It's no secret that soaring data center growth has overwhelmed the power grid, creating multiyear delays. To counter these long waits, many developers have turned to natural gas -- and a newly announced merger proves just how vital this fuel has become.
Pennsylvania-based EQT, a natural gas producer, said Monday it would acquire Range Resources in an all-stock transaction, creating a combined company with a pro forma enterprise value exceeding $50 billion. The deal would create the largest vertically integrated natural gas producer in the U.S., producing over 9 billion cubic feet of natural gas equivalent a day across the Appalachian Basin, according to the companies.
Range Resources shareholders will receive 0.987 shares of EQT for each of their shares. Based on EQT's closing price on Friday, that implies a value of $54.91 for each Range Resources share, a 21% premium to its latest close, valuing the company at around $12.83 billion overall.
Shares of Range Resources climbed 13% to $51.63 in premarket trading Monday and were on pace to close at their highest level since June 16, 2015, according to Dow Jones Market Data. EQT stock dropped 4.2%.
With tech companies requiring massive, uninterrupted gas supplies to power artificial-intelligence data centers, the merger secures over 30 years of inventory for EQT, which it said sets itself up for long-term, multibillion-dollar supply contracts.
EQT isn't alone in racing to supply data centers with natural gas.
Take Enerflex, a Canadian energy infrastructure company, for instance: long rooted in oil and gas, the company recently expanded into gas-fired power generation to support the AI boom. That strategic pivot began early this year, when the company secured its first contract to deliver behind-the-meter power generation for a data center project.
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