US-based natural gas and oil company Rice Energy has entered into a purchase and sale agreement (PSA) to acquire Colorado-based Vantage Energy for approximately $2.7bn, including the assumption of debt.
Vantage Energy comprises two business units, namely Vantage Energy and Vantage Energy II.
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As part of the deal, Rice Midstream Partners (RMP), a growth-oriented limited partnership firm formed by Rice Energy to acquire midstream assets in the Appalachian basin, will be purchasing the acquired midstream assets from Rice Energy for $600m.
Subject to customary closing conditions, the deal is expected to close in the fourth quarter of this year.
Rice Energy chief executive officer Daniel Rice said: “This deal represents the largest core dry gas Marcellus acquisition to date, one that is truly transformational for Rice Energy, Rice Midstream Partners and our respective shareholders.
“This acquisition adheres to our proven strategy of pursuing core shale gas acreage, leveraging our industry-leading technical shale team to deliver best-in-class well results and capturing a greater share of the value chain through our premier midstream services business.
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By GlobalData“Our transaction financings are meant to strengthen Rice Energy's balance sheet even further, including positioning us to capture an additional 20,000 to 40,000 acres of leasehold adjacent to our existing position.
“Our proven success developing the Marcellus Shale in Greene County gives us tremendous confidence in our ability to generate meaningful growth and create substantial value on the acquired assets for both Rice Energy and Rice Midstream Partners, and we look forward to seamlessly integrating the acquired assets into our leading-edge shale development in Appalachia.”
As per the deal, Rice Energy will be acquiring nearly 85,000 net core Marcellus acres in Greene County, Pennsylvania, with rights to the deeper Utica Shale of approximately 52,000 net acres and 37,000 net acres in the Barnett Shale.
RMP will be acquiring 30 miles of dry gas gathering and compression assets. Rice Energy will be allotting the acquired Pennsylvania acreage to RMP to provide gas gathering, compression and water services.
Upon completion of the deal, Rice Energy will control nearly 231,000 net acres in the Marcellus and Ohio Utica cores with an inventory of 1,164 drilling locations, and RMP will control approximately 199,000 acres in Washington and Greene Counties.
