Why Did EQT Buy Alta for $2.9B? Floats $1B in IOUs to Finance Deal
EQT is floating $1 billion worth of “senior notes” (what we call IOUs) to help pay the cash portion of a deal to buy Alta Resources for $2.9 billion (see EQT Buys Alta Res. PA Assets for $2.9B in “Transformative” Deal). The Alta deal, with most of its acreage and wells located in the northeastern PA corridor, will add an extra 1 billion cubic feet per day (Bcf/d) to EQT’s existing production of 4.9 Bcf/d. It makes EQT, already the country’s #1 natural gas producer, even more massive. The question is, why buy Alta and not some other company?
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Of course, there was big news to report on Friday, the day MDN took off as a brief vacation day (the graduation ceremony was great!). The big news from last Thursday afternoon and Friday was (a) EQT’s first quarter update, and (b) EQT announced it has cut a deal to buy the northeastern Pennsylvania Marcellus assets of Alta Resources for a whopping $2.9 billion–pretty close to the asking price (see 
One of the criticisms often leveled against the shale industry is that shale drillers have destroyed shareholder value (the price of company stock) over the past decade or so (see 
The issue of expired leases has once again reared its head for EQT–this time in West Virginia. In 2006 a group of WV landowners/rights owners sued Equitable Production Company (now EQT) claiming, among other things, “damages for improper deductions of post-production expenses from their royalty payments and damages for breach of lease agreements, breach of fiduciary duty, fraud, violation of the West Virginia Consumer Credit and Protection Act…violation of the flat rate royalty statute… and punitive damages, all related to the improper payment of royalties.” That case was settled in 2010. However, a subgroup within the larger class action group has a new/different claim: that EQT let leases lapse and then reentered and drilled on property out-of-lease. It’s called trespass.
Analysts with S&P Global Market Intelligence say that shale gas drillers in the Marcellus/Utica region have finally learned their lesson and are sticking to their promise to keep capital spending restrained this year–even with an increase in the price of gas. Both spending and rig counts are predicted to stay low this year as drillers work on boosting free cash flow and improving company share price.
EQT Corporation, the nation’s largest natural gas producer (focused 100% on the Marcellus/Utica), held its annual meeting yesterday. This meeting had a lot less drama than the meeting in 2019, just two years ago, when brothers Toby and Derek Rice successfully took over the company (see 
All three M-U states received permits to drill new shale wells last week. Pennsylvania received a whopping 17 new permits spread across various counties and drillers. Ohio received just 2 new permits last week, both for Ascent Resources on the same pad. And West Virginia received a big 12 new permits split between two drillers: Antero Resources and Tug Hill Operating.
The experts at RBN Energy have, for the past five years, closely tracked the spending and production of a representative collection of 39 major public E&P (exploration & production) companies. RBN splits the companies tracked into three groups: Oil-Weighted E&Ps, Diversified E&Ps, and Gas-Weighted E&Ps. In a recent post, RBN reveals what those 39 companies have announced they will spend, and produce, in 2021. For eight of the nine gas-weighted E&Ps that produce gas in the Marcellus/Utica, the numbers show drillers will spend 15% less this year, but overall will produce 2% more natural gas than they did last year.
Is there something weird in the water over at EQT headquarters? Yesterday the company issued a statement supporting the draconian, over-the-top federal methane emissions rule implemented under Lord Obama that goes way beyond reasonable when it comes to trapping every last molecule of methane (extremely costly with no real benefit to the environment). President Trump wisely rescinded the Obama rule two months after taking office, back in 2017 (see 
Just yesterday MDN told you that Chesapeake Energy had enrolled in the same program EQT Corporation previously enrolled in to certify its natural gas as “responsibly sourced” (see 
As you can probably divine from our headline, we’re not fans of the so-called “Bipartisan” Policy Center–a group founded by leftist Democrats and RINOs (Republicans in Name Only), which is how mainstream/Democrat media defines bipartisanship. As near as we can determine, the BPC is devoid of anyone who calls him or herself a conservative. But, whatever. The big news is that Toby Rice, CEO of EQT Corporation, has joined the BPC’s American Energy Innovation Council (AEIC) where his expertise will be used “to assist in accelerating the mission toward a clean energy economy.” Good luck Toby.
We don’t write much about Alta Resources, a shale drilling company co-founded by the inventor of shale fracking, George Mitchell. But that doesn’t mean Alta doesn’t drill in the Marcellus. In 2020 Alta was in the Top 10 PA drillers list (see