EQT Announces 2014 Operational Forecast

  EQT Announces 2014 Operational Forecast

    Sales volume guidance of 460 – 480 Bcfe, 28% higher than previous year

Business Wire

PITTSBURGH -- December 18, 2013

EQT Corporation (NYSE: EQT) today announced the Company’s 2014 capital
expenditure (CAPEX) forecast of $2.4 billion. The CAPEX forecast includes $1.9
billion for EQT Production, $475 million for EQT Midstream, and the remainder
for other corporate items. Funding will be provided by cash-on-hand at
year-end, which includes proceeds from the sale of Equitable Gas Company, and
cash generated from operations.

EQT’s 2014 CAPEX excludes CAPEX for EQT Midstream Partners, LP (NYSE: EQM), an
entity controlled by EQT Corporation and consolidated in EQT’s financial
statements. EQT Midstream Partners announced its 2014 financial and CAPEX
forecast today in a separate news release, which can be found at
www.eqtmidstreampartners.com.

"The 2014 CAPEX program is designed to profitably accelerate the development
of our expansive Marcellus position and will result in significant volume
growth in 2015. It includes capital to continue the growth of our midstream
footprint, and to re-start our drilling plans in the Huron in Kentucky. The
Huron has returned to being a profitable play and an added benefit is
increased throughput in the Huron gathering system, which will facilitate a
future sale to EQT Midstream Partners," stated Dave Porges, Chief Executive
Officer.

EQT Production:
EQT Production 2014 CAPEX is projected to total $1.9 billion, excluding land
acquisitions. The breakdown is $1.6billion for well development; $50 million
for developmental geological and geophysical activities, and the remainder for
capitalized overhead, well maintenance and compliance. The 2014 drilling
program is expected to support 2015 sales volume of 575 – 600 Bcfe.

Marcellus Development
The Company plans to spend approximately $1.1 billion on Marcellus well
development in 2014 – drilling 186 Marcellus wells with an average lateral
length of 4,800 feet. All of the wells will be on multi-well pads to maximize
operational efficiency and well economics. Approximately 90% of the Marcellus
drilling program will focus on the Company’s two core development areas of
southwestern Pennsylvania and northern West Virginia; with the remainder in
central Pennsylvania to further de-risk this future development area. EQT
Production owns approximately 560,000 net Marcellus acres.

Utica Development
The Company plans to spend approximately $145 million on Utica well
development in 2014 – drilling 21 wells in its liquids-rich acreage located in
Guernsey County, Ohio. The 2014 Utica wells are expected to have an average
lateral length of 6,500 feet. EQT Production owns approximately 14,000 net
Utica acres in Ohio.

Upper Devonian Development
The Company plans to spend approximately $155 million to drill 30 Upper
Devonian wells in 2014, with an average lateral length of 4,000 feet. The
Upper Devonian shale formation sits above the Marcellus zone across a
substantial portion of EQT’s existing acreage position; to minimize
development costs, all Upper Devonian wells drilled in 2014 will share a pad
with Marcellus wells. EQT Production owns approximately 170,000 net acres in
the Upper Devonian that the Company believes can be developed as a separate
zone.

Huron
EQT plans to spend approximately $180 million to drill 120 Huron wells in
2014, with an average lateral length of 6,000 feet. In addition to the play
being profitable at current prices, a secondary benefit of the Huron drilling
program is an increase in produced volumes through the extensive gathering
system, facilitating a future sale to EQT Midstream Partners. The Company owns
approximately 1.4 million net acres of Huron shale formation in Kentucky and
currently has more than 800 producing horizontal wells in the play.

EQT Midstream:
EQT Midstream plans to invest $475 million in 2014. The breakdown is estimated
to be $345 million for Marcellus gathering infrastructure; and $90 million for
upgrades to the Allegheny Valley Connector, a FERC-regulated transmission
pipeline that EQT acquired as part of the sale of its utility business, and
the remainder for maintenance and compliance activities.

The Marcellus gathering investments are focused on EQT Production's
development areas in southwestern Pennsylvania and northern West Virginia, and
are expected to increase gathering capacity by 120 MMcf per day in
Pennsylvania and 320 MMcf per day in West Virginia.

Hedging:
The Company recently added to its hedge position for the next three years,
bringing its total natural gas hedge to:

                                   2014     2015     2016
Fixed Price
Total Volume (Bcf)                       218        122        60
Average Price per Mcf*                 $ 4.35     $ 4.39     $ 4.45
                                                             
Collars
Total Volume (Bcf)                       24         23         -
Average Floor Price per Mcf *          $ 5.05     $ 5.03     $ -
Average Cap Price per Mcf *            $ 8.85     $ 8.97     $ -

* The average price is based on a conversion rate of 1.05 MMBtu/Mcf


2014 Guidance:
Based on current natural gas prices, EQT Corporation's operating cash flow is
projected to be approximately $1.5 billion in 2014, which includes $55 million
for distribution to EQT Midstream Partners’ public common unitholders. See the
Non-GAAP Disclosures section for important information regarding the non-GAAP
financial measures included in this news release.

