8-KMaterial AgreementsSecurities & ListingOther Events+1

EQT Corp 8-K Report, Material Agreement (Sep 7, 2022)

Filed September 7, 2022For Securities:EQT

Summary

EQT Corporation (EQT) announced a significant acquisition on September 7, 2022, agreeing to purchase substantially all upstream and midstream oil and gas assets of THQ Appalachia I, LLC and THQ-XcL Holdings I, LLC. This transaction, valued at approximately $2.6 billion in cash and 55 million shares of EQT common stock, is expected to significantly expand EQT's operational footprint and asset base in the Appalachian Basin. The deal is structured as an acquisition of membership interests in two of the sellers' midstream subsidiaries, providing EQT with both production and the necessary infrastructure to support it. Financing for the cash portion of the transaction is expected to come from a combination of existing cash, revolving credit facilities, new term loans, and potentially a bridge loan, with EQT securing commitment letters for $2.5 billion in debt facilities. The acquisition is subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act. In conjunction with this acquisition, EQT also announced a substantial increase in its share repurchase program, authorizing up to $2 billion in stock buybacks, doubling the previous authorization.

Key Highlights

  • 1EQT to acquire significant upstream and midstream assets from Tug Hill Parties for $2.6 billion cash and 55 million EQT shares.
  • 2The acquisition is expected to enhance EQT's position in the Appalachian Basin.
  • 3The transaction includes both production assets and gathering/processing midstream infrastructure.
  • 4EQT has secured commitment letters for $1.5 billion in bridge loans and $1.0 billion in term loans to finance the cash consideration.
  • 5The deal is subject to customary closing conditions, including HSR Act approval.
  • 6EQT doubled its share repurchase program authorization to $2 billion, expiring December 31, 2023.
  • 7The closing of the transaction is anticipated by December 5, 2022 (with a potential extension to December 30, 2022).

Frequently Asked Questions

EQT Corporation is acquiring substantially all of the upstream oil and gas assets and midstream gathering and processing assets from THQ Appalachia I, LLC and THQ-XcL Holdings I, LLC (collectively, the Tug Hill Parties). The acquisition is structured as the purchase of membership interests in two of the sellers' midstream subsidiaries.

The total consideration is approximately $2.6 billion in cash and 55 million shares of EQT common stock. A $150 million deposit is to be placed in escrow, which will be credited towards the cash consideration.

EQT plans to fund the cash consideration and related expenses using a combination of cash on hand, borrowings under its revolving credit facility, new term loans, and potentially a bridge loan. EQT has entered into debt commitment letters for a $1.5 billion unsecured bridge loan facility and a $1.0 billion unsecured term loan facility.

The closing is subject to customary conditions, including the accuracy of representations and warranties, compliance with covenants by both parties, and the expiration or termination of waiting periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act. The target closing date is December 5, 2022, with a potential extension to December 30, 2022, if HSR approval is pending.

While announced concurrently, the increased share repurchase program is a separate initiative. EQT doubled its authorization to $2 billion for repurchasing its common stock, effective immediately and expiring December 31, 2023. This allows EQT flexibility in managing its capital structure and returning value to shareholders.