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1 www.riceenergy.com
Investor PresentationJanuary 2015
2 www.riceenergy.com
Rice Energy Strategy1. Focus on long-term value creation
– Invest in 100% core assets with low break-even returns
– Operational excellence broadens the opportunity set for value creation
• Technical Differentiation Differentiated Results Value Differentiation
2. Transform Uncertainties into Assets
– Environmental, Health and Safety – Safety and environmental stewardship is the cornerstone of operational excellence
– Firm Transportation – Assurance of flow today and growth tomorrow to advantaged end markets
– Hedging – Systematic approach to protecting cash flow and liquidity for the next 24 months
3. Maintain a Culture of Learning
– Maintain an entrepreneurial workplace that emphasizes empowerment and continuous improvement
– Incorporating learnings from ourselves and industry to maximize our results with fewest dollars spent
3 www.riceenergy.com
Solid Foundation for Economic Growth
High QualityAssets
Best in Class Execution
Firm Transportation, Liquidity and Hedges
RICE was designed to weather challenging pricing environment
Midstream system provides custom-tailored solution for Rice’s production growth and realization of gathering economics
Reached 200, 300, 400 & 500 MMcf/d of gross operated Marcellus production with fewer wells than any other operator in Pennsylvania
Firm transportation portfolio mitigates basis exposure– ~65% of 2015 production to be delivered to non-Appalachian markets
136,500 net acres situated in the core of the Marcellus and Utica– Over 800 net drilling locations generate 10% IRR at $2.05-3.05/MMBtu
First 3 Utica wells, turned online in 2014, each on track to produce ~5 Bcfe in first year
Marcellus HZ drilling times in Q3’14 averaged 4.1 days per well w/ 8163’ lateral avg
~$475MM MLP IPO eliminates capital markets dependence in 2015
Flexible, low-cost debt mitigates balance sheet risk
Substantial majority of 2015 production hedged at ~$4/MMBtu NYMEX
288 MMcfe/d from 63 net producing wells in September 2014
4 www.riceenergy.com
Concentrated, Core AssetsCORE ASSETS
Gathering PipelineGathering Pipeline to be Constructed
RICE OHIO Gathering PipelineRICE OHIO Gathering Pipeline to be ConstructedRICE Acreage
Legend
Utica Fairway
Marcellus FairwayPA
OH
WV
Monroe
Harrison Jefferson
Brooke
Marshall
Greene
Washington
Ohio
Belmont
BeaverHancock
Fayette
Monongalia
Wetzel
Utica Core
Marcellus Core
COMPANY TOTAL
UTICA (OH)
MARCELLUS (PA)
Highly concentrated position of ~136,500 net acres in the cores of the lowest gas breakeven shale plays in the U.S. ~1,100 net undeveloped locations 288 MMcfe/d net Sept. production from 63 net wells Breakeven NYMEX PV-10 of $2.85-$2.90 / MMBTU
~53,800 net acres, <1% developed 333 net undeveloped Utica locations 3 gross (2 net) producing operated Utica wells
RICE FT & MIDSTREAM
~82,700 net acres, <5% developed 490 net undeveloped Marcellus locations 271 net undeveloped Upper Devonian locations Early but promising Utica activity 81 net producing wells (78 Marcellus, 3 Upper Devonian)
FT: 1.3 MMDth/d of firm capacity: 60% to Gulf Coast and Midwest markets by Q1’15 80% by Q4’17RMP Midstream by YE2015: 4.5 MMDth/d gas gathering capacity RICE Midstream by YE2015: 2.5 MMDth/d gas gathering capacity and 25.7 MMgpd of water distribution
__________________________(1) Net undeveloped locations as of 9/30/14. 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
acreage and footprint. See slide entitled “Additional Disclosures” on detail regarding Rice’s methodology for the calculation of locations.(2) Conversion of Dth to Mcf assumes 1,050 Btu factor
5 www.riceenergy.com
Deep Inventory of High Returning Projects
Inventory and Returns SummaryBreakevens between $2.05-$3.05/MMBtu = profitable returns throughout the commodity price cycle
Net Locations 351 139 283 50
NYMEX PV-10 Breakeven ($/MMBtu) (1) $2.60 $3.05 $2.35 $2.05__________________________Note: See appendix for summary of assumptions used to generate single well IRRs.1. See appendix for a detailed explanation of adjusted midstream fees. Marcellus 750’ economics assume E&P is burdened by 50% of the gathering and compression fee (RICE owns a 50% LP interest in RMP and owns 100% of the IDRs) . W. Greene economics assume E&P is burdened by 100% of the gathering and compression fee (RICE acquired W. Greene assets which were previously dedicated to a third party).Utica Dry 750’ economics assume E&P is not burdened by gathering and compression fee (RICE owns 100% of RICE’s OH midstream assets). Utica Wet 750’ economics assume E&P is burdened by 100% of the gathering, compression and processing fees (RICE is currently in negotiations to dedicate its wet gas Utica acreage to a third party).
NYMEX
7%
24%
49%
81%
121%
171%
8%
27%
53%
88%
132%
13%
32%
56%
87%
124%
168%
20%
36% 55% 78%
106%
138%
–
25%
50%
75%
100%
125%
150%
175%
200%
$2.50 $3.00 $3.50 $4.00 $4.50 $5.00
Marcellus 750' W. Greene Utica Dry 750' Utica Wet 750'
IRR
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Efficient Production Growth Demonstrates Production Potential
__________________________1. Horizontal Marcellus wells only. Data for RICE based on actuals through 11/30/2014, peer data based on Pennsylvania Department of Environmental Protection production reports through June 30, 2014. RICE production excludes acquired CHK wells.
