0
1
Investor Presentation
April 2014
2
Cautionary Statements
FORWARD-LOOKING STATEMENTS
This presentation and the oral statements made in connection therewith ...
3
Rice Energy – Concentrated Core Position
Fayette
Preston
Monongahela
Greene
Washington
Allegheny
Washington
Butler
Marsh...
4
RRC EQT
CHK
CHK
CHK
AEP
AEP/XTO
GPOR
ANTERO
CVXNBL/CNX
CVX
ECLIPSE
AEP
CVX
GPOR
EQTMarshall
Wetzel
Monroe
Harrison
Jeffe...
5
325
180
53
125
54
16
450
235
69
0
100
200
300
400
500
Marcellus Utica Dry Utica Wet
Risked Locations Unrisked Locations
...
6
2,444
3,305
5,678
6,257
24.4
13.0
7.6
5.8
0
10
20
30
40
0
2,000
4,000
6,000
8,000
2010 2011 2012 2013
DrillingDays
Later...
7
Why Invest in Rice?
100% of Leasehold in Core of Marcellus and Utica
Owned and Operated Gathering and Water Midstream
In...
8
Pennsylvania Assets
9
 43,351 net acres in the southwestern core
• 48% held by production with an
additional 36% not expiring until 2017
or l...
10
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
Peer-Leading Results with Stron...
11
Rapidly Growing Production in a Capital Efficient Manner
 Rice reached 300 MMcf/d of gross operated production with fe...
12
Offset Operator
 2 wells, 6,000’ lateral avg
 Missed richest zone
 Inconsistent rock stage to stage
 Screened out o...
13
2,019
1,885
1,685 1,613 1,554 1,516
1,380 1,373 1,336 1,316 1,284 1,249 1,246 1,198 1,196 1,170 1,157 1,156 1,138 1,042...
14
0
2
4
6
8
10
12
14
16
0 1 yrs 2 yrs 3 yrs
Actual Production - Historical Average NSAI - 6,000' Lateral
Type Well Econom...
15
172,744
394,555
47,796
442,351
–
100,000
200,000
300,000
400,000
500,000
2013 2014
Marcellus Utica
Highly Visible Produ...
16
Ohio Assets
17
Utica: Quickly Becoming Another Premier North American Play
__________________________
1. Data per RigData as of March ...
18
Industry Results Confirm our Position in the Utica Core
 Very consistent well results from offset operators clearly
de...
19
High Volume Wells Predicted by Geologic Model
 Consistent offset operators’ strong well results and high quality reser...
20
Rice-Gulfport Belmont County Development Agreement
 Rice and Gulfport Energy entered into a Development Agreement
cove...
21
Utica Dry – Type Well Economics (1) Utica Dry – IRR Sensitivity (2)
Rice’s Utica Well Economics
_______________________...
22
Midstream Assets
23
NFG
Ohio
River
Monongahela
River
TCO –
Columbia Gas
Basis to NYMEX
May ‘14
-$0.09
TETCO-M2
Basis to NYMEX
May ‘14
-$0.3...
24
Midstream Infrastructure Overview
Highlights
 As of December 31, 2013, our owned and operated system comprised of
the ...
25
Financial Policy
26
 Focus on financial flexibility provides downside protection, especially in commodity price down-cycle
 Operate vast ...
27
Commodity Hedging Philosophy
 We employ financial instruments (primarily swaps and costless collars) to mitigate commo...
28
2014 Guidance
Capital Expenditure
Budget by Type
Drilling & Completion Capital
Expenditure Budget by Area
Net Wells Tur...
29
Q1 2014 Preliminary Financial and Operating Data
Low High
Operating statistics
Average daily net production (MMcfe/d) 2...
30
Sources & Uses and Pro Forma Capitalization
Pro Forma CapitalizationProposed Transaction
Sources & Uses
 $750 million ...
31
Appendix
32
Rice Energy History
__________________________
Note: Initial Production refers to 24 hour IP test rate.
April 2013
Clos...
33
Determination of Identified Drilling Locations
Our gross (net) identified drilling locations are those drilling locatio...
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Rice Energy Investor Presentation - April 2014

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Lots of great slides with maps and details of Rice's Marcellus and Utica Shale drilling programs. Rice Energy went public in January 2014 and raised $924 million. So far, as of 1Q14, they have drilled 41 shale wells that are turned in and online, earning them money. In 1Q14 those 41 wells produced a collective average of 209 million cubic feet of natural gas per day.

