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Out with the Old – Part 2: EQT Sign Replaces Rice at HQ Building

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). In that post we shared with you a short video taken by an MDN friend that showed a pair of cranes taking down the Rice Energy name from Rice’s (now former) headquarters building in Canonsburg, PA (just outside Pittsburgh). Another MDN friend sent us a pair of pictures (below), taken the following day, which show an EQT sign now fixed over top of where the Rice Energy sign once stood. Our second MDN friend also told us that all the parking lot signs at the facility have EQT stickers on them, covering over the Rice Energy name. As we said in our Tuesday post, EQT isn’t wasting any time making a statement: Out with the old, in with the new. EQT is firmly large and in charge. A few days after the merger and Rice is already a memory, starting to fade away…
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Corp Raider Slinks Away After Losing EQT Fight; Selling Stock

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way to the deal getting done–primarily opposition by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to vanquish Jana’s efforts to stop the merger. How did EQT do it? We went behind the curtain yesterday to share EQT’s winning strategy in defeating Jana (see EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal). They way corporate raiders work, as we’ve explained many times before, is to buy enough stock in a company to get a board seat, then agitate in the board room, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so the raider can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations. Since Jana lost face and reputation by not stopping the EQT/Rice merger, they’ve decided to slink away, back into the darkness. We spotted a story that says Jana has already sold a portion of their EQT stock–and they continue shop more of it. They’ve thrown in the towel on EQT and will now go pick on someone else to destroy…
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4 Months After Buying Baker Hughes, GE Wants to Sell It

Industrial giant GE (General Electric) wooed and won the hand of Baker Hughes (BH)–the third largest oilfield services company in the world–buying/merging in Baker Hughes with GE’s Oil and Gas division just four months ago (see Baker Hughes and GE Complete Merger, World’s 1st Fullstream Co.). It didn’t take much for BH to say “yes” to GE’s proposal for marriage, coming off a botched attempt at marriage with Halliburton–a deal that the Obama DOJ destroyed (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). But now, four months into wedded bliss, GE has a new CEO and he wants out of the marriage. CEO John Flannery is looking to sell all of, or part of, GE’s majority stake in what is now called “Baker Hughes, a GE Company.” GE wants the nameplate on the door to just say “Baker Hughes, a Company.” Man oh man–four months and he already wants out of the marriage. What does that do to the self-esteem of the BH bride? Maybe GE can get an annulment? After all, it’s only been four months…
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EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal

On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Another corporate raider, D.E. Shaw, piled on too, but at least they supported the deal to merger Rice into EQT (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). You know we loathe corporate raiders. They buy enough stock in a company to get a board seat, then agitate, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so they can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations and disgusting people. Jana was the primary opponent to the EQT/Rice deal. Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to fend off Jana’s efforts against their company. How did they do it? That was the subject of a recent post on the Seeking Alpha investor’s website. Here’s a fascinating look at the strategy EQT used to fend off an evil corporate raider…
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Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger

Yesterday the Marcellus/Utica experienced a fracking earthquake of historic proportions. That is, a fracking earthquake metaphorically speaking. Yesterday Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States. The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Shame on both of them. Fortunately their effort to stop the deal didn’t gain traction. Yesterday was the day when the two companies became one. Two Rice Energy board members, Dan Rice IV and Bobby Vagt, joined the EQT board. Another two independent (outside either firm) board members were also added–Thomas Karam, founder and Chairman of Karbon Partners, and Norman Szydlowski, former president and CEO of SemGroup Corporation. Standing by the virtual water cooler, MDN has overheard that many Rice personnel were nervous about what yesterday would bring. You know the routine: Two rooms–one for those staying, and one for those getting the heave-ho. Everyone waiting to get “the call” to whichever room they’re assigned. We’ve been there. It sucks. But that’s the reality in today’s corporate world. One thing we found interesting is that the huge Rice Energy sign on the company’s (former) HQ building was taken down yesterday–the very day the two merged. An MDN friend caught some of it on a smartphone video (below). EQT isn’t wasting any time making a statement: In with the new, out with the old…
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EQT/Rice Shareholders Make it Official – Merger Happens Nov 13

Next Monday the largest natural gas-producing company in the these United States will be born–from the merger of EQT and Rice Energy, based in Pittsburgh. Yesterday the shareholders for both EQT and Rice voted to approve the merger/deal by overwhelming majorities. The megadeal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). Evil corporate raider Jana Partners tried to stop the deal–but failed, as they acknowledged earlier this week (see Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote). Next Monday the transaction will be complete and the new EQT will produce more natural gas in the Lower 48 States than Chesapeake Energy, the current reigning champ. Some 84% of the EQT shareholders who voted, voted to approve the deal, and 74% of voting Rice shareholders voted in favor of the deal. What happens next? After the consummation of the merger on Monday, EQT CEO Steve Schlotterbeck said the company will immediately appoint a committee to look into…splitting the company. Yes, you read that right. Not splitting it back into EQT and Rice, but splitting it into upstream (drilling) and midstream (pipelines). Two companies will become one and then become two again. Go figure. A recommendation and decision about whether to proceed with a split will happen, according to Schlotterbeck, by “the end of the first quarter 2018.” There’s little doubt the decision will be “yes” on a split…
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Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote

