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EQT Corp (EQT) in Talks to Acquire THQ Appalachia for $4B

EQT Corporation EQT is in negotiations to acquire THQ Appalachia I for $4 billion after including debt, per a Reuters report.

THQ Appalachia is an exploration and production company that engages in the Marshall and Wetzel counties of West Virginia. It has a net production of 760 million cubic feet per day. Natural gas producer, Tug Hill Operating, and investment firm, Quantum Energy Partners, own the upstream company.

The latest transaction will also involve Tug Hill’s XcL Midstream, a pipeline operator that delivers Appalachia’s gas to market.

The deal is being made as EQT Corp gained from the rising natural gas prices in global markets due to Russia’s aggressive invasion of Ukraine. This has encouraged the company to pursue acquisitions.

EQT Corp might confirm a deal with THQ Appalachia’s owners as early as this week after concluding the negotiations successfully.

In June, the owners of THQ Appalachia and XcL Midstream were exploring a sale. An undisclosed investment bank was hired for the sale process, which started earlier that month.

In 2021, EQT Corp acquired another privately-owned natural gas producer, Alta Resources, for $2.9 billion. Alta holds more than 239,000 net acres in the Marcellus shale formation in northeast Pennsylvania.

THQ Appalachia’s asset base can be lucrative for EQT Corp. It will bolster its core footing in the Marcellus shale play, which is expected to boost the free cash flow. Hence, acquiring THQ assets will significantly ramp up EQT Corp’s presence in this prolific region.

Company Profile & Price Performance

EQT Corp primarily explores and produces natural gas, focusing mainly on the Appalachian Basin.

Shares of EQT have outperformed the industry in the past six months. The stock has gained 78.3% compared with the industry’s 8% growth.


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Zacks Rank & Other Key Picks

EQT Corp currently flaunts a Zack Rank #1 (Strong Buy).

Investors interested in the energy sector might look at the following companies that also presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty Energy LBRT offers hydraulic fracturing services to onshore upstream energy companies across multiple basins in North America. LBRT’s debt-to-capitalization stands at just 16% compared with many of its peers that are hugely burdened with debts, accounting for around 50% of their total capital structure.

Liberty Energy has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth and Momentum, and B for Value. LBRT is expected to see earnings growth of 266.7% for 2022.

RPC Inc. RES is among the leading providers of advanced oilfield services, and equipment to almost all prospective oil and gas shale plays in the United States. With no debt load, RPC had cash and cash equivalents of $78.2 million at the second-quarter end. This reflects the company’s strong balance sheet position that provides it with massive financial flexibility.

RPC has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days. The company currently has a Zacks Style Score of A for Growth. RES is expected to see earnings growth of 1,733.3% in 2022.

TotalEnergies SE TTE is among the top five publicly traded global integrated oil and gas companies. TTE is managing long-term debt quite efficiently and trying to keep the same at manageable levels. As of Jun 30, 2022, its cash and cash equivalents were $32,848 million. This was enough to address the current borrowings of $14,589 million.

TotalEnergies has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Value, Growth and Momentum. TTE is expected to see earnings growth of 107% in 2022.

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