Rice buys energy firm for $2.7 billion

Rice Energy Inc. is expanding its oil and gas holdings in the region … and beyond.

The Southpointe-based company announced Monday it agreed to buy Vantage Energy, an oil and gas firm, for $2.7 billion, including assumption of debt. Rice expects the deal to close in the fourth quarter.

When it does, Rice will become the biggest lease holder in Greene County – a designation Englewood, Colo.-based Vantage previously claimed. The purchase will include 85,000 Marcellus shale acres and, beneath that formation, rights to 52,000 Utica shale acres in Greene.

The deal also enables the local gas exploration and production company to venture beyond the Appalachian Basin for the first time. It will acquire 37,000 acres in the Barnett shale in Texas, where about 170 wells are operating.

Rice now operates exclusively in Washington, Greene and Belmont (Ohio) counties.

In addition, Rice Midstream Partners, a master limited partnership and spinoff from Rice Energy, will pay Rice Energy $600 million for Vantage’s midstream assets. They include 30 miles of gathering pipelines and compression assets.

Rice Energy, according to a news relaease, will end up with 231,000 acres in the Marchellus and Ohio Utica, and RMP will be in control of 199,000 acres of dry gas property in Washington and Greene counties. The company, in the release, called it “one of the largest and most concentrated core dry gas acreage dedications in the Marcellus shale.”

Vantage and Rice, interestingly, vied for the oil and gas assets of Alpha Natural Resources, a coal company that went bankrupt. Vantage’s mid-May offer of $339.5 million won out; four-plus months later, Rice ultimately prevails.

The deal spurred Rice to ramp up gas production plans for 2017. It projects a 70 percent increase, with a preliminary budget for drilling and well completion of $950 million to $1.125 billion.

Vantage recently filed to go public for the second time. It abandoned plans to do so in 2014. The company has an office on Johnson Road in North Strabane Township