The guy who runs the investment firm Jana Partners, Barry Rosenstein, is a corporate raider. He invests millions in a company he’s targeted in order to get one or two people elected to the board of directors. Those people then agitate and force the company to lay off hundreds or thousands of employees, and sell off assets, in a bid to make the stock price jump. When the price does jump, corporate raiders like Rosenstein then sell their shares, making a profit on the new/higher price (buy low sell high). It may be legal, but we consider it immoral. In June, EQT, one of the biggest drillers in the Marcellus/Utica, announced a deal to buyout and merge in Rice Energy, another sizable M-U driller (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later Jana targeted EQT in an attempt to stop the deal (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana believes it could make a whole lot more money if the deal doesn’t go through, and instead if EQT splits itself in two–one half a drilling company, the other half a pipeline company (firing a bunch of people along the way). So Jana went on a smear campaign, making all sorts of wild accusations against EQT, including calling EQT management’s compensation structure “perverse,” and accusing the company of using “deceptive” maps of EQT and Rice acreage positions (see Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9). All the trash-talking and bullying didn’t worked. The deal will happen–this week–and Jana is now officially throwing in the towel. They will still vote against the deal with their shares, but they have withdrawn their proxy fight to enlist enough other shares to vote down the deal…
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Corp Raider Supports EQT/Rice Merger, but Lawsuit Still Looms

In something of a good omen ahead of a vote on Nov. 9 by shareholders of EQT and Rice Energy to approve a merger, one of two EQT-shareholding corporate raiders, D.E. Shaw, supports the merger. In point of fact, Shaw has not opposed the merger since it was announced in June. Shaw’s “issue” has been that the merged EQT/Rice should immediately split itself in two–into upstream (drilling) and midstream (pipelines). Shaw’s pressure seems to be one of the (main?) reasons why EQT moved up the timing to consider such a split (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). Last week EQT CEO Steve Schlotterbeck all but confirmed the company will split in two after a special committee formed to explore that option makes its final recommendation (see EQT CEO Signals Company Likely to Split in Two After Rice Merger). Evil corporate raider Jana Partners is still opposed to the merger and is fighting it tooth and nail. Jana may have some help. A flurry of lawsuits have been filed by shareholders opposing the merger–most of them going nowhere. However, one of the lawsuits, filed in Allegheny County Court, will go before a judge three days before the Nov. 9 vote. That lawsuit requests an emergency injunction against the vote. It’s possible the county judge could block the vote, giving Jana more time to whip up opposition…
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UGI Buys NatGas Pipeline Gathering System in NE PA

UGI is a major utility company in Pennsylvania, providing natural gas and electric service to 700,000 Pennsylvania residents across the state. UGI, via its Energy Services subsidiary, operates natural gas storage facilities, compressor stations, LNG plants and local pipeline gathering systems. UGI operates several gathering systems in northeastern PA. Yesterday the company announced is has purchased an existing gathering system from Rockdale Marcellus for an undisclosed sum. The Rockdale gathering system consists of 60 miles of gathering lines–along with dehydration and compression facilities–located in Tioga, Lycoming and Bradford counties in northeast PA. The system was purchased, on paper, by UGI subsidiary Texas Creek, so the gathering system has been rebranded UGI Texas Creek. MDN has a map of the new system below…
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TX Newpark Resources Buys Pittsburgh Well Services Group for $75M

Texas-based Newpark Resources, a drilling fluids and specialty services company for the oil and gas industry, announced yesterday it is buying Well Service Group located in Robinson Township, near Pittsburgh, for $75 million. Well Service Group, a containment and well site service company, was founded in 2012 and has sold and serviced equipment for Newpark from the beginning. So it seems like a natural marriage. It is one company (Newpark) buying out one of its best distributors (Well Service Group). No word on potential layoffs due to the buyout, but we doubt there will be any. This is a relatively small deal as deals go in the oil patch…
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US DOJ Demands Payments from GE re Unsold Water Biz