MMcf/d Production versus Wells - Top 10 Marcellus Producers in Pennsylvania(1)
• Our peer-leading production growth is driven by a focus on well quality, not quantity• RICE reached 500 MMcfe/d of gross operated Marcellus production with fewer wells than every other operator(1) in Pennsylvania• Chart below demonstrates our ability to rapidly grow production with a clear path to 1 Bcf/d+ and beyond
Producing Well Count
Peers: APC, CHIEF, CHK, COG, CVX, EQT, NFG, RRC, SWN, TLM
SW PA Operators
NE PA Operators
72 Operated Marcellus Wells
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Average FT & FS Portfolio (Bbtu/d)2015 2016 2017 2018 2019 2020
PA Only 275 207 207 207 189 142 OH Only 126 182 225 275 275 275 Flexible 433 531 579 841 841 841 Total 834 920 1,011 1,323 1,305 1,253
TETCO
TCODTIDEO
REX
ET Rover
–
200
400
600
800
1,000
1,200
1,400
7/1/14 10/1/14 1/1/15 4/1/15 7/1/15 10/1/15 1/1/16 4/1/16 7/1/16 10/1/16 1/1/17 4/1/17 7/1/17 10/1/17 1/1/18 4/1/18 7/1/18 10/1/18 1/1/19 4/1/19 7/1/19 10/1/19 1/1/20 4/1/20 7/1/20 10/1/20
BBtu/d
Firm Transportation and Firm Sales Portfolio
RICE was early in identifying and securing its basin-leading portfolio of firm capacity Firm capacity covers ~100% of 2015 and a significant portion of RICE’s volumes in 2016-2018
Firm Transport De-Risks Production Growth
Flexible Capacity: 100% of RICE’s TETCO capacity (>50% of RICE’s total firm
capacity) can be nominated from any of RICE’s TETCO interconnects in PA or OH
(PA or OH)
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Successful MLP IPO of Rice Midstream Partners LPSYSTEM MAP – PA GATHERING AND COMPRESSION
Greene
Washington
Legend
RMP Gathering Pipeline to be Constructed
RMP Compressor StationRMP Compressor Station to be Constructed
Long-Haul PipelineDelivery MeterPlanned Delivery Meter
RICE AcreageDedicated to RMP
RMP Gathering Pipeline
RICE AcreageDedicated to 3rd Party
PA MIDSTREAM STATS
Mileage (in miles)
Gathering Capacity(MMDth/d)
YE14 YE15 YE14 YE15
83 111 3.2 4.1
OVERVIEW
SOURCES AND USES($ in millions)Sources UsesIPO Offering $474 Distribution to RICE $414
Fees and Expenses 35Cash to RMP B/S 25
Total Sources $474 Total Uses $474
RICE closed a $475MM IPO of its newly formed MLP, Rice Midstream Partners LP (NYSE:RMP) on 12/22/14
– 28.75MM common units priced at $16.50/unit – $0.75 MQD annualized, 4.5% yield
RMP investment highlights include:– Premier E&P sponsor with strong track record of
execution– 3rd party volumes provide diversification and growth– Concentrated dedication results in minimal organic RMP
capex to meaningfully increase distributions– Organic and drop-down opportunities result in top-tier
growth Allows RICE to illuminate midstream asset value while
maintaining operational control RICE retained its OH gathering and compression and PA & OH
water systems– Retained assets attractive drop-down candidate for RMP
(RMP retains a ROFO)
RMP IPO illuminates value of midstream system and premier sponsorship highlights growth opportunities
