Rice Energy has agreed to acquire Vantage Energy for approximately $2.7bn, including debt, in a bid to create one of the premier natural gas companies in the US.
Vantage’s holdings include approximately 85,000 net core Marcellus acres in Greene County, Pennsylvania with rights to the deeper Utica Shale on approximately 52,000 net acres as well as 37,000 net acres in the Barnett Shale.
Rice Energy said that the deal represents its largest core dry gas Marcellus acquisition till date.
Rice Energy CEO Daniel Rice IV said: "This acquisition adheres to our proven strategy of pursuing core shale gas acreage, leveraging our industry-leading technical shale team to deliver best-in-class well results and capturing a greater share of the value chain through our premier midstream services business.
“Our transaction financings are meant to strengthen Rice Energy's balance sheet even further, including positioning us to capture an additional 20,000 – 40,000 acres of leasehold adjacent to our existing position.”
Meanwhile, Rice Energy said it will divest its Vantage’s midstream assets to Rice Midstream Partners for $600m which include 30 miles of dry gas gathering and compression assets.
Vantage Energy CEO Roger Biemans said: "Vantage, together with its three sponsors – Quantum, Riverstone, and Lime Rock – has assembled one of the largest and most attractive core dry gas positions in the Marcellus Shale.”
With the deal, Rice Energy will control approximately 231,000 net acres in the Marcellus and Ohio Utica cores.
Planned to be completed in the fourth quarter of 2016, the deals are subject to customary closing conditions.