In July, GE Oil & Gas completed its merger/buyout of oilfield services giant Baker Hughes (see Baker Hughes and GE Complete Merger, World’s 1st Fullstream Co.). As is typical in these kinds of megamergers, governmental agencies that review the deal make the deal contingent on certain requirements. In the case of GE/Baker Hughes, the U.S. Dept. of Justice demanded GE sell its Water & Process Technologies business. GE agreed, and lined up a buyer (Suez, a French waste and water group). However, the deal has not happened (yet), and because there is a delay in making it happen due to “various administrative challenges,” the DOJ is demanding GE make DAILY payments–to the DOJ–as an “incentive” to get the deal done. The amount of the payments is unspecified. Where will all that money go? We don’t know, but we can certainly imagine. What do swamp-dwellers do with free money?…
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Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9

The disgusting corporate raiders at Jana Partners are fighting to the bitter end in their attempt to stop the merger/takeover of Rice Energy by EQT. In June EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana is the same company that recently helped Amazon in its hostile takeover of grocery company Whole Foods. Unfortunately (for Jana), their strategy isn’t working this time around. Over the past few weeks Jana has sent a couple of nasty letters to EQT’s board, making some rather wild claims. The tone of Jana’s communication is becoming more shrill as time goes on, as desperation sets in and a vote by EQT shareholders on the deal draws near (Nov. 9). The problem is the financial press picks up on these wild claims and repeats them, so yesterday EQT felt it necessary to (once again) respond and set the record straight–to debunk the lies Jana is spreading about the deal and about EQT’s past performance…
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Pathfinder Resources Completes First Marcellus Deal

Less than three weeks ago MDN told you about District 5 Investments, an energy-focused private equity firm based in Texas, which has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region (see Texas Private Equity Firm Forms to Invest in Marcellus/Utica). According to the initial announcement, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but with a keen interest in the Marcellus/Utica. The company has not wasted any time. According to the Pittsburgh Business Times, Pathfinder Resources has just closed its first deal in our region…
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India’s RIL, Carrizo Sell NEPA Marcellus Assets for $210M

Reliance Industries Limited (RIL) is the single largest company in India, and one of the largest energy companies in the world. RIL invested $3.5 billion in a Marcellus joint venture with Atlas Energy in 2010, and later battled Chevron to buy Atlas–but Chevron won, so RIL became a jv partner with Chevron. RIL currently has 3 U.S. shale joint ventures: the Chevron jv in the Marcellus (owns 40% of that acreage), a jv with Carrizo Oil & Gas in the northeast PA Marcellus (owns 60% of that acreage), and a jv with Pioneer Natural Resources in the Texas Eagle Ford (owns 45% of that acreage). Back in 2015, RIL signaled they are looking to dump all of their U.S. shale assets (see Indian Giant RIL Looking to Dump its Marcellus Joint Ventures). It took a few years, but earlier today Banpu, Thailand’s largest coal producer, announced that is has purchased all of the RIL/Carrizo jv (from both RIL and Carrizo) in northeastern PA–for $210 million. Does Banpu sound familiar? It should. This is the fifth investment Banpu, via its American subsidiary Kalnin Ventures, has made in the northeast Marcellus…
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EQT Raises $3B in IOUs as Down Payment for Rice Energy Purchase

On Wednesday, EQT announced the company has floated $3 billion (yikes!) of IOUs–called “notes” in the financial industry–with various due dates and interest rates payable, in order to make a cash payment due as part of their purchase of Rice Energy. The total deal is worth $8.2 billion, with EQT paying $6.7 billion and assuming Rice’s existing debt of $1.5 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). This deal is moving ahead, over the objections of two different corporate raiders who own a considerable amount of EQT stock (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal and Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). In addition to raising $3 billion in cash from IOUs, EQT is also tapping into its line of credit and the money it has socked away in its checking account to get this deal done…
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Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy

Here’s a business you might not think about nor associate with Marcellus/Utica drilling–fuel deliveries. If you own a home and live outside of an urban area, you know all about fuel deliveries, because you likely either burn fuel oil or propane to heat your home. What you may not know is that drilling operations need a similar service–diesel fuel deliveries (mostly) at drill pads, to run the engines that generate electricity to run drilling and fracking operations. And fuel deliveries to trucking fleets, to keep the trucks moving. Perhaps an unglamorous part of the business–but vital nonetheless. Fuel deliveries run 24/7 in the oilfield, just like every other activity associated with drilling wells. Sprague Resources, founded in 1870 (not a typo!), is one of the largest independent suppliers of energy and materials handling services in the Northeast with products including home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague has just bought out Coen Energy, headquartered in Washington, PA. Coen pretty much does the same thing, but specializes in servicing the fueling (and storage) needs of Marcellus/Utica drillers. No financial details were included in the announcement, other than Sprague expects the addition of Coen to its company will result in an extra $7-$8 million of revenue per year. Here’s the news about one competitor gobbling up another in order to expand its presence in the Marcellus/Utica…
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