Analyst PresentationJune 2013
www.eqt.com 2EQT Corporation (NYSE: EQT)EQT Plaza625 Liberty Avenue, Suite 1700Pittsburgh, PA 15222Pat Kane - Chief Invest...
The Company uses adjusted Midstream EBITDA as a financial measure in this presentation. AdjustedMidstream EBITDA is define...
Calculations Within This PresentationFinding and development costs (F&D costs) from all sources for peer companiespresente...
Key Investment HighlightsExtensive reserves of natural gas* 6.0 Tcfe Proved; >23 years R/P 25.9 Tcfe 3P; >100 years R/P...
www.eqt.com 6275,000 customers6.0 Tcfe proved res. 11,000 pipeline miles3.5 MM acres2012 operating income$470.5 millionLea...
Marcellus Shale drilling driving growthProduction By Playwww.eqt.com 702004006008001,0001,2001,400MarcellusHuron horizonta...
Reserves By Playwww.eqt.com 8Marcellus 15.0Huron 7.4Other 0.825.9 Tcfe 3P reserves(as of December 31, 2012)35.4 Tcfe Total...
www.eqt.com 9560,000 EQT acres*87% NRI / 85% HBP15.7 Tcfe 3P**21.0 Tcfe resource potential**157 wells in 2013>70% YOY prod...
95,000 EQT acres1,080 locations109 wells online*56 wells in 20134,800 foot laterals87 acre spacing9.8 Bcfe EUR / well2,050...
Enhanced economics from liquids upliftwww.eqt.com 1190,000 EQT acres1,065 locations86 wells online**84 wells in 20134,800 ...
Early stages of acreage delineationwww.eqt.com 1280,000 EQT acres727 locations34 wells online*17 wells in 20134,800 foot l...
0%50%100%150%200%250%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 13Marcellus EconomicsIRR - Blen...
Upper Devonian Play14170,000 EQT acres$5 - $6 MM / well11 wells in 20136.0 Bcfe EUR / well4,800 ft avg lateral length2013 ...
Utica Play15RangeEclipseXTOHG EnergyCNXChesapeakeEnervestAnadarkoGulfportEQTwww.eqt.com13,600 EQT acresGuernsey County, Oh...
0.001.002.003.00COGEQTRRCSWNCHKXCOPQPETDNBLQEPDVNSMCXOAPCCLREOGPXDAPASDNFXWLL0.002.505.007.50RRCCOGEQTCLRPETDPQSMSDAPCNBLQ...
05001,0001,5002,0002,5003,0003,5004,0004,5005,0002008 2009 2010 2011 2012 2013EMbblsNGL Volume GrowthLiquidsVolume Growth ...
Midstream Overview18Transmission & StorageGatheringMarketingFormed MLP in 2012 (NYSE: EQM) ~25% of midstream assetsEQTMid...
*Based on revenues**Excludes Big Sandy and Langley in 2008-2011; see Non-GAAP Reconciliation on slide 41.Midstream Overvie...
EQT Midstream Partners, LP (NYSE: EQM)EQT Alignmentwww.eqt.com 20*Based on mid-point of EQT Midstream Partners guidance of...
EQT MidstreamEquitrans - Sunrise ProjectOwned by EQT Corp. Operated by EQT MidstreamPartners$225 MM capital project 314 ...
www.eqt.com 22EQT MidstreamMarcellus Gathering(MMcfd)2012year-endcapacity2013capacityadditionsTotalcapacityafteradditionsP...
Sale of Equitable Gas toPeoples Natural Gas Expected approval by year-end 2013 $720MM cash + midstream assetsMarcellus m...
$1.6 million investmentExpect cashflow break-evenvolumes (200,000 gal) in 201312% return = 450,000 gal/yr.Vehicles have th...
Corporate CitizenshipSafety – Our first priority All accidents are preventable Company goal = zero incidentsCommitted to...
Drilling and Hydraulic FracturingEQT meets or exceeds all federal, state and local regulationsIndustry leading spill preve...
