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Analyst Presentation – EQT Corp

EQT Corp · Feb 9, 2015 · 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 February 2015
  2. Analyst Presentation – EQT Corp – slide 2
    Key Investment Highlights Extensive reserves of natural gas* 10.7 Tcfe Proved; 22 years R/P 42.8 Tcfe 3P; 87 years R/P 53 Tcfe Total Resource Potential; 108 years R/P Proven ability to profitably develop our reserves 23%…
  3. Analyst Presentation – EQT Corp – slide 3
    Leading Appalachian E&P Company 2014 Operating Income of 853.4 million 9,100 pipeline miles 10.7 Tcfe proved reserves 3.4 MM acres As of 12/31/14 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 42.8 Tcfe 3P reserves (as of December 31, 2014) 12,000 Upper Devonian Other 10,739 455 10,000 Huron 760 Marcellus 8,348 1,240 215 8,000 861 Huron 11.9 Bcfe 1,316 6,004 6,000…
  6. Analyst Presentation – EQT Corp – slide 6
    Marcellus Play Near term development focused in four areas Central PA 600,000 EQT acres 86% NRI / 80% HBP 29% wet 23.3 Tcfe 3P Southwestern PA 31 Tcfe total resource potential 122 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 130,000 EQT acres 1,630 locations Kevech Pad 6 wells 247 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 1,070 locations 171 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 730 locations 64 wells online* 4 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 32,000 EQT acres 335 locations 50 wells online* 9 wells in…
  11. Analyst Presentation – EQT Corp – slide 11
    Marcellus Economics IRR - Blended Marcellus Development Areas 350% Wellhead After OpEx After Tax 300% 250% 200% 150% 100% PRICE ATAX IRR 50% 3.00 17% 3.50 30% 4.00 46% 4.50 66% 0% 3.00 3.50 4.00 4.50 5.00…
  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 30 wells online* 59 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
    Industry Leading Cost Structure 3-year F&D (all sources) Mean = 2.74 0.88 /Mcfe For the three years ended 12/31/2013 Per Unit Operating Expenses Mean = 1.68 0.52 /Mcfe Year ended 12/31/2013 17
  15. Analyst Presentation – EQT Corp – slide 15
    Midstream Overview Transmission & Storage 3.5 Bcf/d current capacity 47 Bcf gas storage capacity Gathering 2.0 Bcf/d capacity Formed MLP in 2012 (NYSE: EQM) 600 700 EQT Corporation Adjusted EQT Midstream EBITDA* EQT Midstream…
  16. Analyst Presentation – EQT Corp – slide 16
    EQT Corporation Midstream Marcellus Midstream Assets 2015 Gathering CAPEX 135 - 160 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…
  17. Analyst Presentation – EQT Corp – slide 17
    EQT Midstream Partners, LP (NYSE: EQM) Transmission and storage 3.0 Bcf/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of gas storage capacity Gathering System Jupiter Gathering System Highlights market…
  18. Analyst Presentation – EQT Corp – slide 18
    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/d capacity commitments 20-year…
  19. Analyst Presentation – EQT Corp – slide 19
    EQT Midstream Transmission Allegheny Valley Connector EQT acquired December 2013 200-mile FERC-regulated interstate pipeline 450 MMcf/d capacity 15 Bcf gas storage capacity 30 MM CAPEX in 2015 40 MM projected annual EBITDA…
  20. Analyst Presentation – EQT Corp – slide 20
    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…
  21. Analyst Presentation – EQT Corp – slide 21
    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…
  22. Analyst Presentation – EQT Corp – slide 22
    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…
  23. Analyst Presentation – EQT Corp – slide 23
    Appendix 26
  24. Analyst Presentation – EQT Corp – slide 24
    Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) NGLs (1.6 Gal/Mcf) 10,000 6.00 Btu Premium 9,000 NYMEX 8,000 5.00 7,000 4.00 3.66 3.66 6,000 /Mcf 0.61…
  25. Analyst Presentation – EQT Corp – slide 25
    Capital Investment Summary 2.0 2.05 1.8 1.4 1.2 Midstream Production Distribution Excludes acquisitions 28
  26. Analyst Presentation – EQT Corp – slide 26
    Marcellus Play Acres Within Each Core Development Area EQT has 600,000 total Marcellus acres Expect to develop in four areas for several years Active areas represent 332,000 acres and 3,765 locations EQT has 131,000 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 30
  28. Analyst Presentation – EQT Corp – slide 28
    Marcellus Economics IRR - Southwestern PA 600% Wellhead After OpEx After Tax 500% 400% 300% 200% PRICE ATAX IRR 100% 3.00 28% 3.50 49% 4.00 79% 4.50 119% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 31
  29. Analyst Presentation – EQT Corp – slide 29
    Marcellus Economics IRR - Northern WV Wet Gas Area 400% Wellhead After OpEx After Tax 350% 300% 250% 200% 150% 100% PRICE ATAX IRR 3.00 27% 50% 3.50 41% 4.00 58% 4.50 78% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 32
  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 3.00 7% 10% 3.50 12% 4.00 19% 4.50 28% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 33
  31. Analyst Presentation – EQT Corp – slide 31
    Marcellus Economics IRR - Northern WV Dry Gas Area 160% Wellhead After OpEx After Tax 140% 120% 100% 80% 60% 40% PRICE ATAX IRR 3.00 9% 20% 3.50 16% 4.00 26% 4.50 37% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 34
  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 35
  33. Analyst Presentation – EQT Corp – slide 33
    Upper Devonian IRR 160% Wellhead After OpEx After Tax 140% 120% 100% 80% 60% 40% PRICE ATAX IRR 3.00 9% 20% 3.50 16% 4.00 26% 4.50 37% 0% 3.00 3.50 4.00 4.50 5.00 Realized Price 36
  34. Analyst Presentation – EQT Corp – slide 34
    Marcellus Capacity EQT Capacity & Firm Sales Market Mix MDth/D 2,500 2015E 2016E TETCO M2 3133% 1921% 2,000 FIRM SALES (SHORTTERM) TETCO M3 3436% 3133% FIRM SALES (LONGTERM) TCO 910% 910% 1,500 FIRM MIDWEST Midwest 910%…
  35. Analyst Presentation – EQT Corp – slide 35
    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 ( MM, except net debt /…
  36. Analyst Presentation – EQT Corp – slide 36
    Risk Management Hedging 2015 2016** 2017** Fixed Price Total Volume (Bcf) 265 148 31 Average Price per Mcf* 4.17 4.27 4.27 Collars Total Volume (Bcf) 42 - - Average Floor Price per Mcf * 4.57 - - Average Cap Price per Mcf *…
  37. Analyst Presentation – EQT Corp – slide 37
    Price Reconciliation Three Months Ended Years Ended December 31, December 31, in thousands (unless noted) 2014 2013 2014 2013 LIQUIDS Natural Gas Liquids (NGLs): Sales Volume (MMcfe) (a) 12,819 7,812 40,587 27,860 Sales Volume…
  38. Analyst Presentation – EQT Corp – slide 38
    Price Reconciliation (continued) Three Months Ended Years Ended December 31, December 31, in thousands (unless noted) 2014 2013 2014 2013 Net Liquids sales 61,302 61,414 254,647 194,043 Net natural gas sales, including cash settled…
  39. Analyst Presentation – EQT Corp – slide 39
    Per Unit Operating Expenses Three Months Ended Year Ended UNIT COSTS December 31, December 31, 2014 2013 2014 2013 Production segment costs: (/Mcfe) LOE 0.13 0.14 0.14 0.15 Production taxes 0.13 0.12 0.14 0.13 SG&A 0.21 0.23 0.25…
  40. Analyst Presentation – EQT Corp – slide 40
    Appendix Non-GAAP Reconciliation EQT Corporation Adjusted Midstream EBITDA (millions) 2010 2011 2012 2013 2014 Midstream operating income 179 417 237 329 384 Add: depreciation and amortization 62 57 65 75 87 Less: gains on…

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