Range Resources Corporation (RRC) Earnings Call Transcript

Hello, everyone. Thank you for joining us, and welcome to the EQT and Range Strategic Combination Conference Call. [Operator Instructions] I will now hand the conference over to Cameron Horwitz Managing Director, Investor Relations and Strategy. Cameron, please go ahead.

Good morning, and thank you for joining today's call to discuss EQT's acquisition of Range Resources. With me today are Toby Rice, President and Chief Executive Officer of ETC; Jeremy Knop, Chief Financial Officer of EQT; and Dennis Degner, President and Chief Executive Officer of Range. . In a moment, Toby, Jeremy and Dennis will present their prepared remarks with a question-and-answer session to follow. An investor presentation outlining the transaction has been posted to the Investor Relations portion of our website and we will reference certain slides during today's discussion. A replay of today's call will be available on our website beginning this evening. I'd like to remind you that today's call may contain forward-looking statements. Actual results and future events could materially differ from these forward-looking statements because of factors described in today's press release, our investor presentation, the Risk Factors section of our most recent Form 10-K and in subsequent filings we make with the SEC. We do not undertake any duty to update any forward-looking statements. Today's call also contains certain non-GAAP financial measures. Please refer to today's press release and investor presentation for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. Lastly, in connection with the transaction, EQT intends to file with the SEC a registration statement that will include a joint proxy statement of EQT and Range and will contain important information regarding the transaction. With that, I'll turn the call over to Toby.

Thanks, Cam, and good morning, everyone. This morning, we announced an agreement to acquire Range Resources in an all-stock transaction creating what we believe is the undisputed leading natural gas platform in North America. This transaction comes at a pivotal moment for America's economy as the convergence of modern industry and energy ushers in a new era of growth. Nowhere is this transformation more evident than in Appalachia, which is emerging as the epicenter of the U.S. economic renaissance. With a significant inflection in natural gas demand on the horizon, driven by new power generation facilities and expanding pipeline infrastructure, we believe this combination supercharges EQT's positioning making us the operator of choice for this next wave of demand and unlocking opportunities to create differentiated shareholder value from our combined world-class resource base that neither company could achieve independently. . The combination of EQT and Range brings together 2 of the highest quality, longest-duration natural gas assets in North America, with more than 30 years of inventory served by EQT's integrated infrastructure, EQT's leading commodities marketing platform and a fortress investment-grade balance sheet. We forecast a pro forma unlevered free cash flow breakeven below $2 per million Btu, making EQT the lowest cost and highest quality natural gas producer in the country by a wide margin. The combined company's peer-leading inventory duration and unmatched cost structure provides tremendous resilience through commodity cycles while enhancing upside exposure to strengthening natural gas fundamentals. This acquisition also provides additional scale and productive capacity to dedicate to premium supply agreements, further solidifying EQT as the partner of choice for power providers and other large energy users seeking long-duration natural gas supply. Range's assets represent some of the highest quality natural gas inventory in North America with acreage directly offsetting EQT's core positions in both Southwest and Northeast Pennsylvania. The combined asset base gives us a broader and complementary development footprint that we can optimize as 1 system. This will give us greater flexibility to optimize development sequencing, infrastructure utilization and volume flows while allocating capital towards the highest return opportunities across the combined inventory. We believe this combination positions the company to capitalize on long-term demand opportunities with superior capital efficiency while providing lower cost and more reliable supply to customers than either company could independently achieve. The strategic fit becomes even more compelling given Range's proximity to the Clarington, Ohio delivery point, which is increasingly becoming a focal point for new power generation and pipeline takeaway projects. EQT's power Pipeline open season reflects the significant demand we see emerging in that area and this combination meaningfully strengthens our ability to serve that demand with low-cost, reliable long-duration supply. Turning to deal synergies. Our diligence has identified annual base synergies of $325 million, consisting largely of corporate and organizational efficiencies and operating savings with the achievability of those savings strengthened by the adjacency of the assets and our experience integrating large-scale transactions. However, the most compelling opportunity lies in unlocking the value of Range's molecules beyond the wellhead, which we believe is the next leg of value creation for this industry in an area where EQT has established itself as a clear leader. We believe there is more than $300 million of additional long-term annual synergy upside from midstream system optimization, gas, LNG and LPG marketing optimization additional premium supply deals and partnering to accelerate inventory development into long-term demand growth. Based on our experience and track record of capturing synergies, we are confident our team can deliver this value for our shareholders. Stepping back, the industrial logic of this combination is clear and compelling. We are bringing together 2 world-class offsetting resource positions that can be developed more efficiently as 1 system and pairing them with EQT's integrated infrastructure and commercial platform. The outcome is a company with superior inventory depth and duration, the lowest free cash flow breakeven in the industry, advantaged connectivity to significant power and LNG demand growth, a fortress investment-grade balance sheet and ultimately, a company best positioned to serve customers and ensure America's modern economy has access to low-cost, reliable, clean natural gas for decades to come. We believe the combination of asset quality, durability, market access and financial strength creates the strongest natural gas platform not only in North America but in the world, 1 built to thrive through the inevitable cycles positioned to uniquely capitalize on new demand growth and compound free cash flow per share for decades to come. I'll now turn the call over to Dennis.

