EQT Corp. on Thursday announced a pair of multi-billion dollar deals aimed at increasing shareholder value and streamlining the operations that have turned it into the nation’s largest natural gas producer.

The company is dropping down to EQT Midstream Partners LP (EQM) the Ohio midstream assets it acquired after buying Rice Energy Inc. last year. EQT is to receive $1.15 billion in cash and shares of EQM for the assets, which include more than 150 miles of gathering lines. EQM is also paying $175 million to Gulfport Energy Corp. for a 25% stake in the Strike Force midstream joint venture it formed with Rice two years ago for some of the Ohio assets.

In addition, EQM is merging with Rice Midstream Partners LP (RMP), which was acquired by EQT in the Rice Energy takeover last year. RMP operates midstream assets in Pennsylvania. The unit-for-unit transaction is valued at $2.4 billion, including the assumption of $325 million in RMP debt. The deal is expected to close in the third quarter.

Management told analysts during a first quarter earnings call on Thursday that the merger would create significant operational efficiencies through the buildout of gathering and header pipeline systems to service the combined EQT and Rice acreage footprint.

After a growth spree that found it bolting on hundreds of thousands of acres in various transactions throughout Appalachia, EQT highlighted plans earlier this year to separate its midstream and production businesses in a complex tax-free spin-off for its shareholders. Before that can happen as scheduled in the third quarter, multiple transactions have to be completed, including the dropdown and merger.

EQT produced 357 Bcfe in the first quarter, up sharply from 1Q2017 when it produced 189.9 Bcfe and from 4Q2017 when it produced 294.4 Bcfe. The sharp production increase, management said, was primarily because of the Rice acquisition.

The company recorded a significant $2.3 billion one-time impairment on noncore assets in the Huron Shale and Permian Basin, which impacted earnings. EQT entered the Permian in an acreage swap with Range Resources Corp. in 2014 and suspended operations a year later as oil prices declined.

EQT said it has reached a deal to sell the Permian assets to an undisclosed buyer for $64 million, marking an exit from the play. The sale is expected to reduce 2018 production guidance by 5 Bcfe to 1.52-1.55 Tcfe.

In Appalachia, David Schlosser, who is president of the exploration and production business, said a program is being implemented to monitor all horizontal drilling operations from a real -time operations center (RTOC) at the headquarters in downtown Pittsburgh.

“The thought behind this project was to improve collaboration amongst our technical teams, provide more consistent well results and improve our efficiencies,” Schlosser said. “Although it’s early stages of implementation, this concept is already creating significant returns.”

For example, Schlosser said the RTOC helped the company drill its longest lateral to date in the Marcellus. The well in Washington County, PA, has a lateral of 18,670 feet. Previously, the company’s longest lateral was 17,400 feet, also in Washington County, which produced 4.6 Bcfe during its 120 days online. The well could ultimately produce 42 Bcfe, Schlosser said.

“Based on drilling, completion and production results to date,” he added, “our current estimate of the lateral length technical limit in the Marcellus is approximately 20,000 feet.”

Interim CEO David Porges, who took over in March after Steven Schlotterbeck resigned, said the company expects to fill the position permanently by the third quarter when it separates the midstream and upstream businesses.

EQT’s average realized price during the first quarter, including hedges, was $3.33/Mcfe, down 5% from the year-ago period. However, higher sales volumes from its recent acquisitions helped drive up revenue to $1.4 billion, compared with year-ago revenue of $894.2 million.

Including the one-time impairment, EQT reported a loss of $1.6 billion (minus $5.99/share) for the first quarter, compared with a profit of $164 million (95 cents) in 1Q2017.