CANONSBURG, Pennsylvania: EQT will acquire Range Resources in a US$13 billion all-stock deal, creating the largest U.S. natural gas producer as the companies position themselves for rising demand from LNG exports and power generation.

The combination of the two major Appalachian Basin producers will give the enlarged company greater scale and infrastructure to supply utilities, LNG exporters and industrial customers.

Including debt, the combined company will have an enterprise value of more than $50 billion.

U.S. natural gas consumption is expected to reach record highs as LNG exports increase and power demand from AI data centers grows. The Energy Information Administration forecasts domestic consumption will rise from 91.9 billion cubic feet per day in 2025 to 94.3 bcfd in 2027.

EQT CEO Toby Rice said the company now sees potential Appalachian gas demand reaching 25 bcfd, up from its previous estimate of 20 bcfd.

The combined company will produce more than nine billion cubic feet equivalent per day and have more than 30 years of drilling inventory across nearly three million net acres. It will also control more than 3,700 miles of midstream infrastructure.

Range Resources shareholders will receive 0.987 EQT shares for each share they own, valuing the transaction at $12.83 billion, or $54.91 per share, according to a Reuters calculation.

That represents a 20.6 percent premium to Range's closing share price on October 23.

Range shares jumped 15.1 percent to $52.43, while EQT shares fell 3.7 percent.

EQT shareholders will own about 73 percent of the combined company, with Range shareholders holding the remaining 27 percent. The transaction is expected to close in the first quarter of 2027.

The combined company expects to generate about $20 billion in cumulative free cash flow over five years at recent market prices.

William Blair analyst Bert Donnes said the acquisition strengthened EQT's position as a leading supplier to growing gas and power markets and positioned it to benefit from an eventual rebound in natural gas prices.

The deal is also expected to lower EQT's unlevered free cash flow breakeven to below $2 per million British thermal units, helping it stay profitable amid fluctuations in natural gas prices.

Rice said customer demand, not output targets, would drive future production growth, adding that mid-single-digit growth was achievable.

EQT's management team will lead the combined company, which will retain its headquarters in Canonsburg, Pennsylvania. Two Range representatives, including CEO Dennis Degner, will join EQT's board.