Thanks, Toby, and good morning, everyone. This transaction marks a major milestone in the Range story following the discovery of the Marcellus Shale over 20 years ago. Range's technical team transformed that world-changing discovery into a high-quality drilling inventory measured in decades. Over the years, we have showcased industry-leading technical abilities, expanded access to international markets, built a bulletproof balance sheet and created a business capable of generating free cash flow through market cycles. Of course, none of this would be possible without the incredible work of our team. Their relentless focus on innovation, commitment to operational excellence, environmental leadership and dedication to our mission, enable us to make this next step in our journey. I can confidently say that Range has never been in a stronger position than it is today. As we look to the future, the Range Board determined that partnering with EQT is the best way to accelerate value creation for shareholders, driven by a new level of enhanced scale, efficiency and operational success from this incredible resource. We believe this is a true win-win for shareholders, employees, customers and the communities where we live and work. The transaction exchange ratio represents a compelling premium for Range shareholders, and the all-stock consideration provides them with the opportunity to participate in the significant value creation opportunities of America's largest and only vertically integrated natural gas producer. We also expect our customers and partners around the world will benefit from this transaction as we gain critical scale, mainstream infrastructure and expanded market access here and abroad. Together with EQT, we believe we will be in an even better position to realize the full potential of our asset base and meet the growing global demand for reliable energy for decades to come. We share EQT's vision for the future of our industry and their conviction that the Appalachian Basin remains the crown jewel of the world's natural gas resources. We are confident that together, we will unlock the immense value of our assets to support this demand. Most importantly, we are excited to join a like-minded organization that shares similar values. Range and EQT are committed to engaging and investing in employees, working safely and efficiently and being responsible members of the communities where we live and work. We will continue to focus on supporting and empowering our teams as a combined company and are excited for this next chapter of range, along with the compelling opportunities that we will unlock together with EQT. With that, I'll turn the call over to Jeremy.

Thanks, Dennis. As Toby outlined, this combination creates the undisputed leading natural gas platform in North America, the resulting scale and durability of the business combined with our integrated platform and investment-grade balance sheet creates a differentiated investment proposition with the scale and financial relevance to compete for capital alongside the largest energy companies in the world. Turning to deal structure. EQT will acquire Range in an all-equity transaction with a pro forma enterprise value greater than $50 billion. Range shareholders will receive 0.987 shares of EQT common stock for each Range share owned, resulting in existing EQT shareholders owning approximately 73% of the combined company and Range shareholders owning approximately 27% at closing. The all-equity nature of the transaction strengthens our balance sheet while creating an even more resilient and diverse asset base. We believe this transaction solidifies EQT's position to reach BBB or equivalent credit ratings from all agencies by early 2027. Our commitment to maintaining a bulletproof balance sheet remains unwavering. As such, we are setting a pro forma maximum debt target of 1x net debt to adjusted EBITDA at a $2.75 NYMEX natural gas price to achieve and maintain BBB or equivalent credit ratings through the cycle. Consistent with EQT's existing strategy, we intend to allocate capital towards disciplined investments in sustainable growth supported by new contractually linked demand, while building cash, opportunistically repurchasing shares and sustainably growing our base dividend. The combination with Range, both supercharges and derisk this plan and positions EQT to compound shareholder capital for the long term in a way that no peer is able to match. As Toby mentioned, we project a pro forma unlevered free cash flow breakeven below $2 per MMBtu, positioning EQT to generate material free cash flow even through the low parts of the commodity cycle. To hammer this point home, we project 5-year cumulative pro forma free cash flow of nearly $14 billion at a $2.75 per MMBtu natural gas price, which is a level where the bulk of our peers will be free cash flow neutral or negative. Importantly, we also maintained significant exposure to upside price environments because our low-cost structure minimizes the need to defensively hedge. With cumulative pro forma 5-year free cash flow north of $38 billion under a $5 per MMBtu upside price scenario. The intrinsic value of the business is strong, but the upside optionality we have created through this large-scale integrated natural gas platform is even stronger. Importantly, the combined sales portfolio also gives us multiple avenues to improve realizations over time. We will have approximately 3 Bcf per day of pro forma in-basin production that can be directed towards premium, long-term supply agreements, providing material exposure to improving local basis over the coming years. We also have nearly 1 Bcf per day of international market exposure through EQT's existing LNG contracts and the greater scale of the combined company gives us the option to increase that exposure as attractive opportunities emerge. Additionally, we plan to leverage the capabilities of EQT's commodities organization across Range's production base. Recall, this team generated approximately $200 million of incremental free cash flow for EQT last year, and expanding that capability across the combined production base represents a meaningful opportunity to enhance realizations and margins without relying on higher commodity prices. Wrapping up, when we announced the Equitrans?acquisition in 2024, we set our goal was to buy wonderful businesses at fair prices rather than fair businesses at wonderful prices. That same principle applies here. Range is a wonderful world-class asset and more importantly, we believe it becomes even more valuable as part of the EQT platform. This combination takes 2 already differentiated companies and puts them in a class of their own, and we're incredibly excited about what lies ahead for EQT and our combined shareholder base. With that, I'll turn the call back over to Toby.

