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1 www.riceenergy.com
Second Quarter 2014 Investor Presentation
August 11, 2014
2 www.riceenergy.com
COMPANY TOTAL
OHIO
PENNSYLVANIA
~127,000 net acres in Appalachia
 280 MMcf/d net June production fro...
3 www.riceenergy.com
43,978
75,834
46,700
50,77290,678
Q4 2013 Q2 2014
Marcellus Utica
126,606
De-risk production growth, ...
4 www.riceenergy.com
 Disciplined approach to increasing core acreage is transformative to our low risk, high return inve...
5 www.riceenergy.com
5.3
2.1
4.8
1.1
2.8
0
100
200
300
400
500
600
700
0% 20% 40% 60% 80% 100% 120% 140%
Net Unrisked Dril...
6 www.riceenergy.com
Pennsylvania Assets
7 www.riceenergy.com
AU2 Pad – 2 Wells
Avg 180 Day IP: 8.8 MMcf/d
Avg Lateral Ft: 5,921’
Allegheny
Washington
Greene
Rice ...
8 www.riceenergy.com
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
- 200 400 600 800 1,000 1,200 1,400 1,600 1,800
Unmatched Wel...
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__________________________
1. See slide entitled “Additional Disclosures” on detail regarding Rice’s ...
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($2.0)
–
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
–
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
$3.00...
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Rice Acreage
Deep Utica Potential in Pennsylvania
 Porosity in southeast OH extends into southwest ...
12 www.riceenergy.com
Net Unrisked Locations 560
NRI Hz Ft. Inventory 2.7mm ft.
PV-10 ($mm) $ 8.5
IRR 104 %
Undiscounted P...
13 www.riceenergy.com
Ohio Assets
14 www.riceenergy.com
__________________________
1. Data per RigData as of August 6, 2014.
Growth and Development
 The Ut...
15 www.riceenergy.com
 Very consistent and predictable well results clearly define Utica Core in the southern portion of ...
16 www.riceenergy.com
Bigfoot 9H Flowing Pressures – Why It’s a Big Deal
Wellhead pressure is the leading indicator of sus...
17 www.riceenergy.com
Belmont + Monroe Counties: The Utica Outliers
Early production results in Belmont and Monroe signifi...
18 www.riceenergy.com
 Offset operator results mirror Rice’s internal geologic model
– Core Features: Strong Point Pleasa...
19 www.riceenergy.com
55
45
28
19
28
10
6
0
10
20
30
40
50
60
70
0
200,000
400,000
600,000
1
3
5
7
9
11
13
15
17
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21
23
...
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Net Unrisked Locations 271
NRI Hz Ft. Inventory 2.1mm ft.
PV-10 ($mm) $ 13.4
IRR 70 %
Undiscounted P...
21 www.riceenergy.com
Midstream Assets
22 www.riceenergy.com
Midstream Overview
Washington
ColumbiaGas(TCO)
NationalFuelGasSupply(NFGS)
Committed to operating ou...
23 www.riceenergy.com
Gulfport (negotiating)
 Dedicated Acreage: ~17,000 gross
 AMI: ~60,000 acres
Midstream Recent Deve...
24 www.riceenergy.com
TETCO
TCO
DTIDEO
REX
ET Rover
–
200
400
600
800
1,000
1,200
7/1/14 7/1/15 7/1/16 7/1/17 7/1/18 7/1/1...
25 www.riceenergy.com
46% 39% 53% 64% 53%
54%
61%
47%
36%
47%
($0.74) ($0.86)
($0.60)
($0.46)
($0.49)
($1.00)
($0.90)
($0....
26 www.riceenergy.com
$3.88
$3.50
$2.94$0.67
$0.16 $0.13 $0.56
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
NYMEX Strip
(7/1-12/31)...
27 www.riceenergy.com
Financial Overview
28 www.riceenergy.com
Beta Acq. PF
($ in millions) 6/30/14 Adj. 6/30/14
Cash $472 ($311) $161
1st Lien Rev. Credit Fac. --...
29 www.riceenergy.com
Update to 2014 Guidance
__________________________
Note: Pro forma for ASR & Greene County acquisiti...
30 www.riceenergy.com
Commodity Hedging Summary
 We employ financial instruments (primarily swaps and
costless collars) t...
31 www.riceenergy.com
Why Invest in Rice?
100% of Leasehold in Core of Marcellus and Utica100% of Leasehold in Core of Mar...
32 www.riceenergy.com
Appendix
33 www.riceenergy.com
1
17 22
28 44 47
70
89
131 128
154
209
241
3 5 13 22 28 35
55 58
84
110
173 177
208
275
319
-
50
100...
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374
152 193
53
560
190
270
69
104%
58%
70%
119%
0%
20%
40%
60%
80%
100%
120%
140%
–
100
200
300
400
...
35 www.riceenergy.com
2Q 2014 Adjusted EBITDA Reconciliation
__________________________
Note: Adjusted EBITDAX is a supple...
36 www.riceenergy.com
Cautionary Statements
FORWARD-LOOKING STATEMENTS
This presentation and the oral statements made in c...
37 www.riceenergy.com
Determination of Identified Drilling Locations as of June 30, 2014 pro forma for ASR buy-in (closed ...
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Rice Energy Investor Presentation - August 11, 2014

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An investor presentation issued by Rice Energy to accompany their 2Q14 financial and operations update and analyst call. The slide deck is full of details of Rice's assets and operations in the Marcellus and Utica Shale region. Definitely worth your time to review!

