EQT Values Range Deal at About $12.83 Billion, Targets More Than 9 Bcf a Day in Production
Key Facts
EQT and Range Resources announced a definitive, stock-funded merger agreement on October 26, unanimously approved by both companies’ boards, in a deal aimed at creating a larger U.S. natural gas producer. Under the companies’ statement, holders of each outstanding Range share will receive 0.987 EQT shares when the agreement closes. As a result, EQT shareholders are expected to own about 73% of the combined company, compared with about 27% for Range shareholders. Reuters valued the shares offered to Range shareholders at about $12.83 billion and the implied offer price at $54.91 a share. That represents a 20.6% premium to Friday’s close before the announcement, according to Reuters’ calculation; this is an estimate of the value of the shares offered, not the value of the combined company.
The deal gives Range shareholders EQT shares instead of cash, with their final stake determined by the announced exchange ratio. In premarket trading on October 26, EQT shares fell 4.6% and Range shares rose 10.1%, according to Reuters. The companies expect the combined company’s net production to exceed 9 billion cubic feet equivalent per day. It will also include about 3 million net acres in Appalachia, a drilling inventory of more than 30 years and more than 3,700 miles of midstream transportation and gathering infrastructure. The combination brings together a broad production base, long-term inventory and infrastructure network in the same region.
EQT is counting on $325 million in annual base savings within two years of the deal’s closing, with a path to more than $600 million over the long term. Savings areas include corporate functions, operations and commodity marketing, according to the companies’ statement. They also expect cumulative free cash flow of about $20 billion over the next five years, based on recent forward prices. The companies said the deal lowers EQT’s unhedged free cash flow breakeven to less than $2 per million British thermal units. Reuters links the improved outlook for U.S. natural gas to growing demand from data centers, prompting producers to seek higher output, deepen drilling inventories and strengthen marketing capabilities.
The deal comes as Range’s second-quarter 2026 results showed average production of about 2.30 billion cubic feet equivalent per day, of which natural gas accounted for about 67%. The company reported GAAP net income of $195 million and cash flow from operating activities of $235 million. In the same quarter, it repurchased $78 million of shares and paid $24 million in dividends. Net debt was about $881 million on June 30, according to the company’s results. Chief Executive Dennis Degner said, "Strategic access to international markets drove a record premium for natural gas liquids products during the quarter and strengthened margins."
The companies’ statement expects two Range representatives to join EQT’s board at closing, including Degner. EQT’s executive management team will lead the combined company, which will remain headquartered in Canonsburg, Pennsylvania. The companies are targeting completion in the first quarter of 2027, subject to regulatory and shareholder approvals and customary closing conditions. Before then, EQT and Range plan to release third-quarter results after the market closes on October 27, 2026. The companies canceled their earnings calls scheduled for October 28, according to the statement.