EQT Announces Proved Reserves Increase of 12% to 6.0 Tcfe 3P Reserves Increase of 21% to 25.9 Tcfe Business Wire PITTSBURGH -- January 24, 2013 EQT Corporation (NYSE:EQT) today reported year-end 2012 total proved reserves of 6,004 Bcfe. This represents a 639 Bcfe net increase over the 5,365 Bcfe reported last year, with a reserve replacement ratio of 345%. The Company's Marcellus proved reserves increased by 864 Bcfe based on wells drilled in 2012, a higher estimated ultimate recovery (EUR) from reduced cluster spacing wells, and an increased well density across a portion of its acreage in Greene County, Pennsylvania. The utilization of reduced cluster spacing increased EUR an average of 23% per well, where applicable. Reduced cluster spacing was used for approximately 25% of the proved developed wells, and will be used for 25% of the proved undeveloped wells. The EUR of proved Marcellus wells averaged 6.4 Bcfe, with an average length of pay of 4,512 feet. For 2012, drill bit finding costs were $0.53 per Mcfe. The Company's Marcellus proved developed producing (PDP) additions totaled 309 Bcfe on $389 million of capital for a development cost of $1.26 per Mcfe. PDP negative revisions totaled 110 Bcfe, primarily due to a reduction in expected well life, as a result of lower natural gas prices. Nearly all of the negative revisions relate to Coal Bed Methane (CBM) and other vertical wells. EQT estimates year-end 2012 total reserves, including proved, probable and possible (3P) reserves, at 25.9 Tcfe, an increase of 4.5 Tcfe over the 2011 estimate. More than half of the 3P reserves increase was from a portion of the Company's 170,000 Upper Devonian net acreage, which are expected to be developed independently from the Marcellus. The Company also has approximately 13,600 net Utica acres in Ohio, which add an insignificant amount of possible reserves. To delineate the plays, EQT plans to drill 11 Upper Devonian and 8 Utica wells in 2013. Ryder Scott Company, petroleum consultants audited 100% of the Company’s proved reserves, while estimated 3P reserves are determined in accordance with the Securities and Exchange Commission regulations. The Company also made an assessment of its total resource potential, which include 3P reserve totals. 3P Reserves by Play (year-end 2012): Reserve Upper CBM / Estimates Marcellus Huron* Devonian Other Utica Total (Bcfe) Proved 1,072 965 – 761 – 2,798 Developed Proved 3,206 – – – – 3,206 Undeveloped Total 4,278 965 – 761 – 6,004 Proved Probable 4,873 6,399 93 196 – 11,561 Possible 5,861 – 2,267 77 121 8,326 Total 3P 15,012 7,364 2,360 1,034 121 25,891 Reserves *Includes the Lower Huron, Cleveland, Berea sandstone, and other Devonian aged formations. Annual Comparison of Estimated 3P Reserves by Play: Years Ended December 31, (Bcfe) 2012 2011 Marcellus Proved Developed 1,072 1,015 Proved Undeveloped 3,206 2,399 Total Proved 4,278 3,414 Probable 4,873 4,235 Possible 5,861 5,098 Total 3P Reserves 15,012 12,747 Huron Proved Developed 965 1,062 Proved Undeveloped – – Total Proved 965 1,062 Probable 6,399 4,340 Possible – 2,315 Total 3P Reserves 7,364 7,717 Upper Devonian Proved Developed – – Proved Undeveloped – – Total Proved – – Probable 93 – Possible 2,267 – Total 3P Reserves 2,360 – CBM/Other Proved Developed 761 889 Proved Undeveloped – – Total Proved 761 889 Probable 196 22 Possible 77 2 Total 3P Reserves 1,034 913 Utica Proved Developed – – Proved Undeveloped – – Total Proved – – Probable – – Possible 121 – Total 3P Reserves 121 – Totals Total Proved 6,004 5,365 Total Probable and Possible 19,887 16,012 Total 3P Reserves 25,891 21,377 Total Estimated Resource Potential by Play: Resource Potential Total (Tcfe) Marcellus 19.5 Huron 11.3 Upper Devonian 2.8 CBM/Other 1.6 Utica 0.2 TOTAL 35.4 Summary of Changes in Proved Reserves: Balance at December 31, 2011 (Bcfe) 5,365 Extensions, discoveries and other additions 1,656 Revisions* (754) Purchases - Sales (1) Production (261) Balance at December 31, 2012 6,004 * A substantial portion of the revision is due to proved reserves being re-classified as non-proved reserves, primarily as a result of lower gas prices. Year-end 2012 reserves are based on a $2.79 per Mcfe price, which is $1.33 lower than the price used to estimate the 2011 reserves. Both prices were determined in accordance with the SEC requirement to use the 12-month un-weighted arithmetic average of the first-day-of-the-month price for the preceding twelve months without giving effect to derivative transactions. DEFINITIONS Reserve Replacement Calculations -- Reserve replacement ratio is the sum of the net increase of proved reserves before production, divided by production. Drill Bit Finding Cost -- Drill bit finding cost is the total cost incurred related to natural gas and oil activities, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 932 (ASC 932), less property acquisition costs for proved developed and unproved properties, divided by extensions, discoveries and other additions. About EQT Corporation: EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, transmission, and distribution. EQT is the general partner and majority equity owner of EQT Midstream Partners, LP. With more than 120 years of experience, EQT is a technology-driven leader in the integration of air and horizontal drilling. Through safe and responsible operations, the company is committed to meeting the country’s growing demand for clean-burning energy, while continuing to provide a rewarding workplace and enrich the communities where its employees live and work. Company shares are traded on the New York Stock Exchange as EQT. Visit EQT Corporation on the Internet at www.EQT.com. Cautionary Statements The 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 press release, 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. These measures are by their nature more speculative than estimates of reserves prepared in accordance with SEC definitions and guidelines and accordingly are less certain. 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 certainty associated with each reserve category. Disclosures in this press release contain forward-looking statements. 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 press release specifically include the expectations of resource potential, EUR and projected well drilling plans, including the projected capital budget and the use of reduced cluster spacing. These 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. The company has based these forward-looking statements on current expectations and assumptions about future events. While the company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the company’s control. The risks and uncertainties 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 forth under Item 1A, “Risk Factors” of the company’s Form 10-K filed for the year ended December 31, 2011 and in the company’s Form 10-K for the year ended December 31, 2012 to be filed with the SEC, 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 the company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise. Contact: EQT Corporation Analyst inquiries please contact: Patrick Kane, 412-553-7833 Chief Investor Relations Officer email@example.com or Nate Tetlow, 412-553-5834 Manager, Investor Relations firstname.lastname@example.org or Media inquiries please contact: Natalie Cox, 412-395-3941 Corporate Director, Communications email@example.com
EQT Announces Proved Reserves Increase of 12% to 6.0 Tcfe
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