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Greene County Acquisition
Supplemental Information
July 7, 2014
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__________________________
1. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the...
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Investment Highlights
Pro Forma Net Marcellus Drilling Locations (1)
__________________________
1. See slide entitled “A...
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Nearby Rice Wells Illuminate Acquisition Resource Potential
Rice has 7 producing wells of its own in this area, each pro...
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Acquisition Impact on 2014 Guidance
2014 Capital Expenditures
Impact on Operating Guidance
__________________________
1....
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Determination of Identified Drilling Locations
Our gross (net) identified drilling locations are those drilling location...
7
Cautionary Statements
FORWARD-LOOKING STATEMENTS
This presentation and the oral statements made in connection therewith ...
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Supplemental Information for Rice Energy Purchase of Chesapeake's Greene County, PA Acreage

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Rice Energy presentation with information about their purchase of 22,000 Marcellus Shale acres and 15 producing Marcellus gas wells in Greene County, PA.

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Supplemental Information for Rice Energy Purchase of Chesapeake's Greene County, PA Acreage

  1. 1. 1 Greene County Acquisition Supplemental Information July 7, 2014
  2. 2. 2 __________________________ 1. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations 22,000 net acres in the core of the Marcellus Shale, complementary to our existing acreage position Acreage Summary  22,000 net acres situated in the southwest Marcellus core  100% operated, 95% working interest avg., 18% royalty burden avg.  ~70% of acreage is either HBP or expires in 2017+  Increases pro forma leasehold to 113,000 net acres, 25% increase since IPO  Additive to 2014 budgeted goal of adding 30,000 net acres Marcellus Development Potential  152 risked / 190 unrisked net drilling locations (1), ~7,000 ft lateral avg.  NRI horizontal feet: 900,000’ risked / 1,100,000’ unrisked  1080-1100 BTU gas; no processing needed  Expect reserve/production profile similar to Rice’s producing Marcellus wells in western Greene County  Planning to commence pad-drilling in second half of 2015  7 wells producing an estimated ~20 MMcf/d net; 5 wells in progress  Acreage dedicated to Access Midstream. Terms of midstream services with Rice to be negotiated. Historical gathering rate of $0.45/MMbtu, $0.12/MMbtu compression fee Key Terms and Funding Agenda  Purchase Price: ~$336mm (subject to customary purchase price adjustments)  Effective Date: February 1, 2014 / Closing Date: August 2014  Financing: We intend to fund the acquisition through a combination of cash on hand and borrowings under our revolving credit facility, along with an evaluation of the equity capital markets Western Greene County Acquisition Summary Rice Pro Forma Acreage MapTransaction Profile Rice Acreage Western Greene County Acquisition Marcellus Rigs Utica Rigs Net Acres Pennsylvania 65,978 Ohio 46,700 Total 112,678
  3. 3. 3 Investment Highlights Pro Forma Net Marcellus Drilling Locations (1) __________________________ 1. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of net unrisked and risked locations Pro Forma NRI Marcellus Horizontal Feet Rice W. Greene Acquisition  Core, Contiguous Acreage: Expands our footprint by adding 22,000 net acres adjacent to our concentrated position in western Greene County, PA. Provides additional opportunities to pursue bolt-on and infill leasing opportunities  Increases Risked Marcellus Inventory by ~50%: Adds 152 risked undeveloped locations and ~900K NRI horizontal feet to our Marcellus inventory  Adds ~7 years to drilling inventory, assuming 24 wells per year with 1 rig with an average lateral of 7,000 feet Feet in millions 47% increase 42% increase 56% increase 50% increase
  4. 4. 4 Nearby Rice Wells Illuminate Acquisition Resource Potential Rice has 7 producing wells of its own in this area, each producing or is trending to produce 3.0-4.0 Bcf in its first 12 months(1); excellent analog for the acquired acreage 7 wells, average 5,900’ lateral Amigos Pad: 6 wells, 1070 Btu, avg 5,800’ lateral - Average of 10.1 MMcf/d over 331 days Whipkey Pad: 1 well, 1090 Btu, 6,655’ lateral - 9.2 MM/d over 475 days Amigos Pad Whipkey Pad Cumulative Production, Bcf (1) Rice-operated wells in western Greene County __________________________ 1. Production data through 5/31/14, data normalized to 5,900’ lateral (average lateral length of Rice’s seven producing horizontal wells in western Greene County, PA). Acquired Marcellus Resource Potential, Tcf Adds ~2 Tcf potential net reserves Days Online Bcf Rice Acreage Western Greene County Acquisition Marcellus Rigs Resource Risked Unrisked Net Locations 152 190 Average Lateral 7,000 7,000 Royalty Interest 18.0% 18.0% NRI Horizontal Feet (MM) 0.9 1.1 Bcf / 1,000 Ft. 1.94 1.94 Net Resource Potential (Tcf) 1.7 2.1
  5. 5. 5 Acquisition Impact on 2014 Guidance 2014 Capital Expenditures Impact on Operating Guidance __________________________ 1. Excludes acquisition capital expenditures of $300 million for ASR buy-in. 2. $110 million for Momentum acquisition. 3. Midpoint of published guidance as of 3/13/14. 4. Reflects 8/1/14 closing date. $ millions Original W. Greene Acquisition Pro Forma Drilling $ 580 $ 15 $ 595 Midstream 265 - 265 Leasehold 385 - 385 Total Capex Plus: Acquisitions(1) $ 1,230 110 $ 15 336 $ 1,245 446 Total Capex + Acquisitions $ 1,340 $ 351 $ 1,691 (2) $ millions Midpoint of 2014 Published Guidance(3) W. Greene Acquisition(4) Pro Forma Total Net Production (MMcfe/d) % Dry Gas Heat Content (Btu/Scf) LOE ($/mcfe) G&T and Compression ($/mcfe) Production Taxes & Impact Fees ($/mcfe) 285 100% 1,050 $ 0.38 $ 0.50 $ 0.03 7 100% 1,090 $ 0.38 $ 0.70 $ 0.03 292 100% 1,051 $ 0.38 $ 0.50 $ 0.03 22,000 net acre acquisition is in addition to Rice’s plan to add 30,000 net acres organically in 2014
  6. 6. 6 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, pro forma for the ASR buy-in and the Western Greene County acquisition, we had 344 gross (314 net) pro forma drillable Marcellus locations and 134 gross (117 net) pro forma drillable Upper Devonian locations as of March 31, 2014. With respect to our Ohio acreage, as of March 31, 2014, 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. 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 Western 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 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 165 gross (163 net) pro forma estimated risked Marcellus locations and 77 gross (77 net) pro forma estimated risked Upper Devonian locations as of March 31, 2014. 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 March 31, 2014, 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 477 net risked Marcellus locations (314 pro forma net drillable Marcellus locations and 163 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 640 net unrisked Marcellus locations (314 pro forma net drillable Marcellus locations and 326 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
  7. 7. 7 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.

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