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Transcript of "Rice Energy Investor Presentation - August 11, 2014"

  1. 1. 1 www.riceenergy.com Second Quarter 2014 Investor Presentation August 11, 2014
  2. 2. 2 www.riceenergy.com COMPANY TOTAL OHIO PENNSYLVANIA ~127,000 net acres in Appalachia  280 MMcf/d net June production from 55 wells  61 operated wells in progress  1,033 net risked locations  Average horizontal rigs for 2014: 3 ~51,000 net acres, <1% developed  1 producing Utica well (Bigfoot 9H)  10 operated Utica wells in progress  246 net risked Utica locations ~76,000 net acres, <5% developed  54 producing wells (51 Marcellus, 3 Upper Devonian)  51 operated Marcellus wells in progress  526 net risked Marcellus locations  261 net risked Upper Devonian locations __________________________ Note: Approximately 55,000 net acres in the Marcellus Shale is also prospective for the Geneseo (Upper Devonian) Shale. The Upper Devonian and the Marcellus Shale are stacked formations within the same geographic footprint. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations Rice Energy – Concentrated Core Position RICE FT & MIDSTREAM FT: ~1 Bcf/d firm capacity contracted, 70% to Gulf Coast and Midwest markets Midstream: YE2015 throughput capacity of ~ 4.5 Bcf/d
  3. 3. 3 www.riceenergy.com 43,978 75,834 46,700 50,77290,678 Q4 2013 Q2 2014 Marcellus Utica 126,606 De-risk production growth, neutralize basis volatility, maximize cash margins Substantial Growth to Low-Risk Drilling Inventory Production Growth from High Rate of Return Projects Securing Additional Access to Premium Markets Net Core Acreage 325 526 233 246558 772 Q4 2013 Q2 2014 Marcellus Utica Net Risked Locations 174 262 Q4 2013 Q2 2014 Net Producing Lateral Feet (000s) 154 241 Q4 2013 Q2 2014 Net Production (MMcf/d) IPO Current Appalachia Non-Appalachia 756,000 918,000 671,000 591,000 165,000 247,000 2016 Firm Transport Marcellus development on point + exciting initial results from the Utica 36,000 net acres added, 100% within existing areas of operations Delivering on Our Plan Since IPO Accomplishments Since IPO Increased production by ~60% since year-end 2013 - Turned online 14 Marcellus wells, avg ~8,000’ hz, 30 day avg ~ 13 MMcf/d Drilled the biggest well in the Utica - Bigfoot 9H tested at 42 MMcf/d @ 5850 psi - Producing into sales above type curve Meaningfully added to our core acreage position - Leased ~14,000 net acres + acquired 22,000 net acres (~90% PA, ~10% OH) Secured add’l firm transport to premium markets - Added 275,000 dth/d with access to Gulf Coast, Midwest and Canadian markets Invested in our midstream to grow our bottom line - Acquired Momentum Marcellus gathering system for $110MM - Constructing 1.0 bcf/d Marcellus header system with FT to Gulf Coast Basis Exposure (2015-2016) 36% 64% 2015 47% 53% 2016 (1) __________________________ 1. Includes volumes in excess of firm transportation. Non-Appalachian exposure includes TCO
  4. 4. 4 www.riceenergy.com  Disciplined approach to increasing core acreage is transformative to our low risk, high return inventory – Our asset value is not static and will continue to grow  By the end of 2014, we expect to have added ~50,000 net acres through organic leasing (~28,000) and the Greene County Acquisition (22,000) Core Acreage Growth Since 2011 Proven Ability to Grow Core Position
  5. 5. 5 www.riceenergy.com 5.3 2.1 4.8 1.1 2.8 0 100 200 300 400 500 600 700 0% 20% 40% 60% 80% 100% 120% 140% Net Unrisked Drilling Locations Single Well Pre-Tax IRR % Deep Inventory of High Returning Projects Ohio Utica Dry Ohio Utica Wet Marcellus Western Greene Marcellus Geneseo Bubble Size indicates net potential reserves, Tcf  Marcellus: 750 net unrisked drilling locations with 60-110% IRR; type curve de-risked by 50+ producing Marcellus wells  Ohio Utica: 339 net unrisked drilling locations with 70-120% IRR; first Utica well, Bigfoot 9H, tracking above budgeted EURs  Upper Devonian: 406 net unrisked drilling locations with 20-30% IRR  PA Utica: To be determined 16 Tcf of net undeveloped potential reserves – Average 86% IRR to develop 13.3 Tcf from Marcellus and Utica IRR difference driven by historical gathering fee
  6. 6. 6 www.riceenergy.com Pennsylvania Assets
  7. 7. 7 www.riceenergy.com AU2 Pad – 2 Wells Avg 180 Day IP: 8.8 MMcf/d Avg Lateral Ft: 5,921’ Allegheny Washington Greene Rice Energy AcreageRice Energy AcreageRice 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’ Brova 1H Avg 180 Day IP: 9.5 MMcf/d Lateral Ft: 3,552’ Big Daddy Pad – 2 Wells Avg 180 Day IP: 6.7 MMcf/d Avg Lateral Ft: 3,150’ Hulk Pad – 3 Wells Avg 180 Day IP: 14.5 MMcf/d Avg Lateral Ft: 9,000’ Mono 4H Avg 556 Day IP: 10.3 MMcf/d 5.7 Bcf produced in 18 months Lateral Ft: 6,233’ Whipkey 1H Avg 180 Day IP:10.5 MMcf/d Avg Lateral Ft: 6,655’ Wayne Pad – 4 Wells Avg 180 Day IP:11.1 MMcf/d Avg Lateral Ft: 6,691’ Amigos Pad – 3 Wells Avg 180 Day IP: 12.2 MMcf/d Avg Lateral Ft: 6,317’  Acreage: 75,834 net acres in the southwestern core (100% operated) – 80% held by production or does not expire until 2017+  Inventory: 787 total net risked identified drilling locations, 526 in the Marcellus and 261 in the Upper Devonian  Operations: Well results from 51 producing horizontal Marcellus wells as of June 30, 2014  51 additional Marcellus wells currently in progress Marcellus Overview _________________________ 1. Figures represent pro forma impact from Greene County Acquisition. Marcellus Well ResultsSummary (1)  Sustained prolific production rates over a 6-month period Marcellus Well Results To Date Wells Turned Avg. Lateral Flow Rates (MMcf/d) D&C Year(s) To Sales Length 0-90 0-120 0-180 ($/Ft) 2010-2011 6 3,281 5.7 5.8 5.8 2,377$ 2012 9 5,731 9.2 9.7 9.6 1,663$ 2013 22 6,286 11.2 11.2 10.9 1,469$ 1Q 2014 4 6,691 12.7 12.2 11.1 1,348$ 2Q 2014 10 8,452 12.9 NA NA 1,243$ Total 51 6,291 10.4 10.2 9.9 1,556$ * Flow rates based on wells with available history Producing Pad Pad in Progress
  8. 8. 8 www.riceenergy.com 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Unmatched Well Performance __________________________ 1. Data for Rice Energy based on actuals through 7/31/14, peer data based on Pennsylvania Department of Environmental Protection production reports through December 31, 2013. Rice’s drilling and completion techniques have yielded greater production profile per well, versus our peers Washington & Greene Counties Cumulative Production vs. Time (1) Cumulative Production (Bcfe) Days Online Average 90-Day IP, MarcellusDrilling Proficiency, Marcellus MMcf/d 5.7 9.2 11.2 12.7 12.9 2010-2011 2012 2013 1Q14 2Q14 3,281 5,731 6,286 6,691 8,452 15.8 7.6 5.8 4.5 4.5 – 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 – 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2010-2011 2012 2013 1Q14 2Q14 Avg. Lateral Ft. Avg. Hz. Drilling Days Rice Washington County Rice Greene County Rice Geneseo Peer Marcellus
  9. 9. 9 www.riceenergy.com __________________________ 1. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations. 2. Terms being finalized. Historical gathering and compression rate of $0.45/Mmbtu and $0.12/Mmbtu. We have closed on our previously announced acquisition of 22,000 net acres in the core the SW PA Marcellus Greene County Acquisition Summary Rice Pro Forma Acreage MapTransaction Profile Acreage Summary  22,000 net acres, 100% operated, average 82% NRI  ~70% acreage is either HBP or expires in 2017+ Marcellus – 22,000 net acres  ~20 MMcf/d net from 7 producing wells; 5 wells in progress  152 risked / 190 unrisked net drilling locations (1), avg ~7,000’ lateral  1,080-1,100 Btu/Scf  Reserve profile similar to Rice’s Marcellus wells in SW PA  Commence pad-drilling in first half of 2015 Utica – 14,000 net acres  Expecting 1,020-1,040 Btu/Scf  Initial test in 1H 2015 Geneseo (Upper Devonian) – 18,500 net acres  135 unrisked net drilling locations (1), avg ~7,000’ lateral  Expecting 1080-1100 Btu/Scf  Initial test in 2016 Midstream  Acreage dedicated to Access Midstream  No processing needed Key Terms/Dates  Closed on 8/1/14 Rice Acreage Western Greene County Acquisition
  10. 10. 10 www.riceenergy.com ($2.0) – $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 – 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% $3.00 $3.50 $4.00 $4.50 $5.00 IRR NPV-10 __________________________ Note: Production data through 7/21/14, data normalized to 5,900’ lateral (average lateral length of Rice’s seven producing horizontal wells in western Greene County, PA). Rice Well Performance, Western Greene Resource Potential & NAV Whipkey Pad Amigos Pad Acquisition of a De-risked, High-Return Marcellus Position Resource Risked Unrisked Net Locations 152 190 Value ($mm) Single-Well PV-10 (at $4 HHUB) $6.1 $6.1 Undeveloped Acreage Value $927 $1,159 PDP Value $75 $75 Total Value Potential $1,002 $1,234 Purchase Price $336 $336 Single Well PV-10 ($MM) and IRR 7% 26% $0.7 $2.7 $6.1 $9.6 $13.0 58% 107% 180% Trans Energy 2.0 BCFE/1000’ Chesapeake Vantage 2.2 BCF/1000’ 22,000 Acre Acquisition Rice has had considerable success from its development on trend and in close proximity to the acquired acreage. 0.0 1.0 2.0 3.0 4.0 5.0 0 100 200 300 400 500 Bcf Days Whipkey and Amigos Pads 5.0 4.0 1-Year
  11. 11. 11 www.riceenergy.com Rice Acreage Deep Utica Potential in Pennsylvania  Porosity in southeast OH extends into southwest PA – Belmont  Washington – Monroe  Greene  Thick, high pressure and high porosity Utica section in southwest PA at depths between 12,000-13,000’ TVD – Industry tests underway in SW PA from multiple operators  We plan to spud our first PA Utica well in early 2015 – To be located on our recently acquired acreage in western Greene County East EQT Preparing Range In Progress Rice (PA) Permitting West OH WV RICE: ~50k acres in central Belmont 40+ MMcf/d IP 1050-1150 BTU RICE: ~15k acres in western Greene 2015 Test 1020-1040 BTU 12,000 – 13,000’9500’7500’5000’ 6000’ County 0% 6% 12% Porosity Peer Avg 20-40 MMcfe/d 1150-1250 BTU Peer Avg 5-15 MMcfe/d IP 1250-1350 BTU MuskingumFairfield Guernsey Belmont Ohio/Marshall Washington / Greene 10,500’Depth PA Point Pleasant Core