Investment SummaryExtensive reserves of natural gasProven ability to profitably develop our reservesCommitted to maximize ...
www.eqt.com 28Appendix
Capital Investment Summarywww.eqt.com 29*Excludes acquisitions and EQT Midstream Partners, LP06001,2001,8002009 2010 2011 ...
Marcellus Acreage AcquisitionChesapeake Marcellus – Southwestern PA*99,000 acres / 67,000 netMarcellus acres 25,000 core ...
Marcellus PlayType Curves by Area - 4,800’ lateralwww.eqt.com 31Type curve and well cost data posted on www.eqt.com under ...
Marcellus PlayAcres Within Each Core Development Areawww.eqt.com 32EQT has 560,000* total Marcellus acres Expect to devel...
0%50%100%150%200%250%300%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 33Marcellus EconomicsIRR - ...
0%50%100%150%200%250%300%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 34Marcellus EconomicsIRR - ...
0%10%20%30%40%50%60%70%80%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 35Marcellus EconomicsIRR -...
Access to downstreammarkets TGP: 350,000 Dth/d to NJ/NY TETCO: 150,000 Dth/d to NJ,year-end 2014Backhaul to Gulf Coast ...
($ thousands, except net debt / capital) As of March 31, 2013Short-term debt $0Long-term debt 2,505,649Cash (160,325)Net d...
www.eqt.com 38Risk ManagementHedgingAs of April 24, 2013* The average price is based on a conversion rate of 1.05 MMBtu/Mc...
Price Reconciliationwww.eqt.com 39Three Months EndedMarch 31,in thousands (unless noted) 2013 2012LIQUIDSNGLs:Gross NGL Re...
www.eqt.com 40Per Unit Operating ExpensesThree Months EndedMarch 31,2013 2012Production segment expenses: ($ / Mcfe)Lease ...
www.eqt.comAppendixNon-GAAP Reconciliation41Adjusted Midstream EBITDA(millions) 2008 2009 2010 2011 2012Midstream operatin...
Upcoming SlideShare
Loading in …5
×

EQT Analyst Presentation for Marcellus Shale Drilling Program

25,130 views

Published on

EQT Corporation released updated numbers on May 31, 2013 for their estimated ultimate recovery (EUR) rates in the Marcellus Shale. EQT says the average well in southwest PA and WV will produce close to 10 billion cubic feet of natural gas per well over their lifetimes, while wells in central PA will produce around 6 1/2 billion cubic feet on average. The EUR numbers are up from previous estimates.

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
25,130
On SlideShare
0
From Embeds
0
Number of Embeds
364
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

EQT Analyst Presentation for Marcellus Shale Drilling Program

  1. 1. Analyst PresentationJune 2013
  2. 2. www.eqt.com 2EQT Corporation (NYSE: EQT)EQT Plaza625 Liberty Avenue, Suite 1700Pittsburgh, PA 15222Pat Kane - Chief Investor Relations Officer(412) 553-7833The Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that acompany anticipates as of a given date to be economically and legally producible and deliverable by application of development projects to known accumulations. We use certainterms in this presentation, such as “EUR” (estimated ultimate recovery) and total resource potential, that the SECs rules strictly prohibit us from including in filings with the SEC.We caution you that the SEC views such estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the natural gasindustry. We also note that the SEC strictly prohibits us from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certaintyassociated with each reserve category.Disclosures in this presentation contain certain forward-looking statements. Statements that do not relate strictly to historical or current facts are forward-looking. Without limitingthe generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of plans, strategies, objectives and growth andanticipated financial and