EQT set to become largest US gas producer after $6.7B purchase

By Luke Geiver | June 20, 2017

The benefit of drilling longer laterals for shale oil or gas production has now been proven by EQT Corp. The Pittsburgh-based shale gas producer has agreed to acquire Rice Energy for roughly $6.7 billion in a transaction being made in part by EQT’s ability to create longer laterals with access to Rice’s acres. In some cases, EQT intends to drill laterals twice as long in up to three counties throughout acreage in West Virginia and Pennsylvania’s Marcellus shale gas play. The exploration and production company said in its call with investors on the transaction that it will increase its rate of return on many wells by bringing on longer laterals that could reach up to 12,000 feet.

The move by EQT to purchase Rice and its assets makes the new combined entity the largest natural gas producer in the U.S. “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, president and CEO of EQT.

Since the beginning of 2016, EQT has added more than 485,000 acres to its portfolio that mainly consists of acreage in the Marcellus. Now, with the Rice transaction pending, the company intends to focus more on integrating all of its assets while improving operational efficiencies as it drills longer laterals.

In addition to the producing assets and undeveloped acreage, EQT will also receive Rice’s midstream assets which EQT said will help connect its gas volumes to the East Coast and the Gulf Coast.

Through the transaction, EQT received more that 3,000 undeveloped locations and 420,000 acres.

The transaction is expected to close in the fourth quarter of 2017.