Top oil & gas exploration stocks, according to Mizuho

EQT and Range Resources agreed to a $13.7 billion all-stock merger, creating the dominant gas producer in Appalachia. This follows the 2024 merger of Chesapeake and Southwestern, forming Expand Energy. The deal highlights ongoing M&A activity among US shale gas producers, with fewer companies controlling prime acreage.

EQT reported Q3 earnings, missing estimates on natural gas and oil sales volumes and revenues. Average daily sales volume was 6,335.00 MMcfe/D, below the 6,501.11 MMcfe/D estimate. Natural gas prices averaged $2.60, slightly above the $2.51 estimate. Operating revenues were $1.51 billion, down 10.1% year-over-year, missing the $1.62 billion estimate.

EQT Corp. expanded its LNG business with a 7 billion cubic feet storage contract in Louisiana and a 10-year sales deal with a Lithuanian energy provider. It also announced a $13 billion all-stock merger with Range Resources Corp. (RRC), expected to close in Q1, making EQT the largest U.S. independent natural gas producer. EQT's LNG strategy includes production, marketing, and shipping.

Range Resources (RRC) warns that its merger with EQT may face delays or denial due to regulatory hurdles, potentially increasing costs and reducing benefits. Analysts' average price target for RRC is $46.76, suggesting a 16.32% downside from current levels, according to the company.

EQT (EQT) will acquire Range Resources (RRC) in an all-stock deal valued at $13 billion, creating the largest U.S. natural gas company with a combined enterprise value exceeding $50 billion. The deal, expected to close in Q1 2027, requires shareholder and regulatory approval. The combined company will have over 9 Bcfe/d of net production and industry-leading breakeven prices. EQT expects $325 million in annual cost savings and $300 million from post-production activities.

EQT Corporation will acquire Range Resources in an all-stock deal, creating the largest U.S. natural gas producer with over 9 billion cubic feet equivalent per day in production, according to Wood Mackenzie. The combined company will have a pro forma enterprise value of over $50 billion and target $325 million in annual synergies. EQT's net debt is expected to be $5.5 billion by Q2 2026. The deal is expected to close in Q1 2027, subject to regulatory and shareholder approvals.