  12. 12. 12 www.riceenergy.com Net Unrisked Locations 560 NRI Hz Ft. Inventory 2.7mm ft. PV-10 ($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 / 1000' 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 % 0 2 4 6 8 10 12 14 16 0.0 yrs 0.5 yrs 1.0 yrs 1.5 yrs 2.0 yrs 2.5 yrs 3.0 yrs MMcf/d 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. Excludes Greene County Acquisition. Includes 190 unrisked locations from Greene County acquisition. Based on historical gathering and compression fees, single well PV-10 of $6.1mm and single well IRR of 58%. 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 wells are produced on restricted choke program Hedged IRRUnhedged IRR 750 3.7mm ft
  13. 13. 13 www.riceenergy.com Ohio Assets
  14. 14. 14 www.riceenergy.com __________________________ 1. Data per RigData as of August 6, 2014. Growth and Development  The Utica play as a whole has contracted to the Southern Utica Core, which has delivered some of the highest volume shale wells in North America  Rice controls 50,772 acres concentrated in the heart of the core in Belmont County, surrounded on all sides by robust results  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 efficiency gains with extended laterals Utica Rigs Over Time (1) The Southern Utica Core has become the most active region in the Appalachian Basin 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  Rice’s production is expected to be substantially all dry gas and enables multiple take-away options November 2012 August 2014 Utica Fairway Marcellus Fairway Marcellus Core Utica Core Total Rigs: 49 Rigs in Core: 38 Belmont Rigs: 8 Utica Fairway Industry Rigs Rice Acreage Position Marcellus Fairway Marcellus Core Utica Core Total Rigs: 33 Rigs in Core: 6 Belmont Rigs: 0 Utica: The Newest Premier Shale Play
  15. 15. 15 www.riceenergy.com  Very consistent and predictable well results clearly define Utica Core in the southern portion of the play  Wells in Belmont and Monroe have routinely tested > 30 MMcf/d  Rice’s first well in Belmont, Bigfoot 9H, tested at a stabilized rate of 42 MMcf/d  Currently producing at a restricted rate of 14 MMcf/d  Rice Energy controls 50,772 net acres in the center of Belmont County.  Industry getting very strong results in WV panhandle. Pennsylvania delineation is underway from peers__________________________ Note: Initial production rates are based on operator announcements and public filings. Gulfport: Shugert 1-2H 3 BCF in 309 Days (10 MMcf/d avg.) Belmont Rice: 1 well Bigfoot 9H IP: 42 Mmcfe/d 676 Mmcfe in 49 Days (14 MMcf/d avg.) Rice: 2 wells Blue Thunder Pad Completing AR: Gary 2H 2.4 BCF in 157 Days (15 MMcf/d avg.) Rice’s acreage is surrounded by the largest producing wells in the Utica Rice: 5 wells Digger Pads Hz Drilling Industry Results Confirm our Position in the Utica Core Monroe Gulfport Irons 1-4H 1.5 BCF in 106 Days (14 MMcf/d avg.) MHR Stadler A 184 Mmcf in 8 Days (23 MMcf/d avg.) XTO Kaldor 1H 1.2 BCF in 110 Days (11 MMcf/d avg.) Rice: 3 Wells Mohawk Warrior Pad Tophole Drilling ECR Tippens 1.3 BCF in 93 Days (14 MMcf/d avg.) Gulfport: Stutzman 2.7 BCF in 259 Days (10 MMcf/d avg.) 20 – 40 Mmcfe 10-20 Mmcfe < 10 Mmcfe > 40 Mmcfe Chevron 1 Well IP: 20+ Mmcfed Planned / In Progress Noble Guernsey Harrison Marshall Wetzel Rice Acreage IP Rates Sized and Color Coded 20 – 40 Mmcfe 10-20 Mmcfe < 10 Mmcfe > 40 Mmcfe Planned / In Progress
  16. 16. 16 www.riceenergy.com Bigfoot 9H Flowing Pressures – Why It’s a Big Deal Wellhead pressure is the leading indicator of sustainability of initial flow rates. Utica pressure regime suggests our 1.5-2.0 MMcf/d initial flow rate could be sustainable for up to 14 months, approximately 1-8 months longer than our budgeted Utica type curve Flow rate decline when wellhead psi = line psi Line pressure (750-1500 psi) FlowRate,Mcf/d Budget Type Curve WellheadPressure,psi Bigfoot Flow Rate Projection 1 Year Cumulative 5.1 Bcf 3.8 Bcf 4.9 Bcf 18 Month Cumulative 7.3 Bcf Bigfoot 9H Actual Days Bigfoot 9H is in the heart of our Belmont County position and representative of the production potential from our remaining drilling locations Flat Period Cumulative 5.9 Bcf Flow rate decline when wellhead psi = line psi 4.7 Bcf 6.0 Bcf
  17. 17. 17 www.riceenergy.com Belmont + Monroe Counties: The Utica Outliers Early production results in Belmont and Monroe significantly outperforming the Utica as a whole - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 - 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 CumulativeProduction(Mcfe) Days Online Belmont Monroe Other Utica Susquehanna, PA (Marcellus)  Rice believes Belmont + Monroe could be as potent as leading Marcellus counties  Rice is set for significant growth with its 50,000 acres in the center of Belmont County Ohio __________________________ Note: Production data per Ohio Department of Natural Resources.
