Rice Energy to buy Vantage Energy for $2.7B

Pittsburgh Post-Gazette

Rice Energy Inc. announced Monday that it’s buying another oil and gas company, Vantage Energy Inc., for $2.7 billion, in a deal that gives the Canonsburg company holdings it tried unsuccessfully to acquire earlier this year.

The announcement comes two weeks after Colorado-based Vantage filed to go public for the second time; its first attempt in 2014 was suspended amid low commodity prices.

The deal will make Rice the largest lease holder in Greene County. The company currently has operations in Washington and Greene counties in Pennsylvania, and in Belmont County, Ohio.

It will also give Rice its first move outside of the Appalachian basin — adding 37,000 acres in the Barnett Shale in Texas and some 177 operating wells there.

As part of the deal, Rice Midstream Partners, a master limited partnership spun out of Rice Energy that operates gathering lines in the area, will buy Vantage's midstream assets — about 30 miles of gathering pipelines in Greene County and compression infrastructure — for $600 million.

A few months ago, Rice and Vantage competed for the oil and gas assets of bankrupt coal company Alpha Natural Resources. Rice was seen as a shoo-in for the Greene County properties, serving as a stalking horse bidder, but Vantage swooped in and won with a $339.5 million offer.

With the acquisition — scheduled to be completed in the fourth quarter, according to Rice — the firm will get the Alpha assets in the end.

To accommodate its growing company and the projected 70 percent increase in natural gas production that it anticipates next year, Rice released its preliminary drilling and well completion budget for 2017. It will be between $950 million and $1.125 billion.

The company’s stock closed at $27.14 on Monday, enjoying a 150 percent climb since the beginning of the year.