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Analyst Presentation – EQT Midstream Partners Lp

EQT Midstream Partners Lp · May 1, 2014 · 42 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 Midstream Partners Lp – slide 1
    Analyst Presentation May 2014
  2. Analyst Presentation – EQT Midstream Partners Lp – slide 2
    Non-GAAP Measures The Company uses Adjusted EQT Midstream EBITDA as a financial measure in this presentation. Adjusted EQT Midstream EBITDA is defined as EQT Midstream operating income (loss) plus depreciation and amortization expense…
  3. Analyst Presentation – EQT Midstream Partners Lp – slide 3
    Calculations Within This Presentation Finding and development costs (F&D costs) from all sources for peer companies presented in this presentation are calculated as the cost incurred, relating to natural gas and oil activities in…
  4. Analyst Presentation – EQT Midstream Partners Lp – slide 4
    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%…
  5. Analyst Presentation – EQT Midstream Partners Lp – slide 5
    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 6
  6. Analyst Presentation – EQT Midstream Partners Lp – slide 6
    Production By Play Marcellus Shale drilling driving growth 1,600 Marcellus 1,400 Huron horizontal CBM 1,200 Vertical 1,000 Production MMcf/d 800 600 Began horizontal drilling 400 200 0 2006 2007 2008 2009 2010…
  7. Analyst Presentation – EQT Midstream Partners Lp – slide 7
    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…
  8. Analyst Presentation – EQT Midstream Partners Lp – slide 8
    Marcellus Play Near term development focused in three areas Central PA 560,000 EQT acres 87% NRI / 85% HBP 18.5 Tcfe 3P 23.9 Tcfe total resource potential Southwestern PA 194 wells in 2014 70% YOY production growth 50% of…
  9. Analyst Presentation – EQT Midstream Partners Lp – slide 9
    Marcellus Play Southwestern PA Prolific dry gas region 110,000 EQT acres 1,260 locations 182 wells online* 102 wells in 2014 Kevech Pad 4,800 foot laterals 2 wells 2,762 Avg Lateral Length per well 87 acre spacing 10,112 Mcfe…
  10. Analyst Presentation – EQT Midstream Partners Lp – slide 10
    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 1,040 locations 158 wells…
  11. Analyst Presentation – EQT Midstream Partners Lp – slide 11
    Marcellus Play Central Pennsylvania Early stages of acreage delineation 80,000 EQT acres Frano Pad 2 wells 3,614 Avg Lateral Length per well 720 locations 7,970 Mcfe Avg 30-day IP per well 50 wells online* 20 wells in 2014…
  12. Analyst Presentation – EQT Midstream Partners Lp – slide 12
    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 Realized Price See…
  13. Analyst Presentation – EQT Midstream Partners Lp – slide 13
    Upper Devonian Play 170,000 EQT acres 5 - 6 MM / well 43 wells in 2014 6.0 Bcfe EUR / well* 4,000 ft avg lateral length in 2014 2014 drilling program to delineate acreage position EQT acreage *Based on 4,800 lateral…
  14. Analyst Presentation – EQT Midstream Partners Lp – slide 14
    Huron Play Kentucky Targeting high-return, liquid-rich acreage 1.4 MM EQT acres 85 % Wet; 15 % Dry 10,000+ horizontal locations 889 horizontal wells online** 120 wells planned in 2014 6,000 foot laterals WV 1.4 Bcfe EUR /…
  15. Analyst Presentation – EQT Midstream Partners Lp – slide 15
    Pending Acquisition of Permian Basin Assets Texas Stacked Horizontal Potential 73,000 net acres 78% WI / 62% NRI 98% HBP Howard Mitchell Nolan 500 MMBOE of resource potential Stacked Play Opportunity Upper Wolfcamp Lower…
  16. Analyst Presentation – EQT Midstream Partners Lp – slide 16
    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…
  17. Analyst Presentation – EQT Midstream Partners Lp – slide 17
    Liquids Volume Growth and Marcellus Price Uplift 35% of EQTs Marcellus acreage is wet Marcellus Liquids Price Uplift NGL Volume Growth (1200 Btu Gas) 7,000 8.00 NGLs (1.8 Gal/Mcf) 6,000 7.00 BTU Premium 6.76 NYMEX (1) 6.00…
  18. Analyst Presentation – EQT Midstream Partners Lp – slide 18
    Midstream Overview Transmission & Storage Legend Transmission Gathering Gathering EQT Leases Marketing Storage Pool Marcellus Huron EQT Utica Midstream Total Transmission capacity (BBtu/d) 2,700 Miles of transmission…
  19. Analyst Presentation – EQT Midstream Partners Lp – slide 19
    Midstream Overview EQT Production sales drive EQT Midstream EBITDA growth 70% of Midstream revenues from EQT Corporation Fixed fee contracts Transmission contracts with 15-year weighted average life* Minimal direct commodity…
  20. Analyst Presentation – EQT Midstream Partners Lp – slide 20
