Appalachian pure-play Rice Energy Inc. announced record production of 1.440 Bcfe/d in the third quarter in what could be its last earnings report if EQT Corp.’s $8 billion acquisition of the company is approved by shareholders at special meetings on Thursday.
Rice Midstream Holdings LLC, which operates the company’s midstream assets in Ohio, reported gathering throughput of 1.438 million Dth/d for the quarter, up 22% from 2Q2017. Rice Midstream Partners LP, which owns and operates the company’s midstream assets in Pennsylvania, also reported a 9% year/year increase in throughput to 1.483 million Dth/d. EQT would acquire the company’s midstream assets as well.
Rice went public in 2014. The company did not host an earnings conference call to discuss results, given the pending merger. But in a nod to the company’s young management team and the broader workforce that helped build its dominant 252,000 net acre position in both states, CEO Daniel J. Rice said the momentum built by its “shalennial team” would continue and help contribute “meaningfully” to EQT’s future growth.
The shareholder resistance that snowballed since EQT announced the buyout in June appears to have slowed in the days leading up to the vote. Hedge fund Jana Partners LLC, which owns nearly 6% of EQT’s shares and wanted the merger scrapped in favor of separating the midstream and upstream businesses, announced Friday that it would withdraw proxy materials filed in opposition to the acquisition. Another hedge fund, D.E. Shaw & Co. LP, which owns about 4% of EQT’s shares, also recently wrote to management to say its funds would vote for the merger.
Meanwhile, the proxy advisory firms Institutional Shareholder Services Inc., Glass, Lewis & Co. and the Egan-Jones Ratings Company have all recommended that EQT Corp. shareholders vote to approve the $8 billion deal.
Rice said it has completed the sale of 36,000 net acres in the Barnett Shale that were acquired last year in a broader deal to buy subsidiaries of Vantage Energy Inc. The sale of those assets closed in the third quarter for $175 million.
Third quarter production was up from 747 MMcfe/d in the year-ago period and 1.354 Bcfe in 2Q2017. The company turned to sales three Marcellus Shale wells and five Utica Shale wells during the quarter.
Third quarter revenue was up to $365.3 million from $198.9 million in the year-ago period. Rice reported a net loss of $107.1 million (minus 49 cents/share), compared to net income of $91 million (42 cents) in 3Q2016.