EQT Announces Year-End 2009 Proved Reserves of 4.1 Tcfe, a 31% Increase

PITTSBURGH, Jan. 28 /PRNewswire-FirstCall/ -- EQT Corporation (NYSE: EQT) today reported year-end 2009 total natural gas proved reserves of 4,068 Bcfe.  This represents a 31% net increase over the 3,110 Bcfe the company reported last year.  Proved reserves increased primarily in the Marcellus and Huron/Berea plays as a result of its 2009 drilling program.  In addition, the application of new Securities and Exchange Commission (SEC) oil and gas reporting rules permitted the booking of proved undeveloped reserves (PUDs) in locations more than one offset away from existing wells. Partially offsetting these reserve additions, EQT also reported a reduction of CBM/other reserves as a result of removing previously booked vertical locations.

EQT estimates year-end 2009 total natural gas reserves, including proved, probable and possible reserve categories (3P), at 12.5 Tcfe.  This marks a 32% net increase over EQT's 2008 total of 9.5 Tcfe. This increase was driven mainly by the success of the company's Marcellus and Huron/Berea horizontal drilling programs.  Probable reserves increased by 69% to 5.6 Tcfe and include 2.1 Tcfe of reserves from locations that would have been classified as proved, however their presumptive scheduled development is beyond the five year SEC requirement.

The company's drill bit reserve replacement ratio was 1,104% from 1,159 Bcfe of extensions, discoveries and other additions, with a drill bit reserve replacement cost of approximately $697.1 million, or $0.60 per Mcfe.  The company's total proved reserve replacement ratio, including revisions, was 1,013% from 1,063 Bcfe of additions.  All-in replacement costs, including $24.9 million in acquisitions of unproved properties in Pennsylvania, totaled $722 million, or $0.68 per Mcfe.  For the three year period from 2007 through 2009, EQT's drill bit reserve replacement ratio was 741% at a drill bit reserve replacement cost of $0.79 per Mcfe.  The three-year total proved reserve replacement ratio, including revisions, was 664% at an all-in replacement cost of $0.94 per Mcfe.

Summarized below are the company's estimated 3P reserves broken out by play:

    
    
    
    Reserve Estimates
     (Bcfe)               Huron/Berea    Marcellus   CBM / Other       Total
    -----------------     -----------    ---------   -----------       -----
    Proved Developed            1,014          153          906        2,073
    Proved Undeveloped          1,002          908           85        1,995
       Total Proved             2,016        1,061          991        4,068
       ------------             -----        -----        -----        -----
    Probable                    3,618        1,870           88        5,576
    Possible                    1,103        1,028          705        2,836
       TOTAL                    6,737        3,959        1,784       12,480
       -----                    -----        -----        -----       ------
    
    * 100% of the company's proved reserves have been audited by Ryder Scott Company, petroleum consultants.  The company's 3P reserves have been determined in accordance with the SEC guidelines.  
    
    * Proved reserves are limited to reserves that are anticipated to be developed in five years. EQT's five year plan is based on a capital development investment budget totaling $2.9 billion.
    
    

The company has also made an assessment of its total resource potential, including 3P reserves and its estimate of the potential resources beyond the 3P totals.  This resource potential is estimated to be:

    
    
    
    Emerging Plays – Resource Potential          Total (Tcfe)
    -----------------------------------          ------------
    Huron/Berea                                       13
    Marcellus                                         11
    CBM/Other                                          2
         TOTAL                                        26
         -----
    

    
    
    
    Reserves by Play
    
                                                   Years Ended
                                                   December 31,
                                                   ------------
    (Tcfe)                                      2009           2008
                                                ----           ----
    
    Huron/Berea
    Proved Developed                           1,014            868
    Proved Undeveloped                         1,002            688
    Total Proved                               2,016          1,556
    Probable                                   3,618          2,716
    Possible                                   1,103          2,308
    
    Marcellus
    Proved Developed                             153             23
    Proved Undeveloped                           908             54
    Total Proved                               1,061             77
    Probable                                   1,870            368
    Possible                                   1,028            458
    
    CBM/Other
    Proved Developed                             906          1,004
    Proved Undeveloped                            85            473
    Total Proved                                 991          1,477
    Probable                                      88            221
    Possible                                     705            289
    
    Totals
    Proved Developed                           2,073          1,895
    Proved Undeveloped                         1,995          1,215
    Total Proved                               4,068          3,110
    Probable                                   5,576          3,305
    Possible                                   2,836          3,055
    

Reserve Replacement Calculations

Drill bit reserve replacement ratio is the sum of extensions, discoveries and other additions, divided by production.  The per unit drill bit reserve replacement cost is the total cost incurred related to natural gas and oil production activities calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 932 (ASC 932) less property acquisition costs for unproved properties, divided by the extensions, discoveries and other additions.  Total proved reserve replacement ratio is the sum of purchases, sales, extensions, discoveries and other additions, and revisions, divided by production.  The all-in replacement cost is the total cost incurred related to natural gas and oil production activities calculated in accordance with ASC 932, divided by the total net reserve additions, which include purchases, sales, extensions, discoveries and other additions, and revisions.    

SEC Oil and Gas Reporting Requirements

On December 29, 2008, the United States Securities and Exchange Commission (SEC) adopted final rules amending and modernizing its oil and gas reporting requirements.  The new rules are effective for annual reports on Form 10-K for fiscal years ending on or after December 31, 2009.  Key aspects of the new rules for EQT include the following:

• Oil and gas companies may classify proved undeveloped reserves ("PUDs") any distance from known proved reserves (rather than only in immediately offsetting units) based on a "reasonable certainty" standard; and
• PUD wells scheduled for drilling more than five years from the original date reserves were booked, including reserves presently booked, are subject to being reduced to non-proved status.

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 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 "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 "resource potential" estimates as inherently unreliable and these estimates may be misleading to investors unless the investor is an expert in the 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.

The company's calculations of replacement ratios and replacement costs may differ significantly from the calculations used by other companies who report similar measures. As a result, our measures may not be comparable to similar measures reported by other companies. The data used to calculate these measures is preliminary and, in some cases, remains subject to audit.  Final data will be included in the company's 2009 Form 10-K, which will be filed with the SEC.

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. 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, 2008 and in the company's 10-K for the year ended December 31, 2009 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.  

EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, processing, transmission and distribution.  Additional information about the company can be obtained through the company's web site, http://www.eqt.com; Investor information is available on that site at http://ir.eqt.com.  EQT Corporation uses its web site as a channel of distribution of important information about the company, and routinely posts financial and other important information regarding the company and its financial condition and operations on the Investors web pages.

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