Rice Energy Inc. will buy Colorado-based Vantage Energy, a shale-gas producer operating in the Appalachian basin, for $2.7 billion in cash and debt.
Pennsylvania-based Rice announced Tuesday that it expects the deal to finalize by the end of September.
Vantage Energy’s buyout guarantees Rice rights to 85,000 acres of the Marcellus Shale in Greene County, Pennsylvania, along with rights to 52,000 acres of the Utica Shale, located under the Marcellus.
Rice will also acquire 37,000 acres of the Barnett Shale in Texas.
"This deal represents the largest core dry gas Marcellus acquisition to date, one that is truly transformational for Rice Energy, Rice Midstream Partners and our respective shareholders,” Daniel Rice IV, CEO of Rice Energy said in a statement.
Following the deal, Rice Energy will control one of the largest, most concentrated regions of natural gas acreage in the Marcellus Shale—about 199,000 acres in Pennsylvania’s Washington and Greene Counties.
The planned acquisition follows Vantage outbidding Rice Energy in May for natural gas assets in central Greene County owned by Alpha Natural Resources subsidiary Pennsylvania Land Resources, the Pittsburgh Business Times reports. The assets were sold to the company for a cash bid of $339.5 million.
“We believe the combination of Rice and Vantage creates the premier natural gas company in the country,” Vantage CEO Roger Biemans said. “Rice will have a multi-decade inventory of the most economic dry gas in North America, a tremendous growth story for its midstream business, and a management team that has proven its ability to execute on its strategy."
The deal follows Vantage Energy’s bid for Greene County natural gas assets, previously owned by Pennsylvania Land Resources. Vantage won out over Rice Energy with a $339.5 million bid, Denver Business Journal reported.
Multimedia business & healthcare reporter Chloe Aiello can be reached via email at [email protected] or twitter.com/chlobo_ilo.
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