- EQT agreed to buy rival Appalachian driller Range Resources in an all-stock deal valued at about $12.8 billion, creating the largest US natural gas producer. The combined company will produce the equivalent of about 7% of total US gas output and hold more than 30 years of drilling inventory across nearly 3 million net acres.
- Range shareholders will receive 0.987 EQT shares per share and own about 27% of the combined company, leaving EQT holders with about 73% (Lumida calculation). Bloomberg Intelligence’s Vincent Piazza put the premium at about 20% to Friday’s close. Range shares rose 16% to $52.94 and EQT fell 3% to $53.98 by late morning in New York, which implies a deal value of about $53.28 per Range share, roughly 0.6% above Range’s trading price (Lumida calculation).
- The deal takes the top spot from Expand Energy, formed through Chesapeake’s 2024 purchase of Southwestern Energy, which operates in both Appalachia and the Haynesville basin. EQT is doubling down on Appalachia, where production is cheap but far from the Gulf Coast LNG export terminals now being built.
- EQT expects $325 million in annual savings within two years and raised its forecast for Appalachian gas demand growth to about 25 billion cubic feet per day by the early 2030s. The companies’ assets sit near Northern Virginia’s Data Center Alley, positioning the combined firm to supply AI-driven power demand.
What Happened?
EQT announced Monday that it will acquire Range Resources in an all-stock transaction worth about $12.8 billion. CEO Toby Rice, who took control of EQT in 2019 after a proxy fight, is building a gas producer with the scale to sell to domestic power plants and to overseas buyers through LNG exports. The deal is expected to close in the first quarter of 2027, subject to shareholder and regulatory approvals. Citigroup and RBC Capital Markets advised EQT, while Evercore led advice for Range with J.P. Morgan Securities also advising.
Why It Matters?
Natural gas has emerged as a key energy source for the AI boom, and this deal is a bet that Appalachian supply will be needed close to where data centers and manufacturing are growing. Rice said the transaction “comes at a pivotal moment for America’s economy,” pointing to the convergence of modern industry and energy. Scale and $325 million of expected savings could help the combined company compete on cost, while its concentration in one basin contrasts with Expand Energy’s two-basin footprint. EQT’s 3% share decline suggests some investors are weighing the dilution and premium against those benefits.
What’s Next?
Shareholder votes and regulatory reviews are the next steps before the expected first-quarter 2027 close. Investors will watch whether the gap between Range’s price and the implied deal value stays narrow, a sign the market expects completion. Progress on the $325 million savings target and on new demand from power generation near the Ohio River will be key to the deal’s case. Gas prices are also a factor, with US futures down 1.1% at the time of the report.
Affected Tickers and Coins: EQT, RRC, EXE, UNG
Source: Bloomberg
