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Analyst Presentation – EQT Corp

EQT Corp · Dec 1, 2014 · 40 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. Analyst Presentation – EQT Corp – slide 1
    Analyst Presentation December 2014
  2. Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 8.3 Tcfe Proved; 23 years R/P 36.4 Tcfe 3P; 100 years R/P 44 Tcfe Total Resource Potential; 120 years R/P Proven ability to profitably develop our reserves 24%…
  3. Analyst Presentation – EQT Corp – slide 3
    Leading Appalachian E&P Company 2013 Operating Income of 654.6 million 10,400 pipeline miles 8.3 Tcfe proved reserves 3.6 MM acres As of 12/31/13 6
  4. Analyst Presentation – EQT Corp – slide 4
    Production By Play Marcellus Shale drilling driving growth 1,800 Marcellus 1,600 Huron horizontal Vertical 1,400 1,200 Production MMcf/d 1,000 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010…
  5. Analyst Presentation – EQT Corp – slide 5
    Reserves By Play Proved Reserve Growth 36.4 Tcfe 3P reserves (as of December 31, 2013) 9,000 8,348 Upper Devonian 215 8,000 CBM/Other 861 Huron 7,000 Marcellus 1,316 6,004 6,000 5,220 5,365 761 Huron 11.5 Bcfe 5,000…
  6. Analyst Presentation – EQT Corp – slide 6
    Marcellus Play Near term development focused in four areas Central PA 580,000 EQT acres 86% NRI / 80% HBP 33% wet 18.5 Tcfe 3P Southwestern PA 23.9 Tcfe total resource potential 181 wells in 2015 Northern WV (Dry) Northern…
  7. Analyst Presentation – EQT Corp – slide 7
    Marcellus Play Southwestern PA Prolific dry gas region Oliver West Pad 3 wells 3,919 Avg Lateral Length per well 9,291 Mcfe Avg 30-day IP per well 115,000 EQT acres 1,460 locations Kevech Pad 6 wells 220 wells online* 2,970…
  8. Analyst Presentation – EQT Corp – slide 8
    Marcellus Play Northern West Virginia Wet Gas Area Enhanced economics from liquids uplift Big 190 Pad 5 wells 6,308 Avg Lateral Length per well 12,511 Mcfe Avg 30-day IP per well 90,000 EQT acres 1,060 locations 156 wells…
  9. Analyst Presentation – EQT Corp – slide 9
    Marcellus Play Central Pennsylvania Early stages of acreage delineation 80,000 EQT acres Frano Pad 3 wells 4,409 Avg Lateral Length per well 7,532 Mcfe Avg 30-day IP per well 720 locations 55 wells online* 19 wells in 2015…
  10. Analyst Presentation – EQT Corp – slide 10
    Marcellus Play Northern West Virginia Dry Gas Area EQTs newest development area GRT26 Pad 2 wells 3,270 Avg Lateral Length per well 6,547 Mcfe Avg 30-day IP per well 30,000 EQT acres 300 locations 49 wells online* 24 wells in…
  11. Analyst Presentation – EQT Corp – slide 11
    Marcellus Economics IRR - Blended Marcellus Development Areas PRICE ATAX IRR 3.00 26% 3.50 40% 4.00 59% 4.50 82% Realized Price See appendix for IRR by development area 14
  12. Analyst Presentation – EQT Corp – slide 12
    Upper Devonian Play Developed in conjunction with Marcellus 170,000 near-term testing & development EQT acres 2,000 locations 26 wells online* 58 wells in 2015 4,800 foot laterals 83 acre spacing 6.1 Bcfe EUR / well* Greene…
  13. Analyst Presentation – EQT Corp – slide 13
    Dry Utica / Point Pleasant Potential Targeting deep, high pressure rock beneath existing development areas 400,000 EQT acres 3,000 locations 5 wells in 2015 6,400 foot lateral 13,500 feet deep 12 - 17 MM / well EQT acreage…
  14. Analyst Presentation – EQT Corp – slide 14
    Permian Basin Stacked Horizontal Potential 73,000 net acres 78% WI / 62% NRI Howard Mitchell Nolan 98% HBP 500 MMBOE of resource potential Stacked Play Opportunity Upper Wolfcamp Sterling Lower Wolfcamp Glasscock Coke…
  15. Analyst Presentation – EQT Corp – slide 15
    Industry Leading Cost Structure 3-year F&D (all sources) 6.00 Mean = 2.74 4.00 0.88 /Mcfe 2.00 0.00 SM SWN CHK RRC EQT EOG EGN AR STR COG NFG NFX XEC RICE WLL CXO…
  16. Analyst Presentation – EQT Corp – slide 16
    Midstream Overview Transmission & Storage 2.8 TBtu/d current capacity 47 Bcf gas storage capacity Gathering 1.9 TBtu/d capacity by year-end 2014 Formed MLP in 2012 (NYSE: EQM) EQT Corporation Adjusted EQT Midstream EBITDA* 600…
  17. Analyst Presentation – EQT Corp – slide 17
    EQT Corporation Midstream Marcellus Midstream Assets 2015 Gathering CAPEX 235 MM EQT 135 - 145 MM EQM Tioga 65 MMcf/d Allegheny Valley Connector Longhorn 130 MMcf/d Terra 80 MMcf/d Mercury 250 MMcf/d Applegate 150…
  18. Analyst Presentation – EQT Corp – slide 18
    EQT Midstream Partners, LP (NYSE: EQM) Transmission and storage 2.8 Tbtu/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of gas storage capacity Gathering System Jupiter Gathering System Highlights market…
  19. Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Partners, LP Growth Projects Mountain Valley Pipeline 300-mile FERC regulated pipeline to growing demand center in southeast US Q4 2018 expected in-service JV with NextEra Energy 2 Bcf/day capacity 20-year term…