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Transcript of "Rice Energy Investor Presentation - April 2014"

  1. 1. 1 Investor Presentation April 2014
  2. 2. 2 Cautionary Statements FORWARD-LOOKING STATEMENTS This presentation and the oral statements made in connection therewith may contain “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, regarding Rice Energy’s strategy, future operations, financial position, estimated revenues and income/losses, projected costs, prospects, plans and objectives of management are forward-looking statements. These statements often include the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Rice Energy’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Rice Energy assumes no obligation to and does not intend to update any forward looking statements included herein. Rice Energy cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond their control, incident to the exploration for and development, production, gathering and sale of natural gas, natural gas liquids and oil. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating natural gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under “Risk Factors” in Rice Energy’s Form 10-K filed on March 21, 2014 and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Rice Energy’s actual results and plans could differ materially from those expressed in any forward-looking statements. This presentation has been prepared by Rice Energy and includes market data and other statistical information from sources believed by Rice Energy to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on Rice Energy’s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although Rice Energy believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness. NON-PROVEN OIL AND GAS RESERVES The SEC permits oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions and certain probable and possible reserves that meet the SEC’s definition for such terms. We may use certain broader terms such as "EUR" (estimated ultimate recovery of resources), and we may use other descriptions of volumes of potentially recoverable hydrocarbon resources throughout this presentation that the SEC does not permit to be included in SEC filings. These broader classifications do not constitute "reserves" as defined by the SEC, and we do not attempt to distinguish these classifications from probable or possible reserves as defined by SEC guidelines. Our estimates of EURs have been prepared by our independent reserve engineers. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized, particularly in areas or zones where there has been limited or no drilling history. We include these estimates to demonstrate what we believe to be the potential for future drilling and production by the company. Actual locations drilled and quantities that may be ultimately recovered from our properties will differ substantially. In addition, we have made no commitment to drill all of the drilling locations which have been attributed to these quantities. Ultimate recoveries will be dependent upon numerous factors including actual encountered geological conditions, the impact of future oil and gas pricing, exploration and development costs, and our future drilling decisions and budgets based upon our future evaluation of risk, returns and the availability of capital and, in many areas, the outcome of negotiation of drilling arrangements with holders of adjacent or fractional interest leases. Estimates of resource potential and other figures may change significantly as development of our properties provide additional data and therefore actual quantities that may ultimately be recovered will likely differ from these estimates. Our forecast and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells, the undertaking and outcome of future drilling activity and activity that may be affected by significant commodity price declines or drilling cost increases.
  3. 3. 3 Rice Energy – Concentrated Core Position Fayette Preston Monongahela Greene Washington Allegheny Washington Butler Marshall Wetzel Marion Harrison Taylor Doddridge Tyler Washington Wood Pleasants Ritchie Barbour Tucker Somerset Belmont Monroe Harrison Jefferson Carroll Columbiana Tuscarawas Guernsey Noble Morgan Muskingum Coshocton Holmes StarkWayne Westmoreland Blair Athens Allegany Ohio Brooke HQ Marcellus/Upper Devonian  Net acres at 12/31/13(1): ~43,000  1Q14 est. net production (MMcf/d): 205-210  Net Risked Locations(2): 536 (325 Marcellus, 211 Upper Devonian)  Current Rigs: 4 (2 top hole + 2 horizontal) Pennsylvania Ohio Utica  Net acres at 12/31/13: ~47,000  Net Risked Locations(2): 233  Current Rigs: 2 (1 top hole + 1 horizontal) Rice Energy  Net acres at 12/31/13: ~90,000  1Q14 est. net production (MMcf/d): 205-210  Net Risked Locations(2): 769  Current Rigs: 6 (3 top hole + 3 horizontal) West Virginia __________________________ 1. Approximately 39,020 gross (36,932 net) acres in the Marcellus Shale is also prospective for the Upper Devonian Shale. The Upper Devonian and the Marcellus Shale are stacked formations within the same geographic footprint. 2. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations
  4. 4. 4 RRC EQT CHK CHK CHK AEP AEP/XTO GPOR ANTERO CVXNBL/CNX CVX ECLIPSE AEP CVX GPOR EQTMarshall Wetzel Monroe Harrison Jefferson Guernsey Noble Ohio Brooke Westmoreland Allegheny PDC CNX Carroll Washington Belmont Greene Fayette Positioned Within the Core and Surrounded by Development __________________________ Note: Pennsylvania acreage excludes 548 net acres in Fayette and Tioga counties. Non-Rice wells depicted are drilled and/or permitted.  Significant industry activity drives data analysis, learning curve and best practices  Marcellus – More than 1,000 producing Marcellus wells in Washington County and Greene County, PA  Utica – Belmont County, OH boasts highest active rig count in the play (9 rigs as of December 2013) Belmont 43,996 Guernsey 1,727 Harrison 765 Total 46,488 Washington 27,474 Greene 15,680 Allegheny 197 Total 43,351 OH NET ACRES PA NET ACRESRice Acreage Rice Producing Laterals Rice Development Laterals PA OH WV
  5. 5. 5 325 180 53 125 54 16 450 235 69 0 100 200 300 400 500 Marcellus Utica Dry Utica Wet Risked Locations Unrisked Locations Rice Energy Net Drilling Inventory (2) 104% 70% 119% 0% 20% 40% 60% 80% 100% 120% Marcellus Utica Dry Utica Wet __________________________ 1. Assumes $40.00 per Bbl NGL. 2. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations 3. Three wells currently shut-in as of 3/31/13. 4. Defined as total drilling and completion capital expenditures for the period divided by PDP and PDNP volumes after adding back production for the period. Rice pro forma for ASR buy-in. IRR Rice Energy Well Economics @ $4.00 / MMBtu NYMEX (1) Net Drilling Locations Extensive drilling inventory of low risk, high return projects  Rice believes the most critical component of creating shareholder value is repeatedly delivering high single well returns  Driven by production and costs  Sustained, prolific production  Our Marcellus wells have an average 180-day IP of ~9.0 MMcf/d, ~1.6 Bcf cumulative, with an average lateral length of 5,275’  Our Marcellus wells have an average 360-day IP of ~7.4 MMcf/d, ~2.7 Bcf cumulative, with an average lateral length of 4,876’  Low cost structure  Historically achieved $1.09/Mcf proved developed F&D(4) and $1,640 per lateral foot D&C cost  Our D&C costs have continued to trend down as a result of pad drilling and longer laterals and our 3 Hulk wells (9,000’ laterals) averaged $1,165 per lateral foot Rice – A Returns Focused Company PV-10 ($mm, 100% WI) Undiscounted Payback $8.5mm 1.0 yrs $19.6mm 1.0 yrs $13.4mm 1.2 yrs NRI HZ Ft Inventory 2.2mm ft. 0.5mm ft.1.8mm ft. Lateral Length Assumed 6,000’ 9,700’9,700’
  6. 6. 6 2,444 3,305 5,678 6,257 24.4 13.0 7.6 5.8 0 10 20 30 40 0 2,000 4,000 6,000 8,000 2010 2011 2012 2013 DrillingDays LateralLength(feet) 2 28 44 47 70 89 131 128 154 13 22 28 35 55 58 84 110 173 177 208 0 50 100 150 200 250 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Net Daily Production Gross Daily Production 30 45 65 80 114 150 174 224 1 3 5 5 7 8 11 15 17 23 29 33 40 0 10 20 30 40 50 0 50 100 150 200 250 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Gross Producing Horizontal Feet Gross Producing Horizontal Wells Established Track Record of Drilling Proficiency Producing Horizontal Feet and Wells (Gross) Average Daily Production MMcf/dFeet (‘000) # Rigs: 2 2 2 2 2 2 2 2 2 3 4 4 4 Wells Average Lateral Length (2) Average Drilling & Completion Cost Per Lateral Foot Proven track record of growing production, reducing costs and improving drilling efficiency Lateral Length, Ft Drilling Days (Kickoff to TD) 1,078 893 831 974 826 842 567 622 651 638 703 536 1,437 1,423 1,437 1,193 994 999 763 927 845 875 789 815 2,515 2,315 2,268 2,168 1,820 1,841 1,331 1,550 1,496 1,513 1,492 1,351 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 NA (1) Drilling Cost per Foot Completion Cost per Foot _______________________ 1. No wells brought online in Q3 2011. 2. Well data based on IP date.
