EQT acquires Range Resources in blockbuster merger
Southpointe will be headquarters for the newly combined company
EQT Corp. has acquired Range Resources in a merger that will create a natural gas company with a pro forma enterprise value worth more than $50 billion, the companies announced Monday.
In a joint press release, the two companies said the all-stock transaction will “create America’s leading natural gas company” that will be headquartered at EQT’s corporate offices in Southpointe.
The transaction, which was unanimously approved by both boards of directors, is expected to close at the beginning of next year.
EQT’s executive management team will run the combined company from the Southpointe headquarters while two representatives from Range Resources will be added to EQT’s Board of Directors. EQT’s existing shareholders are expected to own about 73% of the newly combined company and Texas-based Range’s shareholders will own about 27% of it.
“This transaction brings together two of the highest-quality, longest-duration asset bases in North America and creates a company uniquely positioned for the next era of natural gas,” EQT President and CEO Toby Z. Rice said in a written statement. “As the lowest-cost natural gas producer in the industry, supported by multiple decades of high-quality inventory, the combined company will offer exceptional resilience through commodity cycles while maintaining significant upside to strengthening natural gas fundamentals. … We believe this combination creates a must-own energy company capable of generating durable, through-cycle free cash flow while compounding value for shareholders for decades to come.”
Rice and his brothers, Dan and Derek, launched Rice Energy Inc. in 2008 and eventually took the company public in January 2014. EQT acquired Rice Energy in November 2017 for $6.7 billion, although the Rice brothers later raised concerns about the direction of the company and launched a successful proxy battle to take control in July 2019. Toby Rice was elevated to president and chief executive officer of EQT.
Texas-based Range Resources, which had offices in Southpointe, pioneered exploration of the Marcellus Shale, drilling the first successful well into the play by utilizing horizontal drilling on the Renz farm in Washington County in October 2004, fracking its first well setting the stage for the ongoing natural gas boom in the region.
Range Resources President and CEO Dennis L. Degner, who will have a seat on the EQT board, lauded the merger.
“This combination of two highly successful operators with decades of inventory creates opportunities to build long-term value neither could fully realize independently,” he said in a written statement. “The combined company will be uniquely positioned to capitalize on increasing demand for natural gas and liquids both domestically and internationally, delivering superior returns for investors. I want to thank our employees, whose hard work, dedication and commitment have positioned us to enter this next chapter of value creation with EQT.”
The combined company is expected to have 9 Bcfe/d of net production and 30 years of inventory across nearly 3 million net acres in addition to about 3,700 miles of midstream infrastructure, according to the press release.
The transaction is subject to required regulatory approvals and clearances and must be approved by shareholders of both EQT and Range.