Thanks, Jeremy. In closing, I want to thank everyone at EQT and Range who helped make today's announcement possible. To the Range team, I've watched firsthand over the years as you built an exceptional company with a world-class asset base. I know the work and determination behind what you've accomplished and the results speak for themselves. 20 years ago, as Range pioneered the discovery of the Marcellus, you told the world, drilling is just the beginning. Today, this transaction recognizes everything you've built and marks the beginning of what we get accomplished together. Now we tell the world this combination is just the beginning. . This combination establishes EQT as the clear leader across every dimension that matters in our industry, inventory quality and duration, cost structure, financial strength, free cash flow generation and long-term growth potential. Together, these advantages establish what we believe is the most compelling investment proposition in the energy sector, combining exceptional downside resilience with differentiated long-term upside potential. We have a tremendous opportunity ahead of us, and we look forward to working together to realize the full potential of this combination, creating lasting value for all of our stakeholders. With that, we'll open the line up for questions.

[Operator Instructions] Your first question comes from the line of Neil Mehta with Goldman Sachs.

Yes. Toby, Dennis, congratulations to both of you. Maybe just can you just give us a little bit of background here on how this came together? Any background you can provide about the process? What is the competitive process? Is this something that you guys have been talking about potentially for a while. Just any perspective you can provide about how this all came together.

Yes. Thanks, Neil. Well, I think the investment community has identified the merits of a potential combination. I mean it makes so much sense for the reasons that we laid out in our deck. This combination creates undisputed natural gas champion that checks the box on every metric that matters for an energy business, we significantly advanced EQT with this transaction. So it's made a ton of sense. But as far as a timing perspective, I think the 1 catalyst for us that really opened our eyes on this opportunity, why now is the emergence of this demand that's showing up in our backyard in Appalachia. And I think the opportunity that it presents for both of our companies just allows us to compete more aggressively to win these opportunities. When you look at the asset base that we have at EQT, we've stated our productive capacity could be north of 12 Bcf a day. And you look at what Range brings to the table, and they're 2.5 Bcf a day, they've stated in the past that they could double that production base and hold it flat for 15 years. That's a 5 Bcf a day productive capacity. Put those together, we have a productive capacity of 17 Bcf a day, looking at an opportunity set that's -- could be 20 Bcf a day, seeing how we can put these companies together and take a significant piece of this opportunity. I think to me was the compelling catalyst for us to act now.

Great. And then a follow-up, this might be for Jeremy. I just -- as we try to pencil out the accretion, how should we think about that as we think about '27, '28 on either free cash flow per share or EBITDA basis? And just any advice about thinking about the modeling of that dynamic?

Yes, Neil, I would take the approach of putting both businesses together from the public financials and the synergies that we've guided to or almost entirely on the operating expense side as opposed to the capital. Range, as everybody knows, is a fantastic operator. I think there are learnings from the Range operating team and I think will take a best of both approach. But I would expect most of the synergies to show up on the operating expense side.

Your next question comes from the line of Betty Jiang with Barclays.

