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EQT Completes Long-Awaited $5.2 Billion Acquisition of Tug Hill and XcL Midstream
09/07/2023
EQT disbursed roughly $2.4 billion in cash and issued 49.6 million shares of its common stock to acquire the Tug Hill and XcL Midstream assets.
On August 22, EQT Corp. announced the completion of its long-delayed acquisition of XcL Midstream, following extensive Federal Trade Commission (FTC) reviews. The final purchase, post-price adjustments, consisted of about $2.4 billion in cash and 49.6 million EQT common shares. The cash component was financed through a $1.25 billion term loan, $1 billion from existing cash reserves, and a previously escrowed $150 million deposit.
FTC Clears EQT's Deal with Quantum
Shortly after gaining FTC approval, which addressed antitrust issues between EQT and Quantum Energy Partners, EQT has finalized its acquisition of Tug Hill and XcL Midstream. A consent order ensures both companies maintain confidentiality and avoid competitive conflicts, according to an FTC release on August 16.
EQT CEO Toby Z. Rice states that the merger, first revealed on July 22, integrates the teams of Tug Hill and XcL Midstream into EQT. He further highlights that the acquired assets are among the most cost-efficient in the Appalachian region, promising to reduce EQT's NYMEX free cash flow breakeven price by around $0.15 per MMBtu. Rice also sees potential annual synergies exceeding $80 million, which could further trim corporate expenses.
Tug Hill's upstream assets currently have an average output of around 800 million cubic feet per day, with liquids yield of 20%.
XcL Midstream contributes 145 miles of owned and operated midstream gathering systems, offering connections to all significant long-haul interstate pipelines in southwest Appalachia. EQT intends to offer updated financial projections in line with its third-quarter earnings report.
About EQT Corporation
EQT Corporation is a premier independent natural gas producer, primarily active in the Marcellus and Utica Shales within the Appalachian Basin. Committed to responsible development, the company aims to be the preferred operator for all stakeholders. EQT prioritizes operational efficiency, technology, and sustainability to produce reliable, low-cost, and environmentally responsible energy. With a deep-rooted focus on safety and environmental stewardship, EQT is driven by core values of trust, teamwork, heart, and evolution.
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WhiteHawk Energy Secures $100M Finance Facility for Core Natural Gas Asset Acquisition
WhiteHawk Energy LLC completed its second Haynesville Shale mineral and royalty acquisition of the year, spanning northwestern Louisiana and eastern Texas. WhiteHawk also secured a $100 million acquisition finance facility from an undisclosed "top tier institution." The company will utilize $20 million from this facility to fund the Haynesville purchase from Mesa Minerals Partners II LLC
Lycos Energy Inc. Secures Durham Creek Exploration Ltd. & $25M Equity Financing
Lycos Energy Inc. has solidified a conclusive agreement to procure Durham Creek Exploration Ltd., a prominent heavy oil producer, for a total of CA$22.5 million. Lycos Energy Inc. is delighted to disclose the conclusion of a definitive agreement to acquire Durham Creek Exploration Ltd., an independent, private heavy oil producer. This acquisition, by way of a plan of arrangement, is valued at $22.5 million, comprising $12.5 million in cash and 2.8 million Lycos common shares, each valued at $3.55. The Acquisition will be financed through a $25 million bought deal equity financing.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.
Exxon Mobil recently completed its acquisition of Pioneer Natural Resources, a deal worth about $60 billion. This transaction, which is the biggest in shale oil history, significantly changes the competitive landscape in the Permian Basin, a major oil field. This marks Exxon Mobil's largest deal since its $84.4 billion merger with Mobil Corp. in 1999. With this acquisition, Exxon Mobil's production in the Permian Basin will double to 1.3 million barrels of oil equivalent per day.
OXY has been the leader in Permian Basin production for the past five years. Currently, the Houston-based oil and gas company is deepening its presence in the basin with a $12 billion acquisition of CrownRock, adding over 94,000 acres in the Midland Basin and increasing its oil output by about 170,000 barrels per day. Occidental announced an increase in its proved reserves to 4.0 billion barrels of oil equivalent by the end of December 2023, up from 3.8 billion the previous year. Activities in the Permian largely fueled this rise. Occidental added approximately 303 million barrels through infill development projects as well as new discoveries and the further development of existing fields brought in another 153 million barrels.