EQT-Range Deal Valued at $12.83 Billion Targets Output Above 9 Billion Cubic Feet a Day
Key Facts
EQT and Range Resources announced a definitive merger agreement on October 26 under which EQT will acquire Range in an all-stock deal that Reuters valued at about $12.83 billion. The implied offer price is $54.91 per share, a 20.6% premium to Friday’s close before the announcement. The combined company’s enterprise value exceeds $50 billion, according to a Range filing with the U.S. Securities and Exchange Commission. Net production from the new entity is expected to exceed 9 billion cubic feet equivalent a day. The companies are betting that a broader asset base and a long drilling inventory will strengthen their position in the U.S. gas market.
Under the terms of the exchange, Range shareholders will receive 0.987 EQT share for each share they own. The companies expect EQT shareholders to own about 73% of the company after closing, with Range shareholders holding about 27%. The combined assets include nearly 3 million net acres and a drilling inventory of more than 30 years, according to the filing. These figures would put the new company at the top of U.S. gas producers by expected production volume. In a Reuters comparison, rival Expand Energy produced about 7.2 billion cubic feet equivalent a day in 2025 and expected production of between 7.4 billion and 7.6 billion in 2026.
EQT Chief Executive Toby Rice told Reuters that the company’s estimate of potential gas demand growth in Appalachia had risen to 25 billion cubic feet a day, from 20 billion previously. The figure is an estimate of potential demand in the region, not a production target for the company. Rice added that about half of expected demand growth would remain in the basin to supply power plants, while the other half is tied to pipeline projects that carry gas to other markets. The deal comes as the U.S. Energy Information Administration forecasts domestic consumption rising from 91.9 billion cubic feet a day in 2025 to 94.3 billion in 2027. Demand growth is linked to new liquefied natural gas export terminals and power plants supplying data centers, according to Reuters.
Rice said the expanded production base with Range supports EQT’s goal of exposing 15% of its gas sales to international markets, while expanding access to the domestic Appalachia market and global liquefied natural gas markets. He also said the expanded resource base strengthens the company’s ability to sign long-term supply agreements, and that potential growth opportunities would be supported by contracted demand. EQT estimates the combined entity will generate about $20 billion in cumulative free cash flow over the next five years, based on recent forward market prices. The company also said the deal would lower its unlevered free cash flow breakeven to less than $2 per million British thermal units. These estimates come as near-term oversupply has pressured prices and prompted producers to cut output, according to Reuters.
Rice said future production growth would be driven by customer demand rather than production targets, and that mid-single-digit growth was achievable. The deal follows a wave of sector consolidation: Devon Energy and Coterra Energy agreed to a deal in May 2026 to form the third-largest gas producer, followed by the October 2024 merger of Chesapeake Energy and Southwestern Energy that created Expand Energy. The Marcellus and Utica basins in Pennsylvania, Ohio and West Virginia produce about one-third of U.S. gas, according to Reuters. In premarket trading after the announcement, Range shares rose 10.1%, while EQT shares fell 4.6%. Range shares closed at $55.88 on October 28, according to EL7 data.
EQT expects to complete the deal in the first quarter of 2027, subject to regulatory approvals, approval from both companies’ shareholders and customary closing conditions. Completion remains contingent on securing those approvals before the assets transfer to the combined company. Rice said the expanded resource base would allow the company to become a preferred operator for long-term supply agreements. The company also tied future growth opportunities to contracted demand. The expected closing date puts the deal’s completion next year, after regulatory and shareholder requirements are met.