    EQT Midstream Partners, LP (NYSE: EQM) Transmission and storage 2.25 Tbtu/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of working gas storage Gathering System Jupiter Gathering System Highlights market…
  21. Analyst Presentation – EQT Midstream Partners Lp – slide 21
    EQT Midstream Partners, LP Jupiter Gathering System EQT sold to EQT Midstream Partners on May 7, 2014 1.18 billion 35 mile gathering system in Greene and Washington Counties in Pennsylvania 10-year firm transportation agreement…
  22. Analyst Presentation – EQT Midstream Partners Lp – slide 22
    EQT Midstream Marcellus Gathering Total Tioga 2013 2014 capacity 65 MMcf/d year-end capacity after (MMcf/d) capacity additions additions Pennsylvania 1,150 120 1,270 Longhorn West Virginia 350 320 670 130 MMcf/d Total 1,500 440…
  23. Analyst Presentation – EQT Midstream Partners Lp – slide 23
    EQT Midstream Transmission Allegheny Valley Connector EQT acquired December 2013 200 mile FERC-regulated interstate pipeline 450 BBtu/d capacity 15 Bcf working gas storage 90 MM CAPEX in 2014 40 MM annual EBITDA in 2014…
  24. Analyst Presentation – EQT Midstream Partners Lp – slide 24
    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…
  25. Analyst Presentation – EQT Midstream Partners Lp – slide 25
    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…
  26. Analyst Presentation – EQT Midstream Partners Lp – slide 26
    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…
  27. Analyst Presentation – EQT Midstream Partners Lp – slide 27
    Appendix 28
  28. Analyst Presentation – EQT Midstream Partners Lp – slide 28
    Capital Investment Summary 3.0 2.4 2.5 1.8 2.0 1.4 B 1.5 1.2 1.1 1.0 0.5 0.0 2010 2011 2012 2013 2014F Midstream Production Distribution Excludes acquisitions and EQT Midstream Partners, LP 29
  29. Analyst Presentation – EQT Midstream Partners Lp – slide 29
    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…
  30. Analyst Presentation – EQT Midstream Partners Lp – slide 30
    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 280,000 acres and 3,020 locations EQT has 130,000 additional…
  31. Analyst Presentation – EQT Midstream Partners Lp – slide 31
    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 Realized Price Oil price held constant at…
  32. Analyst Presentation – EQT Midstream Partners Lp – slide 32
    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 Realized Price Oil price held…
  33. Analyst Presentation – EQT Midstream Partners Lp – slide 33
    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 Realized Price Oil price held constant…
  34. Analyst Presentation – EQT Midstream Partners Lp – slide 34
    Upper Devonian IRR 160% Wellhead Wellhead After OpEx ATAX 140% 120% 100% 80% 60% 40% NYMEX ATAX IRR 4.00 44% 20% 4.50 55% 5.00 66% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 35
  35. Analyst Presentation – EQT Midstream Partners Lp – slide 35
    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 36
  36. Analyst Presentation – EQT Midstream Partners Lp – slide 36
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix* NYMEX 11% 12% TCO 11% 12% Tetco M2 48% 50% Tetco M3 26% 28% *2014 forecast 37
  37. Analyst Presentation – EQT Midstream Partners Lp – slide 37
    Pittsburghs Strip District NGV Station Sales Volumes 1.6 million investment 12% return = 450,000 gal/yr. Vehicles have the potential to use 15% 20 25 Tcf / year in the U.S. 20% 45% 20% EQT Fleet Refuse Taxi & Shuttle…
  38. Analyst Presentation – EQT Midstream Partners Lp – slide 38
    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) March 31,…
  39. Analyst Presentation – EQT Midstream Partners Lp – slide 39
    Risk Management Hedging 2014** 2015 2016*** Fixed Price Total Volume (Bcf) 171 131 60 Average Price per Mcf (NYMEX)* 4.36 4.37 4.45 Collars Total Volume (Bcf) 18 23 Average Floor Price per Mcf (NYMEX)* 5.05 5.03 Average Cap…
  40. Analyst Presentation – EQT Midstream Partners Lp – slide 40
    Price Reconciliation Three Months Ended March 31, in thousands (unless noted) 2014 2013 LIQUIDS NGLs: Gross NGL Revenue 72,114 51,423 Oil: Net Oil Revenue 4,214 4,986 Total Liquids Revenue 76,328 56,409 GAS Gas Revenue 516,636 270,427…
  41. Analyst Presentation – EQT Midstream Partners Lp – slide 41
    Per Unit Operating Expenses Three Months Ended UNIT COSTS March 31, 2014 2013 Production segment costs: ( / Mcfe) LOE 0.14 0.16 Production taxes 0.16 0.15 SG&A 0.24 0.28 0.54 0.59 Midstream segment costs: ( / Mcfe) Gathering…
  42. Analyst Presentation – EQT Midstream Partners Lp – slide 42
    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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