The Shale Revolution:

Lessons Learned

DUG East Conference

November 3, 2010
Pittsburgh
Birth of an Industry
Haymaker Well - nation’s first natural gas well
Drilled in 1878 in Murrysville, PA

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

 2006-2008 – 36% increase in

American recoverable
reserves

 2010 in Pennsylvania –

• 903 wells drilled

• 2065 wells permitted

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 How the Shales Changed EQT

500
Marcellus
Huron / Berea horizontal
CBM
Vertical
Production MMcf / d

Began horizontal drilling

250

0
2006 2007 2008 2009 2010E
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Leading Appalachian E&P Company
2009 operating income
$356.7 million

4.1 Tcfe proved res. 11,000 pipeline miles

275,000 customers

3.4 MM acres

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Reserves By Play
4.1 Tcfe proved reserves* 12.5 Tcfe 3P reserves*

Huron/Berea Marcellus Huron/Berea Marcellus

2.0 1.1 6.7 4.0

CBM/Other
1.0 CBM/Other
1.8

28 Tcfe Total Resource Potential

*As of 12/31/09
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Marcellus – Outstanding Potential

~500,000 EQT acres

13.5 Tcfe resource potential
3 wells
$3.8 – $4.2 MM / well
OH
5 – 6 Bcfe EUR / well
34 wells
100 wells in 2010 PA

MD
59 wells
WV
EQT Acreage

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 The Shale Revolution: Lessons Learned

Lesson #1 – Improved Techniques Increase

Production and Reduce Costs

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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

"Fishhook" design reaches more pay 1,150 ft missed pay

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

EQT productivity more than doubled

since 2008
 Greene Co. Cooper well - average
30-day production rate of 22 MMcfe
per day
 Armstrong Co. Rosborough well -
24-hour IP of 15 MMcfe
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 The Shale Revolution: Lessons Learned

Lesson #1 – Improved Techniques Increase

Production and Reduce Costs
Lesson #2 – Preserving the Environment is
Good Business

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 Lesson #2 – Preserving the
Environment is Good Business

Meet or exceed all federal, state and local regulations

Pre-drill testing of all domestic water sources

“Triple casing” to protect drinking water supplies

Recycle frack water and pumping water

 Self-contained system
 Zero disposal in waterways

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Lesson #2 – Preserving the
Environment is Good Business

Use industry-leading spill prevention plans

 Site-specific information – pictures, maps, topography

 All electronic – accessible 24/7 online

 Electronic SPCC inspections monthly, at a minimum

Disclose frack fluid additives – www.EQT.com

Embrace appropriate punishment for bad actors

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 The Shale Revolution: Lessons Learned

Lesson #1 – Improved Techniques Increase

Production and Reduce Costs
Lesson #2 – Preserving the Environment is
Good Business
Lesson #3 – Natural Gas is the New Neighbor

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Lesson #3 – Natural Gas is the New
Neighbor

Our neighbors are concerned about water

 “Natural gas companies are going to pollute the water”
• 2004/2009 EPA studies – No evidence of impact
• 2009 Ground Water Protection Council report
(commissioned by DOE) – no documented cases/state
regulation sufficient
• EDF’s Scott Anderson – “….if wells are constructed
right and operated right…hydraulic fracturing will not
cause a problem.”

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Lesson #3 – Natural Gas is the New
Neighbor

Our neighbors are concerned about water

 “Natural gas companies are going to use all the water”
• Recycle/reuse the water for the next well
• The same amount of water used to complete a well is
used by one U.S. golf course every 8 days (Pittsburgh
has 65 golf courses)
• Natural gas industry uses less than 2% of all water
used by all industries in Pennsylvania

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Lesson #3 – Natural Gas is the New
Neighbor

Our neighbors are concerned about air

 “Natural gas companies are going to pollute the air”
• Nov. 1, 2010 PA DEP news release -
Sec. Hanger: “…the data shows no emission levels
that would constitute a concern to the health of
residents living near [natural gas] operations.”
• Majority of potential emission sources at drilling sites
are primarily trucks - already covered by federal
emissions standards

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Lesson #3 – Natural Gas is the New
Neighbor

Our neighbors are concerned about jobs

 “Natural gas companies aren’t hiring locally”
• Drilling and completing one Marcellus well requires
410 people from 150 occupations!
• Nationally –
– 2008 – 3 million jobs, $385 billion
• Locally –
– 2010 - 100,000 jobs, $8.2 billion
– 2011 – 110,000 jobs, $11.0 billion
– 2020 – 174,000 jobs, $13.5 billion
• Support programs to train Pennsylvanians

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 The Shale Revolution: Lessons Learned

Lesson #1 – Improved Techniques Increase

Production and Reduce Costs
Lesson #2 – Preserving the Environment is
Good Business
Lesson #3 – Natural Gas is the New Neighbor
Lesson #4 – To Thrive, We MUST Create Demand

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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

Survey says “the government should do more to

encourage natural gas use” -
 73% “supporters of business”
 69% “supporters of environment”

Consumption expected to increase nearly 50% by 2030

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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

Source: EIA – 2009 Annual Energy Review

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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.

100% conversion means:

1) 68% reduction in imports
2) U.S.A. saves $265B / year

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Lesson #4 – To Thrive, We MUST Create
Demand

Feedstock, or raw material, for making chemicals,

fertilizers and plastics

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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