  7. 7. 7 Why Invest in Rice? 100% of Leasehold in Core of Marcellus and Utica Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream Operations Differentiated Technical Approach Has Led to Industry Leading Well Results Conservative Financial and Hedging Approach to Protect Downside and Lock-In Attractive Returns Nimble and Incentivized Management and Technical Teams Top-Tier Growth With Attractive Risk-Adjusted Return Profile Firm Transportation Contracts De-risk Production Growth, Ensure Takeaway and Limit Appalachian Basis Exposure
  8. 8. 8 Pennsylvania Assets
  9. 9. 9  43,351 net acres in the southwestern core • 48% held by production with an additional 36% not expiring until 2017 or later • Expect to hold substantially all of our core acreage under our current development plan • The Upper Devonian and Marcellus are stacked formations within the same geographic footprint, substantially all of our acreage is also prospective for the Upper Devonian  Drilled and completed 44 horizontal wells as of March 31, 2013 • Average Marcellus initial 120-day production rates of 9.9 MMcf/d  519 total net risked identified drilling locations, 325 in the Marcellus and 194 in the Upper Devonian  Average working interest of 95% (100% operated)  March 2014 average net production of ~230 MMcf/d Marcellus Overview _________________________ Note: Wells shown are all Marcellus wells turned to sales in 2013 and 2014 YTD. Marcellus Well ResultsSummary  Sustained prolific production rates over a 6-month period Allegheny Washington Greene PA OH WV Rice Energy Acreage X-Man Pad – 2 Wells Avg 180 Day IP: 12.8 MMcf/d Avg Lateral Ft: 7,410’ Thunder 2 Pad – 2 Wells Avg 180 Day IP: 12.0 MMcf/d Avg Lateral Ft: 9,006’ Lusk Pad – 2 Wells Avg 180 Day IP: 10.2 MMcf/d Avg Lateral Ft: 5,780’ AU2 Pad – 2 Wells Avg 180 Day IP: 8.8 MMcf/d Avg Lateral Ft: 5,921’ Brova 1H Avg 180 Day IP: 9.5 MMcf/d Lateral Ft: 3,552’ Amigos Pad – 3 Wells Avg 120 Day IP: 11.7 MMcf/d Avg Lateral Ft: 6,317’ Big Daddy Pad – 2 Wells Avg 180 Day IP: 6.7 MMcf/d Avg Lateral Ft: 3,150’ Hulk Pad – 3 Wells Avg 120 Day IP: 15.7 MMcf/d Avg Lateral Ft: 9,000’ Mono 4H Avg 482 Day IP: 11.2 MMcf/d 5.4 Bcf produced in 16 months Lateral Ft: 6,233’ Whipkey 1H Avg 180 Day IP:10.5 MMcf/d Avg Lateral Ft: 6,655’ 2012 2013 2014 Gotham Pad – 4 Wells Avg 60 Day IP:12.6 MMcf/d Avg Lateral Ft: 6,691’
  10. 10. 10 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Peer-Leading Results with Strong Production Profiles __________________________ 1. Rice Energy days online based on producing days, peer data based on Pennsylvania Department of Environmental Protection production reports as of December 31, 2013.  Producing wells have exhibited strong production profiles compared to those of Marcellus peers  D&C strategies have resulted in consistently higher cumulative production and cash flows on a per well basis Rice Marcellus Rice Upper Devonian Peer Wells Washington & Greene Counties Cumulative Production vs. Time (1) Cumulative Production (Bcfe) Days Online
  11. 11. 11 Rapidly Growing Production in a Capital Efficient Manner  Rice reached 300 MMcf/d of gross operated production with fewer wells than any company over the last 30 years  Nearly linear production growth an outcome of committed takeaway capacity and repeatable well results  Rice is focused on being the most capital efficient operator in the Marcellus, not the biggest Rice 308 MMcf/d 41 Wells (1) Rice is drilling the biggest wells and growing production faster than its peers while maintaining a healthy balance sheet __________________________ Note: Based on management analysis of Pennsylvania Department of Environmental Protection production reports. 1. Rice’s gross operated production surpassed 300 MMcf/d in February 2014. At that time, Rice had brought 44 gross wells online and had 3 wells shut-in. GrossDailyProduction(Mcf/d)
  12. 12. 12 Offset Operator  2 wells, 6,000’ lateral avg  Missed richest zone  Inconsistent rock stage to stage  Screened out on 20% of stages Rice Energy  2 wells, 6,000’ lateral avg  In 3’ window for entire lateral  Most brittle + gas rich zone  Completion pumped as designed Avg Production per Well  Peak IP: 6.0 MMcf/d  6 Month Avg: 2.8 MMcf/d Avg Production per Well  Peak IP: 20.0 MMcf/d  6 Month Avg: 10.2 MMcf/d Pads Drilled 2 Miles Apart Rice Energy Two 6,000’ Laterals Offset Operator Two 6,000’ Laterals  Within a localized geologic area, performance variability is mostly attributable to operator execution; not rock quality  Our lateral placement accuracy has yielded higher productivity and greater consistency in productivity versus our peers’ efforts Differentiator #1: Proficiency with Lateral Placement In Target zone Washington County, PA Rice is able to achieve consistent and predictable results by using the same methodical approach
