EQT Midstream Partners to Acquire Sunrise Pipeline from EQT Corporation

  EQT Midstream Partners to Acquire Sunrise Pipeline from EQT Corporation

Business Wire

PITTSBURGH -- July 15, 2013

EQT Midstream Partners, LP (NYSE: EQM) and EQT Corporation (NYSE: EQT) today
announced that EQT Midstream Partners has agreed to acquire EQT Corporation’s
(EQT) wholly owned subsidiary, Sunrise Pipeline, LLC (Sunrise), for $507.5
million cash and $32.5 million of common and general partners units. EQT
Midstream Partners (Partnership) also agreed to pay additional consideration
of $110 million to EQT upon the effectiveness of a new transportation
agreement with a third-party that the Partnership expects to become effective
post-closing. In addition, the Partnership announced a $0.40 cash distribution
per unit for the second quarter 2013, which represents a $0.03 or 8% increase
over the first quarter 2013 cash distribution per unit.

Sunrise Acquisition
The primary assets of Sunrise consist of: (i) 41.5 miles of 24-inch diameter
FERC-regulated pipeline that parallels and interconnects with the segment of
the Partnership’s transmission and storage system from Wetzel County, West
Virginia to Greene County, Pennsylvania; (ii) the Jefferson compressor station
in Greene County; and (iii) an interconnect with the Texas Eastern pipeline in
Greene County. The Sunrise pipeline has existing throughput capacity of
approximately 400 BBtu per day, all of which is subscribed under firm
transmission contracts with a weighted-average remaining contract life based
on contracted revenues of approximately 10 years as of June 30, 2013. EQT
Energy, LLC (EQT Energy), EQT’s marketing affiliate, has entered into a firm
contract for 305 BBtu per day of capacity. In addition, 95 BBtu per day of
capacity has been contracted with third-parties. These contracts provide $44.3
million in annual firm reservation revenue and up to $0.7 million of annual
firm usage revenue, if fully utilized.

Sunrise is currently expanding its Jefferson compressor station, which will
provide approximately 550 BBtu per day of additional capacity. The Partnership
will invest $30 million for the expansion, which is fully subscribed and
expected to be in service by September 1, 2014. EQT Energy has entered into a
precedent agreement for approximately 295 BBtu per day of firm capacity over a
10-year term, commencing on the date the expansion is placed in service, which
results in $26.9 million of annual firm reservation revenue.

Sunrise also entered into a precedent agreement with a third-party, over a
20-year term, for firm transportation capacity related to the Jefferson
expansion. The precedent agreement is for approximately 252 BBtu per day of
firm transportation capacity from November 1 through March 31 of each year and
62 BBtu per day of firm transportation capacity from April 1 through October
31 of each year. The agreement is expected to commence April 1, 2014, and
result in $13.0 million of annual firm reservation revenue and up to $1.0
million of annual firm usage revenue, if fully utilized. If a transportation
agreement becomes effective under the terms of the precedent agreement by
December 31, 2014, the Partnership will make a payment of $110 million to EQT
as additional consideration.

The Partnership currently operates the Sunrise assets as part of its
transmission and storage system under a lease agreement with EQT. The lease is
accounted for as a capital lease for GAAP purposes and, as a result, revenues
and expenses associated with Sunrise are included in the Partnership’s
financial statements; however, the monthly lease payment to EQT offsets the
impact on the Partnership’s distributable cash flow. Effective with the close
of the Sunrise transaction, the lease agreement will terminate.

Management expects the Sunrise acquisition to be immediately accretive to the
Partnership’s distributable cash flow per unit. The Partnership valued Sunrise
based on the present value of expected future cash flows, which are expected
to ramp up significantly in 2014 and 2015 based on the growth provided by the
Jefferson compressor station expansion and related contracts.

Upon completion of the Jefferson expansion, revenues generated under contracts
are expected to be approximately $84 million annually. In addition, if fully
utilized, revenues generated by firm usage could add up to $1.7 million
annually, based on the terms of the previously described contracts. The
Partnership expects ongoing operating expenses for the Sunrise assets,
excluding depreciation and amortization, to be approximately $5 - $7 million
per year.

The terms of the acquisition were approved by the Partnership's Conflicts
Committee, which is comprised entirely of independent directors. The committee
was advised by Evercore Partners Inc. regarding financial matters; and
Richards, Layton & Finger P.A. regarding legal matters. The general partner
and its affiliates were advised by Baker Botts L.L.P. regarding legal matters.

EQT Midstream Partners Quarterly Cash Distribution
Today, the Partnership announced a quarterly cash distribution of $0.40 per
unit for the second quarter of 2013. The distribution represents a $0.03 or 8%
increase over the first quarter cash distribution per unit. The second quarter
distribution will be paid on August 14, 2013 to all unitholders of record at
the close of business on August 5, 2013.

In addition, the Partnership announced estimated second quarter 2013 adjusted
EBITDA of $23.4 million, which includes $0.5 million of expenses related to
the Sunrise transaction. The estimated second quarter 2013 adjusted EBITDA
results are in line with the previously issued guidance of adjusted EBITDA
between $22 and $24 million.

