Why EQT and Gulfport Energy Are Natural Gas Winners in an Oil-Driven Market

The energy sector is in a state of flux, with oil prices swinging wildly due to geopolitical tensions and production cuts. Yet within this volatility, a clear opportunity emerges: natural gas, where structural tailwinds are aligning to create a multi-year growth story. Companies like EQT Corporation (EQT) and Gulfport Energy (GPOR) are positioned to capitalize on this shift, leveraging operational resilience, underappreciated catalysts, and a valuation disconnect from their growth trajectories. Here’s why these names are must-watch plays.

UBS’s Bullish Thesis: Natural Gas Prices to Stay Elevated Through 2026

UBS’s recent analysis underscores a prolonged period of tight natural gas markets, with prices remaining elevated through 2026. Key drivers include:
- LNG Supply Constraints: New projects are delayed, with only 30–42 bcm of incremental supply expected in 2025–2026. Delays at Qatar’s North Field expansion and U.S. LNG terminals like Altamira Energy amplify this bottleneck.
- European Demand Surge: Europe’s LNG imports must rise to 168 bcm in 2025, driven by reduced Russian pipeline gas and aging North Sea fields. Storage levels, while stable, remain below historical averages, leaving little room for error.
- Geopolitical Risks: Ukraine’s gas transit contract expiration and potential Russian supply cuts add uncertainty, while Asia’s LNG demand (projected at $18.54/MMBtu in 2025) remains resilient despite high prices.

UBS’s price floor of €30/MWh in Europe and $3.50/MMBtu in the U.S. by 2026 suggests that even in a downside scenario, gas prices will remain robust. This creates a “lower for longer” backdrop that rewards companies with low-cost production and exposure to premium pricing.

Operational Resilience: EQT and Gulfport’s Competitive Edge

Both EQT and Gulfport have already proven their ability to thrive in volatile markets.

EQT: Midstream Ownership and the Olympus Acquisition

EQT’s Q1 2025 results highlight operational mastery:
- Production: Achieved 571 Bcfe sales volume, the top end of guidance, with minimal winter weather disruption.
- Cost Efficiency: Per-unit operating costs fell to $1.05/Mcfe, a 8% improvement, driven by midstream synergies from its Equitrans Midstream acquisition. Gathering costs dropped to $0.08/Mcfe—a 87% decline from 2024—thanks to asset ownership.
- Debt Reduction: Net debt fell to $8.1 billion, with plans to stay below the $7.5 billion target, enhancing financial flexibility.

The $1.8 billion Olympus Energy acquisition is a game-changer:
- Strategic Fit: 90,000 net acres adjacent to EQT’s core, enabling operational efficiencies and extending its resource base.
- Synergies: A 15% unlevered free cash flow yield and $270 million annual cash flow boost position EQT to dominate Appalachia’s gas-rich Marcellus and Utica basins.

Gulfport: Liquids Growth and Cost Discipline

Gulfport’s Q1 results reveal hidden strengths:
- Production Mix: Liquids output rose 14% YoY to 15.2 MBbl/day, with oil-rich SCOOP assets boosting margins.
- Operational Efficiency: Drilling footage improved 28% YoY, while completion efficiency hit a record 105.5 continuous pumping hours per pad—a 26% gain since 2022. Drilling and completion costs fell 35% since 2022, ensuring low breakeven points.
- Strategic Shift: A pivot to dry gas Utica drilling in late 2025 aims to boost 2026 free cash flow, aligning with UBS’s price outlook.

Underappreciated Catalysts: Why the Market Misses the Upside

1. Low Oil-Driven Capex Cuts: Oil producers’ focus on returns has left gas capex constrained, reducing supply growth and supporting prices. EQT and Gulfport, with in-house midstream assets, avoid this bottleneck.
2. M&A Synergies: The Olympus acquisition gives EQT a 10-year production runway at maintenance capex levels, while Gulfport’s liquids-rich inventory unlocks premium pricing.
3. Shareholder Returns:
4. EQT generated $1.04 billion in free cash flow in Q1, funding debt reduction and future buybacks.
5. Gulfport has $356 million remaining on its $1 billion buyback program, with plans to return 95–96% of free cash flow to investors.

Valuation: Growth Outpacing Stock Prices

Both stocks trade at a discount to their 2025–2029 free cash flow projections, which UBS’s price thesis supports:
- EQT:
- Enterprise Value: $30 billion vs. projected $2.5–3.3 billion in cumulative free cash flow (2025–2029)—75–110% of current valuation.
- The Olympus deal’s 3.4x EBITDA multiple suggests further upside as synergies materialize.
- Gulfport:
- Market Cap: $3.1 billion vs. $2.5–3.3 billion in free cash flow over five years, implying price-to-free-cash-flow ratios below 1.0.

Conclusion: Act Now Before the Market Catches Up

The natural gas sector is entering a golden period of pricing strength, driven by structural supply-demand imbalances. EQT and Gulfport are uniquely positioned to benefit:
- EQT leverages midstream control and Olympus’s synergies to dominate Appalachia.
- Gulfport excels in liquids-rich growth and operational efficiency, with a shareholder-friendly capital policy.

With UBS’s price forecasts backing multi-year tailwinds and valuations lagging free cash flow growth, both stocks present asymmetric upside. Investors should act swiftly to secure positions in these underappreciated leaders of the natural gas renaissance.

Invest now, before the market’s recognition of these catalysts drives prices higher.