Rice Energy entered into a purchase and sale agreement for Vantage Energy, acquiring midstream assets for in a $2.7 billion deal that included acreage in the Marcellus, Utica and Barnett shales, along with debt assumption. In connection with the acquisition, Rice Midstream Partners (RMP) will purchase the midstream assets from Rice Energy for $600 million. The transaction is expected to close in the fourth quarter.
Core midstream assets involved in the deal include 30 miles of dry gas gathering and compression assets. As part of the transaction, Rice Energy will dedicate the acquired Pennsylvania acreage to RMP for gas gathering, compression and water services. The exploration and production (E&P) assets include about 85,000 net core Marcellus acres in Greene County, PA, with rights to the deeper Utica Shale on about 52,000 net acres and 37,000 net acres in the Barnett Shale.
Following this transaction, Rice Energy will control 231,000 net acres in the Marcellus and Ohio Utica cores with an inventory of 1,164 drilling locations that generate average single well returns of 95% at strip pricing. Similarly, Rice Midstream Partners will control one of the largest and most concentrated core dry gas acreage dedications in the Marcellus Shale, covering about 199,000 acres in Washington and Greene counties.