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EQT Acquires Rice Energy to Dominate U.S. Natural Gas

Here's why the multi-billion dollar deal is so important...

Written by Keith Kohl
Posted June 20, 2017 at 5:16PM

This time last year I wrote that natural gas was on the rise.

A few months later, I wrote that the U.S. had once again become a net exporter of natural gas. That shouldn’t come as a surprise to us considering the fact that our natural gas exports have been steadily rising for nearly two decades:

 nat gas expor

We’re not the only ones noticing how vital natural gas will be to our transition away from fossil fuels...

Yesterday, EQT Corp (NYSE:EQT) announced that it had acquired Rice Energy (NYSE:RICE) for $6.7 billion dollars, making it the biggest natural gas producer in the United States.

EQT will now provide roughly 5% of all the natural gas supply in the U.S., leap-frogging over massive energy powerhouses like ExxonMobil.

Why Rice? Well, Rice Energy controlled approximately 185,000 acres of land in the Marcellus Shale play — which accounts for one-fifth of all the natural gas extracted from beneath U.S. soil.

We’ve talked about the Marcellus quite a bit here at Energy and Capital. The play has an incredible amount of natural gas reserves at hand, with companies pumping out about 19.3 billion cubic feet every single day!

Of course, demand is higher than ever. Last year, the U.S. consumed a total 27.4 trillion cubic feet of natural gas.

And now that U.S. natural gas has finally reached the world stage, we could be seeing more of these huge deals in the future.

After news of the deal broke, Rice Energy’s shares jumped from Friday lows of $19.44 to highs of $25.52.

rice hr

Will EQT will deliver for its new shareholders? As our leading gas producer, it’s certainly in a strong position right now.

More important, however, is that this deal may just be the beginning. It seems almost inevitable that we’ll see more cherry-picking in the Marcellus going forward.

Until next time,

Keith Kohl Signature

Keith Kohl

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A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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