Natural gas producer EQT Corp. has signed an agreement to buy back its former unit Equitrans Midstream in a roughly $5.5 billion all-stock deal, The Wall Street Journal reported on March 11.
The combined company is expected to be valued at more than $35 billion, including debt, the report said.
The deal is expected to be announced later on March 11, the report said, citing people familiar with the matter.
Both the companies did not immediately respond to a Reuters request for comment.
Shares of Equitrans jumped more than 8% in premarket trading, while EQT was down about 1%.
The deal comes at a time when U.S. natural gas producers are curbing their output and spending on drilling activity as an oversupplied market has brought the prices of the commodity down to multi-decade lows.
The transaction closely follows rival Chesapeake Energy's $7.4 billion bid for Southwestern Energy in January.
In 2018, EQT split into two, separating its midstream operations from the gas production business.
The largest U.S. natural gas producer has operations focused in the cores of the Marcellus and Utica shales in the Appalachian Basin.
Recommended Reading
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Imperial Expects TMX to Tighten Differentials, Raise Heavy Crude Prices
2024-02-06 - Imperial Oil expects the completion of the Trans Mountain Pipeline expansion to tighten WCS and WTI light and heavy oil differentials and boost its access to more lucrative markets in 2024.
Carlson: $17B Chesapeake, Southwestern Merger Leaves Midstream Hanging
2024-02-09 - East Daley Analytics expects the $17 billion Chesapeake and Southwestern merger to shift the risk and reward outlook for several midstream services providers.
Midstream Builds in a Bearish Market
2024-03-11 - Midstream companies are sticking to long term plans for an expanded customer base, despite low gas prices, high storage levels and an uncertain political LNG future.
Exclusive: Renewables Won't Promise Affordable Security without NatGas
2024-03-25 - Greg Ebel, president and CEO of midstream company Enbridge, says renewables needs backing from natural gas to create a "nice foundation" for affordable and sustainable industrial growth, in this Hart Energy Exclusive interview.