Non-GAAP Disclosures
As used herein, the Partnership defines adjusted EBITDA as net income (loss)
plus net interest expense, income tax expense (if applicable), depreciation
and amortization expense, non-cash long-term compensation expense, and other
non-cash adjustments (if applicable) less other income and the Sunrise
Pipeline lease payment. Adjusted EBITDA is a non-GAAP supplemental financial
measure that management and external users of the Partnership’s financial
statements, such as industry analysts, investors, lenders, and rating
agencies, use to assess:

  *performance versus prior periods;
  *the Partnership’s operating performance as compared to other publicly
    traded partnerships in the midstream energy industry, without regard to
    historical cost basis or financing methods;
  *the ability of the Partnership’s assets to generate sufficient cash flow
    to make distributions to the Partnership’s unitholders;
  *the Partnership’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.

The Partnership believes that adjusted EBITDA provides useful information to
investors in assessing the Partnership’s financial condition and results of
operations. Adjusted EBITDA should not be considered an alternative to net
income, operating income, net cash provided by operating activities or any
other measure of financial performance or liquidity presented in accordance
with GAAP. Adjusted EBITDA has important limitations as an analytical tool
because it excludes some but not all items that affect net income and net cash
provided by operating activities. Additionally, because adjusted EBITDA may be
defined differently by other companies in its industry, the Partnership’s
definition of adjusted EBITDA may not be comparable to similarly titled
measures of other companies, thereby diminishing its utility.

The table below reconciles estimated adjusted EBITDA with estimated net income
as derived from the Partnership’s estimated results for the quarter ended June
30, 2013.

                                                        Three Months Ended
                                                            June 30, 2013
                                                            (in thousands $)
Reconciliation of Estimated Adjusted EBITDA to
Estimated Net Income
Estimated net income                                        $    17,890
Estimated interest expense, net                                  6,485
Estimated depreciation and amortization                          7,858
Estimated non-cash long-term compensation expense                209
Estimated non-cash reserve adjustment                            (430      )
Estimated sunrise lease payment                                  (8,338    )
Estimated other income                                          (229      )
Estimated Adjusted EBITDA                                   $    23,445    

About EQT Midstream Partners:
EQT Midstream Partners, LP is a growth-oriented limited partnership formed by
EQT Corporation to own, operate, acquire and develop midstream assets in the
Appalachian basin. The Partnership provides midstream services to EQT
Corporation and third-party companies through two primary assets: the
Equitrans Transmission and Storage System and the Equitrans Gathering System.
The Partnership has a 700-mile, FERC-regulated interstate pipeline system and
more than 2,000 miles of FERC-regulated, low-pressure gathering lines.

Visit EQT Midstream Partners, LP at www.eqtmidstreampartners.com.

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, EQT 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 at www.EQT.com.

Cautionary Statements
Disclosures in this press release contain certain 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 plans, strategies, objectives and growth and
anticipated financial and operational performance of the Partnership and its
subsidiaries, including guidance regarding the Partnership’s and Sunrises’
transmission and storage and gathering revenue and volume growth; revenue
projections; infrastructure programs (including the timing, cost, capacity and
sources of funding with respect to such programs); asset acquisitions,
including the Partnership’s and Sunrise’s ability to complete the Sunrise
acquisition; capital commitments, projected capital and operating
expenditures, including the amount and timing of capital expenditures
reimbursable by EQT, capital budget and sources of funds for capital
expenditures; liquidity and financing requirements, including funding sources
for the Sunrise acquisition; projected usage revenue; projected revenues, and
anticipated synergies from the Sunrise acquisition. 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
Partnership has based these forward-looking statements on current expectations
and assumptions about future events. While the Partnership 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 Partnership’s control. With respect to the proposed Sunrise
transaction, these risks and uncertainties include, among others, disruption
to the Partnership's business, including customer and supplier relationships
resulting from the transaction; risks that the conditions to closing may not
be satisfied; and impact of the transaction on the Partnership’s future
operating income, 2013 capital program and distributions. The risks and
uncertainties that may affect the operations, performance and results of the
Partnership’s business and forward-looking statements include, but are not
limited to, those risks discussed in the Partnership’s most recent Annual
Report on Form 10-K, Quarterly Report on Form 10-Q and other filings with the
Securities and Exchange Commission. Any forward-looking statement speaks only
as of the date on which such statement is made and the Partnership does not
intend to correct or update any forward-looking statement, whether as a result
of new information, future events or otherwise.

This release serves as qualified notice to nominees under Treasury Regulation
Sections 1.1446-4(b)(4) and (d). Please note that 100% of the Partnership’s
distributions to foreign investors are attributable to income that is
effectively connected with a United States trade or business. Accordingly, all
of the Partnership’s distributions to foreign investors are subject to federal
income tax withholding at the highest effective tax rate for individuals or
corporations, as applicable. Nominees, and not the Partnership, are treated as
the withholding agents responsible for withholding on the distributions
received by them on behalf of foreign investors.


EQT Midstream Partners
Analyst inquiries please contact:
Nate Tetlow, 412-553-5834
Investor Relations Manager
Patrick Kane, 412-553-7833
Chief Investor Relations Officer
Media inquiries please contact:
Natalie Cox, 412-395-3941
Corporate Director, Communications
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