Congratulations on the deal. My first question is on the 30-year plus inventory. Clearly, that's going to be a huge differentiator. But historically, the market is just unlikely to give you full credit for resources that's super far out. So how do you think about maximizing the value of that inventory over time and help to showcase to the market to optimize our value as well.

Yes, Betty, great question. We believe that our inventory is 1 of the most underappreciated aspects of our companies. And the way that we're going to monetize that and show the value there is by signing up for this long-term demand and competing to capture this. These supply contracts will give us the opportunity to sustainably grow our businesses and that's how we're going to be able to showcase the quality of this deep inventory we have is going to be converting that into demand and sustainable production growth. .

If I could follow up just on that. I think historically, for EQT, the optimal level may be in the low- to mid-single-digit level and then have that growth meaning capturing a portion of demand. Does that change or philosophy change given this transaction?

No, Betty, I think 1 thing we want to make clear with this transaction, while this is transformative to the quality of the business and a lot of things that we're incredibly excited about. From a strategic execution standpoint, our strategy remains unchanged. We still are going to have a commitment to quality, our sustainable growth. We're still going to have a commitment to making sure that's sustainable and it follows demand. And we will have the ability now to allocate volumes that are flowing above ground to fill these contracts and look to backfill these over time. And you're on point with sort of the mid-single-digit growth is sort of a good ballpark for how we think about the growth rate that we'll look at for.

Yes, Betty, I would think about it as same strategy, same framework just really enhancing our ability to execute that at even greater scale and capture even more opportunities. So it's really about supercharging the plan we already had in accelerating that with even more confidence than we had before. And that's really why, as Toby said a few minutes ago, why now, why the deal made so much sense. That's really what puts it all together.

Your next question comes from the line of Arun Jayaram with JPMorgan.

Yes. Toby, Dennis, congratulations on this transaction. Toby and Jeremy, I was wondering if you could comment on how you believe this deal will help unlock the next wave of demand for EQT. And maybe you could comment on what you're seeing at the Clarington, Ohio kind of delivery point, which is kind of highlighted some of your enthusiasm about some of the power generation and other supply deal potential at this hub.

Yes, Arun. So I'd look at the productive base we have within Appalachia right now, which is the big source of demand coming, over 3 Bcf a day exposed to local markets, that's before we think about adding the sustainable growth. So we've got a significant amount of supply that we're going to be able to support gas supply contracts. This long duration inventory that we have is going to allow us to continue to extend that opportunity set. And I think when you mentioned the Clarington demand hub that we see rising, we are taking advantage of that with our power pipe, which, as you know, is going through an open season process right now. We're seeing when we'll have some updates on that in the future. but we're seeing really strong interest in that. And to have the range asset base next door to this type of asset, which allows us to feed even more of that supply to feed that demand is going to set the table for us to create even more gas supply opportunities with that piece of infrastructure.

Yes. I'd also think about just where the range asset is positioned right there along the Ohio River, it's almost like beachfront real estate to where this emerging kind of epicenter of growth is really coming from where we see that gas leaving the basin. So really, what we're trying to do is position around that, not only core resource but around that core market egress to those new demand centers. I'd also point out that, that shipping port deal that we have that we announced last year that's already signed, that is in the middle of Range's acreage. So our ability to serve that even more efficiently, I think, is a great example of what you can do when you have an even larger asset base. you can provide ultimately better service to customers really at cheaper rates, but actually capture more margin at the same time in the process. And that's really the essence of what we're trying to do here, even just when we look at it domestically and then I think internationally, what this opens up for us to really supercharge what we're doing in LNG, and I think -- when I think about a lot of the conversations we have in the LNG markets, it usually starts with LNG and ends with LPG. So I think taking the NGL international exposure that Range has already built up and pairing that with our LNG strategy, I think, is going to be a really powerful combination.

Great. And just a follow-up, you guys have highlighted a $325 million of annualized baseline synergies. I wanted to see, Toby, if you can elaborate on the development plan optimization piece of this, I know that EQT has used a combo development scheme to efficiently develop your assets. How is the Range acreage, how could that support kind of combo development in your eyes?

