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Cautionary Statements
2
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 proved, probable and possible reserves that a company anticipates as of a given
date to be economically and legally producible and deliverable by application of development projects to known accumulations. We use certain terms in this presentation, such as “EUR” (estimated ultimate
recovery) and total resource potential, that the SEC’s 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 gas industry. We also note that the SEC strictly prohibits us from aggregating proved, probable and possible (3P)
reserves on filings with the SEC due to the different levels of certainty associated with each reserve category.
Disclosures in this presentation contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of
1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this
presentation specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of EQT Corporation and its subsidiaries (EQT), including
guidance regarding EQT’s strategy to develop its reserves; drilling plans and programs (including the number, type, depth, lateral lengths, and locations of wells to be drilled, number of frac crews and number
and type of rigs); projected natural gas prices, liquids price impact, basis, premium and average differential; total resource potential, reserves and EUR; projected EQT and third party production sales
volumes and growth rates (including liquids sales volumes and growth rates); internal rate of return (IRR), compound annual growth rate (CAGR) and expected after-tax returns per well; technology (including
drilling and completion techniques); projected drilling and completions (D&C) costs, other well costs, G&A expenses, expense reductions and unit costs; projected frac stage lengths, proppant per foot and
water per foot; projected market mix; projected gathering and transmission volume and growth rates; infrastructure programs (including the timing, cost and capacity of expected gathering and transmission
expansion projects); the cost, capacity, timing of regulatory approvals, and anticipated in-service date of the Mountain Valley Pipeline (MVP) project; the ultimate terms, partners, and structure of the MVP joint
venture; acquisition transactions; the projected capital efficiency savings and other operating efficiencies and synergies resulting from EQT’s acquisition of Rice Energy Inc. (Rice); EQT’s ability to achieve the
anticipated synergies and efficiencies from its acquisition of Rice; monetization transactions, including asset sales, joint ventures or other transactions involving EQT’s assets; the terms and timing of the
midstream streamlining transactions and the separation of EQT’s midstream business, and EQT’s ability to complete such transactions; whether the conditions to the separation and midstream streamlining
transactions can be satisfied; whether the operational, financial and strategic benefits of the transactions can be achieved; dividend and distribution amounts and rates; projected return of capital; the
projected cash flows resulting from EQT’s limited partner interests in EQT GP Holdings, LP (EQGP) and limited partner interests and incentive distribution rights in Rice Midstream Partners LP (RMP) and
related growth rates; projected cash flows, including the ability to fund the 2018 drilling program through cash from operations; projected free cash flow, adjusted operating cash flow attributable to EQT,
adjusted operating cash flow attributable to EQT Production, pipeline, water and net marketing services revenue, and net income attributable to noncontrolling interests; projected capital contributions and
capital expenditures; liquidity and financing requirements, including funding sources and availability; changes in credit ratings; potential future impairments of EQT’s assets; hedging strategy; the effects of
government regulation and litigation; and tax position and the expected impact of changes to tax laws. These forward-looking statements involve risks and uncertainties that could cause actual results to differ
materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. EQT has based these forward-looking statements on
current expectations and assumptions about future events. While EQT considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic,
competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond EQT’s control. The risks and uncertainties that may affect the operations, performance and results of
EQT’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors,” of EQT’s Form 10-K for the year ended December 31, 2017, as filed with the SEC
and as updated by any subsequent Form 10-Qs. Any forward-looking statement speaks only as of the date on which such statement is made and EQT does not intend to correct or update any forward-looking
statement, whether as a result of new information, future events or otherwise.
Information in this presentation regarding EQGP and its subsidiaries, including EQM, and RMP and its subsidiaries, is derived from publicly available information published by EQGP, EQM and RMP, as
applicable.
