EQT Corp. has agreed to buy THQ Appalachia I LLC (Tug Hill) and THQ-XcL Holdings I LLC, acquiring Tug Hill's upstream assets and XcL Midstream's gathering and processing assets.
The Tug Hill purchase will add 800 MMcfd of natural gas equivalent production across 90,000 core net acres in southwest Appalachia to EQT’s portfolio. It includes roughly 300 remaining net risked locations, which the company says compete favorably with its adjacent assets and provide additional wet-gas production optionality.
Buying XcL Midstream brings EQT 95 miles of midstream gathering with connectivity all interstate transmission carriers operating in the region. The system will give EQT 1 bcfd of rich- and 3.5 bcfd of lean-gas deliverability, the 225-MMcfd Clearfork gas processing plant, and 20,000 b/d of condensate stabilization.
The companies expect the $5.2-billion transaction—$2.6 billion cash and $2.6 billion in stock—to close fourth-quarter 2022, with an effective date of July 1, 2022. Tug Hill and XcL Midstream are backed by equity commitments from funds managed by Quantum Energy Partners.