Eqt Corporation · NYSE:EQT
Eqt — Investor Presentation (October 2016)
31 slides from Eqt's investor presentation, October 2016
Slide 1: Analyst Presentation October 2016
Analyst Presentation October 2016
Slide 2: EQT Cautionary Statements
EQT Cautionary Statements EQT Corporation (NYSE: EQT) EQT Plaza 625 Liberty Avenue, Suite 1700 Pittsburgh, PA 15222 Pat Kane - Chief Investor Relations Officer (412) 553-7833 The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only p
Slide 3: Non-GAAP Measures
Non-GAAP Measures The Company uses Adjusted EQT Midstream EBITDA as a financial measure in this presentation. Adjusted EQT Midstream EBITDA is defined as the Company’s EQT Midstream business segment’s operating income (loss) plus depreciation and amortization expense less gains on dispositions. Adju
Slide 4: Key Investment Highlights
Key Investment Highlights Extensive reserves of natural gas* 10.0 Tcfe proved; >16 years R/P 6.3 Tcfe proved developed 78 Tcfe total resource potential Proven ability to profitably develop our reserves Six consecutive years of >25% production growth 22% production sales volume growth i
Slide 5: Leading Appalachian E&P Company
Leading Appalachian E&P Company 2015 Operating Income of $563.1 million 10.0 Tcfe proved reserves 9,100 pipeline miles 3.4 MM acres 5 As of 12/31/2015
Slide 6: Production By Play
Production By Play Marcellus Shale drilling driving growth 2,200 Marcellus 2,000 Other 1,800 1,600 Production MMcf/d 1,400 1,200 1,000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E 6 Huron reserves included in “Other”
Slide 7: Proved Reserves
Proved Reserves 12.0 10.0 8.0 3.7 5.9 Tcfe 6.0 4.4 2.4 3.2 4.0 6.3 4.8 2.0 4.0 3.0 2.8 0.0 2011 2012 2013 2014 2015 Proved Developed Proved Undeveloped 78 Tcfe Total Resource Potential 7 As of 12/31/2015
Slide 8: Marcellus Play
Marcellus Play 660,000 EQT acres 86% NRI / 80% HBP 7.8 Tcfe proved reserves 31 Tcfe total resource potential 105 wells in 2016 Core Development Area 8
Slide 9: Marcellus Core Development Area
Marcellus Core Development Area Development strategically focused on core 320,000 EQT acres* ~3,370 locations* 668 wells online* 105 wells in 2016: 84 PA wells 21 WV wells 6,500’ laterals $5.7 MM / well 13.6 Bcfe EUR / well 2.1 Bcfe / 1,000 ft. EUR Core Development Area 9 *As of 07/08/
Slide 10: Core Marcellus Economics
Core Marcellus Economics Assumptions Economics Lateral Length 6,500' 140% 120% EUR / Well (Bcfe) 13.6 100% EUR / 1,000' (Bcfe) 2.1 80% 60% Avg. Heat Content (MMBtu / Mcf) 1.07 40% 9,000' 6,500' 20% Well Cost ($MM) $5.7 5,500' 0% Working Interest 100% $2.00 $2.50 $3.00 Price 5,500' 6,500' 9,000' NRI
Slide 11: Utica Play
Utica Play 450,000 EQT acres* Pettit 593066 Greene County, PA 5,200’ lateral Shipman 593894 ~3,400 locations* Greene County, PA 7,000’ lateral 4 wells online 5 wells in 2016 13,000’ to 13,500’ deep Scotts Run 591340 30 Tcfe total resource Greene County, PA 3,200’ lateral potential $12 – $13 MM
Slide 12: Upper Devonian Play
Upper Devonian Play Developed in conjunction with Core Marcellus 70,000 core near-term development acres ~600 core locations* 74 wells online* 30 wells in 2016: 7,500’ laterals $5.7 MM / well 10.9 Bcfe EUR / well 1.5 Bcfe / 1,000 ft. EUR Core Upper Devonian Development Area 12 *As of 6/30/
Slide 13: Upper Devonian Economics
Upper Devonian Economics Assumptions Economics Lateral Length 7,500' 140% 120% EUR / Well (Bcfe) 10.9 100% 80% EUR / 1,000' (Bcfe) 1.5 60% Avg. Heat Content (MMBtu / Mcf) 1.042 40% 10,000' 7,500' 20% Well Cost ($MM) $5.7 6,500' 0% Working Interest 100% $2.50 $3.00 $3.50 Price 6,500' 7,500' 10,000' N
Slide 14: Upper Devonian Play: Benefits of Codevelopment
Upper Devonian Play Benefits of Codevelopment Upper Devonian: Use it or lose it investment Shared infrastructure improves IRR per well Codevelopment increases value per acre by 50% Fracs Grow Toward Low Pressure Codevelopment Delayed UD Development 200 400 Fracture Penetration (ft) 600 14
Slide 15: EQT Corporation Midstream Overview
EQT Corporation Midstream Overview – Consolidated Transmission & Storage* 3.6 Bcf/d current capacity 47 Bcf gas storage capacity Gathering* 2 Bcf/d capacity Formed MLP in 2012 (NYSE: EQM) EQT Corporation Adjusted EQT Midstream EBITDA** $700 800 EQT Midstream $600 700 EQT Midstream Partne
Slide 16: EQT Corporation Midstream Assets
