Equitable Resources, Inc. (EQT)

[msmithgold]

EQT Activist Pushes Merger with RRC or AR

Summary of Activist Letter

Potential E&P-related synergies:
Enhanced present value and well IRRs through contiguous acreage and longer laterals
Improved capital allocation from drilling best locations of the merged footprint
Enhanced Marcellus/Utica and wet/dry production optionality
Realized prices/netbacks optimization
Financial flexibility would enable higher production growth
Offer a bigger/better platform for strategic delineation
Increased reservoir understanding and improved well development

Potential Midstream and Marketing-related synergies:
Coordinated field gathering and compression development enabling reduced capital spending
Increased pipeline fee income from OVC and MVC pipelines
Equitrans could be expanded with additional captive volumes
EQGP unit price appreciation resulting from improved EQM distribution growth
Combined company to have more leverage with pipeline companies and end-market customers

Other potential synergies:
Strengthened management team
EQT’s minimally levered balance sheet and investment credit rating to be capitalized
G&A and opex savings
Potential value accretion from follow-on acquisitions and roll-ups
Potential value creation from a down-the-road full separation of upstream/midstream

Full summary: https://investoralmanac.com/2017/01/05/activist-pushes-eqt-on-a-merger-with-antero-or-range/