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ANALYST PRESENTATION – EQT Corp

EQT Corp · Dec 18, 2013 · 39 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 18, 2013
  2. ANALYST PRESENTATION – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 6.0 Tcfe Proved; 23 years R/P 25.9 Tcfe 3P; 100 years R/P 35.4 Tcfe Total Resource Potential; 135 years R/P Proven ability to profitably develop our reserves 28%…
  3. ANALYST PRESENTATION – EQT Corp – slide 3
    Leading Appalachian E&P Company 2014 EBITDA Forecast 1.7 billion 11,000 pipeline miles 6.0 Tcfe proved res. 3.5 MM acres www.eqt.com 6
  4. ANALYST PRESENTATION – EQT Corp – slide 4
    Production By Play Marcellus Shale drilling driving growth 1,600 Marcellus 1,400 Huron horizontal CBM 1,200 Vertical 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 25.9 Tcfe 3P reserves 7,000 (as of December 31, 2012) CBM/Other 6,004 6,000 Huron 5,365 761 Marcellus 5,220 5,000 889 866 965 4,068 Huron 7.4 4,000 1,062 Bcfe 991 1,475 3,110 Other…
  6. ANALYST PRESENTATION – EQT Corp – slide 6
    Marcellus Play Central PA 560,000 EQT acres 87% NRI / 85% HBP 15.7 Tcfe 3P 21.0 Tcfe resource potential Southwestern PA 186 wells in 2014 70% YOY production growth 50% of acreage will utilize RCS Northern WV Near term…
  7. ANALYST PRESENTATION – EQT Corp – slide 7
    Marcellus Play Southwestern PA Prolific dry gas region 105,000 EQT acres 1,200 locations 149 wells online* Kevech Pad 96 wells in 2014 2 wells 2,762 Avg Lateral Length per well 4,800 foot laterals 10,112 Mcfe Avg 30-day IP per…
  8. ANALYST PRESENTATION – EQT Corp – slide 8
    Marcellus Play Northern West Virginia Wet Gas Area Enhanced economics from liquids uplift Big 176 Pad 6 wells 3,688 Avg Lateral Length per well 90,000 EQT acres 8,103 Mcfe Avg 30-day IP per well 1,065 locations 96 wells…
  9. ANALYST PRESENTATION – EQT Corp – slide 9
    Marcellus Play Central Pennsylvania Early stages of acreage delineation 80,000 EQT acres Frano Pad 2 wells 3,614 Avg Lateral Length per well 727 locations 7,970 Mcfe Avg 30-day IP per well 42 wells online* 20 wells in 2014…
  10. ANALYST PRESENTATION – EQT Corp – slide 10
    Marcellus Economics IRR - Blended Marcellus Development Areas 250% Wellhead After OpEx After Tax 200% 150% 100% 50% PRICE ATAX IRR 4.00 58% 4.50 76% 5.00 96% 0% 3.00 3.50 4.00 4.50 5.00 See appendix for IRR by…
  11. ANALYST PRESENTATION – EQT Corp – slide 11
    Upper Devonian Play 170,000 EQT acres 5 - 6 MM / well 30 wells in 2014 6.0 Bcfe EUR / well 4,000 ft avg lateral length 2014 drilling program to delineate acreage position www.eqt.com 14
  12. ANALYST PRESENTATION – EQT Corp – slide 12
    Huron Play Kentucky 1.4 MM EQT acres 85 % Wet; 15 % Dry 10,000+ horizontal locations 800+ horizontal wells online** 120 wells planned in 2014 WV 6,000 foot laterals KY 1.4 Bcfe EUR / well* 120 wells 230 Mcfe EUR / ft. of…
  13. ANALYST PRESENTATION – EQT Corp – slide 13
    Utica Play 13,600 EQT acres Guernsey County, Ohio 9.4 MM / well 21 wells in 2014 6,500 ft avg lateral length in 2014 EQT CNX Chesapeake Range Enervest Eclipse Anadarko XTO Gulfport HG Energy www.eqt.com 16
  14. ANALYST PRESENTATION – EQT Corp – slide 14
    Industry Leading Cost Structure 7.50 3-year F&D (all sources) 1.30 Mean = 2.99 5.00 /Mcfe 2.50 0.00 PQ SD SM RRC SWN CHK EQT NBL QEP EOG COG NFX CLR PXD WLL PETD DVN…
  15. ANALYST PRESENTATION – EQT Corp – slide 15
    Liquids Volume Growth and Marcellus Price Uplift 35% of EQTs Marcellus acreage is wet NGL Volume Growth Marcellus Liquids Price Uplift (1200 Btu Gas) 7,000 8.00 NGLs (1.8 Gal/Mcf) 6,000 7.00 BTU Premium 6.38 NYMEX 6.00 5,000…
  16. ANALYST PRESENTATION – EQT Corp – slide 16
    Midstream Overview Transmission & Storage Gathering Marketing EQT Midstream Total Transmission capacity (BBtu/d) 2,700 Miles of transmission pipeline 900 Marcellus gathering capacity (BBtu/d) 1,500 Miles of Marcellus gathering…
  17. ANALYST PRESENTATION – EQT Corp – slide 17
    Midstream Overview EQT Production sales drives EQT Midstream EBITDA growth 70% of Midstream revenues from EQT Corporation Fixed fee contracts Transmission contracts with 9-year weighted average life* Minimal direct commodity…
  18. ANALYST PRESENTATION – EQT Corp – slide 18
    EQT Midstream Partners, LP (NYSE: EQM) Equitrans transmission and storage 2.25 Tbtu/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of working gas storage Highlights market valuation of midstream assets EQT…
  19. ANALYST PRESENTATION – EQT Corp – slide 19
