EQT buys Rice Energy in a $6.7 billion deal
Pittsburgh-based EQT Corp. is acquiring Rice Energy Inc. in a $6.7 billion merger that will combine two of the largest players in the Marcellus Shale industry.
This acquisition will make EQT the largest natural gas producer in the United States, according to the Pittsburgh company.
The deal, expected to close sometime during the fourth quarter of this year, also comes at a time when local gas drilling volume has been on the decline recently, a trend that is expected to reverse itself in the coming years.
“This transaction brings together two of the top Marcellus and Utica producers to form a natural gas operating position that will be unmatched in the industry,” said Steve Schlotterbeck, EQT’s president and chief executive officer in a statement Monday.
EQT is the second largest driller with 524 wells in Greene, Fayette, Washington and Westmoreland counties, as well as Allegheny, Beaver, Butler, Armstrong, Indiana, Clarion and Lawrence counties. EQT has 1,729 shale gas permits statewide, according to the Pittsburgh Business Times.
Rice, meanwhile, has 297 shale wells that have been drilled in the region, and 851 permits statewide, the business journal said. The Canonsburg company has 467 employees, while EQT employs more than 1,100 in Pennsylvania.
“Rice has built an outstanding company with an acreage footprint that is largely contiguous to our existing acreage, which will provide substantial synergies and make this transaction significantly accretive in the first year,” Schlotterbeck’s statement said.
Under the terms of the deal, EQT will acquire all of Rice’s outstanding stock. It will also acquire $1.5 billion in net debt, as well as preferred equity.
With the merger, EQT said there should be a 50 percent increase in the average lateral lengths of future wells in Washington — the largest gas-producing county in the state — and in Greene, the fourth largest, the state Public Utilities Commission said.