US gas producer EQT buys rival Alta for $2.9bn
Pittsburgh-based EQT, the largest US natural gas producer, said May 6 it would buy shale rival Alta Resources and its upstream and midstream assets for $2.9bn.
The deal brings EQT 300,000 acres in the Marcellus shale basin within the broader Appalachia reservoir. The assets in question are producing around 1bn ft3 equivalent/d. Atla’s midstream holdings include 300 miles of owned and operated pipelines.
“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,” EQT CEO Toby Rice said.
EQT estimates the deal, which is expected to close in Q3, will yield between $300mn and $400mn in annual free cash flow.
EQT had said just the day before that it was slimming down on planned spending for the year. “The efficiencies being realised across the organisation have enabled us to reduce our expected 2021 capital expenditures by $75mn, while still delivering the same volumes,” Rice said.
EQT reported a net loss for the three month period ending March 31 of $41mn, compared with a year-ago loss of $167mn. The company attributed the improvement in part to higher sales and income from investments.
EQT last month joined its peers in committing to have the majority of its production in the Marcellus shale basin certified as responsibly-sourced gas (RSG) by the end of this year.