EQT to buy Range Resources in $13 billion deal to create top US gas producer

By Sumit Saha

Oct 26 (Reuters) - EQT said on Monday it will buy Range Resources in a $13 billion all-stock deal to create the largest US natural gas producer, betting on rising demand from LNG exports and power generation.

The deal combines two major Appalachian Basin producers, giving EQT greater scale and infrastructure to serve utilities, LNG exporters and industrial customers.

Including debt, the combined company will have an enterprise value of more than $50 billion.

US natural gas consumption is expected to hit record highs, driven by LNG exports and power demand from AI data centers.

The Energy Information Administration forecasts domestic consumption to rise from 91.9 billion cubic feet per day (bcfd) in 2025 to 94.3 bcfd in 2027.

EQT now expects potential Appalachian gas demand rising to 25 bcfd, compared with its previous estimate of 20 bcfd, CEO Toby Rice said on a conference call.

The combined company will have net production of more than 9 billion cubic feet equivalent per day (bcfed), over 30 years of drilling inventory across nearly 3 million net acres and more than 3,700 miles of midstream infrastructure.

Rival Expand Energy produced about 7.2 bcfed in 2025 and expects output of 7.4-7.6 bcfed in 2026.

Range shareholders will receive 0.987 EQT shares per share held, valuing the deal at $12.83 billion, or $54.91 per share, a 20.6% premium to Friday's closing price, according to a Reuters calculation.

Shares of EQT were down 2.3%, while those of Range Resources were up 16.7% at $53.14.

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.

Rice said future production growth would be driven by customer demand rather than output targets, adding that mid-single-digit growth was achievable.

EQT's management team will lead the combined company, which will retain its headquarters in Canonsburg, Pennsylvania.

Two Range representatives, including CEO Dennis Degner, will join EQT's board.

(Reporting by Sumit Saha in Bengaluru; Editing by Shilpi Majumdar, Shinjini Ganguli and Saumyadeb Chakrabarty)