  18. 18. 18 www.riceenergy.com  Offset operator results mirror Rice’s internal geologic model – Core Features: Strong Point Pleasant porosity, impermeable Upper Utica cap, highly overpressured – Essentially 100% of Rice acreage is located in a concentrated area with these characteristics  Data from initial Rice-operated wells in Belmont County very encouraging:  Porosity > 14% in our target interval. Strongest in the play. • First three horizontal wells drilled had 100% of the lateral geosteered within a 4’ sweet spot  Impermeable Upper Utica cap. Important for fracture containment during completions  Severely overpressured • Pressure Gradient > 0.8 psi/ft. Calculated bottomhole pressure > 8000 psi 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 ~50,772 net acres in the heart of the high porosity Point Pleasant core in Belmont County CRAWFORD MERCERERIE BEAVER COLUMBIANA CARROLL JEFFERSON BELMONT MONROE WASHINGTON ATHENSMERCER WASHINGTON 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 High Volume Wells Predicted by Geologic Model 30-40 MMcfe/d 20-30 MMcfe/d 10-20 MMcfe/d 5-10 MMcfe/d 0-5 MMcfe/d >40 MMcfe/d
  19. 19. 19 www.riceenergy.com 55 45 28 19 28 10 6 0 10 20 30 40 50 60 70 0 200,000 400,000 600,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 Utica Learning Curve Update Systematically reducing drilling days/costs while maintaining precision wells Improved Gas Control Procedures Improved Mud Properties Improved Bit Selection Remainder of Delineation Program • Fit-for-Purpose Deep Tophole Rig (June) • More aggressive bit selection • Deep casing elimination trial • Fit-for-Purpose Horizontal Rig (June) • Reduction of discretionary science • Pad drilling (2H 2014) Initial Observations from Utica Development 1. Drilling – Utica is extremely brittle, highly charged with gas, and consistent across acreage. – Very calm geologic environment leading to 100% lateral placement in 4’ sweet spot 2. Completions – Formation is highly receptive to Rice’s aggressive frac design. – First 100 stages pumped: 100% of sand placed in the ground with no issues 3. Production – Smooth and predictable production profile. 100% uptime on first well through two months 4. Landowners + Community – Very supportive. Maintaining open communication with planning Lateral Length Well Name Lateral Targeting Proficiency Completion Proficiency # Sand pumped per stage Blue Thunder 10H: 9000’ Lateral Bigfoot 9H: 40 Stage Frac 5 wells off two adjacent pads to be completed and turned to sales together “Tandem Pads” Year End 2014 Goal: < 30 Days for 9000’ Laterals
  20. 20. 20 www.riceenergy.com Net Unrisked Locations 271 NRI Hz Ft. Inventory 2.1mm 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 / 1000' 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 Dry – Type Well Economics (1) Utica Dry – IRR Sensitivity (2) ___________________________ 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 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 Utica Single-Well Economics Net Unrisked Locations 69 NRI HzFt. Inventory 0.5mm ft. PV-10 ($mm) $ 19.6 IRR 119 % Undiscounted Payback 1.0 yrs D&C ($mm) $ 8.0 Type Curve Assumptions 120-DayIP (MMcf/d) Pre-Processed 15.2 Bcf / 1000' 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 % Bigfoot 9H production performance indicates significant upside potential to our single-well economics. We will update EURs, type curves and single-well economics in January 2015
  21. 21. 21 www.riceenergy.com Midstream Assets
  22. 22. 22 www.riceenergy.com Midstream Overview Washington ColumbiaGas(TCO) NationalFuelGasSupply(NFGS) Committed to operating our gas gathering assets to maximize transportation potential via 1 Bcf/d of firm capacity with access to premium US markets. Through YE 2014, RICE will have invested $475 million in midstream infrastructure with 4.5 Bcf/d of outlet capacity in the cores of the Marcellus and Utica shales Rockies Express  Firm Capacity: 175 Mdth/d  In-service date: Summer 2015 Texas Eastern (TETCO)  Firm Capacity: ~540 Mdth/d  In-service date: Summer 2015 OH Water System  Withdrawal Capacity: 5 MMgpd  Expected Savings: $500k/well  In-service date: Summer 2015 Dominion Transmission  Firm Capacity: ~90 Mdth/d  In-service PA Water System  Withdrawal Capacity: 5 MMgpd  Expected Savings: $500k/well  In-service date: 1H15 Columbia (TCO)  Firm Capacity: ~200 Mdth/d  In-service date: In-service Dominion East Ohio  Firm Capacity: ~30 Mdth/d  In-service Texas Eastern (TETCO)  Firm Capacity: ~540 Mdth/d  In-service date: 4Q14 ET Rover  Firm Capacity: 100 Mdth/d  In-service date: Summer 2017 Allegheny Marshall Belmont Monroe Harrison Jefferson Brooke Greene Ohio
  23. 23. 23 www.riceenergy.com Gulfport (negotiating)  Dedicated Acreage: ~17,000 gross  AMI: ~60,000 acres Midstream Recent Developments Summary of 3rd Party Opportunities We have entered into a letter of intent with Gulfport Energy to provide midstream services for a predominantly dry gas area covering approximately 65% of Gulfport’s acreage within our area of mutual interest (AMI) EQT  Dedicated Acreage: ~17,000 gross  AMI: ~60,000 acres Antero  Dedicated Acreage: ~4,000 gross  AMI: ~6,000 acres Range  Johnson Pad dedicated