9 www.riceenergy.com
Rice Midstream Holdings LLCMidstream
OH G&C and PA & OH water
Rice Midstream Partners LPNYSE: RMP
MidstreamPennsylvania G&C
Rice Energy Inc.NYSE: RICE
Upstream D&C and Leasehold
Public Unitholders
%50 LP interest
100%
100% IDRs& 50% LP
__________________________Note: D&C – drilling and completion, G&C – gathering and compression.
RICE Upstream, Midstream and RMP revolvers eliminate the need to access capital markets in 2015
Pre-MLP, Rice had one revolver ($550MM) to fund upstream and midstream activities
Post MLP, Rice has three revolvers:
1) RICE Upstream - $550MM
2) RICE Midstream - $300MM
3) RMP - $450MM
Rice’s access to low-cost borrowing capacity increased from $550MM to $1.3B
Allows Rice to allocate capital to fund upstream and midstream development from three distinct capital sources
OVERVIEW
RICE significantly increased liquidity through MLP and two new midstream facilities to self-fund future development
ORG STRUCTURE AND LIQUIDITY12/31/2014 UnauditedRICE Upstream Revolver ($ MM)Borrowing Base $550Drawn –Letters of Credit (67)
Available BB $483Cash 229
Liquidity $712
RICE Holdco Midstream RevolverRevolver Size $300Drawn –
Available Revolver 300Cash –
Liquidity $300
RMP RevolverRevolver Size $450Drawn –
Available Revolver 450Cash 25
Liquidity $475
New Midstream Revolvers Enhance Liquidity
10 www.riceenergy.com
Pennsylvania Assets
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Strong Execution Drives Consistent ResultsHighlights
Proven, De-Risked Asset: RICE has turned 78 Marcellus (3 Upper Devonian) wells into sales through year-end 2014
Premier SW PA Marcellus operator: RICE has drilled and completed the top 3, as well as 7 of the top 10 wells in terms of cumulative production in Washington County
The industry has drilled ~1,000 wells in Washington and Greene counties
Visibility on Growth: ~95% of RICE operated wells coming online in 2015 are in various stages of development today
__________________________1. Wells in Progress excludes wells in the Permitting/Constructing Category
Wells Turned Avg. Lateral Flow Rates (MMcf/d) D&CPeriod To Sales Length (Ft) 0-90 91-180 181-360 ($/Ft)2010-2011 6 3,281 5.7 6.0 4.4 2,377$ 2012 9 5,731 9.2 10.0 6.8 1,663$ 2013 22 6,286 11.2 10.6 8.3 1,476$ Q1 2014 4 6,691 12.7 9.4 NA 1,349$ Q2 2014 10 8,452 12.9 NA NA 1,254$ Q3 2014 5 8,163 NA NA NA 1,247$
Total 56 6,458 10.6 9.7 6.9 1,533$ * Flow Rates based on wells with available history
Marcellus Well Results To Date
Greene
Iron Man Southwest Pad – 2 WellsAvg. Lateral Ft: 7,500’
Jacobs North Pad – 6 WellsAvg. Lateral Ft: 4,400’
Big Daddy Shaw Pad – 5 WellsAvg. Lateral Ft: 7,900’
Mad Dog North Pad- 5 WellsAvg. Lateral Ft: 9,700’
Behm Pad – 3 WellsAvg. Lateral Ft: 7,500’
Pollock North 1 Pad – 4 WellsAvg. Lateral Ft: 3,800’
Zorro South Pad – 5 WellsAvg. Lateral Ft: 9,300’
PLHC North Pad – 9 WellsAvg. Lateral Ft: 7,300’
Wolverine Pad – 4 WellsAvg. Lateral Ft: 8,000’
Shotski – 1 WellAvg. Lateral Ft: 4,000’
Washington
Rice Energy Acreage
CompletingDrillingPermitting/Constructing
In Sales
Swagler Pad – 3 WellsAvg. Lateral Ft: 6,500’
Captain Jack– 6 WellsAvg. Lateral Ft: 7,500’
Waterboy – 4 WellsAvg. Lateral Ft: 9,000’
Briggs Pad – 1 WellAvg. Lateral Ft: 6,400’
Mama Bear Pad – 5 WellsAvg. Lateral Ft: 6,000’
12 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 2015
– To be located on our recently acquired acreage in western Greene County
East
EQTPreparing
RangeIn Progress
Rice (PA)Permitting
West
OH WV
RICE: ~50k acresin central Belmont
40+ MMcfe/d IP1050-1150 BTU
RICE: ~15k acresin western Greene
2015 Test1020-1040 BTU
12,000 – 13,000’9500’7500’5000’ 6000’County
0%
6%
12%Porosity
Peer Avg20-40 MMcfe/d1150-1250 BTU
Peer Avg5-15 MMcfe/d IP1250-1350 BTU
MuskingumFairfield Guernsey Belmont Ohio/Marshall Washington / Greene10,500’Depth
PA
Point Pleasant Core
RRC Test: 59 MMcfe/d
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–
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
– 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
750' Avg. Historical Production 750 Type Well
Marcellus Single Well Economics
Marcellus – IRR Sensitivity
NYMEX
750’ Type Well Versus Historical Production (Normalized for 7,000’ Lateral)
Years Online
Cumulative Production1 year 3.8 Bcf2 years 5.6 Bcf5 years 8.2 Bcf10 years 10.3 BcfEUR 13.9 Bcf
Restricted Rate
MMcf/
d
__________________________Note: See appendix for summary of assumptions used to generate single well IRRs1. See appendix for a detailed explanation of adjusted midstream fees. Marcellus 750’ economics assume E&P is burdened by 50% of the gathering and compression fee (RICE owns a 50% LP interest in RMP and owns 100% of the IDRs) . W. Greene economics assume E&P is burdened by 100% of the gathering and compression fee (RICE acquired W. Greene assets which were previously dedicated to a third party).