Important Information for Investors
3
Important Additional Information
This communication relates to, among other things, a potential proposal that may be made regarding a business combination transaction involving EQM and RMP. In
connection with the potential transaction with RMP and subject to future events, EQM may file a registration statement on Form S-4 with the U.S. Securities and
Exchange Commission (SEC) which will include a document that serves as a prospectus of EQM and a proxy statement of RMP (the proxy statement/prospectus), and
each party will file other documents regarding the proposed transaction with the SEC. Investors and security holders are urged to carefully read the entire registration
statement and proxy statement/prospectus and other relevant documents filed with the SEC if and when they become available, because they will contain important
information. Subject to future events, a definitive proxy statement/prospectus will be sent to RMP’s unitholders, in which case investors and security holders will be able
to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from EQM or RMP as described in the paragraphs
below.
The documents filed by EQM with the SEC may be obtained free of charge at EQM’s website at www.eqtmidstreampartners.com or at the SEC’s website at
www.sec.gov. These documents may also be obtained free of charge from EQM by requesting them by mail at EQT Midstream Partners, LP, 625 Liberty Avenue, Suite
1700, Pittsburgh, PA 15222, Attention Investor Relations, or by telephone at (412) 553-5700.
The documents filed by RMP with the SEC may be obtained free of charge at RMP’s website at www.ricemidstream.com or at the SEC’s website at www.sec.gov. These
documents may also be obtained free of charge from RMP by requesting them by mail at Rice Midstream Partners LP, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA
15222, Attention Investor Relations, or by telephone at (412) 553-5700.
Participants in the Solicitation
EQM, RMP and certain of their directors, executive officers and employees may be deemed participants in the solicitation of proxies from RMP unitholders in connection
with the potential transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the unitholders of
RMP in connection with the potential transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy
statement/prospectus if and when it is filed with the SEC. Information about the directors and executive officers of EQM is set forth in EQM’s 2017 Annual Report on
Form 10-K, as previously filed with the SEC on February 15, 2018. Information about the directors and executive officers of RMP and their ownership of RMP common
units is set forth in RMP’s 2017 Annual Report on Form 10-K, as previously filed with the SEC on February 15, 2018. Free copies of these documents may be obtained
as described in the paragraphs above.
Key Investment Highlights
Leading natural gas producer in the United States
Focused on development of the Marcellus Shale
Industry-leading cost structure
Pipeline capacity portfolio assures market access and improved basis
EQGP and EQM growth opportunity resulting from recent acquisition
Cash flows from EQGP to double over next three years
Strong balance sheet and liquidity
4
Unmatched combination of scale, growth, inventory, financial quality and cost structure
(1)As of 12/31/17
(2)Enterprise value is calculated by utilizing EQT share price as of 12/31/17 and excludes net debt of EQM and RMP
(3)Acres and locations as of 12/31/17
EQT Profile
5
Well-positioned to improve overall well economics and deliver stronger returns
Market Cap(1) $ 15.1 B
Enterprise Value(2) $ 20.9 B
Net Marcellus Acres(3) 1,000,000
Core Net Marcellus Acres(3) 680,000
Core Marcellus Undeveloped Locations(3) 2,500
2017 Sales (pro forma) 1,317 Bcfe
2018E Production 1,520 – 1,560 Bcfe
2018 Capital and Development Plan
2018 capital investments of $2.4 B*
$2.2 B for well development
6
Volume growth of 17% forecast within cash flow
*Excludes EQT Midstream Partners, Rice Midstream Partners and retained midstream assets capital expenditures
**25 net
EQT Acreage
Marcellus Core
Ohio Core
Upper Devonian Core
Spuds
Average
Length (ft)
PA Marcellus 106 13,600
WV Marcellus 28 8,600
Total Marcellus 134 12,600
Ohio Utica 45** 11,000
Upper Devonian 16 15,800
2018F
Rice Acquisition Implementation Strategy
2018 17% production growth with cash flow breakeven
Approved plan to address the sum-of-the-parts discount
Begin to realize capital, operational and administrative synergies
Average PA Marcellus well 13,600 feet vs 12,000 target
Same EUR for $210 million less capital compared to 8,000 foot wells
G&A $110 million less than pre-deal total