  13. 13. 13 2,019 1,885 1,685 1,613 1,554 1,516 1,380 1,373 1,336 1,316 1,284 1,249 1,246 1,198 1,196 1,170 1,157 1,156 1,138 1,042 1,021 1,015 1,002 883 0 lb 1,000 lb 2,000 lb 3,000 lb Pounds per Lateral Foot Differentiator #2: Early Adopter of New Services & Techniques __________________________ Note: Marcellus wells in Pennsylvania completed since 2010, PA DEP data, company analysis. 205 255 256 256 258 266 272 285 287 294 294 295 295 307 313 316 317 323 332 357 366 368 452 474 502 0' 200' 400' 600' Feet per Stage Average Frac Stage Length 150-250’ stages since first HZ well in 2010… long before this technique became an industry buzzword Strong correlation between sand concentration and production Rice executes the same methodical approach since its first horizontal well in 2010 and was early to identify the benefits of new oilfield services and techniques Other Marcellus Operators Rice Marcellus / Utica Peers Other Marcellus Operators Rice Marcellus / Utica Peers Average Sand Concentration
  14. 14. 14 0 2 4 6 8 10 12 14 16 0 1 yrs 2 yrs 3 yrs Actual Production - Historical Average NSAI - 6,000' Lateral Type Well Economics (2) 1.94 Bcf / 1,000’ Type Curve (1) IRR Sensitivity (3) 30% 61% 104% 162% 236% 52% 77% 135% 169% $3.00 $3.50 $4.00 $4.50 $5.00 0% 50% 100% 150% 200% 250% NYMEX ($ / MMBtu) Rice’s Marcellus Shale Type Curve ___________________________ 1. Represents gross type curve. Actual production is normalized to 6,000’ laterals. Normalized production excludes six wells; five due to suboptimal spacing to offset producing wells and one well excluded because majority of lateral was drilling in suboptimal zone (second Marcellus well in Company’s history). Data has been adjusted to reflect only producing days. 2. Based on $4.00/MMBtu and 100% WI. Net horizontal feet calculation based on net revenue interest assuming a 18.5% average royalty interest in the Marcellus. 3. IRR is net to Rice’s ownership interest. Hedged IRR assumes 50% of production hedged at $4.00/MMBtu in the first year and 25% of production hedged at $4.00/MMBtu in the second year. All new wells are produced on restricted choke program Hedged IRRUnhedged IRR Net Unrisked Locations 450 NRI HZ Ft. Inventory 2.2mm ft. PV-10 ($mm) $8.5 IRR 104% Undiscounted Payback 1.0 yrs D&C ($mm) $8.0 Type Curve Assumptions 120-Day IP (MMcf/d) Pre-Processed 13.4 Bcf / 1,000' 1.94 Average Lateral Length 6,000 NGL Yield (Bbls / MMcf) - Gas Mmbtu (Pre-Processed) 1,050 Gas Shrink 0% Gross EUR (Bcfe, Post-Processing) 11.6 % Gas 100% MMcf/d
  15. 15. 15 172,744 394,555 47,796 442,351 – 100,000 200,000 300,000 400,000 500,000 2013 2014 Marcellus Utica Highly Visible Production Growth in 2014  ~270,000 NRI horizontal feet scheduled for first sales in 2014, of which ~85% or ~230,000 horizontal feet were in progress as of March 2014  Similarly, 2014 development fuels 2015 production growth __________________________ Note: Feet in progress denotes horizontal feet from wells spud but not yet producing. NRI Horizontal Feet Bridge (12/31/13 – 12/31/14) 184,491 42% 85,116 19% Producing In Progress 2014 2014 Scheduled Development NRI Producing Horizontal Feet, by Area Utica - 2 Rigs Marcellus - 4 Rigs Greene County, PA Washington County, PA Producing Drilling/Completing On Schedule Greene Washington Belmont GPOR Non-Op 172,744 39%
  16. 16. 16 Ohio Assets
  17. 17. 17 Utica: Quickly Becoming Another Premier North American Play __________________________ 1. Data per RigData as of March 14, 2014. Growth and Development  Horizontal rig count has dramatically increased due to recent results and activity continues to shift towards the Utica core  Rice has partnered with one of the most active and proven operators in the play, Gulfport Energy (NYSE: GPOR) • Gulfport and Rice’s acreage positions are very complementary, leading to substantial drilling cost savings • Rice is able to leverage off of Gulfport’s learning curve Utica Rigs Over Time (1) Rig count continues to grow and rig activity is shifting towards the core area in Belmont and Monroe counties Infrastructure Build-out  Active build-out of midstream infrastructure to support production in the Utica  Take-away capacity out of the Appalachian Basin will continue to improve • The proposed reversal of the Rockies Express pipeline could add significant take- away capacity  Rice’s production is expected to be substantially all dry gas and enables multiple take-away options November 2012 March 2014 Utica Fairway Utica Core Competitor Horizontal Rigs Rice Acreage Position Dry Gas Line Rice Horizontal Rig Marcellus Fairway Marcellus Core Utica Fairway Utica Core Marcellus Fairway Marcellus Core