IRR
Net Locations 351 139
NYMEX PV-10 Breakeven ($/MMBtu) (1) $2.60 $3.05
7% 24%
49% 81%
121%
171%
8% 27%
53% 88%
132%
–
50%
100%
150%
200%
$2.50 $3.00 $3.50 $4.00 $4.50 $5.00
Marcellus 750' W. Greene
14 www.riceenergy.com
Ohio Assets
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Concentrated Core Position: 53,767 net acres concentrated in the heart of Belmont County
Strategic JV with Proven Operator: RICE + GPOR complementary acreage positions provide substantial efficiency gains
Rice operates ~27,000 net acres and Goshen and Smith townships with 69% average operated working interest (1)
GPOR operates ~23,000 net acres in Washington and Wayne townships with 43% average RICE non-operated working interest (1)
Early Results Exceeding Expectations: RICE has turned 3 horizontal Utica wells into sales (Bigfoot and Blue Thunder pads) which are on track to be some of the best performing dry-gas Utica wells in the play. Flow rate and pressure declines are superior to RICE’s Marcellus results
Dry-Gas Core De-Risked by Industry: 23 rigs running in Belmont and Monroe counties (“dry-gas” core) which represents 44% of the total rigs running in the Utica (2)
Visibility on Growth: All 2015 operated Utica wells currently in progress and concentrated within 5 mile radius in central Belmont County
Utica: Dry-Gas Core Established, Significant Growth AheadUtica Development MapOperational Highlights
Belmont
Gold Digger– 2 WellsAvg. Lat. Length: 9,000’
MonroeNoble
Guernsey
Harrison
Marshall
Wetzel
Son Uva Digger– 3 WellsAvg. Lat. Length: 9,000’
Mohawk Warrior– 3 WellsAvg. Lat. Length: 12,000’
Blue Thunder – 2 WellsAvg. Lat Length: 9,000’Status: In sales @ 16 MMcfe/d held flat since 9/16/14
Bigfoot 9H – 1 WellLat. Length: 7,000’Status: In sales @ 14 MMcfe/d held flat since 6/20/14
Thunderstruck– 5 WellsAvg. Lat. Length: 9,400’
Dragons Breath– 4 WellsAvg. Lat. Length: 9,700’
= 20+ Mmcfe/d IP
RICE Acreage
Drilling
Permitting/Constructing
Completions
RICE PA Utica Test (Permitting) In Sales
RMP has a right of first offer on all of RICE’s interests in its Utica gas gathering system__________________________
1. Assumes RICE + GPOR 90% working interest. 2. As of November 30, 2014.
Madusa– 3 WellsAvg. Lat. Length: 9,400’
Spitfire – 5 WellsAvg. Lat. Length: 9,000’
Big Dawg – 4 WellsAvg. Lat. Length: 9,000’
Iron Warrior– 5 WellsAvg. Lat. Length: 8,500
Thrasher– 5 WellsAvg. Lat. Length: 9,000Bounty Hunter– 4 Wells
Avg. Lat. Length: 9,000
Krazy Train– 2 WellsAvg. Lat. Length: 10,000’
Razin Kane– 3 WellsAvg. Lat. Length: 8,500’
16 www.riceenergy.com
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0 30 60 90 120 150 180 210 240 270 300 330 360 390 420 450 480 510 540
Utica Production and Pressures Update
Line pressure (750-1500 psi)
Flow
Rat
e, Mc
f/dW
ellhe
ad P
ress
ure,
psi
Bigfoot Flow Rate Projection
1 YearCumulative
5.1 Bcf
18 MonthCumulative
7.3 Bcf
Days
Flat Period Cumulative
6.1 Bcf
Flow rate decline whenwellhead psi = line psi
4.9 Bcf
6.4 Bcf
Blue Thunder 10H/12H – 9,000’ lateralsBigfoot 9H – 7,000’ lateral
• Bigfoot 9H (7,000’ lateral) continues to produce steadily 14 MMcf/d @ 11 psi/d FCP decline.• Blue Thunder 10H and 12H (9,000’ laterals) were turned to sales in September and have stabilized at 16 MMcfd/d @ 13 psi/d
FCP decline
__________________________Note: Data as of November 30, 2014.
17 www.riceenergy.com
–
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
– 1.0 2.0 3.0 4.0
Utica Type Well Utica Avg. Historical Production
Utica Single Well Economics
IRR Sensitivity
NYMEX
IRR
750’ Utica DRY Type Well Versus Historical Production (Normalized for 8,000’ Lateral)
Cumulative Production1 year 5.2 Bcf2 years 7.8 Bcf5 years 11.3 Bcf10 years 14.2 BcfEUR 20.0 Bcf
MMcf/
d
Restricted Rate
Years
__________________________Note: See appendix for summary of assumptions used to generate single well IRRs. 1. See appendix for a detailed explanation of adjusted midstream fees Utica Dry 750’ economics assume E&P is not burdened by gathering and compression fee (RICE owns 100% of RICE’s OH midstream assets). Utica Wet 750’ economics assume E&P is burdened by 100% of the gathering and compression fees (RICE is currently in negotiations to dedicate its wet gas Utica acreage to a third party). Note: Utica Wet economics assume RICE pays a gathering and compression fee consistent with the fee RICE pays RICE OH midstream for gathering and compression. RICE is currently negotiating an agreement with a third party which may change single well economics.