LOE per unit $0.04 less – approximately $62 million savings
Refinanced Rice debt – approximately $45 million savings
Complete midstream streamlining transactions
Gathering system integrations begin
2019 Fully realize synergies
35% fewer wells with same total feet of pay
Targeting production cash-flow breakeven
2020+ Return of capital to shareholders
7
Significant progress in synergies this year
Leading natural gas producer in the United States
2018E sales volumes of 1,520 – 1,560 Bcfe
Over 100 years of experience in the Appalachian Basin
Industry-leading cost structure
680,000 core net Marcellus acres and 65,000 core net OH
Utica acres
17% production growth in 2018
$2.3-$2.8 B of free cash flow with 10-15% production
volume CAGR over 2019-2023
EQT Plans to Separate Midstream Business
8
Creating Two Premier, Independent Energy Companies
Dedicated Management Teams
Investor Alignment
Optimal Capital Structures
Easier to Understand Financial
Reporting at EQT
Benefits
Distinct strategic goals
Incentives to match business profiles
Matching investors with their
preferred cash flow characteristics
Both entities in strong balance sheet
position
Targeting investment grade credit
metrics
Eliminates complicated consolidated
accounting
Better insight to standalone
businesses
EQT Production (Upstream)EQT Production (Upstream)
NewCo (Midstream)NewCo (Midstream)
Third-largest natural gas gatherer in the United States
Premier asset footprint in the Appalachian Basin
Stable and predictable cash flow profile
60% of revenue generated from long-term firm reservation
charges
$4.8 B of 5-year projected organic growth Capex
Mountain Valley Pipeline to extend reach into southeast
markets
16-year weighted average contract life*
More Attractive Equity Currency Improves access to capital markets
Customer Expansion Enhanced potential for customer
base expansion and organic growth
*Includes gathering, transmission, storage, and EQM’s pro rata portion of MVP
EQT Plans to Separate Midstream Business
9
Separation and Midstream Streamlining Timelines
Separation Timeline
Key Milestones Start Date Anticipated Completion Date
Establish Management, BOD, and Separation Plan Underway By End of Q3 2018
Midstream Streamlining Underway By End of Q3 2018
Tax Opinion and/or Private Letter Ruling from IRS Q1 2018 Q3 2018
SEC Form 10 Review Process Q2 2018 Q3 2018
Completed Separation By End of Q3 2018
Midstream Streamlining Timeline
Key Milestones Anticipated Completion Date
EQT Proposes Midstream Streamlining Transactions to Conflicts Committees Q1 2018
Sign & Announce Definitive Agreements for Midstream Streamlining Transactions Q2 2018
File Form S-4 Registration Statement/Proxy for EQM/RMP Merger Q2 2018
SEC Review of S-4 Q3 2018
RMP Shareholder Vote Q3 2018
Complete Midstream Streamlining Transactions By End of Q3 2018
Improving Economics – Marcellus
10
Longer laterals and more wells per pad reduce cost per foot
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2013 2014 2015 2016 2017 2018E
La
tera
l le
ng
th (
ft.)
Includes Upper Devonian
Marcellus Play
1,000,000 total net acres
680,000 core acres
2,500 core undeveloped locations*
134 wells in 2018
106 PA, 28 WV
12,600 ft. average lateral length
$11.3 MM / well
2.4 Bcfe EUR / 1,000’
100% working interest
86% NRI
11
Development strategically focused on core
Development
area
*Assumes 12,000 foot lateral
Improving Economics – Marcellus
12
Larger frac jobs increase recoveries per foot
-
0.5
1.0
1.5
2.0
2.5
3.0
2013 2015 2018E
EU
R (
Bcfe
/ 1
,000 f
t)2013 2015 2018E
Stage length ft 190 170 200
Proppant (lb / ft) 1,350 1,550 2,250
Water (bbl / ft) 35 39 40
EUR / 1000’ 1.9 2.1 2.4
$-
$0.20
$0.40
$0.60
$0.80
2013 2014 2015 2016 2017 2018E
Dri
llin
g &
Co
mp
leti
on
s C
os
t ($
/ M
cfe
)
Improving Economics – Marcellus
13
$0.37 per Mcfe in 2018
Lower drilling and completion cost per foot + higher productivity, drive lower cost per Mcfe
0%
20%
40%
60%
80%
100%
120%
140%
160%
6,000 8,000 12,000 14,000
Improving Economics – Marcellus SW PA laterals extend from 8,000’ to 13,600’ – dramatically increasing returns
IRR returns – wellhead price (NYMEX minus $0.50 basis) 14
6 Well Pad6,000' Lateral
8 Well Pad8,000' Lateral
12 Well Pad12,000' Lateral
12 Well Pad14,000' Lateral
6,000 8,000 12,000 14,000
$2.00 14% 19% 25% 29%
$2.50 38% 49% 62% 71%
$3.00 74% 96% 120% 140%
Corporate Structure
15
Announced separation of midstream business
Current Structure and Midstream Streamlining TransactionsCurrent Structure and Midstream Streamlining Transactions After Separation and Midstream StreamliningAfter Separation and Midstream Streamlining
EQGP
Retained
Midstream
Public
RMP
IDRs
RMPEQM
EQT ProductionEQT Production
NewCo Corp.NewCo Corp.