  18. 18. 18 Industry Results Confirm our Position in the Utica Core  Very consistent well results from offset operators clearly define Point Pleasant Core in the southern portion of the play  Offset operators’ results, from the likes of Gulfport and Antero, tie extremely well with internal geologic model  Rice Energy has captured 46,488 net acres in what is potentially the highest volume shale play in the country  Development is underway on initial pads (stars)  Initial test results for Bigfoot 9H in second quarter 2014 Utica Core IP Results Sized and Color-Coded >30 MMcfe/d 20-30 MMcfe/d 10-20 MMcfe/d 5-10 MMcfe/d 0-5 MMcfe/d __________________________ Note: Initial production rates are based on operator announcements and public filings. Gulfport: 1 well IP: 30 MMcfe/d (in sales) Gulfport: 2 Wells IP: 29 - 45 MMcfe/d Eclipse: 1 well IP: 20 MMcfe/d TUSCARAWAS Rex: 3 Wells IP: 18 - 19 MMcfe/d Rice Acreage Rice: 1 well Bigfoot 9H Reached TD Mid-March Rice: 2 wells Blue Thunder 10H, 12H Drilling Ahead Hess: 1 well IP: 25 MMcfe/d Gulfport: 1 well IP: 21 MMcf/d Avg 14 MMcfe/d in Q3 ‘13 Antero: 5 wells IP: 37 – 53 MMcfe/d (peak) Antero: 2 wells IP: 20 – 22 MMcfe/d Rice’s acreage is offset by some of the largest producing wells in the Utica Magnum Hunter: 1 Well IP: 32 MMcfe/d
  19. 19. 19 High Volume Wells Predicted by Geologic Model  Consistent offset operators’ strong well results and high quality reservoir and geologic characteristics should equate to low risk and highly productive well results • Offset operator production results mirror Rice’s internal geologic model • Core Features: Strong Point Pleasant porosity, impermeable Utica cap, highly overpressured  Increased capital spending by the industry confirms Rice’s belief that the Utica is one of the premier and highest quality shale plays in North America  Initial data from pilot hole in Belmont County very encouraging: • Porosity > 14% in our target interval translates into strong results • Severely overpressured: Pressure Gradient > 0.8 psi/ft • Flowed substantial gas unstimulated while drilling pilot hole through the Point Pleasant North South 6 MMcfe2 MMcfe 8 MMcfe 12 MMcfe 30 MMcfe 0% 6% Rice Belmont Leasehold Porosity 12% __________________________ Note: Initial production rates are based on operator announcements and public filings. 20 MMcfe1 MMcfe Pending Results Utica Point Pleasant Core Rice Energy controls ~46,488 net acres in the heart of the high porosity Point Pleasant core in Belmont County Point Pleasant Core Belmont + Monroe Counties 30+ MMcfe/d 20-30 MMcfe/d 10-20 MMcfe/d 5-10 MMcfe/d 0-5 MMcfe/d CRAWFORD MERCERERIE BEAVER COLUMBIANA CARROLL JEFFERSON BELMONT MONROE WASHINGTON ATHENSMERCER WASHINGTON
  20. 20. 20 Rice-Gulfport Belmont County Development Agreement  Rice and Gulfport Energy entered into a Development Agreement covering an Area of Mutual Interest in the core of the Utica • Contiguous acreage immediately creates a more drillable position to provide development and unit visibility • Mutually beneficial, coordinated effort allows for shared learning in development, leasing and infrastructure  Management teams are dedicated to the science and execution of low risk, repeatable results • Gulfport has three of the highest producing wells in Belmont County, the Shugert 1-12H, Irons 1-4H and Shugert 1-1H AMI ~50,000 net acres Marshall Ohio Belmont Monroe Noble Jefferson Harrison Tuscarawas Guernsey Brooke Rice Operated ~69% Rice Participating Interest Gulfport Operated ~57% GPOR Participating Interest Rice’s AMI partnership provides the opportunity to leverage Gulfport’s Utica experience and realize substantial cost synergies  Areas: The agreement is divided up into two areas and each party’s participating interest is based on the amount of acreage they own • Rice Operated Northern Contract Area (~27,000 net acres) o Townships: Goshen & Smith o Net Acres & Participating Interest: Rice ~18,400 & ~69% / Gulfport ~8,400 & 31% • Gulfport Operated Southern Contract Area (~23,000 net acres) o Townships: Washington & Wayne o Net Acres & Participating Interest: Rice ~9,700 & ~43% / Gulfport ~13,100 & 57%  Term: The agreement has a term of ten years and is terminable upon 90 days notice by either party Terms of the Agreement Acreage MapOverview
  21. 21. 21 Utica Dry – Type Well Economics (1) Utica Dry – IRR Sensitivity (2) Rice’s Utica Well Economics ___________________________ 1. Based on $4.00/MMBtu and 100% WI. Net horizontal feet calculation based on net revenue interest assuming a 20% average royalty interest in the Utica. 2. IRR is net to Rice’s ownership interest. Hedged IRR assumes 50% of production hedged at $4.00/MMBtu in the first year and 25% of production hedged at $4.00/MMBtu in the second year. 21% 41% 70% 108% 155% 33% 51% 91% 115% $3.00 $3.50 $4.00 $4.50 $5.00 0% 50% 100% 150% 200% NYMEX ($ / MMBtu) Hedged IRRUnhedged IRR Net Unrisked Locations 235 NRI HZ Ft. Inventory 1.8mm ft. PV-10 ($mm) $13.4 IRR 70% Undiscounted Payback 1.2 yrs D&C ($mm) $14.0 Type Curve Assumptions 120-Day IP (MMcf/d) Pre-Processed 17.1 Bcf / 1,000' 2.25 Average Lateral Length 9,700 NGL Yield (Bbls / MMcf) - Gas Mmbtu (Pre-Processed) 1,080 Gas Shrink 0% Gross EUR (Bcfe, Post-Processing) 21.8 % Gas 100% Utica Wet – Type Well Economics (1) Utica Wet – IRR Sensitivity (2) 57% 85% 119% 160% 210% 78% 98% 142% 166% $3.00 $3.50 $4.00 $4.50 $5.00 0% 50% 100% 150% 200% 250% NYMEX ($ / MMBtu) Hedged IRRUnhedged IRR Net Unrisked Locations 69 NRI HZ Ft. Inventory 0.5mm ft. PV-10 ($mm) $19.6 IRR 119% Undiscounted Payback 1.0 yrs D&C ($mm) $14.0 Type Curve Assumptions 120-Day IP (MMcf/d) Pre-Processed 15.2 Bcf / 1,000' 2.00 Average Lateral Length 9,700 NGL Yield (Bbls / MMcf) 40 Gas Mmbtu (Pre-Processed) 1,200 Gas Shrink 15% Gross EUR (Bcfe, Post-Processing) 21.1 % Gas 78%
