Range Resources Corp M&A announcement

Cameron, please go ahead. Good morning, and thank you for joining today's call to discuss EQT's acquisition of Range Resources.

With me today are Toby Rice, President and Chief Executive Officer of EQT, Jeremy Knop, Chief Financial Officer of EQT, and Dennis Degner, President and Chief Executive Officer of Range. in a moment, Toby, Jeremy, and Dennis will present their prepared remarks with a question and answer session to follow. An investor presentation outlining the transaction has been posted to the investor relations portion of our website, and we will reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. I'd like to remind you that today's call may contain forward-looking statements.

Actual results and future events could materially differ from these forward-looking statements because of factors described in today's press release, our investor presentation, the Risk Factors section of our most recent Form 10-K, and in subsequent filings we make with the SEC. We do not undertake any duty to update any forward-looking statements. Today's call also contains certain non-GAAP financial measures. Please refer to today's press release and investor presentation for important disclosures regarding such measures, including reconciliation to the most comparable GAAP financial measures. Lastly, in connection with the transaction, EQT intends to file with the SEC a registration statement that will include a joint proxy statement of EQT and Range and will contain important information regarding the transaction. With that, I'll turn the call over to Toby.

Thanks, Cam, and good morning, everyone. This morning, we announced an agreement to acquire Range Resources in an all-stock transaction, creating what we believe is the undisputed leading natural gas platform in North America. This transaction comes at a pivotal moment for America's economy as the convergence of modern industry and energy ushers in a new era of growth. Nowhere is this transformation more evident than in Appalachia, which is emerging as the epicenter of the U.S. economic renaissance. With a significant inflection in natural gas demand on the horizon, driven by new power generation facilities and expanding pipeline infrastructure, we believe this combination supercharges EQT's positioning, making us the operator of choice for this next wave of demand and unlocking opportunities to create differentiated shareholder value from our combined world-class resource base that neither company could achieve independently.

The combination of EQT and Range brings together two of the highest quality, longest duration natural gas assets in North America, with more than 30 years of inventory served by EQT's integrated infrastructure, EQT's leading commodities marketing platform, and a fortress investment-grade balance sheet. We forecast a pro forma unlevered free cash flow breakeven below $2 per MMBtu, making EQT the lowest cost and highest quality natural gas producer in the country by a wide margin. The combined company's peer-leading inventory duration and unmatched cost structure provides tremendous resilience through commodity cycles while enhancing upside exposure to strengthening natural gas fundamentals. This acquisition also provides additional scale and productive capacity to dedicate to premium supply agreements, further solidifying EQT as the partner of choice for power providers and other large energy users seeking long-duration natural gas supply.

Range's assets represent some of the highest quality natural gas inventory in North America, with acreage directly offsetting EQT's core positions in both southwest and northeast Pennsylvania. The combined asset base gives us a broader and complementary development footprint that we can optimize as one system. This will give us greater flexibility to optimize development sequencing, infrastructure utilization, and volume flows while allocating capital toward the highest return opportunities across the combined inventory. We believe this combination positions the company to capitalize on long-term demand opportunities with superior capital efficiency while providing lower cost and more reliable supply to customers than either company could independently achieve. The strategic fit becomes even more compelling given Range's proximity to the Clarington, Ohio, delivery point, which is increasingly becoming a focal point for new power generation and pipeline takeaway projects.

EQT's POWER pipe open season reflects the significant demand we see emerging in that area, and this combination meaningfully strengthens our ability to serve that demand with low-cost, reliable, long-duration supply. Turning to deal synergies, our diligence has identified annual base synergies of $325 million, consisting largely of corporate and organizational efficiencies and operating savings, with the achievability of those savings strengthened by the adjacency of the assets and our experience integrating large-scale transactions. However, the most compelling opportunity lies in unlocking the value of Range's molecules beyond the wellhead, which we believe is the next leg of value creation for this industry in an area where EQT has established itself as a clear leader.

We believe there is more than $300 million of additional long-term annual synergy upside from midstream system optimization, gas, LNG, and LPG marketing optimization, additional premium supply deals, and partnering to accelerate inventory development into long-term demand growth. Based on our experience and track record of capturing synergies, we are confident our team can deliver this value for our shareholders. Stepping back, the industrial logic of this combination is clear and compelling. We are bringing together two world-class offsetting resource positions that can be developed more efficiently as one system and pairing them with EQT's integrated infrastructure and commercial platform.

The outcome is a company with superior inventory depth and duration, the lowest free cash flow breakeven in the industry, advantage connectivity to significant power and LNG demand growth, a fortress investment-grade balance sheet, and ultimately a company best positioned to serve customers and ensure America's modern economy has access to low-cost, reliable, clean natural gas for decades to come. We believe the combination of asset quality, durability, market access, and financial strength creates the strongest natural gas platform, not only in North America, but in the world. One built to thrive through the inevitable cycles, positioned to uniquely capitalize on new demand growth and compound free cash flow per share for decades to come. I will now turn the call over to Toby.

Thanks, Toby, and good morning, everyone. This transaction marks a major milestone in the Range story, following the discovery of the Marcellus Shale over 20 years ago. Range's technical team transformed that world-changing discovery into a high-quality drilling inventory measured in decades. Over the years, we have showcased industry-leading technical abilities, expanded access to international markets, built a bulletproof balance sheet, and created a business capable of generating free cash flow through market cycles. Of course, none of this would be possible without the incredible work of our team. Their relentless focus on innovation, commitment to operational excellence, environmental leadership, and dedication to our mission enable us to make this next step in our journey. I can confidently say that Range has never been in a stronger position than it is today.

As we look to the future, the Range board determined that partnering with EQT is the best way to accelerate value creation for shareholders, driven by a new level of enhanced scale, efficiency, and operational success from this incredible resource. We believe this is a true win-win for shareholders, employees, customers, and the communities where we live and work. The transaction exchange ratio represents a compelling premium for Range shareholders, and the all-stock consideration provides them with the opportunity to participate in the significant value creation opportunities of America's largest and only vertically integrated natural gas producer. We also expect our customers and partners around the world will benefit from this transaction as we gain critical scale, midstream infrastructure, and expanded market access here and abroad.

Together with EQT, we believe we will be in even better position to realize the full potential of our asset base and meet the growing global demand for reliable energy for decades to come. We share EQT's vision for the future of our industry and their conviction that the Appalachian Basin remains the crown jewel of the world's natural gas resources. We are confident that together, we will unlock the immense value of our assets to support this demand. Most importantly, we are excited to join a like-minded organization that shares similar values. Range and EQT are committed to engaging and investing in employees, working safely and efficiently, and being responsible members of the communities where we live and work.

We will continue to focus on supporting and empowering our teams as a combined company and are excited for this next chapter of Range, along with the compelling opportunities that we will unlock together with EQT. With that, I will turn the call over to Jeremy.