EQT Corporation has agreed to Alta Resources Development’s shale gas assets in the US in a cash and stock deal valued at $2.95bn. Credit: Unsplash

EQT Corporation has agreed to acquire Alta Resources Development’s shale gas assets in the US in a cash and stock deal valued at $2.95bn.

EQT will purchase Alta’s membership interests in upstream and midstream subsidiaries, as well as 300,000 acres in the Marcellus Shale.

EQT expects the transaction to add about one billion cubic feet per day equivalent of gas production while its annual free cash flow by $400m.

Under the terms of the deal, EQT will make $1bn cash payment to Alta Resources. It will also make committed financing and equity from its unsecured credit facility.

Additionally, EQT will issue about $1.9bn in EQT stock to shareholders of Alta Resources. However, no single Alta shareholder will receive more than 5% of the combined company.

EQT president and CEO Toby Rice said: “The acquisition of Alta’s assets represents an attractive entry into the Northeast Marcellus while accelerating our deleveraging path, providing attractive free cash flow per share accretion for our shareholders and adding highly economic inventory to EQT’s already robust portfolio.

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“In addition to increasing our long-term optionality, we believe this transaction accelerates both our path back to investment grade metrics and our shareholder return initiatives.”

The acquisition is a part of EQT’s strategic acquisition framework and efforts to establish a significant position in the core of the Northeast Marcellus.

EQT expects the deal to be accretive to both free cash flow per share and net asset value (NAV) per share.

Subject to customary closing conditions, the transaction is planned to be closed in the third quarter of 2021.