EQT Corp. agreed on Monday to acquire Range Resources Corp. in an all-stock transaction that would combine two of the largest producers in the Appalachian Basin into a natural gas company with a pro forma enterprise value of more than $50 billion.
Under the merger agreement, which both boards approved unanimously, Range shareholders will receive 0.987 share of EQT common stock for each Range share they own. When the transaction closes, EQT’s existing shareholders are expected to hold roughly 73% of the combined company and Range’s shareholders about 27%, the companies said in a joint announcement.
Scale in the Appalachian Basin
The combined producer would have more than 9 billion cubic feet equivalent per day of net production, more than 30 years of drilling inventory across nearly 3 million net acres, and more than 3,700 miles of midstream pipeline, according to the companies. Pittsburgh-area EQT said the combination would push its unlevered free cash flow breakeven below $2 per million British thermal units and add exposure to natural gas liquids, which have been a core part of Range’s business.
EQT is targeting $325 million in base annual synergies within two years from corporate overhead, field operations and commodity marketing, and it sees a path to more than $600 million a year over the long term through development planning, infrastructure optimization and wider marketing margins on gas, liquefied natural gas and natural gas liquids. The company projected roughly $20 billion of cumulative free cash flow over the next five years at recent futures prices.
Why it matters
Because the consideration is entirely stock, the transaction adds no acquisition debt, and EQT said it expects the combined company to carry credit metrics consistent with a BBB rating at closing. The tie-up also concentrates a large share of Appalachian supply under one operator as EQT pitches itself to large end users of gas, including liquefied natural gas buyers, as a partner for premium, long-term supply arrangements.
The market read the terms favorably for Range holders. The exchange ratio implied a premium of about 20% to Range’s Friday close, and Range shares rose about 16% on Monday while an exchange-traded fund tracking oil and gas producers gained about 1.6%. Mizuho raised its price target on Range to $67 from $52 and kept an Outperform rating, citing the exchange ratio.
Advisers and timing
Citi and RBC Capital Markets advised EQT, with Kirkland & Ellis as legal counsel. Evercore served as lead financial adviser to Range, with J.P. Morgan Securities also advising and Gibson, Dunn & Crutcher as legal counsel.
The companies expect to close in the first quarter of 2027, subject to regulatory approvals and votes by the shareholders of both EQT and Range. Two Range representatives, including Chief Executive Dennis Degner, will join EQT’s board at closing. EQT’s management team, led by Chief Executive Toby Rice, will run the combined business from headquarters in Canonsburg, Pa., while Range has been based in Fort Worth, Texas.
Both companies said they would still release third-quarter results after the market close on Oct. 27 but canceled their separate earnings calls scheduled for Oct. 28.