  22. 22. 22 Midstream Assets
  23. 23. 23 NFG Ohio River Monongahela River TCO – Columbia Gas Basis to NYMEX May ‘14 -$0.09 TETCO-M2 Basis to NYMEX May ‘14 -$0.35 DTI – Dom. South Basis to NYMEX May ‘14 -$0.59 Rice Acreage Belmont Jefferson Harrison Monroe Brooke Hancock Ohio Marshall Greene MonongaliaWetzel Washington Allegheny Fayette Pipeline and Basis Overview Basis Strip Prices as of 3/31/14 Access to multiple long-haul pipelines and substantial firm transportation contracts support production growth and provides basis/pricing diversification Firm Transportation/Sales & Associated Basis (1)  ~65% of FT outside of Appalachia by 2016 Pennsylvania long-haul access – Columbia, DTI, TETCO  Ohio long-haul access – DEO, REX, TETCO __________________________ 1. These amounts include approximately 115,000 MMBtu/d of firm sales contracted with a third party through October 2017, subject to annual renewal. 2. As of 3/31/2014. ($0.04) MMBtu/d Basis Strip Prices (Discount to NYMEX) (2) 330 654 761 - 200 400 600 800 2014 2015 2016 TCO M2 Dom S M3 Michcon ELA HHUB $(1.50) $(1.00) $(0.50) $- $0.50 $1.00 $1.50 $2.00 TCO M2 Dom S M3 Michcon ELA
  24. 24. 24 Midstream Infrastructure Overview Highlights  As of December 31, 2013, our owned and operated system comprised of the following: • Gas gathering pipeline system with 1.5 Bcf/d throughput capacity • 27 miles of high-pressure gathering pipelines • 33 miles of high-density polyethylene pipelines for transporting water  Provides the ability to efficiently bring wells online, mitigates the risk of unplanned shut-ins and creates pricing and transportation optionality • Connected to multiple large pipelines: Columbia, DEO, DTI, REX, TETCO • Continue to expand our Pennsylvania gathering system congruent with our future development plans • Recently announced an acquisition of 28 miles of high pressure gathering pipelines in Washington and Greene counties Committed to owning and operating midstream assets to ensure off-take capacity from the wellhead Rice Gathering and Water System  We will replicate the strategy deployed in Pennsylvania of owning and operating our own midstream system in Ohio • Expect to have our gathering system in Belmont County substantially complete by Q2 2015 • Plan to invest $375 million in midstream infrastructure, including our ~$110 million Momentum acquisition, in 2014  Focused on securing long haul firm transport (FT) and firm sales (FS) takeaway capacity to provide certainty of sales • Heavy investment from 3rd party off-takers will provide additional flexibility for long haul transportation & storage • We continue to identify and acquire additional takeaway capacity to facilitate production growth Development Plans Washington Greene Belmont Momentum Acquisition
  25. 25. 25 Financial Policy
  26. 26. 26  Focus on financial flexibility provides downside protection, especially in commodity price down-cycle  Operate vast majority of our properties to control timing, execution and cost of our drilling program  Maintain a minimum of $200 million of liquidity, consisting of cash on hand and borrowing base availability  Pro forma for the Senior Unsecured Notes, we will have $1,099 million of liquidity (as of 12/31/13)  Expect borrowing base to increase meaningfully as a result of successful drilling program Focus on Financial Flexibility  Acreage strategy driven by quality over quantity  Built leasehold position through carefully selected and privately negotiated acreage acquisitions and low risk bolt-on opportunities; leasehold budget is highly discretionary and will be deployed opportunistically  Targeting the core of the Marcellus and Utica with single well IRRs of 70% - 119% and break even pricing between $1.84 - $2.82 per Mcfe Maintain Conservative Business Model  Committed to building and owning midstream infrastructure to meet our production growth  Allows us to commercialize our production more quickly and provides us with a competitive advantage in acquiring bolt- on acreage  Will continue to enter firm transport and firm sales agreements to assure access to market and diversify basis exposure  Over 80% of 2014E gross production contracted through firm transport or firm sales agreements Midstream Infrastructure Emphasis  Goal of protecting near-term financial commitments from sudden changes in commodity prices  Typically hedge 50% of forecasted production for up to two years out  71.3 Bcf of natural gas production hedged for 2014 at a weighted average index floor price of $4.06 per MMBtu (1)  59.1 Bcf of natural gas production hedged for 2015 at a weighted average index floor price of $4.05 per MMBtu Active Commodity Hedging Program Financial Policy __________________________ 1. Hedges as of 3/31/14.