Public
Public
Public
Public
EQTEQTEQT
Production
EQT
Production
EQTEQT
RMP to be
acquired by EQM
IDRs to be
acquired by EQGPRetained
Midstream to be
acquired by EQM
EQGP
EQM
LP Units
LP Units
IDRs &
LP Units
IDRs &
LP Units
MLPs – EQM and RMP
EQT Midstream Partners (NYSE: EQM)
~2.3 Bcf per day firm gathering capacity, including
600 MMcf per day high pressure header pipeline for
Range Resources
4.4 Bcf per day current transmission capacity
10-year fixed-fee gathering contracts
Fixed-fee transmission contracts with an average
remaining term of 16 years
950-mile, FERC-regulated interstate pipeline
Rice Midstream Partners (NYSE: RMP)
246,000 acres dedication in core Marcellus
Backbone water systems in southwestern PA and
southeastern OH
16
Strategically located assets connecting supply to demand markets
Asset statistics as of 12/31/2017
EQT Midstream Partners
JV with NextEra, ConEd, WGL, RGC Resources
45.5% EQM ownership interest
EQM to construct and operate pipeline
$3.5 B total project cost
~$1.6 billion EQM investment
Q4 2018 targeted in-service
2 Bcf per day firm capacity commitments
1.3 Bcf per day by EQT Production
Expect $0.01 / Mcfe premium to NYMEX at
delivery point
Received FERC certificate on October 13, 2017
17
Mountain Valley Pipeline connects supply hub to southeast power generation markets
MVP significantly improves EQT pricing in 2019
Key Investment Highlights
Leading natural gas producer in the United States
Focused on development of the Marcellus Shale
Industry-leading cost structure
Pipeline capacity portfolio assures market access and improved basis
EQGP and EQM growth opportunity resulting from recent acquisition
Cash flows from EQGP to double over next three years
Strong balance sheet and liquidity
18
Unmatched combination of scale, growth, inventory, financial quality and cost structure
Non-GAAP Financial Measure
As used in this presentation, free cash flow is defined as EQT’s net cash provided by operating activities plus changes in other assets and
liabilities less capital expenditures pro forma for the announced separation and other midstream transactions. Free cash flow is a non-GAAP
supplemental financial measure that management and external users of EQT’s consolidated financial statements, such as industry analysts,
lenders and rating agencies, use to assess EQT’s liquidity on a consolidated pro forma basis for the announced separation and transactions.
EQT believes that consolidated pro forma free cash flow provides useful information to investors in assessing the impact of the separation and
other transactions on EQT’s ability to generate cash flow in excess of capital requirements and return cash to shareholders. Free cash flow
should not be considered an alternative to net cash provided by operating activities or any other measure of liquidity presented in accordance with
GAAP.
