EQT (NYSE:EQT) announced an agreement to acquire Range Resources in an all-stock transaction that the companies said would create a larger integrated natural gas producer with expanded Appalachian Basin inventory, infrastructure access and marketing capabilities.
Under the agreement, Range shareholders will receive 0.987 shares of EQT common stock for each Range share they own. EQT said existing EQT shareholders are expected to own approximately 73% of the combined company at closing, while Range shareholders would own about 27%. The pro forma enterprise value of the combined company is expected to exceed $50 billion.
Toby Rice, EQT’s president and chief executive officer, said the deal combines adjacent resource positions in southwest and northeast Pennsylvania and comes as the company sees a significant future increase in regional natural gas demand from power generation and pipeline development.
“This transaction comes at a pivotal moment for America’s economy,” Rice said, citing the growth of modern industry and energy demand in Appalachia. He said EQT sees an opportunity to serve new demand with a larger, lower-cost production platform and long-duration supply resources.
Scale, inventory and demand opportunities
EQT said the combined company would have more than 30 years of drilling inventory, supported by EQT’s integrated infrastructure, commodities marketing platform and investment-grade balance sheet. The company forecast a pro forma unlevered free cash flow breakeven below $2 per MMBtu.
Rice said EQT’s productive capacity could exceed 12 billion cubic feet per day, while Range has stated it could potentially sustain production capacity of about 5 Bcf per day. Combined, he said, the companies could have approximately 17 Bcf per day of productive capacity as they pursue an addressable demand opportunity that EQT has raised to 25 Bcf per day in Appalachia.
The companies highlighted Range’s proximity to the Clarington, Ohio, delivery area, where EQT expects new power-generation projects and pipeline takeaway capacity to emerge. EQT said its POWER pipe project is in an open-season process and has received strong interest, though it did not provide further details.
Jeremy Knop, EQT’s chief financial officer, said the combined portfolio would include about 3 Bcf per day of in-basin production that could be directed toward premium long-term supply agreements. EQT also expects to retain nearly 1 Bcf per day of international market exposure through its existing LNG contracts.
Synergies and financial targets
EQT identified $325 million of annual base synergies, primarily from corporate and organizational efficiencies and operating savings. Knop said the company expects most of those synergies to appear in operating expenses rather than capital expenditures.
The company also identified more than $300 million of potential additional long-term annual upside from midstream system optimization, gas, LNG and LPG marketing, premium supply arrangements and partnerships intended to accelerate development tied to long-term demand growth.
- Pro forma unlevered free cash flow breakeven forecast below $2 per MMBtu.
- Nearly $14 billion in projected five-year cumulative pro forma free cash flow at $2.75 per MMBtu natural gas.
- More than $38 billion in projected five-year cumulative pro forma free cash flow under a $5 per MMBtu scenario.
- A maximum net debt-to-adjusted EBITDA target of 1x at a $2.75 NYMEX natural gas price.
Knop said EQT expects the all-equity structure to strengthen its balance sheet and help support a goal of reaching BBB or equivalent ratings from all agencies by early 2027. The company said it plans to continue disciplined investment, build cash, repurchase shares opportunistically and grow its base dividend sustainably.
Rice said the transaction accelerates EQT’s deleveraging progress and could increase its capacity for share repurchases. He added that EQT’s overall capital-allocation framework and focus on sustainable, demand-linked growth would remain unchanged.
Operations and integration
The companies said Range will continue executing its existing 2027 development plan following the announcement. Dennis Degner, Range’s president and chief executive officer, said Range is on track to complete the second year of its multiyear growth plan in 2026 and is refining its approach for 2027.
Rice said EQT does not anticipate major scheduling changes during the first 12 months after the transaction. Over time, management expects to assess opportunities to improve field-level development sequencing, gathering-system utilization, compression and downstream marketing.
Range’s liquids production was described as an added source of durability and diversification rather than the central strategic rationale for the transaction. Knop said the principal objective is to expand the natural gas business and capture anticipated demand growth, while the liquids portfolio could provide additional marketing and infrastructure optimization opportunities.
Degner said Range’s board concluded that a combination with EQT offered the best opportunity to accelerate shareholder value creation through greater scale, infrastructure access and market reach. He said Range shareholders would receive a premium through the exchange ratio while retaining equity participation in the combined company.
“We were also comfortable in the go-it-alone case because of the inventory and the duration that we had,” Degner said. “As you started to really look at this combination, it presented a force multiplier type moment for our organizations.”
About EQT (NYSE:EQT)
EQT Corporation is a natural gas exploration and production company headquartered in Pittsburgh, Pennsylvania. The company develops and operates unconventional oil and gas properties, with a primary focus on natural gas and natural gas liquids produced from shale formations.
EQT’s operations are concentrated in the Appalachian Basin, particularly the Marcellus and Utica shale formations in Pennsylvania, West Virginia and Ohio. Its activities include drilling, completion, production and management of natural gas wells, along with related gathering and infrastructure operations that support the transportation of its products to market.
The company traces its roots to Equitable Gas, founded in 1878, and has evolved through multiple stages of expansion and restructuring in the U.S.
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