US-based natural gas producer EQT has announced the completion of its acquisition of Equitrans Midstream, creating a vertically integrated natural gas business.
The merger, first announced in March 2024, values the combined entity at $35bn, with EQT shareholders owning approximately 74% and Equitrans shareholders the remaining 26%.
As per the initial announcement, the combined company boasts 27.6tcf equivalent of proved reserves and a daily net production of 6.3bcf equivalent, as well as more than 2,000 miles of pipeline infrastructure.
EQT has projected that the combined company will have an unlevered NYMEX free cash flow breakeven price of around $2 per one million British thermal units.
This pricing is at the lower end of the North American cost curve, which is expected to enable the generation of robust free cash flow throughout various commodity cycles, the company noted.
EQT has also identified potential annual synergies exceeding $425m associated with the merger.
These synergies, once realised, could further reduce EQT's long-term free cash flow breakeven price, enhancing the company's financial resilience.
The integration of Equitrans' midstream assets is expected to immediately improve the economics of EQT's approximately 4,000 drilling locations.
In line with the merger's completion, EQT has welcomed three former Equitrans directors – Vicky A Bailey, Thomas F Karam and Robert F Vagt – to its board.
EQT president and CEO Toby Rice said: “We are excited to complete this highly strategic transaction significantly ahead of our original timeline, and welcome both Equitrans employees and shareholders to EQT. The early close resulted in nearly $150m of savings relative to our original forecast and brings forward our de-leveraging and synergy capture timetables.
“We are wasting no time unleashing our integration team, which has a successful track record of rapidly integrating three large-scale acquisitions over the past several years, to efficiently combine these organisations. This combination leaves EQT in a tremendously advantaged position to compete and win as we enter the global era of natural gas.”