operational performance of the company and its subsidiaries, including guidance regarding the company’s strategy to develop its Marcellus and otherreserves; drilling plans and programs (including the number, type, spacing, the use of reduced cluster spacing, feet of pay, average lateral length, and location of wells to bedrilled and the availability of capital to complete these plans and programs); total resource potential, reserves, EUR, expected decline curve, reserve replacement ratio, reservesto production ratio, and production and sales volumes and growth rates; Marcellus liquids price uplift; internal rate of return (IRR), compound annual growth rate (CAGR) andexpected after-tax returns per well; F&D costs, operating costs, unit costs, well costs and EQT Midstream costs; infrastructure programs (including the timing, cost and capacity ofthe transmission and gathering expansion projects); projected EQT Midstream EBITDA and growth rates; projected EQT Midstream Partners EBITDA and the value of EQTMidstream Partners units; monetization transactions, including midstream asset sales (dropdowns) to EQT Midstream Partners and other asset sales and joint ventures or othertransactions involving the company’s assets; the proposed transfer of Equitable Gas Company, LLC (Equitable Gas) to PNG Companies LLC; the timing of receipt of requiredapprovals for the proposed Equitable Gas transaction; guidance regarding the expected form and amount of midstream assets to be exchanged in the Equitable Gas transaction;the expected EBITDA to be generated from the midstream assets and commercial arrangements transferred by or entered into with Peoples Natural Gas or its affiliates; thenumber of developable acres expected to be acquired from Chesapeake Energy Corporation; capital expenditures, including funding sources and availability; financingrequirements and availability; projected operating revenues and cash flows; hedging strategy; the effects of government regulation; the expected economics of public-accessnatural gas refueling stations; and tax position. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from projectedresults. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The company has based these forward-lookingstatements on current expectations and assumptions about future events. While the company considers these expectations and assumptions to be reasonable, they areinherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyondthe company’s control. With respect to the proposed Equitable Gas transaction, these risks and uncertainties include, among others, the ability to obtain regulatory approvals forthe transaction on the proposed terms and schedule; disruption to the companys business, including customer, employee and supplier relationships resulting from thetransaction; and risks that the conditions to closing may not be satisfied. With respect to the proposed Chesapeake transaction, these risks and uncertainties include, amongothers, that the conditions to closing may not be satisfied for some or all of the acreage and that properties may not provide access to the anticipated reserves. The risks anduncertainties that may affect the operations, performance and results of the company’s business and forward-looking statements include, but are not limited to, those set forthunder Item 1A, “Risk Factors” of the company’s Form 10-K for the year ended December 31, 2012, as updated by any subsequent Form 10-Qs. Any forward-looking statementspeaks only as of the date on which such statement is made and the company does not intend to correct or update any forward-looking statement, whether as a result of newinformation, future events or otherwise.EQT’s approximately 560,000 Marcellus acres include approximately 25,000 developable acres within EQT’s Southwestern Pennsylvania development area that EQT expects toacquire from Chesapeake Energy Corporation. An additional 42,000 Marcellus acres to be acquired are unlikely to be developed due to near-term lease expirations or a scattedfootprint.EQT Cautionary Statements