EQT Corporation Midstream Midstream Assets Allegheny Valley Allegheny Tioga Valley 65 MMcf/d Connector Connector 200-mile FERC pipeline Longhorn 130 MMcf/d 450 MMcf/d capacity ~$40 MM projected annual Terra 80 MMcf/d EBITDA Applegate Marcellus Gathering 150 MMcf/d Applegate Longhorn
Slide 17: EQT GP Holdings, LP (NYSE: EQGP)
EQT GP Holdings, LP (NYSE: EQGP) EQT owns 90% LP interest of EQGP EQGP owns in EQM* 26.6% limited partner interest 1.8% general partner interest incentive distribution rights EQGP Price Value of EQGP Units Value per per Unit held by EQT ($MM) EQT share $22 $5,274 $31 $24 $5,753 $33 $26 $6,
Slide 18: EQT Midstream Partners, LP (NYSE: EQM)
EQT Midstream Partners, LP (NYSE: EQM) Transmission & Storage 3.1 Bcf/d current capacity 700 mile FERC-regulated interstate pipeline 32 Bcf of gas storage capacity Marcellus Gathering System Jupiter Gathering System PA dry gas Northern West Virginia Gathering System Wet and dry gas
Slide 19: EQT Midstream Partners, LP Growth Projects
EQT Midstream Partners, LP Growth Projects Ohio Valley Connector 37-mile FERC regulated pipeline to connect transmission in West Virginia to Clarington, OH Placed in-service Q4 2016 ~1 Bcf/d capacity 650 BBtu/d contracted by EQT under firm 20-year term Mountain Valley Pipeline 300-mile
Slide 20: Corporate Citizenship
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 charitable giving of $5.2 million in 2015 More than $20 m
Slide 21: Investment Summary
Investment Summary Extensive reserves of natural gas Proven ability to profitably develop our reserves Six consecutive years of >25% production growth 22% production sales volume growth in 2016 Extensive and growing midstream business Strong liquidity position Committed to maximize sha
Slide 22: Appendix
Appendix 22
Slide 23: Statoil Acreage Acquisition
Statoil Acreage Acquisition Closed transaction on July 8, 2016 62.5k Marcellus / 53k Utica net acres 500 new Marcellus locations of 5,600’ Stacked pay Existing Production 24 producing Marcellus wells 3 complete, not online 4 drilled, not complete 40 MMcfe/d* current Legend production EQT
Slide 24: Acreage Acquisition Summary
Acreage Acquisition Summary Acquisition Metrics Net Marcellus Acres 62,500 Net Utica Acres 53,000 Working Interest 100% Net Revenue Interest 84% Held by Production or Term 2018+ 87% Current Production* 40 MMcfe/d Incremental Feet of Pay 3.1 MM feet Estimated Reserves** 950 Bcfe Estimated Developed R
Slide 25: Liquids Volume Growth and Marcellus Impact
Liquids Volume Growth and Marcellus Impact Liquids Volume Growth Marcellus Liquids Price Impact (1200 Btu Gas) 12,000 10,000 8,000 Mbbls 6,000 4,000 2,000 - 2011 2012 2013 2014 2015 2016F Includes natural gas liquids and oil Pricing is as of 9/8/2016 and is the 1 year forward NYMEX and Mount Belvieu
Slide 26: Capital Investment Summary
Capital Investment Summary $1.9 2.0 $1.8 $1.6 1.5 $1.3 $1.0 $B 1.0 0.5 0.0 2012 2013 2014 2015 2016F Midstream Production 26 Excludes acquisitions and EQT Midstream Partners, LP
Slide 27: Scotts Run Utica Well Update
Scotts Run Utica Well Update Cumulative Production, Pressure and Rate vs. Time 4,500 4,000 EUR: 6.0 Bcf / 1,000’ Cumulative Production 3,500 (MMcf / 1,000’ Lateral) 3,000 2,500 3.0 Bcf / 1,000’ recovered by producing day 349 2,000 1,500 1,000 500 30 MMcf/d - -0 mid-July 365 1 730 2 1095 3 2015 Years
Slide 28: Marcellus Capacity
Marcellus Capacity EQT Capacity & Firm Sales Market Mix 2016E 2017E TETCO M2 20-22% 12-14% TETCO M3 35-37% 31-33% TCO 8-10% 6-8% Midwest 19-21% 30-32% NYMEX 13-15% 15-17% 28
Slide 29: Risk Management
Risk Management Hedge Position as of July 27, 2016 300 $4.00 $3.61 $3.31 $3.50 250 $3.13 $3.26 $3.00 $3.16 200 $2.98 $2.50 $ / Mcf Bcf 150 $2.00 $1.50 100 $1.00 50 $0.50 156 246 103 - $0.00 2016 2017 2018 Hedged Volume Average Hedge Price NYMEX Price 2016(a) 2017 2018 NYMEX Price ($/Mcf) as of 7/27/
Slide 30: Ample Financial Flexibility to Execute Business Plan
Ample Financial Flexibility to Execute Business Plan EQT Debt ratings Moody’s Standard & Poor’s Fitch Long-term debt Baa3 BBB BBB- Outlook Stable Stable Stable Strong balance sheet ($ MM, except net debt / capital) June 30, 2016 Short-term debt* $ 0 Long-term debt* 2,302 Cash and cash equivalents* (
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation EQT Corporation Adjusted EQT Midstream EBITDA (millions) 2011 2012 2013 2014 2015 Midstream operating income $417 $237 $329 $384 $473 Add: depreciation and amortization 57 65 75 87 95 Less: gains on dispositions 203 – 20 7 – Less: Big Sandy and Langley 14 – – – – Adjusted Mid