EQT Corporation EQT has announced the sale of the remaining interest in its non-operated natural gas assets in northeast Pennsylvania. The company is reportedly selling its interest to Equinor ASA EQNR in a cash transaction worth $1.25 billion. The announcement came just a few months after EQT sold a 40% interest in the assets to EQNR in lieu of the latter's onshore asset in the Appalachian basin and $500 million in cash.

EQT’s Debt Burden

EQT has mentioned that it will be using the cash proceeds from this transaction to reduce the debt associated with its acquisition of Equitrans Midstream. The $14 billion acquisition added more than 2,000 miles of pipelines, significantly expanding EQT’s portfolio of assets. However, it also saddled the natural gas producer with a huge debt burden. As of Sept. 30, 2024, EQT’s total debt amounted to $13.8 billion, indicating a substantial increase from $5.8 billion recorded at the end of 2023.

Equinor’s Portfolio Expansion

After the closure of the deal, Equinor shall own a 40.7% working interest in the natural gas assets. These assets, located in the prolific Marcellus shale in the United States, are expected to increase EQNR’s total production by adding 80,000 barrels of oil equivalent per day to its short-term U.S. production.

Zacks Rank and Key Picks

Currently, EQT carries a Zacks Rank #4 (Sell) while EQNR holds a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC and Sunoco LP SUN. Archrock presently sports a Zacks Rank #1 (Strong Buy), while Sunoco carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than that of the composite stocks in the industry, providing unitholders with consistent returns.

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