  3. 3. The Company uses adjusted Midstream EBITDA as a financial measure in this presentation. AdjustedMidstream EBITDA is defined as EQT Midstream operating income (loss) plus depreciation and amortizationexpense less gains on dispositions. Adjusted Midstream EBITDA also excludes EQT Midstream resultsassociated with the Big Sandy Pipeline and Langley processing facility. Adjusted Midstream EBITDA is nota financial measure calculated in accordance with generally accepted accounting principles (GAAP).Adjusted Midstream EBITDA is a non-GAAP supplemental financial measure that Company managementand external users of the Company’s financial statements, such as industry analysts, investors, lenders andrating agencies, may use to assess: (i) the Company’s performance versus prior periods; (ii) the Company’soperating performance as compared to other companies in its industry; (iii) the ability of the Company’sassets to generate sufficient cash flow to make distributions to its investors; (iv) the Company’s ability toincur and service debt and fund capital expenditures; and (v) the viability of acquisitions and other capitalexpenditure projects and the returns on investment of various investment opportunities.The Company believes that the presentation of adjusted EQT Midstream EBITDA in this presentationprovides useful information in assessing its financial condition and results of operations. Adjusted EQTMidstream EBITDA should not be considered as an alternative to operating income or any other measure offinancial performance or liquidity presented in accordance with GAAP. Adjusted EQT Midstream EBITDAhas important limitations as analytical tools because they exclude some but not all items that affect operatingincome. Additionally, because adjusted EQT Midstream EBITDA may be defined differently by othercompanies in the Company’s industry, the Company’s definition of adjusted EQT Midstream EBITDA willmost likely not be comparable to similarly titled measures of other companies, thereby diminishing the utilityof the measure. Please see the Appendix for reconciliations of adjusted EQT Midstream EBITDA to its mostdirectly comparable financial measure calculated and presented in accordance with GAAP.EQT is unable to provide a reconciliation of projected EBITDA to projected net income, the most comparablefinancial measure calculated in accordance with GAAP, due to the unknown effect, timing and potentialsignificance of certain income statement items.www.eqt.com 3EQT Non-GAAP Measures
  4. 4. Calculations Within This PresentationFinding and development costs (F&D costs) from all sources for peer companiespresented in this presentation are calculated as the cost incurred, relating tonatural gas and oil activities in accordance with Financial Accounting StandardsBoard Accounting Standards Codification 932 (ASC 932), divided by the sum ofextensions, discoveries and other additions; purchase of natural gas and oil inplace; and revisions of previous estimates, as provided for years 2010 – 2012.Per unit operating expenses are calculated by dividing the sum of lease operatingexpenses, production taxes and the gathering and transmission costs for equitygas, by production sales volumes for the same period. Per unit operatingexpenses in the presentation are calculated for the year ended December 31,2012.www.eqt.com 4
