EQT acquires Marcellus upstream, midstream inventory in $1.8-billion deal

EQT Corp., Pittsburgh, Pa., has agreed to acquire the upstream and midstream assets of Olympus Energy, Canonsburg, Pa., for $1.8 billion comprised of $500 million in cash and 26 million shares of EQT common stock. 

The assets comprise a vertically integrated, contiguous 90,000 net acre position offsetting EQT’s existing core acreage in Southwest Pennsylvania with net production of about 500 MMcfd, the operator said as part of its first-quarter 2025 earnings report Apr. 22. 

The bolt-on acquisition offers upside, the company said. 

Olympus Energy has over 10 years of “high-quality Marcellus inventory at maintenance activity levels, with an additional 7 years of upside from the Utica,” the company noted. Add to that a potential strategic value upside with positioning “adjacent to several proposed power generation projects," said EQT president and chief executive officer Toby Rice. 

As low oil prices have hampered merger and aquisition activity from areas like the Permian basin, "gas-focused operators are ramping up their M&A efforts ahead of increasing demand from LNG and datacenters," said Andrew Dittmar, principal analyst at Enverus Intelligence Research, in an email to Oil & Gas Journal Apr. 23. 

The deal with Olympus "is an obvious strategic fit for EQT given the close overlap of its existing position with the Olympus acreage and opportunities for midstream synergies. Most gas companies, including EQT which has over 30 years of high-quality drilling inventory, are not under the same pressure to add inventory as oil-focused companies short on locations," Dittmar said. 

Helpful to EQT in this deal is its ability to use equity for the majority of the purchase price, he said. "The integrated, low-cost producer is in the inviable position of having stock that trades at a premium to peers but is still an attractive acquisition currency to sellers given the quality of underlying business."

The deal is expected to close in this year’s third quarter, subject to regulatory approval and customary closing conditions.

EQT 2025 guidance 

EQT has raised its 2025 production guidance and lowered its mid-point capital spending guidance due to efficiency gains, well performance, and synergy capture from ownership of gathering, transmission, and storage assets acquired from Equitrans Midstream Corp., the company said in the Apr. 22 release (OGJ Online, Mar. 11, 2024; Nov. 13, 2018).

EQT noted all guidance items exclude the impact of the pending Olympus Energy acquisition. 

In 2025, EQT expects total sales volume of 2,200–2,300 bcfe, an increase of 25 bcfe from its prior outlook. The company expects to spend $1.95–2.07 billion on maintenance capital expenditures in 2025, which is $25 million below its prior guidance. 

During 2025, the operator plans to turn-in-line (TIL) 95–120 net wells, including 32–50 net wells in second-quarter 2025. Total sales volume in second-quarter 2025 is expected to be 520– 570 bcfe.

“EQT is off to an exceptional start in 2025, with the first quarter generating the strongest financial results in recent company history,” Rice said.  

“Seamless coordination across our integrated midstream and upstream assets resulted in volumes at the high end of guidance, and our tactical production response opening chokes into peak winter prices drove higher realizations. Along with lower-than-expected capital spending, EQT generated more than $1 billion of free cash flow in the first quarter alone,” he continued. 

Capital expenditures in first-quarter 2025 were $497 million, 19% below the mid-point of guidance due to lower-than-expected completions, land, and midstream spending.

Net cash provided by operating activities was $1.741 billion. The company exited the quarter with $8.4 billion total debt and $8.1 billion of net debt, down about $1 billion from year-end 2024.