EQT Corp. (NYSE:EQT) announced that it will become the largest natural gas producer in the United States with the acquisition of Range Resources (NYSE:RRC) for over $50 billion. This all-stock deal also includes debt and is expected to produce more than 9 billion cubic feet equivalent of gas daily in the Appalachian basin.
Deal Details and Stock Value
In this deal, Range shareholders will receive 0.987 shares of EQT for each share they own, which translates to a value of $54.91 per share and a 20.6 percent increase over Friday's closing price. This brings the value of Range's stock to about $12.8 billion. After the merger, EQT shareholders will own approximately 73 percent of the combined company, while Range shareholders will hold the remaining 27 percent.
Production Capacity and Future Forecasts
The new producer, with nearly 3 million acres in the Appalachian basin, over 30 years of drilling inventory, and more than 3,700 miles of midstream pipelines, will become a major force in the natural gas industry. EQT expects this deal to reduce free cash flow costs without debt to below $2 per million British thermal units and to yield about $325 million in annual savings over two years.
Furthermore, the company anticipates that total free cash flow will reach approximately $20 billion over the next five years at current prices. Given the U.S. Energy Information Administration's (EIA) forecasts for increased U.S. gas production, EQT views this acquisition as a key step in capitalizing on new opportunities in the natural gas and LNG export sectors.
The EIA expects U.S. gas production to rise from 107.6 billion cubic feet per day in 2025 to 115.9 billion cubic feet per day in 2027. LNG exports are also projected to reach a record 17.4 billion cubic feet per day in 2026. Half of the developing natural gas-fired power generation capacity in the U.S. is related to data centers.
According to a study by EY, gas reserves among the 30 largest U.S. producers have increased by 14 percent, while their acquisition and merger costs have decreased by 70 percent. EQT's stock fell 4.2 percent in pre-market trading to $53.27, while Range's stock rose 14.2 percent to $52.00. This deal is expected to close in the first quarter of 2027, pending shareholder and regulatory approvals.