  5. 5. Key Investment HighlightsExtensive 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/PProven ability to profitably develop our reserves > 30% production sales volume growth in 2013 Industry leading cost structureExtensive and growing midstream businessEQT Midstream Partners, LP (NYSE: EQM) EQT is general partner and owns 60% Ongoing source of low cost capital Approximately 25% of midstream businesswww.eqt.com 5*As of 12/31/12
  6. 6. www.eqt.com 6275,000 customers6.0 Tcfe proved res. 11,000 pipeline miles3.5 MM acres2012 operating income$470.5 millionLeading Appalachian E&P Company
  7. 7. Marcellus Shale drilling driving growthProduction By Playwww.eqt.com 702004006008001,0001,2001,400MarcellusHuron horizontalCBMVerticalProductionMMcfdBegan horizontal drilling2006 2007 2008 2009 2010 2011 2012 2013E 2014E
  8. 8. Reserves By Playwww.eqt.com 8Marcellus 15.0Huron 7.4Other 0.825.9 Tcfe 3P reserves(as of December 31, 2012)35.4 Tcfe Total Resource Potential771,0612,8793,4144,2781,5562,0161,4751,0629651,4779918668897613,1104,0685,2205,3656,00401,0002,0003,0004,0005,0006,0007,0002008 2009 2010 2011 2012BcfeCBM/OtherHuronMarcellusProved Reserve Growth
  9. 9. www.eqt.com 9560,000 EQT acres*87% NRI / 85% HBP15.7 Tcfe 3P**21.0 Tcfe resource potential**157 wells in 2013>70% YOY production growth>50% of acreage will utilize RCSMarcellus PlayCentral PASouthwestern PANorthern WVNear term development focused in three areas* Includes 25,000 developable acres related to an acreage acquisition expected to close in Q2 2013** Includes reserves associated with the 25,000 developable acres related to an acreage acquisition expected to close in Q2 2013
  10. 10. 95,000 EQT acres1,080 locations109 wells online*56 wells in 20134,800 foot laterals87 acre spacing9.8 Bcfe EUR / well2,050 Mcfe EUR / ft. of lateral$6.5 MM / well> 90% of locations utilize RCSProlific dry gas regionwww.eqt.com 10* As of 3/31/2013Marcellus PlaySouthwestern PAProducing PadsTharpe Pad10 wells6,175’ Avg Lateral Length per well17,950 Mcfe Avg 30-day IP per wellScotts Run Pad7 wells5,793’ Avg Lateral Length per well15,696 Mcfe Avg 30-day IP per wellKevech Pad2 wells2,762’ Avg Lateral Length per well10,112 Mcfe Avg 30-day IP per well
  11. 11. Enhanced economics from liquids upliftwww.eqt.com 1190,000 EQT acres1,065 locations86 wells online**84 wells in 20134,800 foot laterals83 acre spacing9.8 Bcfe EUR / well*2,035 Mcfe EUR / ft. of lateral*$6.6 MM / well100% of locations utilize RCSMarcellus PlayNorthern West Virginia – Wet Gas Area* Liquids converted at 6:1 Mcfe per barrel (1.9 Bcfe per well from liquids). EUR assumes ethane rejection. Ethane recovery would result in EUR of 12.8 Bcfe.** As of 3/31/13Producing PadsBig 176 Pad6 wells3,688’ Avg Lateral Length per well8,103 Mcfe Avg 30-day IP per wellPEN 15 Pad5 wells5,705’ Avg Lateral Length per well9,317 Mcfe Avg 30-day IP per well
  12. 12. Early stages of acreage delineationwww.eqt.com 1280,000 EQT acres727 locations34 wells online*17 wells in 20134,800 foot laterals110 acre spacing6.6 Bcfe EUR / well1,375 Mcfe EUR / ft. of lateral$6.6 MM / well100% of locations utilize RCSMarcellus PlayCentral Pennsylvania* As of 3/31/13Producing PadsFrano Pad2 wells3,614’ Avg Lateral Length per well7,970 Mcfe Avg 30-day IP per wellRosborough Well4,062’ Lateral Length6,489 Mcfe 30-day IP
  13. 13. 0%50%100%150%200%250%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 13Marcellus EconomicsIRR - Blended Marcellus Development AreasSee appendix for IRR by development areaOil price held constant at $92.50 /bblNYMEX ATAX IRR$4.00 58%$4.50 76%$5.00 96%NYMEX
