Professional Documents
Culture Documents
Lessons Learned
Pittsburgh
18 miles Murrysville
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New Life for an Old Industry
Pennsylvania Gas Production, 1993 - 2010
210,000,000
175,000,000
140,000,000
Mcf
105,000,000
70,000,000
35,000,000
1993 1996 2000 2005 2010
Year
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Natural Gas is Our Future
Available NOW -
250-500 TCF recoverable
Marcellus resources
2010 in Pennsylvania –
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How the Shales Changed EQT
500
Marcellus
Huron / Berea horizontal
CBM
Vertical
Production MMcf / d
250
0
2006 2007 2008 2009 2010E
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Leading Appalachian E&P Company
2009 operating income
$356.7 million
275,000 customers
3.4 MM acres
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Reserves By Play
4.1 Tcfe proved reserves* 12.5 Tcfe 3P reserves*
CBM/Other
1.0 CBM/Other
1.8
MD
59 wells
WV
EQT Acreage
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The Shale Revolution: Lessons Learned
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Lesson #1 – Improved Techniques
Increase Production and Reduce Costs
Conventional
Pad Drilling & Skid Packages for Rigs
Construction costs spread over pad wells
Reduces rig mobilization costs
(from approximately $200,000 to $20,000) Marcellus
Extended laterals –
Recover up to two times more gas Fishhook Design
Costs only about 40% more
F&D cost is about $0.75 per Mcf
Marcellus
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Lesson #1 - Improved Techniques
Increase Production and Reduce Costs
Target the formation:
Best reservoir characteristics
• Most brittle rock
• Best porosity & permeability
Maximum gas filled porosity
Maximum natural fracturing
Best hydraulic fractures
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Lesson #2 – Preserving the
Environment is Good Business
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Lesson #2 – Preserving the
Environment is Good Business
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The Shale Revolution: Lessons Learned
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Lesson #3 – Natural Gas is the New
Neighbor
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Lesson #3 – Natural Gas is the New
Neighbor
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Lesson #3 – Natural Gas is the New
Neighbor
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Lesson #3 – Natural Gas is the New
Neighbor
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The Shale Revolution: Lessons Learned
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Lesson #4 – To Thrive, We MUST Create
Demand
Natural Gas
Cheaper
Cleaner
Abundant
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Lesson #4 – To Thrive, We MUST Create
Demand
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Lesson #4 – To Thrive, We MUST Create
Demand
<1% Transportation
38% 31%
Residential & Electrical
Commercial Power
31%
Industrial
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Lesson #4 – To Thrive, We MUST Create
Demand
Petroleum Use
2009 U.S. Petroleum Use by Sector
(billion barrels)
2009 U.S. Imports, billion bbls
Aviation,
Canada & Mexico 1.3 Marine,
Electric
Military
Power
OPEC 1.8 0.9
0.1
Other 1.2 Vehicles
3.6
Total 4.3 Residential &
Commercial
0.3
69% of usage
Industrial
1.5
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Lesson #4 – To Thrive, We MUST Create
Demand
225 million gasoline-burning vehicles in U.S.
10 million NGVs in the world
Only 120,000 NGVs in the U.S.
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Lesson #4 – To Thrive, We MUST Create
Demand
Used to generate:
Ethane-Based Ethylene
Hydrogen
Ammonia
Methanol
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Cautionary Statement
The 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 a company anticipates at 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 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 total resource potential 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 reserves in 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. 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 the company and its subsidiaries, including guidance regarding the company’s drilling and infrastructure programs
(including the Equitrans expansion project) and technology, the timing of the signing and the terms of the natural gas processing and
natural gas liquids infrastructure joint venture, the timing of construction and expected economics of public-access natural gas
refueling stations, the expected decline curve, the expected feet of pay, total resource potential, production and sales volumes,
reserves, estimated ultimate recoveries, internal rate of return (IRR), expected after-tax returns per well, F&D costs, unit costs, direct
well costs, midstream costs, reserve replacement ratio, capital commitments and capital expenditures, capital budget, financing
plans, dividend rate, projected operating cash flows and revenue, hedging strategy, growth rate and tax position (including tax
refunds). 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, 2009, 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.
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