A subsidiary of Rice Energy Inc. has purchased all of the assets held by upstart Lola Energy LLC in a series of transactions that were finalized this month, according to deed transfers and assignments of interest filed in three northern West Virginia counties and another in southwest Pennsylvania.
Lola was formed in 2015 with a $250 million private equity commitment from Denham Capital Management LP and funds from its executive management team. CEO Jim Crockard's LinkedIn profile indicated the company "exited" its position in a "confidential sale" this month to "an undisclosed strategic buyer just ahead of breaking ground on the company's first permitted pad location" in Greene County, PA.
Crockard's profile also said the company built a nearly 20,000 acre position through leasing and mineral buying in Greene County and Monongalia County, WV. At the time Lola was formed, the company was already leasing in Greene County and evaluating other land in southwest Pennsylvania, northern West Virginia and eastern Ohio.
Rumors of the sale to Rice have swirled for weeks. An assignment and bill of sale transferring rights and interests between Lola Drilling I LLC, Lola Energy Operating Co. LLC and Rice Drilling B LLC were filed in Monongalia County on July 18. NGI's Shale Daily obtained a copy of the public record along with related filings in other counties and verified similar transactions in the region. They note a purchase and sale agreement between the parties dated May 31. In Monongalia County, for example, assets, equipment, contracts, production and permits, among other things, were listed under the assignment of interest.
Similar documents transferring assets were filed in Wetzel County, WV, last week (July 19). The same day, an assignment of interest was filed in Marion County, WV, between the parties, according to the county clerk's office. Another assignment of interest and bill of sale were filed at the end of last week between the parties in Greene County, according to an official in the register and recorder's office. Deed transfers were also filed in all of the counties.
The price Rice agreed to pay for the assets could not be determined. It's also unclear how the new assets might impact EQT Corp.'s $8 billion acquisition of Rice, which was announced in June. Representatives for Rice and Lola could not be reached to comment. If the assets are included in that deal, they would likely sweeten the pot, sources familiar with the companies said.
"It does move the needle,” said a source who did not want to be named discussing a transaction that hasn’t been formally announced. “This has been EQT's goal all along to block up core acreage and make it more contiguous. It is a sweetener for the deal. That's a lot of infill acreage."
EQT spokeswoman Natalie Cox said Rice continues to operate as a separate company until the proposed acquisition is closed. She could not provide any additional information.
Crockard formerly was EQT’s senior vice president and treasurer. Lola COO Richard Hill and Chief Commercial Officer Dave Bradley also had been EQT executives.
Rice acquired Vantage Energy Inc. subsidiaries last year. Vantage was Greene County's largest leaseholder at the time. EQT has said many of the synergies it can achieve by acquiring Rice are focused in Greene County and Washington County, PA, where the companies have significant overlap.
EQT has added more than 485,000 acres to its development portfolio since the start of 2016. The company has pursued a consolidation strategy aimed at longer laterals and more operational efficiencies. If the deal to acquire Rice were to be completed, EQT would become the nation's largest natural gas producer, according to the Natural Gas Supply Association and NGI calculations.