20
Free Cash Flow
Non-GAAP Financial Measures
Adjusted operating cash flow attributable to EQT and adjusted operating cash flow attributable to EQT Production are non-GAAP supplemental financial measures that are presented as indicators of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt. EQT includes this information because management believes that changes in operating assets and liabilities relate to the timing of cash receipts and disbursements and therefore may not relate to the period in which the operating activities occurred. Adjusted operating cash flow attributable to EQT is EQT’s net cash provided by operating activities, less changes in other assets and liabilities, adjusted to exclude EQM and RMP adjusted EBITDA, plus EQM and RMP interest expense plus the EQGP and RMP cash distributions payable to EQT. Prior to EQT’s 2018 operational forecast announcement in December 2017, EQT’s calculation of adjusted operating cash flow attributable to EQT did not include the addition of EQM’s and RMP’s interest expense. EQT believes it is preferable to present this non-GAAP supplemental financial measure with this adjustment as it better reflects EQT’s cash flows by excluding the cost of debt for EQM and RMP. Management believes that removing the impact on operating cash flows of the public unitholders of EQM, EQGP and RMP that is otherwise required to be consolidated in EQT’s results provides useful information to an EQT investor. As used in this news release, adjusted operating cash flow attributable to EQT Production means the EQT Production segment’s total operating revenues less the EQT Production segment’s cash operating expense, less gains (losses) on derivatives not designated as hedges, plus net cash settlements received (paid) on derivatives not designated as hedges, plus premiums received (paid) for derivatives that settled during the period, plus EQT Production asset impairments (if applicable). Adjusted operating cash flow attributable to EQT and adjusted operating cash flow attributable to EQT Production should not be considered as alternatives to net cash provided by operating activities presented in accordance with GAAP.
EQT has not provided projected net cash provided by operating activities or a reconciliation of projected adjusted operating cash flow attributable to EQT or projected adjusted operating cash flow attributable to EQT Production to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. EQT is unable to project net cash provided by operating activities because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. EQT is unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of its and customers’ payments, with accuracy to a specific day, three or more months in advance. Furthermore, EQT does not provide guidance with respect to its average realized price or income taxes, among other items, that are reconciling items between net cash provided by operating activities and adjusted operating cash flow attributable to EQT and adjusted operating cash flow attributable to EQT Production, as applicable. Natural gas prices are volatile and out of EQT’s control, and the timing of transactions and the income tax effects of future transactions and other items are difficult to accurately predict. Therefore, EQT is unable to provide projected net cash provided by operating activities, or the related reconciliation of projected adjusted operating cash flow attributable to EQT and projected operating cash flow attributable to EQT Production to projected net cash provided by operating activities, without unreasonable effort.
21
Adjusted Operating Cash Flow Attributable to EQT and Adjusted Operating Cash Flow
Attributable to EQT Production
Non-GAAP Financial Measures
EQT Midstream Partners adjusted EBITDA means EQM’s net income plus EQM’s net interest expense, depreciation and amortization expense,
income tax expense (if applicable), preferred interest payments received post-conversion, and non-cash long-term compensation expense less
EQM’s equity income, AFUDC-equity, pre-acquisition capital lease payments for Allegheny Valley Connector, LLC (AVC), and adjusted EBITDA of
assets prior to acquisition. EQT Midstream Partners adjusted EBITDA is a non-GAAP supplemental financial measure that management and
external users of EQT’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess the
effects of the noncontrolling interests in relation to:
EQT's operating performance as compared to other companies in its industry;
the ability of EQT's assets to generate sufficient cash flow to make distributions to its investors;
EQT's ability to incur and service debt and fund capital expenditures; and
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
EQT believes that EQT Midstream Partners adjusted EBITDA provides useful information to investors in assessing EQT's financial condition and
results of operations. EQT Midstream Partners adjusted EBITDA should not be considered as an alternative to EQM’s net income, operating
income, or any other measure of financial performance or liquidity presented in accordance with GAAP. EQT Midstream Partners adjusted
EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect EQM's net income. Additionally,
because EQT Midstream Partners adjusted EBITDA may be defined differently by other companies in EQT's or EQM's industries, the definition of
EQT Midstream Partners adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing the utility
of the measure.
