allocation Be the low cost operator Building a…
  6. 2Q 2020 Earnings Presentation – EQT Corp – slide 6
    Promises Made Promises Delivered We have successfully transformed into a modern, technology-enabled energy producer Promise Milestone Delivery Achieve 730 per foot well costs by mid-year 2020 Well costs of 680 per foot in 2Q20 80% of…
  7. 2Q 2020 Earnings Presentation – EQT Corp – slide 7
    Going Beyond our Promises A New Paradigm for the Shale Business EQTs success plays an integral role in providing the U.S. with a clean, domestic energy source Success starts and continues with a strong balance sheet and financial…
  8. 2Q 2020 Earnings Presentation – EQT Corp – slide 8
    Meaningful Reduction in Well Costs Being Realized Achieved and exceeded second half 2020 well cost target of 730 per lateral foot PA MARCELLUS WELL COSTS(1) /ft. 970 Target(2): 730 850 800 745 680 50/ft. below target…
  9. 2Q 2020 Earnings Presentation – EQT Corp – slide 9
    EQT Continues to Push the Operational and Technical Boundaries Setting records and driving value through improved drilling operations HORIZONTAL DRILLING SPEED (FT/HR) HORIZONTAL DAYS PER 1,000 FT. 200 1.00 180 160 0.80 140 120…
  10. 2Q 2020 Earnings Presentation – EQT Corp – slide 10
    Next Generation Frac Technology Further Improves Operational and Environmental Performance PUMPING HOURS PER MONTH STAGES PER MONTH 400 200 180 300 160 200 140 3Q19 4Q19 1Q20 2Q20 3Q19 4Q19 1Q20 2Q20 11
  11. 2Q 2020 Earnings Presentation – EQT Corp – slide 11
    New Technology Is Driving Efficiency Gains Complementing our ESG Focus Evolving our operations to drive down costs and lessen environmental impact Electric Frac Fleet Hybrid Drilling Rigs High automation capacity, improving cycle…
  12. 2Q 2020 Earnings Presentation – EQT Corp – slide 12
    2020E Capital Expenditures Budget Evolution towards more efficient capital deployment 2020E CAPITAL EXPENDITURES(1) (B) 1.6 2020 Capital Expenditure Budget: Reserve Development: 815 - 875 MM 1.4 PA Marcellus: 645 MM 1.2 OH…
  13. 2Q 2020 Earnings Presentation – EQT Corp – slide 13
    2020E Detailed Guidance PRODUCTION 2020E FINANCIAL GUIDANCE(1) Total Sales Volumes (Bcfe) 1,450 - 1,500 Btu uplift (MMbtu/Mcf) 1.045 - 1.055 Gas 95% Average Differential (/Mcf) (0.40) - (0.20) Liquids 5% Adjusted EBITDA(2,3) (MM)…
  14. 2Q 2020 Earnings Presentation – EQT Corp – slide 14
    Market Update: Natural Gas Fundamentals Natural gas supply indicators suggest an undersupplied market in 2021 Rig Counts(1) Jan-20 Jul-20 450 900 U.S. rigs down 67%, reducing well inventory & 400 350 800 affecting future gas…
  15. 2Q 2020 Earnings Presentation – EQT Corp – slide 15
    Debt and Capitalization Summary As of June 30, 2020 4.6 B in total debt B 6/30/20 3/31/20 Equity settlement of the convertible senior notes could Cash & Cash Equivalents 0.0 0.0 reduce long-term debt by 0.3 B Current Portion of…
  16. 2Q 2020 Earnings Presentation – EQT Corp – slide 16
    Effectively Managing Maturity Schedule Multiple levers can be pulled to manage upcoming maturities CLEAR LINE OF SIGHT AMPLE COVERAGE AND OPTIONALITY Does not include 2021+ FCF Next substantial debt maturity not until…
  17. 2Q 2020 Earnings Presentation – EQT Corp – slide 17
    Meaningful Progress Made Towards Net Debt Target Path to less than 2.0x net debt to EBITDA(1) NET DEBT(1,2,3) (B) 5.0 5.3 4.6 4.0 1.5 B reduction target 2021+ FCF 3.0 2.0 1.0 - 12/31/2019 1Q20 Net Debt…
  18. 2Q 2020 Earnings Presentation – EQT Corp – slide 18
    Actively Managing Liquidity Ample liquidity to cover midstream letters of credit (LC) Successfully placed 0.1 B in surety bonds during LIQUIDITY(1) 2Q20, replacing letters of credit to improve liquidity Excess surety capacity…
  19. 2Q 2020 Earnings Presentation – EQT Corp – slide 19
    Firm Transportation Portfolio Accesses diverse markets and provides flexibility and opportunity Rationalizing our firm transportation portfolio to improve net-back pricing 2Q20: Have executed several small FT trades with positive…
  20. 2Q 2020 Earnings Presentation – EQT Corp – slide 20