  14. 14. Upper Devonian Play14170,000 EQT acres$5 - $6 MM / well11 wells in 20136.0 Bcfe EUR / well4,800 ft avg lateral length2013 drilling program todelineate acreage positionwww.eqt.com
  15. 15. Utica Play15RangeEclipseXTOHG EnergyCNXChesapeakeEnervestAnadarkoGulfportEQTwww.eqt.com13,600 EQT acresGuernsey County, Ohio$9.4 MM / well8 wells in 20136,000 ft avg lateral length in 2013
  16. 16. 0.001.002.003.00COGEQTRRCSWNCHKXCOPQPETDNBLQEPDVNSMCXOAPCCLREOGPXDAPASDNFXWLL0.002.505.007.50RRCCOGEQTCLRPETDPQSMSDAPCNBLQEPSWNPXDCXODVNCHKXCOWLLEOGAPANFXIndustry Leading Cost Structurewww.eqt.com 16$/Mcfe$/Mcfe3-year F&D (all sources)Per Unit Operating ExpensesMean = $1.64Mean = $2.99$1.30$0.66For the three years ended 12/31/12Year ended 12/31/12
  17. 17. 05001,0001,5002,0002,5003,0003,5004,0004,5005,0002008 2009 2010 2011 2012 2013EMbblsNGL Volume GrowthLiquidsVolume Growth and Marcellus Price Uplift17(1) NGL component prices per gallon of $1.02 for Propane, $1.93 for I-Butane, $1.82 for N-Butane, and $2.44 for Natural Gasoline;Ethane (2-3 gal/Mcf) is rejected back into the gas stream.~35% of EQT’s Marcellus acreage is “wet”Additional 100 MMcfe / day capacity by YE 2013www.eqt.com$3.77 $3.77$0.75$0.17$2.18$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00Not Processed Processed$/McfMarcellus Liquids Price Uplift(1200 Btu Gas)NGLs (1.8 Gal/Mcf)BTU PremiumNYMEX$4.52$6.12(1)
  18. 18. Midstream Overview18Transmission & StorageGatheringMarketingFormed MLP in 2012 (NYSE: EQM) ~25% of midstream assetsEQTMidstreamTotal*Transmission capacity (BBtu/d) 1,700Miles of transmission pipeline 700Marcellus gathering capacity (BBtu/d) 1,115Miles of Marcellus gathering pipeline 100Compression horsepower 300,000Working gas storage (Bcf) 32*Year-end 2012www.eqt.com
  19. 19. *Based on revenues**Excludes Big Sandy and Langley in 2008-2011; see Non-GAAP Reconciliation on slide 41.Midstream Overviewwww.eqt.com 19EQT Production sales drives Midstream EBITDA growth 70% of Midstream revenues from EQT Corporation Fixed fee contracts Transmission contracts with 10-year weighted average life* Minimal direct commodity exposureBcfe$MM0100200300400$0$100$200$300$4002008 2009 2010 2011 2012 2013EEQT MidstreamEQT Midstream Partners, LPProduction Sales Volumes (Bcfe)EQT Corporation Adjusted Midstream EBITDA**
  20. 20. EQT Midstream Partners, LP (NYSE: EQM)EQT Alignmentwww.eqt.com 20*Based on mid-point of EQT Midstream Partners guidance of $90MM-$95MM Adjusted EBITDA for 2013.Equitrans transmissionand storage 1.4 TBtu/d capacity 700 mile FERC-regulatedinterstate pipeline 32 Bcf of working gas storageHighlights market valuationof midstream assets EQT ownership• 2.0% GP interest – 0.7 MM units• 57.4% LP interest – 20.3 MM unitsEQM Price per UnitImplied EBITDAMultiple*Value of EQM LPUnits ($MM)$48 18.0x $975$49 18.4x $995$50 18.7x $1,015$51 19.1x $1,036
  21. 21. EQT MidstreamEquitrans - Sunrise ProjectOwned by EQT Corp. Operated by EQT MidstreamPartners$225 MM capital project 314 BBtu/d capacity Connects MarkWestprocessing plant to TETCOExpansion opportunity Incremental 630 BBtu/dthrough compressionwww.eqt.com 21
  22. 22. www.eqt.com 22EQT MidstreamMarcellus Gathering(MMcfd)2012year-endcapacity2013capacityadditionsTotalcapacityafteradditionsPennsylvania 765 400 1,165West Virginia 350 0 350Total 1,115 400 1,515*Capacity for each system represents estimated year-end 2013 capacity2013 CAPEX$190 MM2013 Capacity AdditionsJupiter 200 MMcfdApplegate 150 MMcfdTerra 50 MMcfd
  23. 23. Sale of Equitable Gas toPeoples Natural Gas Expected approval by year-end 2013 $720MM cash + midstream assetsMarcellus midstream assets ~$40 MM annual EBITDA* 200 miles of transmission pipe 15 Bcf storage Supply contracts Adds to dropdown inventoryDistributionPending Transactionwww.eqt.com 23*For this slide, defined as earnings before interest, taxes, depreciation and amortization
