The new company unites both providers of natural gas to create a new EQT that is in a “position that will be unmatched in the industry,” said Steve Schlotterbeck, EQT’s president and chief executive officer.
He added that Rice makes sense for the company as the company has an “acreage footprint” that is similar to EQT’s existing acreage, making the move “significantly accretive in its first year.
The $6.7 billion price tag was agreed upon after adding up 0.37 shares of EQT common stock and $5.30 in cash per share of Rice common stock. The deal is slated to be completed sometime in the fourth quarter, barring any unforeseen circumstances and pending regulatory approval.
Schlotterbeck added that the company has shifted its focus towards driving its capital efficiency higher through longer laterals, which it will achieve by reducing operating costs per units through operational and G&A synergies. Its sales portfolio will be boosted by the deal, expanding its access to premium markets.
Daniel J. Rice IV, chief executive officer, Rice Energy, said the merger will create the most responsible producer of natural gas out there.
The end result is increased value to shareholders. Rice shareholders benefited quite a bit from the move as RICE stock surged 25.2% on Monday. EQT shares also soared early in the day, before slipping back down 8.8% later in the day.