This time last year I wrote that natural gas was on the rise.
A few months later, I wrote that the U.S. had once again become a net exporter of natural gas. That shouldn’t come as a surprise to us considering the fact that our natural gas exports have been steadily rising for nearly two decades:
We’re not the only ones noticing how vital natural gas will be to our transition away from fossil fuels…
Yesterday, EQT Corp (NYSE:EQT) announced that it had acquired Rice Energy (NYSE:RICE) for $6.7 billion dollars, making it the biggest natural gas producer in the United States.
EQT will now provide roughly 5% of all the natural gas supply in the U.S., leap-frogging over massive energy powerhouses like ExxonMobil.
Why Rice? Well, Rice Energy controlled approximately 185,000 acres of land in the Marcellus Shale play — which accounts for one-fifth of all the natural gas extracted from beneath U.S. soil.
We’ve talked about the Marcellus quite a bit here at Energy and Capital. The play has an incredible amount of natural gas reserves at hand, with companies pumping out about 19.3 billion cubic feet every single day!
Of course, demand is higher than ever. Last year, the U.S. consumed a total 27.4 trillion cubic feet of natural gas.
And now that U.S. natural gas has finally reached the world stage, we could be seeing more of these huge deals in the future.
After news of the deal broke, Rice Energy’s shares jumped from Friday lows of $19.44 to highs of $25.52.
Will EQT will deliver for its new shareholders? As our leading gas producer, it’s certainly in a strong position right now.
More important, however, is that this deal may just be the beginning. It seems almost inevitable that we’ll see more cherry-picking in the Marcellus going forward.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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