22
EQT Midstream Partners Adjusted EBITDA
Non-GAAP Financial Measures
Rice Midstream Partners (RMP) adjusted EBITDA means RMP’s net income (loss) before net interest expense, depreciation expense, acquisition
costs, amortization of intangible assets, non-cash equity compensation expense, incentive unit expense, amortization of deferred financing costs
and other nonrecurring items. RMP adjusted EBITDA is a non-GAAP supplemental financial measure that management and external users of
EQT’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess the effects of the
noncontrolling interests in relation to:
EQT's operating performance as compared to other companies in its industry;
the ability of EQT's assets to generate sufficient cash flow to make distributions to its investors;
EQT's ability to incur and service debt and fund capital expenditures; and
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
EQT believes that RMP adjusted EBITDA provides useful information to investors in assessing EQT's financial condition and results of operations.
RMP adjusted EBITDA should not be considered as an alternative to RMP’s net income, operating income, or any other measure of financial
performance or liquidity presented in accordance with GAAP. RMP adjusted EBITDA has important limitations as an analytical tool because it
excludes some, but not all, items that affect RMP's net income. Additionally, because RMP adjusted EBITDA may be defined differently by other
companies in EQT's or RMP's industries, the definition of RMP adjusted EBITDA may not be comparable to similarly titled measures of other
companies, thereby diminishing the utility of the measure.
23
Rice Midstream Partners Adjusted EBITDA
Non-GAAP Financial Measure
As used in this presentation, earnings before interest, taxes, depreciation and amortization (EBITDA) means the earnings before interest, taxes
and depreciation of the NewCo pro forma for the announced separation and the other contemplated midstream transactions (in reference to the
NewCo target leverage ratio). EBITDA is a non-GAAP supplemental financial measure that management and external users of EQT’s
consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess NewCo’s leverage on a
consolidated basis pro forma for the transactions.
EQT believes that NewCo’s pro forma debt to EBITDA ratio provides useful information to investors in assessing the viability of the separation and
the proposed transactions. EBITDA should not be considered as an alternative to net income, operating income or any other measure of financial
performance or liquidity presented in accordance with GAAP. EBITDA has important limitations as an analytical tool because it excludes some,
but not all, items that affect net income. Additionally, because EBITDA may be defined differently by other companies in EQT's industry, the
definition of EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measure.
24
NewCo EBITDA
Non-GAAP Financial Measures
As used in this presentation, Ohio retained midstream earnings before interest, taxes, depreciation and amortization (EBITDA) means the earnings before interest, taxes and depreciation of EQT’s Ohio retained midstream assets. EBITDA is a non-GAAP supplemental financial measure that management and external users of EQT’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess the potential contribution of the Ohio retained midstream assets to EQT’s future operating performance and cash flows.
EQT believes that the projected EBITDA of the Ohio retained midstream assets provides useful information to investors in assessing the present and future impact of the assets on EQT's financial condition and results of operations. EBITDA should not be considered as an alternative to net income, operating income or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income. Additionally, because EBITDA may be defined differently by other companies in EQT's industry, the definition of EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measure.
EQT has not provided projected net income from the Ohio retained midstream assets, the most comparable financial measure calculated in accordance with GAAP, or a reconciliation of projected EBITDA to projected net income of the assets. The Ohio retained midstream assets are operated as part of the EQT Production business segment, and EQT does not allocate certain costs, such as interest and tax expenses, to individual assets within its business segments. Therefore, the projected net income of the Ohio retained midstream assets and a reconciliation of projected EBITDA of the assets to projected net income from those assets are not available without unreasonable effort.