13% 32%
56% 87%
124% 168%
20% 36%
55% 78%
106% 138%
–
50%
100%
150%
200%
$2.50 $3.00 $3.50 $4.00 $4.50 $5.00Utica Dry 750' Utica Wet 750'
Net Locations 283 50
NYMEX PV-10 Breakeven ($/MMBtu) (1) $2.35 $2.05
18 www.riceenergy.com
Midstream Assets
19 www.riceenergy.com
Rice Midstream Partners LP (“RMP”)
GATHERING SYSTEM INFORMATION
System
9/30/14 Dedicated
GrossAcreage
Nov14 Throughput
(MDth/d)Midstream Fees
($/Dth) (1)
RICE Operated (Washington) 47,000 305 Gathering: $0.30
Compression:$0.07
3rd Party (Washington) 21,000 39 Gathering(2): $0.43
Compression(3): $0.07
RICE Operated (Greene) 16,000 166 Gathering: $0.30
Compression: $0.07
Total 84,000 510
Marcellus Gathering and Compression Concentrated high pressure natural gas gathering and
compression assets in the Marcellus Shale Substantially all of RICE’s drilling locations within
the RMP dedication are within 5 miles of the current PA gathering system
Multiple long-haul takeaway options also limits RMP capex spend to deliver volumes to market
Gathering throughput driven by SW PA technical leaders ~85% of 2015E estimated throughput from RICE
operated volumes, ~15% from 3rd party, primarily EQT
RMP will begin installing compression for RICE operated wells in the second half of 2015 that is expected to generate revenues starting in 2Q 2016
Adding incremental compression capacity for third party volumes starting in 1H2015
__________________________1. Fees will be annually escalated based upon changes in the Consumer Price Index. Compression fees are derived on a per stage basis 2. Certain of RMP’s third-party contracts provide for an increase in the gathering fee received by RMP upon completion of construction of an 18-mile, 30 inch pipeline connecting RMP’s gathering system to TETCO (completed November 2014)3. In certain of RMP’s 3rd party agreements, the per stage fees charged for compression varies depending on line pressure as opposed to being a flat fee per stage. Accordingly, the 3rd party compression fee is shown on a wtd. avg. based on historical throughput.
SYSTEM MAP
Greene
Washington
Legend
RMP Gathering Pipeline to be Constructed
RMP Compressor StationRMP Compressor Station to be Constructed
Long-Haul PipelineDelivery MeterPlanned Delivery Meter
RICE AcreageDedicated to RMP
RMP Gathering Pipeline
RICE AcreageDedicated to 3rd Party
PA MIDSTREAM STATS
Mileage (in miles)
Gathering Capacity(MMDth/d)
YE14 YE15 YE14 YE15
83 111 3.2 4.1
20 www.riceenergy.com
Midstream System Statistics
__________________________1. Fees will be annually escalated based upon changes in the Consumer Price Index. Compression fees are derived on a per stage basis 2. Assumes that gathering and compression fees for OH services are equivalent to those to be paid by RICE to RMP for gathering and compression for Pennsylvania assets. The gathering and compression fees for OH services are subject to negotiation and
final agreement and may ultimately be changed.3. Certain of RMP’s third-party contracts provide for an increase in the gathering fee we will receive upon completion of construction of an 18-mile, 30 inch pipeline connecting its gathering system to TETCO (completed November 2014)4. Certain of RMP’s 3rd party agreements, the per stage fees charged for compression varies depending on line pressure as opposed to being a flat fee per stage. Accordingly, the 3rd party compression fee is shown on a wtd avg based on historical throughput.
Marcellus (PA) Utica (OH)
Gathering and Compression Statistics Gathering and Compression StatisticsYE14 YE15 YE14 YE15
Gathering and Compression StatisticsGas Gathering Pipeline Mileage (miles) 83 111 Gas Gathering Pipeline Mileage (miles) 21 50
Design Gathering Capacity (MMDth/d) 3.2 4.1 Design Gathering Capacity (MMDth/d) 0.5 2.6
Acreage Dedications Acreage DedicationsRICE 63,000 RICE 36,8543rd Party 21,000 3rd Party 19,604
Total Acreage Dedications 84,000 Total Acreage Dedications 56,458
Midstream Fees Paid by RICE to RMP ($/dth) (1) Midstream Fees Paid by RICE to RICE OH ($/dth) (1) (2)
Gathering $0.30 Gathering $0.30Compression (per stage of compression) $0.07 Compression (per stage of compression) $0.07
3rd Party Midstream Fees ($/dth) 3rd Party Midstream Fees ($/dth)Gathering (3) $0.43 Gathering undisclosedCompression (4) $0.07 Compression undisclosed
Water Distribution System Statistics Water Distribution System StatisticsYE15 YE15
Water Distribution System StatisticsConnected Water Sources (MMGPD) 9.2 Connected Water Sources (MMGPD) 16.5
RMP Assets at IPO
21 www.riceenergy.com
Diverse Market Exposure
WashingtonColumbia Gas (TCO)
National Fuel Gas Supply (NFGS)
FT portfolio includes 1.3 MMDth/d (1.2 Bcf/d) of firm capacity to premium US markets, including recently added 320 MDth/d on TETCO’s Access South project with firm path to the Gulf Coast and estimated in-service date of November 2017(1).
Rockies Express
Firm Capacity: 175 MDth/d In-service date: Summer 2015 Markets: Gulf Coast, Midwest
OH Water System
Direct-Connect Capacity: 16.5 MMGPD Expected Savings: $500k/well In-service date: YE2015
Dominion Transmission
Firm Capacity: ~90 MDth/d In-service date: Online
PA Water System
Direct-Connect Capacity: 8.9MMGPD
Expected Savings: $500k/well In-service date: YE2015
Columbia (TCO)
Firm Capacity: ~200 MDth/d In-service date: Online Westside Expansion: 50 MDth/d In-service date: November 2014
Dominion East Ohio
Firm Capacity: ~30 MDth/d In-service date: Online
ET Rover
Firm Capacity: 100 MDth/d In-service date: Summer 2017 Market: Dawn, ON
Allegheny
Marshall
Belmont
Monroe
Harrison
Jefferson
Brooke
Greene
Ohio
PA Gas Gathering System
Throughput Capacity: 4.1 MMDth/d In-service date: Online
OH Gas Gathering System
Throughput Capacity: 2.6 MMDth/d In-service date: YE2015
Texas Eastern (TETCO)