  24. 24. $1.6 million investmentExpect cashflow break-evenvolumes (200,000 gal) in 201312% return = 450,000 gal/yr.Vehicles have the potential to use20 – 25 Bcf / year in the U.S.www.eqt.com 24Pittsburgh’s Strip District NGV Station25%11%32%31%Sales VolumesEQT FleetRefuseTaxi & ShuttleAll Other
  25. 25. Corporate CitizenshipSafety – Our first priority All accidents are preventable Company goal = zero incidentsCommitted to: The environment Our employees and contractors The communities where we drill and work• EQT Foundation charitable giving of >$4 million / year• More than $20 million / year in state and local taxeswww.eqt.com 25
  26. 26. Drilling and Hydraulic FracturingEQT meets or exceeds all federal, state and local regulationsIndustry leading spill prevention plans and results Supports the disclosure of frac fluid additivesUtilize multiple barriers to protect drinking water supplies Pre-drilling water sampling within 2,500’ of drilling locationsMulti-well pads reduce surface impactswww.eqt.com 26
  27. 27. Investment SummaryExtensive reserves of natural gasProven ability to profitably develop our reservesCommitted to maximize shareholder value by: Accelerating the monetization of our vast reserves Operating in a safe and environmentally responsible manner Funding with cash flow and debt capacitywww.eqt.com 27
  28. 28. www.eqt.com 28Appendix
  29. 29. Capital Investment Summarywww.eqt.com 29*Excludes acquisitions and EQT Midstream Partners, LP06001,2001,8002009 2010 2011 2012 2013F9331,1201,217Midstream Production Distribution$MM1,222*1,515*
  30. 30. Marcellus Acreage AcquisitionChesapeake Marcellus – Southwestern PA*99,000 acres / 67,000 netMarcellus acres 25,000 core acres:Washington, Greene andAllegheny counties• 97.5% average WI81.5% average NRI• $2,400 per acre10 horizontal Marcelluswells in Washington County 54 Bcfe EUR 3 wells on line; 7 additionalby YE 201330OverviewEQT acreageAcquisition acreageAsset Map*Pursuant to an agreement expected to close in Q2 2013
  31. 31. Marcellus PlayType Curves by Area - 4,800’ lateralwww.eqt.com 31Type curve and well cost data posted on www.eqt.com under investor relations
  32. 32. Marcellus PlayAcres Within Each Core Development Areawww.eqt.com 32EQT has 560,000* total Marcellus acres Expect to develop in three areas for several years Active areas represent 265,000 acres and 2,875 locations EQT has 115,000 additional acres in PA & 180,000 additional acres in WV• Estimated 1,235 Mcfe EUR per lateral foot for wells drilled on additional acres* Includes 25,000 developable acres related to an acreage acquisition expected to close in Q2 2013Type curve and well cost data posted on www.eqt.com under investor relationsEUR (Mcfe) /Lateral Foot Total Net AcresTotal netUndevelopedAcresLocationsUtilizing ReducedCluster SpacingRemainingLocations¹Southwestern PA 2,050 95,000 80,000 90% 904Northern WV 2,035 90,000 79,000 100% 955Central PA² 1,375 80,000 78,000 100% 710265,000 237,000 96% 2,5681Based on 4,800 laterals with lateral spacing estimates ranging from 500 to 1,000² EQT holds approximately 160K acres in Central PA. Near term development is focused on 80,000 acres.
  33. 33. 0%50%100%150%200%250%300%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 33Marcellus EconomicsIRR - Southwestern PANYMEX ATAX IRR$4.00 63%$4.50 88%$5.00 119%Oil price held constant at $92.50 /bblNYMEX
  34. 34. 0%50%100%150%200%250%300%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 34Marcellus EconomicsIRR - Northern WV – Wet Gas AreaNYMEX ATAX IRR$4.00 82%$4.50 99%$5.00 118%NYMEXOil price held constant at $92.50 /bbl