Yes, Arun, our approach here really is to rightsize the operations to the asset. And I think what you've seen Range do with their operating techniques on their asset base, I think, is best-in-class for that asset. So I would not look at this as us bringing combo development to an area where they've already proven exceptional operating capacity in their areas. That said, we will look for combo development opportunities where it makes sense. This is probably going to show up in the drier gas areas. We do have some good dry gas overlap in Washington County and then the operational scale we have achieved up in like [indiscernible] County, it could be some further opportunities for us to take advantage of that. But I think from an opportunity from a scheduling perspective, we don't anticipate any scheduling changes. It's going to be business as usual, probably for the first 12 months. And then I think from a scheduling perspective, 1 of the opportunities we have is really taking advantage of some of the bigger picture opportunities, not just optimizing for the laterals or the site but optimizing for the field. And there could be some opportunities where we could move some activity around to better serve the gathering infrastructure that we have in place. And those will be opportunities to bring greater efficiencies. But I'd say what I'm most excited about is looking at the efficiencies we're going to bring on the infrastructure level and then also the opportunities we see on the downstream capturing demand set.

Your next question comes from the line of Phillip Jungwirth with BMO.

Congrats on the deal. It looks like in the deck, you might have raised your Appalachia natural gas demand potential to 25 Bs a day, whereas I think last quarter was around 20 Bs a day. But one, I just wanted to confirm this. And then generally, how are you seeing momentum across in-basin power demand pipeline takeaway, especially just given some of the noise around data center construction intra-quarter across different states.

That is a good observation. We have raised it. We continue to be in dialogue with probably every party involved. I'd say that momentum continues to build and that certainly illustrates it. Look, I think we're bullish on that opportunity as we've ever been right now. Really up and down the value chain. And I think, look, the goal of this deal is to better position the business to serve these opportunities, help catalyze and bring more of these to fruition. Ultimately, it's about putting the customers first, kind of the philosophy in which we approach this and having a better business and platform from which to do that, I think, will help bring more of this to fruition. So we're excited.

Great. Then on the gas marketing front, you mentioned the strong commercial capabilities you've built in recent years with Range or increasing gas marketing capacity 25%. And was just hoping beyond the higher volumes, you could talk about some of the nuances and how this helps you. And then longer term, do you see opportunities to optimize Range's margins through just whether it's gathering, gas FT, liquids FT and optimizing those contracts given the increased scale or just over time as those contracts roll off?

Yes. Great questions. On the marketing side, a lot of the value does come down to scale, the more scale you have, the more you see in the market. The more you can optimize where those volumes flow. I think what we even do with our curtailment strategy as an example. You look at -- I think some people don't realize, we gather about 600 million a day of gas on our Mako system already of Range's production. Pro forma, when you look at the returns on those wells being dry gas, but with now integrated economics, it's actually the best across Range's entire portfolio. And not only that, it unlocks the ability to pursue the same strategic curtailment strategy across that asset base that we have on our own. That's a huge value driver for us every year. I think what we're doing in the NGL side of the business with the recent Blackline acquisition. And when you look at what we can do through the other facilities on the East Coast, I think there is further upside there just optimizing where all those barrels flow. And then look, on the midstream side, I think our ability to replicate some of what we've done with Equitrans with compression across Range's asset base, certainly, as you look at growing that business and pulling forward the really deep inventory they have across the Marcellus and across the deeper Utica, I think there's an enormous opportunity for us, both on the assets we already gather, but also on the other assets that are largely served by [ MPLX ] to work with them and further optimize that. So I think there's a tremendous amount of value that we've only just started scratching the surface on. And that's really part of some of those upside synergies, why we bucketed that differently. It's hard at this juncture say exactly what those are, but we think there's a bunch of value there to unlock and do it more efficiently, and we can certainly play a part in that.

Your next question comes from the line of Josh Silverstein with UBS.

I just wanted to ask on capital allocation post close. How do you envision free cash flow allocation between debt reduction, buybacks and organic growth. You mentioned that 1x net debt-to-EBITDA target of 2.75. So do you first go to debt reduction and then the buybacks ramp both companies were on that track to basically ramp buybacks meaningfully next year?

Yes. I would say our approach on the capital allocation framework is going to be largely unchanged. I would note that this transaction does accelerate our deleveraging progress. And when it comes to -- will continue to show modest growth on our dividend over time. But to the point on buybacks, if we were excited about our buyback opportunity. We're even more excited with this pro forma combination and our ability to buy back our stock. A couple of things that are really driving deceleration. One, the deleveraging nature is going to give us more the ability to be more opportunistic. And then the accretion on free cash flow per share, coupled with the synergies that we've got are going to give us more capacity to be more aggressive on the buyback when those opportunities present itself.

Got it. And then just on the $300 million of strategic upside synergies. Can some of this come kind of post close? Or is this being developed over time that demand wave coming? I'm just kind of curious on the time frame for that.