25
Ohio Retained Midstream EBITDA
65,000 total net acres
190 undeveloped locations*
45 gross (25 net) wells in 2018
11,000 ft. average lateral length
$13.6 MM / well
2.1 Bcfe EUR / 1,000’
66% working interest
80% NRI
Ohio Utica Play
*Assumes an 11,000 ft. lateral 26
Development area
Ohio Utica
EQT Acreage
Upper Devonian Play
149,000 total net acres
500 undeveloped locations*
16 wells in 2018
15,800 ft. average laterals
$10.9 MM / well
1.5 Bcfe EUR / 1,000’
100% working interest
84% NRI
Developed in conjunction with Core Marcellus
*Assumes a 15,000 ft. lateral
Development
area
UD Core
EQT Acreage
27
2018 Guidance
28Based on current NYMEX natural gas prices of $2.77
Q1 2018 2018
Total production sales volume (Bcfe) 350 – 360 1,520 – 1,560
Liquids sales volume, excluding ethane (Mbbls) 3,230 – 3,250 12,300 – 12,600
Ethane sales volume (Mbbls) 1,540 – 1,560 4,900 – 5,200
Marcellus / Upper Devonian Rigs 8 – 10
Top-hole rigs 4 – 5
Frac Crews 9 – 11
Unit Costs ($ / Mcfe)
Gathering to EQM and RMP $ 0.48 – 0.50
Transmission to EQM $ 0.11 – 0.13
Third-party gathering and transmission $ 0.39 – 0.41
LOE, excluding production taxes $ 0.07 – 0.09
Production taxes $ 0.06 – 0.08
SG&A $ 0.10 – 0.12
Depletion $ 1.10 – 1.12
Development costs ($ / Mcfe) $ 0.41 – 0.43
Average differential ($ / Mcf) $ 0.15 – 0.25 $ (0.35) – (0.25)
Pipeline and net marketing services ($MM) $ 60 – 70 $ 60 – 70
Processing expense ($MM) $ 185
FINANCIAL ($MM)
Adjusted operating cash flow attributable to EQT Production $ 2,300 – 2,350
Adjusted operating cash flow attributable to EQT $ 2,650 – 2,750
Rice Acquisition
29
Synergy Summary
*Discounted at estimated WACC of 8.4%
Base Synergy Metric Up to PV ($B)*
Capital efficiencies Laterals extended to 12,000 feet $1.9
G&A savings $100 million per year $0.6
Upside Synergy Metric Up to PV ($B)*
Drilling and completion best practices EUR improvements of 0 – 5% $2.5
Buying power 0 – 5% reduction in capital $1.4
Marketing optimization $0.00 - $0.05 / Mcfe improvement in realized price $1.4
Upstream LOE optimization $0.00 - $0.03 / Mcfe $0.8
Lengthen WV laterals Lengthen inventory by up to 2,000’ per well $0.7
Perpetuity G&A savings Value realized post-2027 $0.5
MVP expansion Accelerated by up to 3 years $0.2
Other Synergy Metric Annual Savings
Rice debt refinancing Reduced rate from weighted average of 6.56% to 4.38% $45 million
Risk Management
30
Hedge Position
• The Company sold calendar 2018 and 2019 calls for approximately 64 and 45 Bcf
at strike prices of $3.49 and $3.69 per Mcf, respectively.
• For 2018 the Company also sold puts for approximately 3 Bcf at a strike price of
$2.63 per Mcf
• The average price is based on a conversion rate of 1.05 MMBtu/Mcf
• As of January 31, 2018
2018 2019 2020
NYMEX Price ($/Mcf) as of 1/31/18 $3.12 $2.97 $2.94
NYMEX Swaps
Total Volume (Bcf) 541 234 234
Average Price per Mcf (NYMEX) $3.14 $3.03 $3.05
Collars
Total Volume (Bcf) 117 66 -
Average Floor Price per Mcf (NYMEX) $3.28 $3.15 $0.00
Average Cap Price per Mcf (NYMEX) $3.78 $3.68 $0.00
Puts (Long)
Total Volume (Bcf) 10 7 -
Average Floor Price per Mcf (NYMEX) $2.91 $2.94 $0.00
668
307 234
$3.17
$3.06 $3.05 $3.12
$2.97 $2.94
$2.50
$2.60
$2.70
$2.80
$2.90
$3.00
$3.10
$3.20
$3.30
-
100
200
300