Team South Firm Capacity: 270 MDth/d In-service date: September 2014
Union Town to Gas City Firm Capacity: 86.5 MDth/d In-service date: November 2015
Open Firm Capacity: 50 MDth/d In-service date: November 2015
Access South Firm Capacity: 320 MDth/d In-service date: November 2017
Markets: Gulf Coast, Midwest Wetzel
_______________________1. Conversion of Dth to Mcf assumes 1,050 Btu factor.
Gas Gathering Line Water System
Rice Legend
22 www.riceenergy.com
Basis Differential
Basis Exposure and Weighted Average Basis Exposure
Majority of RICE’s 1.3 MMDth/d of firm capacity delivers gas to markets outside of the Appalachian Basin
Long-Haul Firm Transport Improves Realized Pricing
__________________________1. NYMEX Strip as of 11/6/14.
Basis Exposure
46% 45%
20% 20%
11% 8%
15% 15%
8% 12%
($0.52)
($0.56)
($0.60)
($0.58)
($0.56)
($0.54)
($0.52)
($0.50)
($0.48)
($0.46)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016
Midwest
Dom S
TCO
M2
GulfCoast
Wtd.AverageBasis
Henry Hub ($/MMBtu) 2.92$ 3.32$ Basis Differential ($/MMBtu) (0.52) (0.56)BTU Uplift (Mmbtu/Scf) 0.12 0.14
Pre-Hedge Realized Pricing ($/Mcfe) 2.52$ 2.90$ Hedging Impact 0.66 0.20
Post-Hedge Realized Price 3.18$ 3.10$
23 www.riceenergy.com
Why Invest in Rice?
100% of Leasehold in Core of Marcellus and Utica
Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream Operations
Differentiated Technical Approach Has Led to Industry Leading Well Results
Conservative Financial and Hedging Approach to Protect Downside and Lock-In Attractive Returns
Nimble and Incentivized Management and Technical Teams
Top-Tier Growth With Attractive Risk-Adjusted Return Profile
Firm Transportation Contracts De-risk Production Growth, Ensure Takeaway and Limit Appalachian Basis Exposure
24 www.riceenergy.com
Rice Market Snapshot
Rice Midstream Partners LP(NYSE: RMP)
Rice Energy Inc(NYSE: RICE)
$ millions, except per share data, as of 12/31/14Shares Outstanding (MM) 136Price as of 12/31/14 $20.97
Market Capitalization $2,858Debt 900Cash 230
Enterprise Value $3,528Management Ownership 30%52 Week Price Range
High $33.32Low 20.97
RICE's RMP Units Owned% of RMP Units 50%% of RMP IDRs 100%
Website: www.riceenergy.comInvestor Contact: Julie Danvers
Julie.Danvers@RiceEnergy.com
$ millions, except per share data, as of 12/31/14Common Units (MM) 29Subordinated Units (MM) 29
Total Units Outstanding 58Price as of 12/31/14 $16.75
Market Capitalization $963Debt –Cash 25
Enterprise Value $938
52 Week Price RangeHigh $17.86Low 15.74
RICE's RMP Units Owned% of RMP Units 50%% of RMP IDRs 100%
Website: www.ricemidstream.comInvestor Contact: Julie Danvers
Julie.Danvers@RiceMidstream.com
25 www.riceenergy.com
Appendix
26 www.riceenergy.com
43,978 82,626
46,700
53,816 90,678
Q4 2013 Q3 2014Marcellus Utica
De-risk production growth, neutralize basis volatility, maximize marginsSubstantial Growth to Low-Risk Drilling Inventory
Production Growth from High Rate of Return Projects
Securing Additional Access to Premium Markets
Net Core Acreage
325 490
233
333 558
823
Q4 2013 Q3 2014Marcellus Utica
Net Undeveloped Locations
2 13 47
126
247
2010 2011 2012 2013 3Q14PA OH
Net Production (MMcf/d)
IPO CurrentAppalachia Non-Appalachia
YE2017 Firm Transport (Dth/d)46,000 net acres added in 2014, 100% within existing areas of operations
Strong Growth Story
Basis Exposure (2015-2016)
35%
65%
2015
35%
65%
2016
(2)
__________________________1. Acreage and location count includes non-dedicated acreage and locations. 2. Includes volumes in excess of firm transportation. Non-Appalachian exposure includes TCO.
136,442
756,000
1,323,000
1,083,000591,000
165,000 240,000
RICE has a proven track record of growing production and inventory and has secured midstream and FT to support future growth
15 33
60
128
179
2011 2012 2013 2014E 2015EPA Gas PA Water
– – –
38
98
OH Gas OH Water
Pipeline Mileage Growing with Production
Pipe In-Service (miles)PA system fully constructed by YE15; meaningful OH drop-down potential
2011 2012 2013 2014E 2015E
(1)(1)
PA Gathering Mileage Growth (YoY)2012 2013 2014E
YoY Growth 110% 76% 190%
27 www.riceenergy.com
Established Track Record of Drilling ProficiencyAverage Net Daily Production Average Lateral Length v. Horizontal Drilling Days(1)
Net Operated Wells Turned To Sales(2) Average Drilling & Completion Cost Per Lateral Foot(1)