  35. 35. 0%10%20%30%40%50%60%70%80%$3.00 $3.50 $4.00 $4.50 $5.00Wellhead After OpEx After Taxwww.eqt.com 35Marcellus EconomicsIRR - Central PANYMEX ATAX IRR$4.00 20%$4.50 28%$5.00 37%NYMEXOil price held constant at $92.50 /bbl
  36. 36. Access to downstreammarkets TGP: 350,000 Dth/d to NJ/NY TETCO: 150,000 Dth/d to NJ,year-end 2014Backhaul to Gulf Coast TGP: 300,000 Dth/d TETCO: 200,000 Dth/d to TGP TETCO: 150,000 Dth/d,year-end 2014www.eqt.com 36350 MDth/d300 MDth/d150 MDth/d150 MDth/d200 MDth/dTGPTETCOEQT Production areasInterstate Capacity Contracts
  37. 37. ($ thousands, except net debt / capital) As of March 31, 2013Short-term debt $0Long-term debt 2,505,649Cash (160,325)Net debt (total debt minus cash) $2,345,324Total common stockholders equity 3,637,917Net debt / capital 39%23 111663708 7001177410115-2004006008002013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026$MMwww.eqt.com 37Moody’s Standard & Poor’s FitchLong-term debt Baa3 BBB BBB-Outlook Stable Stable StableCommercial paper P-3 A-2 F3Debt ratingsStrong balance sheetManageable debt maturities$MMAmple Financial Flexibility to Execute Business Plan
  38. 38. www.eqt.com 38Risk ManagementHedgingAs of April 24, 2013* The average price is based on a conversion rate of 1.05 MMBtu/Mcf** April through December2013** 2014 2015Fixed PriceTotal Volume (Bcf) 142 110 69Average Price per Mcf (NYMEX)* $ 4.55 $ 4.48 $ 4.59CollarsTotal Volume (Bcf) 19 24 23Average Floor Price per Mcf (NYMEX)* $ 4.95 $ 5.05 $ 5.03Average Cap Price per Mcf (NYMEX)* $ 9.09 $ 8.85 $ 8.97Hedged 60% 30% N/A
  39. 39. Price Reconciliationwww.eqt.com 39Three Months EndedMarch 31,in thousands (unless noted) 2013 2012LIQUIDSNGLs:Gross NGL Revenue $ 51,423 $ 43,939BTU Premium (Ethane sold as natural gas):BTU Premium Revenue $ 21,406 $ 12,708Oil:Net Oil Revenue $ 4,986 $ 4,607Total Liquids Revenue $ 77,815 $ 61,254GASSales Volume (MMcf) 74,654 50,773NYMEX Price ($/Mcf) $ 3.34 $ 2.74Gas Revenues $ 249,021 $ 138,916Basis (193) (118)Gross Gas Revenue (unhedged) $ 248,828 $ 138,798Total Gross Gas & Liquids Revenue (unhedged) $ 326,643 $ 200,052Hedge impact 43,498 76,747Total Gross Gas & Liquid Revenue $ 370,141 $ 276,799Total Sales Volume (MMcfe) 79,392 54,070Average hedge adjusted price ($/Mcfe) $ 4.66 $ 5.12Midstream Revenue Deductions ($ / Mcfe)Gathering to EQT Midstream (0.90) (1.08)Transmission to EQT Midstream (0.23) (0.17)Third-party gathering and transmission (a) (0.27) (0.17)Third-party processing (0.12) (0.11)Total midstream revenue deductions (1.52) (1.53)Average effective sales price to EQT Production $ 3.14 $ 3.59EQT Revenue ($/ Mcfe)Revenues to EQT Midstream $ 1.13 $ 1.25Revenues to EQT Production 3.14 3.59Average effective sales price to EQT Corporation $ 4.27 $ 4.84
  40. 40. www.eqt.com 40Per Unit Operating ExpensesThree Months EndedMarch 31,2013 2012Production segment expenses: ($ / Mcfe)Lease operating $ 0.16 $ 0.20Production taxes (a) 0.15 0.18Selling, general and administrative 0.29 0.39$ 0.60 $ 0.77Midstream segment expenses: ($ / Mcfe)Gathering and transmission $ 0.25 $ 0.37Selling, general and administrative 0.15 0.19$ 0.40 $ 0.56Total ($ / Mcfe) $ 1.00 $ 1.33(a)(a) Excludes for the three months ended March 31, 2012 the retroactive Pennsylvania Impact Fee of $0.11 per Mcfefor Marcellus wells spud prior to 2012.
  41. 41. www.eqt.comAppendixNon-GAAP Reconciliation41Adjusted Midstream EBITDA(millions) 2008 2009 2010 2011 2012Midstream operating income $ 120 $ 154 $ 179 $ 417 $ 237Add: depreciation and amortization 35 53 62 57 65Less: gains on dispositions – – – 203 0Less: Big Sandy and Langley 23 32 31 14 0Adjusted Midstream EBITDA $ 132 $ 175 $ 210 $ 257 $ 302

×