  20. Analyst Presentation – EQT Corp – slide 20
    EQT Midstream Transmission Allegheny Valley Connector EQT acquired December 2013 200 mile FERC-regulated interstate pipeline 450 BBtu/d capacity 15 Bcf gas storage capacity 30 MM CAPEX in 2015 40 MM projected annual EBITDA…
  21. Analyst Presentation – EQT Corp – slide 21
    Corporate Citizenship Safety Our first priority All accidents are preventable Company goal = zero incidents Committed to: The environment Our employees and contractors The communities where we drill and work EQT Foundation…
  22. Analyst Presentation – EQT Corp – slide 22
    Drilling and Hydraulic Fracturing Committed to operate in accordance with federal, state and local regulations Industry leading spill prevention plans and results Supports the disclosure of frac fluid additives Utilize multiple…
  23. Analyst Presentation – EQT Corp – slide 23
    Investment Summary Extensive reserves of natural gas Proven ability to profitably develop our reserves Committed to maximize shareholder value by: Accelerating the monetization of our vast reserves Operating in a safe and…
  24. Analyst Presentation – EQT Corp – slide 24
    Liquids Volume Growth and Marcellus Price Uplift Liquids Volume Growth Marcellus Liquids Price Uplift (1200 Btu Gas) 10,000 NGLs (1.6 Gal/Mcf) 9,000 Btu Premium 6.00 8,000 NYMEX 7,000 5.00 4.49 4.25 6,000 0.79 4.00…
  25. Analyst Presentation – EQT Corp – slide 25
    Capital Investment Summary 3.0 2.5 2.5 2.3 1.8 2.0 1.4 B 1.5 1.2 1.0 0.5 0.0 2011 2012 2013 2014F 2015F Midstream Production Distribution Excludes acquisitions 29
  26. Analyst Presentation – EQT Corp – slide 26
    Marcellus Play Acres Within Each Core Development Area EQT has 580,000 total Marcellus acres Expect to develop in four areas for several years Active areas represent 315,000 acres and 3,540 locations EQT has 130,000 additional acres…
  27. Analyst Presentation – EQT Corp – slide 27
    Marcellus Play Type Curves by Area - 4,800 lateral Type curve and well cost data posted on www.eqt.com under investor relations 31
  28. Analyst Presentation – EQT Corp – slide 28
    Marcellus Economics IRR - Southwestern PA PRICE ATAX IRR 3.00 28% 3.50 49% 4.00 79% 4.50 119% Realized Price 32
  29. Analyst Presentation – EQT Corp – slide 29
    Marcellus Economics IRR - Northern WV Wet Gas Area PRICE ATAX IRR 3.00 65% 3.50 86% 4.00 111% 4.50 141% Realized Price 33
  30. Analyst Presentation – EQT Corp – slide 30
    Marcellus Economics IRR - Central PA PRICE ATAX IRR 3.00 7% 3.50 12% 4.00 19% 4.50 28% Realized Price 34
  31. Analyst Presentation – EQT Corp – slide 31
    Marcellus Economics IRR - Northern WV Dry Gas Area PRICE ATAX IRR 3.00 9% 3.50 16% 4.00 26% 4.50 37% Realized Price 35
  32. Analyst Presentation – EQT Corp – slide 32
    Upper Devonian Play Blended Type Curve - 4,800 lateral Type curve and well cost data posted on www.eqt.com under investor relations 36
  33. Analyst Presentation – EQT Corp – slide 33
    Upper Devonian IRR PRICE ATAX IRR 3.00 13% 3.50 22% 4.00 32% 4.50 45% Realized Price 37
  34. Analyst Presentation – EQT Corp – slide 34
    Huron Play IRR 120% Wellhead Wellhead After OpEx ATAX 100% 80% 60% 40% PRICE ATAX IRR 20% 4.00 35% 4.50 42% 5.00 50% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 38
  35. Analyst Presentation – EQT Corp – slide 35
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix 2014E 2015E Tetco M2 43-46% 31-33% Tetco M3 33-35% 34-36% TCO 11-13% 9-10% Midwest 0% 9-10% NYMEX 11-13% 14-16% 39
  36. Analyst Presentation – EQT Corp – slide 36
    Ample Financial Flexibility to Execute Business Plan EQT Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Capital Strong Structure balance sheet September 30, ( thousands,…
  37. Analyst Presentation – EQT Corp – slide 37
    Risk Management Hedging *The average price is based on a conversion rate of 1.05 MMBtu/Mcf **For 2016 & 2017, the Company also has a natural gas sales agreement for approximately 35 Bcf that includes a NYMEX ceiling price of 4.88…
  38. Analyst Presentation – EQT Corp – slide 38
    Price Reconciliation Three Months Ended Nine Months Ended September 30, September 30, in thousands (unless noted) 2014 2013 2014 2013 LIQUIDS Natural Gas Liquids (NGLs): Gross NGL Revenue (a) 84,868 43,786 215,016 144,469 Oil:…
  39. Analyst Presentation – EQT Corp – slide 39
    Per Unit Operating Expenses (a) NGLs and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods. Information for the three and nine months ended September 30, 2013, has been recast to reflect this…
  40. Analyst Presentation – EQT Corp – slide 40
    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted Midstream EBITDA (millions) 2008 2009 2010 2011 2012 2013 Midstream operating income 120 154 179 417 237 329 Add: depreciation and amortization 35 53 62 57 65 75 Less: gains on…

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