_______________________1. Operated.2. Does not include wells from the Greene County Acquisition.
3,281
5,731 6,286 6,691
8,452 8,163 6,957
9,000 15.8
7.6 5.8
4.5 4.6 4.1
–24681012141618
0
2,000
4,000
6,000
8,000
10,000
2010-2011 2012 2013 1Q14 2Q14 3Q14
DaysFeet
PA OH Avg. Marcellus Hz. Drilling Days
0
50
100
150
200
250
2010-2011 2012 2013 1Q14 2Q14 3Q14
MMcfe/d
PA OH
247241209
127
47
8
$2,377
$1,660 $1,476 $1,349 $1,254 $1,247
$3,241
$1,924
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2010-2011 2012 2013 1Q14 2Q14 3Q14
$/Foot
PA OH
7 10 21
38
05
10152025303540
2010-2011 2012 2013 2014
Wells IP
28 www.riceenergy.com
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
- 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,0000.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
- 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
Differentiated Long-Term Production per Well
__________________________1. Data for RICE based on actuals through 11/30/14, peer data based on Pennsylvania Department of Environmental Protection production reports through June 30, 2014.2. Data for RICE based on actuals through 11/30/14, peer data based on Ohio Department of Natural Resources report through June 30, 2014.
Our drilling and completion techniques have yielded greater production profile per well than our peersWashington and Greene County Historical Production (1)
Cumulative Production (Bcfe)
Days OnlinePeer BelmontPeer Monroe
PeerUticaPeerSusquehanna, PA (Marcellus)
RICE Bigfoot
Utica and Susquehanna, PA Historical Production (2)
RICE Blue Thunder
Peer Marcellus
RICE Washington County
Cumulative Production (Bcfe)
RICE Greene County
RICE Geneseo
Days Online
RICE Bigfoot 12 Mo. Projection
29 www.riceenergy.com
Economic Assumptions Summary
351
139
283
50
81%
53%
87%
78%
64%
53%55%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
–
50
100
150
200
250
300
350
400
Marcellus W. Greene Utica Dry Utica Wet
Net Locations IRR (adj midstream fees) IRR (full midstream fees)
NYMEXBreakeven (Adj Fees) $2.60 $3.05 $2.35 $2.05
NYMEXBreakeven (Full Fees) $2.85 $3.05 $2.90 $2.05
__________________________Note: Single well IRRs and breakeven PV-10 estimates shown under two scenarios. (1) “Adjusted Midstream Fee” adjusts the gathering and compression fee paid by E&P by RICE’s ownership in the midstream assets. For example, in the Marcellus, RICE owns a 50% interest in RMP which provides gathering and compression services to RICE and thus the single well returns analysis assumes the midstream fee is adjusted by 50%. In the Utica, RICE owns 100% of the RICE OH Midstream assets which provide gathering and compression services to RICE and the single well returns assume RICE does not pay a gathering and compression fee. (2) “Full Midstream Fees” assume E&P pays for the full gathering and compression fee regardless of RICE’s ownership in the midstream assets. Note: Utica Wet economics assume RICE pays a gathering and compression fee consistent with the fee RICE pays RICE OH midstream. RICE is currently negotiating an agreement with a third party which may change single well economics.
@ $4 NYMEX
Marcellus W. Greene Utica Dry Utica WetType Well AssumptionsLateral Length 7,000 7,000 8,000 8,000EUR (Bcf/1,000') 2.0 2.0 2.5 2.2NGL Yield (bbls/mmcf) – – – 40Gas Shrink – – – 15%Pre-Processed EUR (Bcfe) 13.9 13.9 20.0 17.6Post-Processed EUR (Bcfe) 13.9 13.9 20.0 19.2% Gas 100% 100% 100% 78%Residue Gas Heat Content (Btu/Scf) 1,050 1,090 1,080 1,200Initial Choke (MMcf/d per 1,000') 1.85 1.85 1.87 1.70Flat Period (days) 150 150 270 270120-Day Avg. IP (MMcf/d) 12.6 12.6 14.5 13.1
D&C AssumptionsD&C ($mm) $8.75 $8.75 $12.00 $12.00D&C per Lateral ($ per foot) $1,250 $1,250 $1,500 $1,500
Operating ExpensesFixed Operating Expenses ($/well/month) -- WI $5,000 $5,000 $5,000 $5,000Variable Operating Expenses ($/mcf) -- WI $0.23 $0.23 $0.23 $0.23All-In Estimated Opex ($/mcf) - WI, year 1 of well $0.25 $0.25 $0.24 $0.24Fixed Operating Expenses ($/well/month) -- NRI $6,098 $6,098 $6,250 $6,250Variable Operating Expenses ($/mcf) -- NRI $0.27 $0.27 $0.28 $0.28All-In Estimated Opex ($/mcf) - NRI, year 1 of well $0.30 $0.30 $0.30 $0.30
Other Costs/ExpensesWell Impact Fee? Yes Yes No NoSeverance Taxes -- % of WI Sales Revenue – – 2.5% 2.5%Royalty 18% 18% 20% 20%
Gathering and Compression Fees (Full Midstream Fees -- see footnote)$/dth -- WI $0.37 $0.57 $0.37 $0.37$/dth -- NRI $0.45 $0.70 $0.46 $0.46$/mcf -- WI $0.39 $0.62 $0.40 $0.44$/mcf -- NRI $0.47 $0.76 $0.50 $0.56
Gathering and Compression Fees (Adjusted Midstream Fees -- see footnote)$/dth -- WI $0.19 $0.57 – $0.37$/dth -- NRI $0.23 $0.70 – $0.46$/mcf -- WI $0.19 $0.62 – $0.44$/mcf -- NRI $0.24 $0.76 – $0.56
Firm Transportation and Basis$/dth -- WI $0.52 $0.52 $0.52 $0.52$/dth -- NRI $0.63 $0.63 $0.65 $0.65$/mcf -- WI $0.55 $0.57 $0.56 $0.62$/mcf -- NRI $0.67 $0.69 $0.70 $0.78Long Term Basis Pricing (% of NYMEX) 9% 9% 9% 9%All-in FT + Basis -- NRI ($/dth) assuming $4/NYMEX $0.99 $0.99 $1.01 $1.01NGL Processing and Transportation ($/barrel) -- WI – – – $6.30NGL Processing and Transportation ($/barrel) -- NRI – – – $7.88
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
Our hedging program helps underpin cash flow used to fund our capital investments. Significant portion of 2015 production is hedged at a weighted average price of $4.05/MMBtu