  24. 24. 24 www.riceenergy.com TETCO TCO DTIDEO REX ET Rover – 200 400 600 800 1,000 1,200 7/1/14 7/1/15 7/1/16 7/1/17 7/1/18 7/1/19 7/1/20 BBtu/d Firm Transportation and Firm Sales Portfolio For production growth assurance and net realized pricing, firm capacity is creating differentiation amongst Appalachian producers. Rice Energy was early in identifying and securing its basin-leading portfolio of firm capacity.  Expect ~100% of 2015 production and substantial majority of 2016 production to be protected by FT and FS Firm Transport De-risks Production Growth __________________________ 1. Average for remaining 2014. Average FT & FS Portfolio (Bbtu/d) 2014 2015 2016 2017 2018 2019 2020 453 811 918 958 1,003 985 938 Recently Acquired ET Rover Capacity: 100,000 MMBTU/D of capacity, 15 year contract, $0.80/MMBTU demand charge, expected in- service July 2017 (1)
  25. 25. 25 www.riceenergy.com 46% 39% 53% 64% 53% 54% 61% 47% 36% 47% ($0.74) ($0.86) ($0.60) ($0.46) ($0.49) ($1.00) ($0.90) ($0.80) ($0.70) ($0.60) ($0.50) ($0.40) ($0.30) ($0.20) ($0.10) $0.00 0% 20% 40% 60% 80% 100% 2Q14 3Q14 4Q14 2015 Average 2016 Average Differential to NYMEX ($/MMbtu)Basis Exposure Non-Appalachia Appalachia Weighted Average Basis Quarterly Basis Exposure Southwest Appalachia basis exposure is significantly reduced by 4Q14 and over 60% of 2015 volumes will access attractive Gulf Coast, Midwest and TCO markets Long-Haul Firm Transport Improves Realized Pricing __________________________ 1. Non-Appalachia includes TCO, Gulf Coast, and Midwest exposure. (1) Nov. 14 - TETCO ELA Capacity online  In November 2014, we begin shipping 270,000 MMbtu/d from TETCO to East Louisiana, thereby shifting a significant amount of production to premium Gulf Coast pricing and significantly improving our overall average expected basis differential
  26. 26. 26 www.riceenergy.com $3.88 $3.50 $2.94$0.67 $0.16 $0.13 $0.56 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 NYMEX Strip (7/1-12/31) Less: Weighted Avg. Basis Impact Plus: 1,050 BTU Gas Uplift Plus: NYMEX & Basis Hedges Realized Price Less: G&T Expense Net Price $/MMBtu 30% 20% 21% 16% 13% 11% 35% 51% 0% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 M2 Dom S TCO Gulf Coast Midwest $0.56 $0.60 $0.68 $0.49 $1.23 $1.09 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 7/1/14 - 12/31/14 2015 $/MMBtu FT+FS Basis (17%) (12%) (35%) (30%) (25%) (20%) (15%) (10%) (5%) 0% 5% 2014 2015% of NYMEX TCO M2 Dom S Gulf Coast Midwest Weighted Average Rice’s firm transportation and sales contracts provides basis and pricing diversification Firm Transportation, Firm Sales and Basis (cont’d) Basis Exposure (1) (7/1 - 12/31) __________________________ 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. NYMEX and basis strips as of 7/24/14. Volume Weighted Basis Impact (1) (2) Estimated 7/1-12/31/14 Realized Price Bridge (2) 52% exposed to M2 and Dom S 37% exposed to M2 and Dom S All-In G&T Expense + Basis (assuming NYMEX strip) (2) Assuming Strip Prices (-17% to NYMEX) (7/1 - 12/31) $0.67 17%
  27. 27. 27 www.riceenergy.com Financial Overview
  28. 28. 28 www.riceenergy.com Beta Acq. PF ($ in millions) 6/30/14 Adj. 6/30/14 Cash $472 ($311) $161 1st Lien Rev. Credit Fac. -- -- -- Long Term Debt Senior Unsecured Notes 900 -- 900 Other Debt 1 -- 1 Total Debt $901 $901 Book Equity $1,190 -- $1,190 Total Capitalization $2,092 $2,092 Liquidity Borrowing Base $385 $40 $425 Less: Amount Drawn -- -- Less: Letters of Credit (6/30) (72) (72) Plus: Cash 472 ($311) 161 Liquidity $786 $515 2Q 2014 Snapshot 2Q14 Summary  Net production of 241 MMcfe/d, 84% and 15% increase over 2Q13 and 1Q14 volumes, respectively  June net production of 280 MMcfe/d  10 Marcellus wells turned to sales with an average lateral length of ~8,400 ft. that produced 132 MMcf/d gross in the month of June  Increased Pennsylvania leasehold position to 75,834 net acres, including ~22,000 completed Greene County acquisition and increased Ohio leasehold position to 50,772 net acres RICE HAS MAINTAINED OPERATIONAL EXCELLENCE AND LIQUIDITY; CONTINUES TO BUILD AND DELINEATE CORE POSITION ___________________________ 1. Beta Acquisition Adjustment for cash payment post 6/30/14 2. Management estimate. Borrowing base redetermination set for October 2014. Capitalization and Liquidity 2Q14 Summary Net Daily Production (MMcfe/d) 241 Net Daily Production (BBtu/d) 1,050 253 Henry Hub ($/MMBtu) $4.58 Less: Basis Differential (0.74) Plus: BTU Uplift 0.19 Plus: Other Revenue 0.09 Realized Pricing ($/Mcfe) - pre-hedges $4.12 Realized Pricing ($/Mcfe) - post-hedges $3.68 Operating Metrics E&P Revenue $4.12 Plus: Hedge Gain/(Loss) (0.45) Less: LOE & Taxes (0.34) Less: Gathering/Transportion (0.42) Less: Cash G&A (0.68) Plus/Less: Other Income / (Expense) 0.05 EBITDAX ($/Mcfe) $2.29 (1) (2)
  29. 29. 29 www.riceenergy.com Update to 2014 Guidance __________________________ Note: Pro forma for ASR & Greene County acquisitions. Rice has updated 2014E guidance to better reflect management’s current outlook  Total net production range has tightened due to greater visibility of pad turn-to-sales timing  Drilling and completions capital of $570 mm reflecting timing adjustments to our drilling schedule  Lease operating expense is trending lower as Marcellus shifts to “development mode”  SG&A has increased as a result staying ahead of our prolific production growth and an increased build-out of our midstream group FY2014 Income Statement & Capital Expenditure Guidance Update Updated 2014E Low High Income Statement Guidance Total Net Production (MMcfe/d) 260 295 % Dry Gas 100% Heat Content 1050 Lease Operating Expense ($/Mcfe) ($0.35) ($0.30) Gathering & Transportation ($/Mcfe) (0.55) (0.45) Production Taxes & Impact Fees ($/Mcfe) (0.03) (0.02) Cash G&A ($ mm) $65 $60 Net Wells Turned to Sales Updated 2014E Marcellus 34 Utica 5 Total 39 Capital Expenditure Guidance ($ mm) D&C $570 Midstream 265 Land 385 Total ($ mm) $1,220
