EQT to acquire Range Resources in $50bn all-stock merger

EQT has reached an agreement to purchase rival Appalachian Basin producer Range Resources in an all-stock transaction. The deal is designed to create a United States natural gas entity with a pro forma enterprise value exceeding $50bn. Under the proposed merger terms, each Range common share will be exchanged for 0.987 EQT common shares. Upon completion, EQT shareholders are expected to retain approximately 73% of the combined group, while Range investors will hold the remaining 27%. Both companies are currently listed on the New York Stock Exchange, and their respective boards have unanimously approved the agreement.

Completion of the merger is anticipated for the first quarter of 2027, subject to regulatory approvals, shareholder votes and other customary conditions. The combined business is projected to achieve net production of more than nine billion cubic feet equivalent per day, manage nearly three million net acres and maintain over 30 years of inventory. The new entity will also incorporate more than 3,700 miles of midstream infrastructure. EQT expects the transaction to reduce its unlevered free cash flow breakeven to below $2 per million british thermal units and increase its exposure to natural gas liquids. The company forecasts base annual synergies of $325m within two years, covering corporate functions, operations and commodities marketing, with longer-term synergies potentially exceeding $600m through development and infrastructure optimisation.

Additional value is expected from improved marketing margins for natural gas, liquefied natural gas and natural gas liquids, as well as faster inventory development linked to contractual demand. EQT projects cumulative free cash flow of about $20bn over five years at recent strip pricing and expects the combined group to maintain BBB-quality credit metrics at closing. Toby Rice, president and CEO of EQT, stated that the transaction unites two of the highest-quality asset bases in North America, positioning the company for the next era of natural gas. He noted that the combined entity would offer resilience through commodity cycles while maintaining upside to strengthening fundamentals.

EQT’s executive management team will operate the combined company, which will remain headquartered in Canonsburg, Pennsylvania. Two Range representatives, including Dennis Degner, are due to join EQT’s board after completion. Degner, president and CEO of Range, said the combined company will be well positioned to capitalise on increasing domestic and international demand for natural gas and liquids. Citi and RBC Capital Markets advised EQT financially, with Kirkland & Ellis acting as legal counsel. Evercore served as Range’s lead financial adviser alongside J.P. Morgan Securities, while Gibson, Dunn & Crutcher provided legal advice.