  27. 27. 27 Commodity Hedging Philosophy  We employ financial instruments (primarily swaps and costless collars) to mitigate commodity price risk  Assures a base level of cash flow to reinvest in growth  Typically target hedging of 50% of forecasted production for up to two years out  Add incremental hedges opportunistically beyond two years  Utilize our bank group as counterparties to avoid cash collateral and margin calls Detailed Hedge Position (1) __________________________ 1. Hedges as of 3/31/14. 2. The index prices for the natural gas price swaps, collars and puts are based on the NYMEX – Henry Hub last trading day futures price. 2014 2015 2016 2017 NYMEX Natural Gas Swaps (2) Volume (BBtu/d) 162 92 99 60 Price ($/MMBtu) $4.12 $4.16 $4.20 $4.24 Natural Gas Collars (2) Volume (BBtu/d) 10 70 - - Ceiling Price ($/MMBtu) $5.80 $4.68 N/A N/A Floor Price ($/MMBtu) $3.00 $3.91 N/A N/A Natural Gas Puts (2) Volume (BBtu/d) 23 - - - Strike Price ($/MMBtu) $4.55 - - - Put Premium ($/MMBtu) $0.45 - - - Basis TCO Volume (BBtu/d) 40 35 8 - Swap Price ($/MMBtu) ($0.24) ($0.42) ($0.44) N/A Dominion South Point / M3 Volume (BBtu/d) 4 25 21 - Swap Price ($/MMBtu) ($0.79) ($0.79) ($0.79) N/A
  28. 28. 28 2014 Guidance Capital Expenditure Budget by Type Drilling & Completion Capital Expenditure Budget by Area Net Wells Turned to Sales by Area (2) Marcellus, 37, 84% Utica, 7, 16% Drilling, $580, 47% Leasehold, $385, 31% Midstream, $265, 22% Marcellus, $430, 74% Utica, $150, 26% 44 Wells$1,230mm (1) $580mm ___________________________ 1. Excludes acquisition capital expenditures of $300 million for ASR buy-in and ~$110 million for Momentum acquisition in 2014. 2. Represents net wells drilled that become revenue producing. 2014 Guidance Income Statement Guidance Low High Total Net Production (MMcfe/d) 260 310 % Dry Gas 100% 100% Heat Content (Btu/Scf) 1,050 Lease Operating Expense ($/mcfe) (0.40)$ (0.35)$ Gathering & Transportation ($/mcfe) (0.55)$ (0.45)$ Production Taxes and Impact Fees ($/mcfe) (0.03)$ (0.02)$ Cash G&A ($mm) 40$ 35$ 1,050
  29. 29. 29 Q1 2014 Preliminary Financial and Operating Data Low High Operating statistics Average daily net production (MMcfe/d) 205 - 210 Natural gas as a percentage of production 100% Heat content (Btu/Scf) 1,050 Total revenues including the effect - of realized hedging gains and losses ($mm) Operating expenses ($mm) Lease operating $7 - $6 Gathering, compression and transportation $10 - $9 Production taxes and impact fees $1 - $1 Realized Prices per mcfe Average prices before effects of hedges $5.45 Average realized prices after effects of hedges $4.82 Average costs per mcfe Lease operating $0.40 - $0.32 Gathering, compression and transportation $0.53 - $0.47 Production taxes and impact fees $0.04 - $0.04 1Q 2014 Preliminary $89 $91
  30. 30. 30 Sources & Uses and Pro Forma Capitalization Pro Forma CapitalizationProposed Transaction Sources & Uses  $750 million senior unsecured notes  Proceeds are intended to be used to: • Repay and permanently retire the $300 million Second Lien Term Loan and pay associated breakage cost of ~$3 million • Fund general corporate purposes including capital expenditures • Pay related fees and expenses ___________________________ 1. Pro forma for Initial Public Offering and Alpha Shale Resources acquisition. Does not include ~$110 million cash consideration for Momentum acquisition. 2. As of April 9, 2014, there was cash on hand of ~$182.6 million. 3. As of April 10, 2014, there were no outstanding borrowings under the revolving credit facility. 4. Net of unamortized original issue discount of ~$3.9 million. As of April 10, 2014, there were $293.3 million in outstanding borrowings under the second lien term loan, net of unamortized original issue discount of ~$3.7 million. 5. Other debt includes (i) $7mm of convertible debentures outstanding as of 12/31/13, (ii) $8mm of NPI note and (iii) $3mm of other debt 6. As of April 10, 2014, there were $71.3 million of outstanding letters of credit. Sources Amount % of Total Senior Unsecured Notes $750 100.0% Total Sources $750 100.0% Uses Amount % of Total Repayment of Second Lien Term Loan $298 39.7% General Corporate Purposes 435 57.9% Fees & Expenses 15 2.0% Breakage Fees 3 0.4% Total Uses $750 100.0% As of December 31, 2013 As (1) Notes As Further ($ in millions) Adjusted Adj. Adjusted Cash (2) $347 $435 $782 Borrowing Base Credit Facility (3) - - - Second Lien Term Loan (4) 294 (294) - Senior Unsecured Notes - 750 750 Other Debt (5) 18 - 18 Total Debt $312 $456 $768 Shareholders' Equity 1,134 (13) 1,121 Total Capitalization $1,446 $443 $1,889 Liquidity Borrowing Base $350 $350 Less: Borrowings - - Less: Letters of Credit (6) (33) (33) Plus: Cash (2) 347 782 Available Liquidity $664 $1,099  On April 11, 2014, Rice announced the private placement offering of $750mm of senior notes due 2022
  31. 31. 31 Appendix
