Oct 26 (Reuters) – EQT said on Monday it will buy Range Resources in a $13 billion all-stock deal to create the largest natural gas producer in the US as it bets on rising demand from LNG exports and power generation.
The deal combines two top natural gas producers in the prolific US Appalachian Basin, giving EQT a deeper drilling inventory and expanded infrastructure to serve utilities, LNG exporters and industrial customers.
Including debt, the combined company will be valued at more than $50 billion.
The merger comes as demand for US natural gas is expected to hit new records, driven by growing LNG exports and power demand from AI data centers. The Energy Information Administration has forecast domestic consumption to rise from 91.9 billion cubic feet per day (bcfd) in 2025 to 94.3 bcfd in 2027.
The combined company will have net production of more than 9 billion cubic feet equivalent per day (bcfepd), over 30 years of drilling inventory across nearly 3 million net acres and more than 3,700 miles of midstream infrastructure.
Range shareholders will receive 0.987 EQT shares for each share held. This gives the deal an equity value of $12.83 billion, or $54.91 per share, and represents a premium of about 20.6% to Range’s last closing price on Friday, according to Reuters calculation.
Shares of EQT were down 3.3% in premarket trading, while those of Range Resources were up 10.8% at $50.42.
EQT shareholders will own about 73% of the combined company, while Range investors will hold the remaining 27%. The transaction is expected to close in the first quarter of 2027.
The combined company expects to generate about $20 billion in cumulative free cash flow over five years at recent market prices.
The deal is also expected to lower EQT’s unlevered free cash flow breakeven to below $2 per million British thermal units (MMBtu), helping it remain profitable through swings in natural gas prices.
EQT’s management team will lead the combined company, which will retain its headquarters in Canonsburg, Pennsylvania.
Two Range representatives, including Chief Executive Dennis Degner, will join EQT’s board.
(Reporting by Sumit Saha in Bengaluru; Editing by Shilpi Majumdar, Shinjini Ganguli and Saumyadeb Chakrabarty)
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