    EQT Midstream Marcellus Gathering Total 2013 2014 capacity year-end capacity after Tioga (MMcf/d) capacity additions additions 65 MMcf/d Pennsylvania 1,150 120 1,270 West Virginia 350 320 670 Longhorn Total 1,500 440 1,940 130…
  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 90 MM CAPEX in 2014 40 MM annual EBITDA 23
  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 EQT meets or exceeds all federal, state and local regulations Industry leading spill prevention plans and results Supports the disclosure of frac fluid additives Utilize multiple barriers to…
  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
    Appendix www.eqt.com 27
  25. ANALYST PRESENTATION – EQT Corp – slide 25
    Capital Investment Summary 3.0 2.4 2.5 2.0 billions 1.5 1.5 1.2 1.2 1.1 1.0 0.5 0.0 2010 2011 2012 2013F 2014F Midstream Production Distribution *Excludes acquisitions and EQT Midstream Partners, LP www.eqt.com…
  26. ANALYST PRESENTATION – EQT Corp – slide 26
    Marcellus Play Type Curves by Area - 4,800 lateral 12,000 Southwestern PA 11,000 10,000 Northern WV - Wet 9,000 Central PA 8,000 Daily Production (Mcfed) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 11 21…
  27. ANALYST PRESENTATION – EQT Corp – slide 27
    Marcellus Play Acres Within Each Core Development Area EQT has 560,000 total Marcellus acres Expect to develop in three areas for several years Active areas represent 275,000 acres and 2,875 locations EQT has 105,000 additional…
  28. ANALYST PRESENTATION – EQT Corp – slide 28
    Marcellus Economics IRR - Southwestern PA 300% Wellhead After OpEx After Tax 250% 200% 150% 100% PRICE ATAX IRR 50% 4.00 63% 4.50 88% 5.00 119% 0% 3.00 3.50 4.00 4.50 5.00 Oil price held constant at 92.50 /bbl…
  29. ANALYST PRESENTATION – EQT Corp – slide 29
    Marcellus Economics IRR - Northern WV Wet Gas Area 300% Wellhead After OpEx After Tax 250% 200% 150% 100% PRICE ATAX IRR 50% 4.00 82% 4.50 99% 5.00 118% 0% 3.00 3.50 4.00 4.50 5.00 Oil price held constant at…
  30. ANALYST PRESENTATION – EQT Corp – slide 30
    Marcellus Economics IRR - Central PA 80% Wellhead After OpEx After Tax 70% 60% 50% 40% 30% 20% PRICE ATAX IRR 4.00 20% 10% 4.50 28% 5.00 37% 0% 3.00 3.50 4.00 4.50 5.00 Oil price held constant at 92.50 /bbl…
  31. ANALYST PRESENTATION – EQT Corp – slide 31
    Upper Devonian IRR 160% Wellhead Wellhead After OpEx ATAX 140% 120% 100% 80% 60% 40% NYMEX ATAX IRR 4.00 44% 4.50 55% 20% 5.00 66% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price www.eqt.com 34
  32. ANALYST PRESENTATION – EQT Corp – slide 32
    Huron Play IRR 120% Wellhead Wellhead After OpEx ATAX 100% 80% 60% 40% PRICE ATAX IRR 4.00 35% 20% 4.50 42% 5.00 50% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price www.eqt.com 35
  33. ANALYST PRESENTATION – EQT Corp – slide 33
    Marcellus & Utica Capacity EQT Capacity & Firm Sales Long-Haul Pipeline Outlets EQT Production areas www.eqt.com 36
  34. ANALYST PRESENTATION – EQT Corp – slide 34
    Pittsburghs Strip District NGV Station 1.6 million investment Sales Volumes Expect cashflow break-even volumes (200,000 gal) in 2013 12% return = 450,000 gal/yr. 31% 25% Vehicles have the potential to use 20 25 Tcf / year in the…
  35. ANALYST PRESENTATION – EQT Corp – slide 35
    Ample Financial Flexibility to Execute Business Plan Debt ratings Moodys Standard & Poors Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ( thousands, except net debt / capital) As of…
  36. ANALYST PRESENTATION – EQT Corp – slide 36
    Risk Management Hedging 2014 2015 2016 Fixed Price Total Volume (Bcf) 218 122 60 Average Price per Mcf * 4.35 4.39 4.45 Collars Total Volume (Bcf) 24 23 - Average Floor Price per Mcf * 5.05 5.03 - Average Cap Price per Mcf…
  37. ANALYST PRESENTATION – EQT Corp – slide 37
    Price Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 in thousands, unless noted Liquids Gross NGL Revenue 43,786 33,545 144,469 112,807 BTU Premium (Ethane sold as natural…
  38. ANALYST PRESENTATION – EQT Corp – slide 38
    Per Unit Operating Expenses Three Months Ended Nine Months Ended UNIT COSTS September 30, September 30, 2013 2012 2013 2012 Production segment costs: ( / Mcfe) LOE 0.15 0.18 0.16 0.19 Production taxes* 0.14 0.16 0.14 0.17 SG&A…
  39. ANALYST PRESENTATION – EQT Corp – slide 39
    Appendix Non-GAAP Reconciliation Adjusted Midstream EBITDA (millions) 2008 2009 2010 2011 2012 Midstream operating income 120 154 179 417 237 Add: depreciation and amortization 35 53 62 57 65 Less: gains on dispositions 203 0 Less:…

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