__________________________1. Hedges as of 12/31/14.
Hedge Book (1)Strategy2015 2016 2017
NYMEX Henry Hub Contract Summary
Natural Gas SwapsVolume Hedged (Bbtu/d) 166 214 60 Weighted Average Swap Price ($/MMBtu) $4.09 $4.14 $4.24
CollarsVolume Hedged (BBtu/d) 139 -- --Weighted Average Floor Price ($/MMBtu) $3.96 -- --Weighted Average Ceiling Price ($/MMBtu) $4.65 -- --
Deferred PutsVolume Hedged (BBtu/d) -- -- --Put Price ($/MMBTU) -- -- --Put Premium ($/MMBTU) -- -- --
Dominion South Point Contract SummaryNatural Gas SwapsVolume Hedged (Bbtu/d) 71 31 –Weighted Average Swap Price ($/MMBtu) $2.53 $2.62 –
TCO Contract SummaryNatural Gas SwapsVolume Hedged (Bbtu/d) 29 – –Weighted Average Swap Price ($/MMBtu) $3.30 – –
Total Volume (BBtu/d) 405 245 60Weighted Average NYMEX Floor ($/MMbtu) $4.03 $4.14 $4.24Weighted Average Appalachian Floor ($/MMbtu) $2.75 $2.62 –
% Swap 66% 100% 100%
Basis Contract Summary
TCOVolume (BBtu/d) 37 17 --Swap Price ($/MMBtu) ($0.42) ($0.42) –
Dominion SouthVolume (BBtu/d) 25 21 --Swap Price ($/MMBtu) ($0.79) ($0.79) –
31 www.riceenergy.com
Post-MLP Organizational and Credit Structure
DE
Rice E&P Subsidiaries
PA Gathering
OH Gathering
Rice Midstream Holdings LLC
Rice Midstream Management LLC
Rice Midstream Partners LPNYSE: RMP
OH WaterPA Water
E&P Credit Group
IDRs& LP
Interests
Rice Energy Inc.NYSE: RICE
Retained Midstream Credit Group
MLP Credit Group
Public Unitholders % LP interest
% LP interestNon-economic
GP Interest
32 www.riceenergy.com
Cautionary StatementsFORWARD-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.
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.
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.
33 www.riceenergy.com
Determination of Identified Drilling Locations as of September 30, 2014
Net undeveloped locations are calculated by taking RICE’s total net acreage and multiplying such amount by a risking factor which is then divided by RICE’s expected well spacing. RICE then subtracts net producing wells to arrive at undeveloped net drilling locations
Undeveloped Net Marcellus Locations: RICE assume these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In the Marcellus, we applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 9/30/14, RICE had 60,713 net acres in the Marcellus which results in 351 undeveloped net locations
Undeveloped Net Western Greene County Locations: RICE assumes these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In Western Greene County, RICE applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 9/30/14, RICE had 21,913 net acres in Western Greene County which results in 139 undeveloped net locations
Undeveloped Net Upper Devonian Locations: RICE assumes these locations have 7,000 foot laterals and 1,000 foot spacing between wells which yields approximately 161 acre spacing. In the Upper Devonian, we applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 9/30/14, RICE had 55,000 net acres prospective for the Upper Devonian which results in 271 undeveloped net locations
Undeveloped Net Utica Locations: RICE assumes these locations have 8,000 foot laterals and 750 foot spacing between wells which yields approximately 138 acre spacing. In the Utica, RICE applies a 10% risking factor to its net acreage to account for inefficient unitization. As of 9/30/14, RICE had 51,324 net acres prospective for the Utica in Ohio which results in 333 undeveloped net locations. This excludes ~2,500 net acres in Guernsey and Harrison Counties in Ohio
Total undeveloped drilling locations dedicated to RMP & RICE are calculated by taking the total net RICE acreage dedicated to RMP in PA and to RICE in OH and multiplying such amount by a risking factor which is then divided by RICE’s expected well spacing. RICE grosses this up by an assumed 90% WI, then subtracts gross producing wells to arrive at gross dedicated RICE operated drilling locations.
Additional Disclosures
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