  32. 32. 32 Rice Energy History __________________________ Note: Initial Production refers to 24 hour IP test rate. April 2013 Closed new $500 million Senior Secured Borrowing Base Credit Facility, $300 million Second Lien Term Loan and received $200 million follow-on equity investment from NGP Feb 2007 Rice Energy founded with $50 million equity investment by the Rice Family May 2009 Acquired initial 615 net acre foothold in the Marcellus (Washington County, PA) Jan 2014 Completed $1.1 billion Initial Public Offering Jan 2014 Acquired ANR’s 50% JV interest for $300 million, funded with $100 million of cash and $200 million of Rice Energy shares Feb 2010 Formed 50% / 50% Joint Venture with Alpha Natural Resources (NYSE: ANR) to develop certain properties in the Marcellus (Greene County, PA) Nov 2012 Acquired initial ~33,500 net acre foothold in the Utica (Belmont County, OH) Feb 2014 Entered agreement to purchase certain gathering assets in the Marcellus (Washington & Greene Counties, PA) from Momentum for ~$110 million October 2010 Completed first horizontal well in the Marcellus, X-Man 1H with 8.6 MMcf/d IP (2,444’ lateral) October 2013 Signed Development & Area of Mutual Interest Agreement with Gulfport in the Utica (Belmont County, OH) on ~50,000 net acres Jan 2012 Natural Gas Partners (“NGP”) invested $100 million of equity in Rice Energy 2007 2008 2009 2010 2011 2012 2013 2014 ($ / MMBtu) Rice’s formative years were during a $2.00-$4.00 gas price environment; being a nimble, low-cost producer is in our DNA March 2014 Successfully drilled and cased Bigfoot 9H Utica well $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 Jan-07 Mar-08 Jun-09 Aug-10 Nov-11 Jan-13 Apr-14 Henry Hub Spot Price
  33. 33. 33 Determination of Identified Drilling Locations Our gross (net) identified drilling locations are those drilling locations identified by management based on the following criteria: Drillable Locations – These are mapped locations that our Vice President of Exploration & Geology has deemed to have a high likelihood as being drilled or are currently in development but have not yet commenced production. With respect to our Pennsylvania acreage, we had 224 gross (200 net) pro forma drillable Marcellus locations and 134 gross (117 net) pro forma drillable Upper Devonian locations as of December 1, 2013. With respect to our Ohio acreage, as of December 1, 2013, we had 637 gross (192 net) drillable Utica locations, all of which are located within the contract areas covered by our Development Agreement and AMI Agreement with Gulfport. Estimated Locations – These remaining estimated locations are calculated by taking our total acreage, less acreage that is producing or included in drillable locations, and dividing such amount by our expected well spacing to arrive at our unrisked estimated locations which is then multiplied by a risking factor. We assume these Marcellus locations have 6,000 foot laterals and 600 foot spacing between Marcellus wells which yields approximately 80 acre spacing. We assume these Upper Devonian locations have 6,000 foot laterals and 1,000 foot spacing between Upper Devonian wells which yields approximately 140 acre spacing. We assume these Utica locations have 8,000 foot laterals and 600 foot spacing between Utica wells which yields approximately 110 acre spacing. With respect to our Pennsylvania acreage, we multiply our unrisked estimated Marcellus and Upper Devonian locations by a risking factor of 50% to arrive at total risked estimated locations. As a result, we had 125 gross (125 net) pro forma estimated risked Marcellus locations and 77 gross (77 net) pro forma estimated risked Upper Devonian locations as of December 1, 2013. With respect to our Ohio acreage, we multiply our unrisked estimated locations by a risking factor of approximately 37% to arrive at total risked estimated locations. We then apply our assumed working interest for such location, calculated by applying the impact of assumed unitization on the underlying working interest as well as, in the case of locations within the AMI with Gulfport, the applicable participating interest. As a result, as of December 1, 2013, we had 116 gross (41 net) estimated risked Utica locations. Estimated locations include ununitized locations that have been risked (50% in the Marcellus, 37% in the Utica) to take into account the risk of forming drilling units. Net Risked Locations – Consist of Drillable Locations and Estimated Locations. We assume 325 net risked Marcellus locations (200 pro forma net drillable Marcellus locations and 125 pro forma net estimated risked Marcellus locations). We assume 233 net risked Utica locations (192 pro forma net drillable Utica locations and 41 net estimated risked Utica locations). Unrisked Locations – Consist of Drillable Locations and Estimated Locations without applying our risking factor. We assume 450 net unrisked Marcellus locations (200 pro forma net drillable Marcellus locations and 250 pro forma net estimated unrisked Marcellus locations). We assume 304 net unrisked Utica locations (192 pro forma net drillable Utica locations and 112 net estimated unrisked Utica locations) Additional Disclosures
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