Production                                 
Total Production Sales Volume (Bcfe)            460 – 480
Liquids Volume^1 (Mbbls)                        6,800 – 6,900
Marcellus Volume^2 (Bcfe)                       360 – 370
Other Volume (Bcfe)                             100 – 110

Marcellus / Upper Devonian / Utica Rigs         7 – 9
Top-Hole Rigs                                   7 – 9
Huron Rigs                                      3 – 4
                                                
Unit Cost ($ / Mcfe)
LOE                                             $0.13 – $0.15
Production Taxes                                $0.13 – $0.15
SG&A                                            $0.21 – $0.23
DD&A                                            $1.33 – $1.35
                                                
Midstream Revenue Deductions ($ / Mcfe)
Gathering to EQT Midstream                      $0.72 – $0.76
Transmission to EQT Midstream                   $0.18 – $0.22
Third-party gathering and transmission          $0.23 – $0.27
Third-party processing                          $0.13 – $0.17
                                                
Midstream
Net Operating Revenues ($MM)
Gathering                                       $395 – $405
Transmission                                    $220 – $230
Storage, Marketing, Other                       $25 – $30
                                                
Unit Cost ($ / Mcfe)
Gathering and transmission                      $0.20 – $0.23
SG&A                                            $0.13 – $0.15
                                                
Financial
Cash-on-hand at year-end 2013                   $850 – $950
                                                
EBITDA
EQT Midstream Partners                          $170 – $175
Other Midstream                             $285 – $295
Total Consolidated Midstream                    $455 – $470
Total Production                            $1,220 – $1,260
Total EBITDA                                $1,675 – $1,730
                                                

       The 2014 sales volume guidance converts natural gas liquids to Mcfe at
^1   a 6 Mcfe per barrel ratio, consistent with how we will report sales
       volumes prospectively.
^2     Includes Upper Devonian volumes
       

Year-end Earnings Information
The Company intends to release full-year 2013 earnings and host a live webcast
for security analysts on February 13, 2014. The webcast will be available at
www.eqt.com and will begin at 10:30 a.m. ET.

NON-GAAP DISCLOSURES
EBITDA and Operating Cash Flow
As used in this news release, EBITDA means earnings before interest, taxes,
depreciation, and amortization expense. As used in this news release,
operating cash flow means net cash provided by operating activities, less
changes in operating assets and liabilities. EBITDA and operating cash flow
are not financial measures calculated in accordance with generally accepted
accounting principles (GAAP).

EBITDA is a non-GAAP supplemental financial measure that Company management
and external users of the Company’s financial statements, such as industry
analysts, investors, lenders and rating agencies, may use to assess: (i) the
Company’s performance versus prior periods; (ii) the Company’s operating
performance as compared to other companies in its industry; (iii) the ability
of the Company’s assets to generate sufficient cash flow to make distributions
to its investors; (iv) the Company’s ability to incur and service debt and
fund capital expenditures; and (v) the viability of acquisitions and other
capital expenditure projects and the returns on investment of various
investment opportunities.

Operating cash flow is a non-GAAP supplemental financial measure that is
presented as an accepted indicator of oil and gas exploration and production
company’s ability to internally fund exploration and development activities
and to service or incur additional debt. The Company also includes this
information because management believes that changes in operating assets and
liabilities relate to the timing of cash receipts and disbursements that the
Company may not control, and therefore, may not relate to the period in which
the operating activities occurred. Accordingly, operating cash flow should not
be considered as a substitute for net cash provided by operating activities
prepared in accordance with GAAP.

About EQT Corporation:
EQT Corporation is an integrated energy company with emphasis on Appalachian
area natural gas production, gathering, and transmission. EQT is the general
partner and significant equity owner of EQT Midstream Partners, LP. With more
than 120 years of experience, EQT continues to be a leader in the use of
advanced horizontal drilling technology – designed to minimize the potential
impact of drilling-related activities and reduce the overall environmental
footprint. 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. EQT shares are traded on the New York Stock
Exchange as EQT.

Cautionary Statements
The Company is unable to provide a reconciliation of projected EBITDA to
projected net income, the most comparable financial measure calculated in
accordance with GAAP, because of uncertainties associated with projecting
future net income. Similarly, the Company is unable to provide a
reconciliation of its projected operating cash flow to projected net cash
provided by operating activities, the most comparable financial measure
calculated in accordance with GAAP, because of uncertainties associated with
projecting future net income and changes in assets and liabilities.

Disclosures in this news 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 news release specifically include
the expectations of plans, strategies, objectives and growth and anticipated
financial and operational performance of the Company and its subsidiaries,
including guidance regarding the Company's strategy to develop its Marcellus
and other reserves; projected operating cash flow, including the portion to be
distributed to the EQT Midstream Partners’ (the Partnership) public common
unitholders; projected EBITDA; drilling plans and programs (including the
number, type, feet of pay and location of wells to be drilled, acreage type,
number and type of drilling rigs, number of multi-pad wells, and the
availability of capital to complete these plans and programs); infrastructure
programs (including the timing, cost and capacity of the transmission and
gathering expansion projects and the availability of capital to complete these
programs); production sales volume and growth rates (including liquids sales
volume and growth rates); projected unit costs and projected gathering,
transmission and third-party processing revenue deductions to EQT Midstream;
gathering and transmission volume and growth rates; projected capital
expenditures, capital budget and sources of funds for capital expenditures,
including asset sales (dropdowns) to the Partnership; and expected cash on
hand at the end of 2013. 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 for the year ended December 31,
2012, 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
pkane@eqt.com
or
Nate Tetlow, 412-553-5834
Manager, Investor Relations
ntetlow@eqt.com
or
Media inquiries please contact:
Natalie Cox, 412-395-3941
Corporate Director, Communications
ncox@eqt.com
 
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