Yes. I think some of it could actually be much sooner. I'll give 2 examples. One, if we just hold our same 15% of production allocated to LNG, there'd be another 2 tons that we could sign up for, that's something we could do sooner. Obviously, it depends on when those facilities ultimately get built to when the cash flow shows up. That's something we not -- we don't necessarily control. Another example, if we were to replicate a deal like CPVC that we announced last quarter, that could be signed up sooner, but it takes 3 to 5 years for that stuff to get built. So there is value that I would say can be secured, but when it turns into cash flow is a bit of the question. So again, it's a little different than the traditional synergy that shows up in 12 to 24 months, but I think it's very real at the same time.

Your next question comes from the line of Sam Margolin with Wells Fargo.

Maybe if we could revisit growth and capital for a second. I think the context is interesting because both companies were progressing on efficiency, you weren't static. So it was becoming easier to grow, in some cases, almost impossible not to grow. And so the question is, do you see maybe like a rebalancing of capital where a little bit more goes into midstream to balance out the midstream connectivity between the 2 assets? Or are you comfortable just continuing to realize upstream efficiencies and growing on your baseline activity level?

Yes. I think 1 thing we're excited about, midstream optimization efficiencies that we can gain from investments in compression are going to be some of the highest return investments that we can make fastest payback. So those will be at the top of the list. It's 1 of the reasons why we prioritize those there since taking over E-Train. So we'll look at those opportunities. I think our growth -- our ultimate growth plans are really going to be governed by the amount of demand that we have and making sure that we're not overwhelming the demand, and we're being thoughtful about how we allocate volumes into that demand as it shows up over time. But I think, like I said before, mid-single-digit growth, I think, is certainly achievable for these organizations. And our opportunities to capture more demand, I think we'll govern the size of that.

Okay. Understood. And then maybe just Jeremy made a remark about LPGs and NGLs, if we could dive into that, maybe just with a little bit more detail because Range did historically spend a lot of time talking about just the NGL macro. And I think you've expressed that you're constructive on it, but maybe if anything's changed on that front for you in the last 6 months or so, notwithstanding external events, that maybe induced the timing of this or just reengaged you in a different production mix?

This is Dennis. Maybe I'll jump in here for a quick second. I think the NGL piece, as you said, has been a hallmark a part of the Range story. We see this as being a part of a few different aspects of this combination and 1 is going to add some additional durability to the pro forma business as we go forward. I think when you look at the duration also for the inventory that Range we bring into this combination and the marketing skill sets that both Range and EQT bring to this process. We think it really expands the ability to touch on something that I think you've heard both Tony and Jeremy reflect on, and that is enhancing margins. And so we think that then enhances the durability to the business going forward. I think you've seen a real pullback in some of the inventory levels on the LPG front over the balance of the past, we'll call it, 6 to 8 months, that's been nice to see. We're still a little bit elevated on that front. But as we get ready to go into the winter months here, we're still continuing to be more and more optimistic storage levels get renormalized. And of course, winter demand always plays a strong part in the equation. I think exports has continued to also reflect a strong output part of this conversation where you're in excess of 2 million barrels a day on a repeatable basis, again, back to the durability of supporting that for our business. So as we get into 2027, we fully expect prices to continue to show strengthening stock levels to get renormalized. And again, as you look at this pro forma entity we're adding some diversity in how we think about the future of meeting demand, both domestically and globally as well.

Your next question comes from the line of John Abbott with Wolfe Research.

Doug is currently traveling. I guess first question really is on potential asset sales. When you sort of think about your pro forma footprint. Is everything core? Are there things, areas that you could potentially trim? How do you think about potential asset sales post the deal?

Yes. John, I'd say all of our assets are up for sale. We will rationalize the assets that we have and make sure we're putting dollars and investing in the best return projects. We have sold assets in the past. We'll continue to look at that. And I think we just pair that up with what we see as a pretty tremendous demand set up and the value of this inventory starting to become appreciated as we look to sign up for this demand and accelerate some of the growth, the production growth from these assets.

All right. And for the second question, I did drop off for a short period side, so I apologize if this was already asked. But do you envision any sort of FTC issues just given the size of the position that you would have in the Marcellus getting the deal done?

No, we do not.

Your next question comes from the line of James West with Melius Research.

Congratulations. Toby curious, we've always thought your growth integration was a competitive strength here. And so adding the midstream assets to range is going to be I think a home run. Could you maybe comment -- you commented a little bit in the Q&A, maybe elaborate more on how you envision that unfolding?