  30. 30. 30 www.riceenergy.com Commodity Hedging Summary  We employ financial instruments (primarily swaps and costless collars) to mitigate commodity price risk  Assures a base level of cash flow to reinvest in growth  Typically target hedging 50% of forecasted production for up to two years out  Add incremental hedges opportunistically beyond two years  Utilize our bank group as counterparties to avoid cash collateral and margin calls __________________________ 1. Hedges as of 5/1/14. Hedge Book (1)Strategy 60-80% of 2014 Production Guidance Hedged 7/1- YE2014 2015 2016 2017 NYMEX Henry Hub Contract Summary Natural Gas Swaps Volume Hedged (Bbtu/d) 164 92 148 60 Weighted Average Swap Price ($/MMBtu) $4.12 $4.16 $4.20 $4.24 Collars Volume Hedged (Bbtu/d) 10 139 -- -- Weighted Average Floor Price ($/MMBtu) $3.00 $3.96 -- -- Weighted Average Ceiling Price ($/MMBtu) $5.80 $4.65 -- -- Deferred Puts Volume Hedged (Bbtu/d) 50 -- -- -- Put Price ($/MMBTU) $4.55 -- -- -- Put Premium ($/MMBTU) $0.45 -- -- -- Total Volume (BBtu/d) 224 231 148 60 Weighted Average Floor ($/Mmbtu) $4.06 $4.04 $4.20 $4.24 % Swap 73% 40% 100% 100% Basis Contract Summary TCO Volume (BBtu/d) 47 37 17 -- Swap Price ($/MMbtu) ($0.27) ($0.42) ($0.42) -- Dominion South Volume (BBtu/d) 8 25 21 -- Swap Price ($/MMbtu) ($0.79) ($0.79) ($0.79) --
  31. 31. 31 www.riceenergy.com Why Invest in Rice? 100% of Leasehold in Core of Marcellus and Utica100% of Leasehold in Core of Marcellus and Utica Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream Operations Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream Operations Differentiated Technical Approach Has Led to Industry Leading Well ResultsDifferentiated Technical Approach Has Led to Industry Leading Well Results Conservative Financial and Hedging Approach to Protect Downside and Lock-In Attractive Returns Conservative Financial and Hedging Approach to Protect Downside and Lock-In Attractive Returns Nimble and Incentivized Management and Technical TeamsNimble and Incentivized Management and Technical Teams Top-Tier Growth With Attractive Risk-Adjusted Return ProfileTop-Tier Growth With Attractive Risk-Adjusted Return Profile Firm Transportation Contracts De-risk Production Growth, Ensure Takeaway and Limit Appalachian Basis Exposure Firm Transportation Contracts De-risk Production Growth, Ensure Takeaway and Limit Appalachian Basis Exposure
  32. 32. 32 www.riceenergy.com Appendix
  33. 33. 33 www.riceenergy.com 1 17 22 28 44 47 70 89 131 128 154 209 241 3 5 13 22 28 35 55 58 84 110 173 177 208 275 319 - 50 100 150 200 250 300 350 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Net Daily Production Gross Daily Production 1,127 893 870 1,058 826 878 675 621 658 638 702 537 454 434 1,437 1,423 1,437 1,188 1,000 999 763 927 844 878 797 828 895 809 2,564 2,315 2,307 2,246 1,826 1,877 1,438 1,549 1,502 1,515 1,500 1,365 1,348 1,243 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Drilling Cost per Foot Completion Cost per Foot 2 17 17 23 30 45 65 80 114 150 174 224 251 342 1 3 5 5 7 8 11 15 17 23 29 33 40 44 55 - 10 20 30 40 50 60 - 50 100 150 200 250 300 350 400 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Horizontal Feet Horizontal Wells | 2013 | Established Track Record of Drilling Proficiency Producing Horizontal Feet and Wells (Gross) Average Daily Production MMcf/dFeet (‘000) Wells Average Lateral Length (2) Average PA Drilling & Completion Cost Per Lateral Foot Proven track record of growing production, reducing costs and improving drilling efficiency NA (1) _______________________ 1. No wells brought online in Q3 2011. 2. Well data based on IP date. | 2011 | | 2012 | 20142010 | 2011 | | 2012 | | 2013 | 20142010 | 2011 | | 2012 | | 2013 | 20142010 # Rigs 2 2 2 2 2 2 2 2 2 2 3 4 4 3 2 2,444 3,281 5,731 6,286 6,691 8,452 24.4 13.3 7.6 5.8 4.5 4.5 – 5 10 15 20 25 30 – 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2010 2011 2012 2013 1Q14 2Q14 DrillingDays LateralLength(feet) Avg. Lateral Ft. Avg. Hz. Drilling Days
  34. 34. 34 www.riceenergy.com 374 152 193 53 560 190 270 69 104% 58% 70% 119% 0% 20% 40% 60% 80% 100% 120% 140% – 100 200 300 400 500 600 Marcellus W Greene Utica Dry Utica Wet IRR NetLocations Risked Locations Unrisked Locations IRR  Marcellus Inventory: 12+ Years, weighted average single well return of ~92% – Type curve de-risked by historical production  Utica Inventory: 15+ Years, weighted average single well return of 78% – First Utica well, Bigfoot 9H, tracking above expectations Difference driven by historical gathering fee Deep Inventory of High Returning Projects ___________________________ Note:. Net horizontal feet calculation based on net revenue interest assuming a 18.5% average royalty interest in the Marcellus and 20.0% average royalty interest in the Utica. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations 1. Economics based on $4.00/Mmbtu and 100% WI. 2. Acquired acreage dedicated to Access Midstream Partners. Historical gathering fee of $0.45/mmbtu and historical compression fee of $0.12/mmbtu. Rice currently in negotiations with Access to determine terms of new gathering agreement. (2) W. Greene Utica Utica Marcellus Acq. Dry Wet Pre-TaxNPV10 ($MM) $8.5 $6.1 $13.4 $19.6 Pre-TaxIRR 104% 58% 70% 119% Net F&D ($/mcf) $0.84 $0.76 $0.80 $0.81 Net Risked Locations 374 152 193 53 Net Unrisked Locations 560 190 270 69 Undiscounted Unrisked Value ($MM) $4,763 $1,159 $3,617 $1,352 Unrisked NRI HZ Ft Inventory (mmft) 2.7 1.1 2.1 0.5 Type Curve Assumptoins 120-Day IP (MMcf/d) Pre-Processed 13.4 15.6 17.1 15.2 Bcf/1,000' 1.94 1.94 2.25 2.00 Average Lateral Length (Ft) 6,000 7,000 9,700 9,700 NGL Yield (Bbls/MMcf) – – – 40.0 Modeled BTU 1,050-1,100 1,090 1,080 1,200 Shrink – – – 15% Gross EUR (Bcfe) 11.6 13.6 21.8 21.1 Well Cost ($MM) $8.0 $8.4 $14.0 $14.0 Historical Gathering + Compression Fee ($/MMBTU) – $0.57 – –