400
500
600
700
800
2018 2019 2020
$ /
Mc
f
Bc
f
Hedged Volume Average Hedge Price NYMEX Price
Market MixBal
2018E 2019E 2020E
TETCO M2 34% 16% 27%
TETCO M3 11% 10% 8%
TCO 4% 4% 3%
Midwest 21% 18% 16%
Gulf 30% 27% 23%
SE 0% 25% 22%
NYMEX* $2.89 $2.82 $2.77
Basis $(0.40) $(0.18) $(0.23)
Realized Price $2.49 $2.64 $2.54
Marcellus Capacity
Significant exposure
to growing Gulf
markets
Multiple legs of
transport provide
flexibility to capture
highest netback
31
Diversified portfolio targeting premium markets
*Assumed NYMEX and realized price; as of March 7, 2018
490,000
1,2
90,0
00
933,000
Southeast
Pipe Project ISD DTH/D
EQM MVPQ4 18/
Q1 191,290,000
Northeast
Pipe Project ISD DTH/D
TETCO TEAM 14 Current 150,000
TETCO TEMAX Current 295,000
TGP 300L Current 40,000
TETCO TME3 Current 5,000
Ohio/Midwest
Pipe Project ISD DTH/D
REX E2W Current 350,000
REX Z3 En. Current 200,000
TETCO U2GC Current 101,500
ANR ML-7 Current 31,500
ETP Rover Current 150,000
ETP Rover Q1 18 100,000
Gulf Coast
Pipe Project ISD DTH/D
TETCO TEAM 14 Current 150,000
TETCO Gulf Mkts Current 100,000
TETCO Backhaul Current 200,000
TETCO
Team
South Current 270,000
TETCO Open Current 50,000
TCO/CGT Westside Current 50,000
TETCO/
REX/NGPL
Gulfcoast
Exp Current 75,000
TETCO/
REX/ANR Mainline Current 105,000
TETCO
Access
South Current 320,000
TCO/CGT LXP/RXP Current 50,000
Marcellus Capacity
32
Pricing details
As of March 7, 2018
BasisBal
2018E 2019E 2020E
TETCO M2 $(0.71) $(0.61) $(0.60)
TETCO M3 $(0.46) $0.02 $(0.02)
TCO $(0.28) $(0.38) $(0.43)
Midwest $(0.31) $(0.33) $(0.28)
Gulf $(0.10) $(0.09) $(0.08)
SE N/A $0.04 $0.05
Basis $(0.40) $(0.18) ($0.23)
Market MixBal
2018E 2019E 2020E
TETCO M2 34% 16% 27%
TETCO M3 11% 10% 8%
TCO 4% 4% 3%
Midwest 21% 18% 16%
Gulf 30% 27% 23%
SE 0% 25% 22%
NYMEX* $2.89 $2.82 $2.77
Basis $(0.40) $(0.18) $(0.23)
Realized Price $2.49 $2.64 $2.54
$2.82 $2.82
$0.56$0.12
$0.83$3.38
$3.77
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
Not Processed Processed
$/M
cf
NGLs (1.6 Gal/Mcf)
Btu Premium
NYMEX
Liquids
33
Volume growth and Marcellus impact
Includes natural gas liquids, ethane, and oil
Liquids Volume Growth Marcellus Liquids Price Impact
(1200 Btu Gas)
Pricing is as of 3/5/2018 and is the 1 year forward NYMEX
at $2.82 and Mount Belvieu for Ethane $0.25, Propane
$0.72, Iso-Butane $0.85, Normal Butane $0.84, and
Pentanes $1.33
-
4,000
8,000
12,000
16,000
20,000
24,000
2013 2014 2015 2016 2017 2018E
Mb
bls
BBB
BB+ BB+
BB- BB- BB-
EQT Peer 1 Peer 2 Peer 3 Peer 4 Peer 5
Investment Grade
Balance Sheet Strength
Benefits of investment grade
Supports consolidation strategy
Assures operational flexibility through cycles
Minimizes counterparty letter of credit
requirements
Enables EQM to fund organic projects / joint
ventures (MVP) with lower-cost capital
Strong liquidity
$2.5 billion revolver at EQT
$1.0 billion revolver at EQM
$0.85 billion revolver at RMP
Significant drop-down inventory
34
Strength in the numbers
Sub-Investment Grade
Investment Grade Rating (S&P) – EQT vs. Marcellus Peers(2) Net Debt(1)
($B) As of 12/31/17
Senior notes $ 4.6
Credit facility borrowings 1.3
Cash (0.1)
Net debt (total debt minus cash) $ 5.8
(1) Debt and cash exclude EQM and RMP
(2) Peers: AR, CNX, GPOR, RRC, SWN