Rice Energy (RICE): Consolidating Marcellus With Vantage Acquisition - Jefferies
- Wall Street falls as investors ready for Trump's inauguration
- IBM (IBM) Tops Q4 EPS by 13c, FY17 EPS Guidance Beats Consensus
- American Express (AXP) Misses Q4 EPS by 7c, FY17 EPS Guidance Tops Views at Mid-Poinit
- Skyworks Solutions (SWKS) Tops Q1 EPS by 3c, Offers Q2 Guidance, Announces Buyback
- After-Hours Stock Movers 01/19: (SWKS) (QRVO) (NVAX) Higher; (AFMD) (SGYP) (IBM) Lower (more...)
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
Jefferies analyst, Jonathan Wolff, reiterated his Buy rating on shares of Rice Energy (NYSE: RICE) after the company announced the acquisition of Vantage Energy for total consideration of $2.7 B. RICE will acquire Vantage’s upstream assets for $2.1 B, while RICE's midstream subsidiary (RMP) will acquire associated midstream/processing rights for $600 MM. RICE will acquire the assets by paying Vantage $1.72 B in cash and issuing 39.1 MM shares to Vantage. RICE also announced an equity deal for 40 MM shares priced at $25.50 (~6% off the close).
Vantage owns 85,000 net Marcellus acres (all in Green County, PA) and 37,000 net Barnett acres. Vantage's 2Q production was 399 MMcfe/d (65% Appalachia/35% Barnett), but has likely declined (per the S1) due to low reinvestment.
When backing out midstream value of $600 MM and using $3k per flowing MMcfe for production value, we arrive at an acreage cost of ~$10,600 per acre (ascribing no value to the Barnett acres). This compares to the recent Greene County acreage sale (that Vantage bought from ANR out of bankruptcy) at ~$12,400 per acre.
No change to the price target of $31.
Shares of Rice Energy closed at $27.14 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Eli Lilly (LLY) to Acquire CoLucid Pharmaceuticals (CLCD) for $960M
- Fifth Third Bank (FITB) to Acquire The Retirement Corporation of America; Terms Not Disclosed
- Cytori Therapeutics (CYTX) to Acquire Assets from Privately Held Azaya Therapeutics
Create E-mail Alert Related CategoriesAnalyst Comments, Mergers and Acquisitions
Related EntitiesJefferies & Co, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!