Gas producer EQT to buy peer THQ Appalachia for $5.2 bln (updated)

Inductance Energy

06/09/2022 22:51

(Adds details on acquiring assets of XcL Midstream, shares)
    Sept 6 (Reuters) - Top U.S. natural gas producer EQT Corp
 EQT.N  said on Tuesday it would buy Quantum Energy-backed THQ
Appalachia I LLC and associated pipeline infrastructure for $5.2
billion, as it looks to take advantage of strong commodity
prices.
    A surge in global natural gas prices following Russia's
invasion of Ukraine has benefited U.S. natural gas producers and
encouraged deals in the industry as companies try to scale up.
    EQT will pay $2.6 billion in cash and about $2.6 billion in
stock to THQ Appalachia, which is owned by privately held
natural gas producer Tug Hill and has net production of around
760 million cubic feet per day. 
    The deal will add an estimated 800 million cubic feet per
day of gas equivalent production, EQT said, adding it will also
acquire assets of XcL Midstream, a pipeline operator that moves
THQ Appalachia's gas to market, as part of the transaction.
    Shares of EQT were marginally up in extended trading after
the company doubled its share repurchase authorization to $2
billion and raised its 2023 debt reduction target to $4 billion.
They have more than doubled this year.
    Reuters on Monday reported that EQT was in advanced
discussions to buy THQ Appalachia I.  urn:newsml:reuters.com:*:nL1N30D1FB
    RBC Capital Markets served as the financial adviser to EQT
for the deal, while J.P. Morgan Securities and Wells Fargo
Securities advised THQ. 
    Upon the closing of the deal, expected in the fourth
quarter, Wil VanLoh, founder and chief executive officer of
Quantum Energy Partners that backs THQ, will join EQT's board.
    Last year, EQT acquired another privately owned natural gas
producer, Alta Resources, for $2.9 billion, including debt.
    

 (Reporting by Shariq Khan and Rithika Krishna; Editing by
Shinjini Ganguli)
 ((Shariq.Khan@thomsonreuters.com; Twitter: @shariqrtrs;))