  35. 35. 35 www.riceenergy.com 2Q 2014 Adjusted EBITDA Reconciliation __________________________ Note: Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income (loss) before interest expense or interest income; income taxes; write-down of abandoned leases; depreciation, depletion and amortization; amortization of deferred financing costs; equity in (income) loss of our joint ventures; derivative fair value (gain) loss, excluding net cash receipts on settled derivative instruments; non-cash compensation expense; (gain) loss from sale of interest in gas properties; (gain) loss on acquisition; (gain) loss on extinguishment of debt; write-off of deferred financing costs; and exploration expenses. Adjusted EBITDAX is not a measure of net income as determined by United States generally accepted accounting principles, or GAAP. Gives pro forma effect to (i) our initial public offering and the completion of the corporate reorganization in connection with our initial public offering and (ii) the consummation of our acquisition of the remaining 50% interest in our Marcellus joint venture from Alpha Natural Resources, Inc., each of which was completed on January 29, 2014, as if such transactions had been completed on the first day of the period presented. 1. The adjustments for the derivative fair value (gains) losses and net cash receipts on settled commodity derivative instruments have the effect of adjusting net income (loss) for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDAX on a cash basis during the period the derivatives settled. 2. Represents gain incurred on the purchase of the remaining 50% interest in our Marcellus joint venture. Three Months Ended Six Months Ended ($ in thousands) June 30, 2014 June 30, 2014 Adjusted EBITDAX reconciliation to net income (loss): Net income (loss) $(7,917) $121,538 Interest expense 15,941 22,983 Depreciation, depletion and amortization 32,552 58,059 Amortization of deferred financing costs 532 1,021 Amortization of intangible assets 340 340 Equity in loss of joint ventures -- 2,656 Derivative fair value (gain) loss (1) 11,198 31,578 Net cash receipts on settled derivative instruments (1) (9,795) (20,953) Gain on purchase of Marcellus joint venture (2) -- (203,579) Non-cash stock compensation expense 1,125 1,216 Non-cash incentive unit expense 1,474 75,276 Income tax (benefit) expense (4,593) 4,782 Loss on extinguishment of debt 3,001 3,144 Write-off of deferred financing costs 6,060 6,896 Exploration expenses 473 959 Adjusted EBITDAX $50,391 $105,916
  36. 36. 36 www.riceenergy.com 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. Certain of Rice Energy's wells are named after superheroes and monster trucks, some of which may be trademarked. Despite their size and strength, Rice Energy's wells are in no manner affiliated with such superheroes or monster trucks. Initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. In particular, production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates. 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.
  37. 37. 37 www.riceenergy.com Determination of Identified Drilling Locations as of June 30, 2014 pro forma for ASR buy-in (closed 1/29/14) and Greene County acquisition (closed 8/1/14) 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, pro forma for the ASR buy-in and the Greene County acquisition, we had 330 gross (301 net) pro forma drillable Marcellus locations and 134 gross (117 net) pro forma drillable Upper Devonian locations. With respect to our Ohio acreage, we had 636 gross (191 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. For our existing Marcellus acreage position and acreage acquired through the ASR buy-in, we assume these Marcellus locations have 6,000 foot laterals and 600 foot spacing between Marcellus wells which yields approximately 80 acre spacing. For the Greene County acquisition, we assume these Marcellus locations have 7,000 foot laterals and 600 foot spacing between Marcellus wells which yields approximately 100 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 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 233 gross (225 net) pro forma estimated risked Marcellus locations and 148 gross (144 net) pro forma estimated risked Upper Devonian locations. 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, we had 139 gross (55 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. Risked Locations – Consist of Drillable Locations and Risked Estimated Locations. We assume 563 gross (526 net) risked Marcellus locations. We assume 282 gross (261 net) risked Upper Devonian locations. We assume 775 gross (246 net) risked Utica locations. Unrisked Locations – Consist of Drillable Locations and Unrisked Estimated Locations. We assume 797 gross (750 net) unrisked Marcellus locations. We assume 430 gross (406 net) unrisked Upper Devonian locations. We assume 1,011 gross (339 net) unrisked Utica locations. Additional Disclosures
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