    Commitment to ESG Transparency EQT leads in environmental, social & governance (ESG) disclosure Bloomberg ESG Disclosure: scores above 40 demonstrate good transparency; scores 50-70 demonstrate excellent transparency CURRENT…
  21. 2Q 2020 Earnings Presentation – EQT Corp – slide 21
    Set up for EQT is Compelling Promise big, deliver big Improving the balance sheet & de-risking near-term debt maturities 2021 natural gas commodity set up compelling for EQT Ability to generate significant free cash flow…
  22. 2Q 2020 Earnings Presentation – EQT Corp – slide 22
    Appendix 23 23
  23. 2Q 2020 Earnings Presentation – EQT Corp – slide 23
    Second Quarter 2020 Results OPERATIONAL AND FINANCIAL RESULTS 2Q 2020 CAPITAL EXPENDITURES (mm) 2Q 2020 Marcellus Bcfe 306 Reserve development 235 Ohio Utica Bcfe 38 Land and lease 28 Other Bcfe 2 Capitalized overhead 13 Total…
  24. 2Q 2020 Earnings Presentation – EQT Corp – slide 24
    Impact of Gas Gathering Agreement Significant short-term fee relief & long-term low cost fee structure CORPORATE GATHERING RATES (/MCFE)(1,2,3) MINIMUM VOLUME COMMITMENT FOR ETRN GGA PRESENT SHORT-TERM LONG-TERM MVC Agreement Status…
  25. 2Q 2020 Earnings Presentation – EQT Corp – slide 25
    Risk Management As of July 22, 2020 Philosophy: 2020(1) 2021 2022 2023 2024 Swaps Volume (MMDth) 575 467 - 2 2 Risk mitigation tool to de-risk cash flow and manage leverage Average Price (/dth) 2.74 2.50 - 2.67 2.67 Calls -…
  26. 2Q 2020 Earnings Presentation – EQT Corp – slide 26
    Experienced, Diverse Board to Oversee EQTs Initiatives DIRECTOR PRINCIPAL EXPERIENCE UNIQUE CONTRIBUTIONS Expertise in public company governance in the context of the energy industry LYDIA BEEBE* Former Corp Secretary, Chevron…
  27. 2Q 2020 Earnings Presentation – EQT Corp – slide 27
    ESG Underpins EQTs Success As a ONE Future Coalition member, EQT exceeded the methane intensity sector level target of 0.28% with a rate of 0.15% (methane emissions per gross COLLABORATIONS production) Joined APIs Environmental…
  28. 2Q 2020 Earnings Presentation – EQT Corp – slide 28
    Non-GAAP Financial Measure Adjusted Net (Loss) Income Adjusted net (loss) income is defined as net (loss) income, excluding impairments, transaction, proxy and reorganization costs, the revenue impact of changes in the fair value of…
  29. 2Q 2020 Earnings Presentation – EQT Corp – slide 29
    Non-GAAP Financial Measure Reconciliation of Adjusted Net (Loss) Income The table below reconciles adjusted net (loss) income with net (loss) income, the most comparable financial measure calculated in accordance with GAAP, as derived…
  30. 2Q 2020 Earnings Presentation – EQT Corp – slide 30
    Non-GAAP Financial Measure Adjusted EBITDA Adjusted EBITDA is defined as net (loss) income, excluding interest expense, income tax (benefit) expense, depreciation and depletion, amortization of intangible assets, impairments,…
  31. 2Q 2020 Earnings Presentation – EQT Corp – slide 31
    Non-GAAP Financial Measure Reconciliation of Adjusted EBITDA The table below reconciles adjusted EBITDA with net (loss) income, the most comparable financial measure as calculated in accordance with GAAP, as reported in the Statements of…
  32. 2Q 2020 Earnings Presentation – EQT Corp – slide 32
    Non-GAAP Financial Measure Adjusted Operating Cash Flow and Free Cash Flow Adjusted operating cash flow is defined as net cash provided by operating activities less changes in other assets and liabilities. Free cash flow is defined as…
  33. 2Q 2020 Earnings Presentation – EQT Corp – slide 33
    Non-GAAP Financial Measure Reconciliation of Net Debt Net debt is defined as total debt less cash and cash equivalents. Total debt includes the Company's current portion of debt, credit facility borrowings, term loan borrowings, senior…
  34. 2Q 2020 Earnings Presentation – EQT Corp – slide 34
    Non-GAAP Financial Measure Adjusted Interest Expense Per Unit Adjusted interest expense per unit is defined as interest expense less non-cash interest expense (amortization) of debt discounts and issuance costs divided by total sales…

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