Report: Marcellus M&A in 2016 Sees Big Increase – Top 5 Deals

Deal-making (mergers and acquisitions, or M&A) in the Marcellus went through the roof in 2016 as compared with 2015. In 2016, there were 13 deals worth $100 million or more. The total value of deals in 2016 was a big $7.25 billion, compared with $920 million in 2015. What was the #1 M&A deal in the Marcellus for 2016? Rice Energy’s purchase of Vantage Energy for $2.7 billion (see Vantage Energy is No More – Rice Energy Completes $2.7B Buyout). Below is an overview of Marcellus deal-making, along with a chart of the Top 5 M&A deals in the Marcellus for 2016…
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Vantage Energy is No More – Rice Energy Completes $2.7B Buyout

Rice EnergyJust two months ago Rice Energy announced they are buying competitor Vantage Energy for $2.7 billion (see Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres). Included in the deal are 85,000 acres of Marcellus leases in Greene County, PA, the primary reason for the deal (see Why Did Rice Energy Pay $2.7B for Vantage Energy? It’s Simple…). Also included, another 52,000 acres of Utica Shale leases. Yesterday Rice announced that the deal is done and dusted–Vantage Energy is no more. Rice now controls some 231,000 net acres in the Marcellus and Ohio Utica Shale “core” areas, with an inventory of 1,164 drilling locations. Very impressive for a company that didn’t exist 10 years ago…
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Rice Energy’s Purchase of Vantage a Way to Quickly “Scale Up”

M&AMore analysis continues to roll in on Rice Energy’s plan to buy Vantage Energy for $2.7 billion (see Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres). We ran a post following the initial announcement pointing out there is one main reason why Rice is buying Vantage: 85,000 Marcellus Shale acres in Greene County, PA (see Why Did Rice Energy Pay $2.7B for Vantage Energy? It’s Simple…). We have part of another article tackling the buyout–this time from top energy analyst and Seeking Alpha writer Richard Zeits. He points out a few interesting facts, like the fact that if you do the math, Rice is essentially paying Vantage $20,000 per acre! But Zeits you have to put the price in context: Rice is using a stock swap as their currency for purchasing the acreage. In other words, this is a clever way for Rice to “scale up” quickly without breaking the bank…
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Why Did Rice Energy Pay $2.7B for Vantage Energy? It’s Simple…

whyYesterday MDN reported the big story that Rice Energy is paying $2.7 billion to buy the assets of Vantage Energy (see Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres). Why did Rice go for the deal? It’s really quite simple. According to Rice Energy, it’s because of the 85,000 acres of Marcellus leases in Greene County, PA. That acreage is located next to Rice’s acreage in the county. The opportunity to essentially double their acreage, in their own back yard, was too good to pass up…
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Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres

M&ALast week MDN reported that Vantage Energy, a Colorado company with major operations in the Marcellus, was once again attempting to float an initial public offering of stock (see Vantage Energy Tries New IPO After Striking Out 2 Yrs Ago). Must be that was a clever fake-out move because yesterday Rice Energy announced they are buying Vantage in a deal worth $2.7 billion. Included in the deal are 85,000 acres of Marcellus leases in Greene County, PA. Also included, another 52,000 acres of Utica Shale leases. Oh! And 37,000 acres of leases in the Texas Barnett Shale–meaning Rice is about to lose its laser focus on the Marcellus/Utica and will no longer be a “pure play” company. The deal instantly elevates Rice’s production predictions for 2017 by 70% over the previous guidance given. In order to pay for the deal, Rice also announced they are floating a new massive round of stock, 40 million shares, which they hope will bring in something over $1 billion in cash. Here’s the details…
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Vantage Energy Tries New IPO After Striking Out 2 Yrs Ago

Vantage Energy logoIn July 2014, Vantage Energy, a Colorado company with major operations in the Marcellus, announced they would launch an initial public offering (IPO) seeking $400. Then in September the number was revised up–the company felt like $601 million would be the goal of their IPO (see Vantage Energy IPO Target Goes from $400M to $601M). In September, Vantage announced they were postponing the IPO, citing “unfavorable equity market conditions” (see Vantage Energy Postpones IPO Citing Unfavorable Market Conditions). Apparently market conditions have improved, because Vantage is back. On Tuesday Vantage filed with the Securities and Exchange Commission (SEC) looking to raise an estimated $600 million in an IPO. If it is successful this time, it will be the first U.S.-based driller to float an IPO in more than two years…
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Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres

Vantage Energy logoEarlier this year Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, filed for bankruptcy and announced it would sell off its Marcellus assets. ANR previously had a joint venture with Rice Energy (which Rice later bought out). Rice was also interested in the 27K acres ANR is selling as part of their bankruptcy–and made a “stalking horse” bid of $200 million for the assets (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). Other drillers objected to what they considered a sweetheart deal (see EQT, APP Challenge Rice Energy’s $200M Bid for ANR Shale Assets). In the end, Rice didn’t get it anyway. ANR announced yesterday that Vantage Energy won the bidding process–paying $339.5 million for the assets, “far exceeding” Rice’s bid…
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Top 10 Marcellus/Utica Drillers in SWPA – Ranked by Production

top-10.jpgEverybody loves a list. We do too! We spotted a ranking in a recent issue of the Pittsburgh Business Times that lists the top 37 shale gas producers in southwestern Pennsylvania, based on the amount of gas they produced in 2015. We pulled the names of the top 10, listed in order from most to least…
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Vantage Energy Cuts $30M Deal to Expand Water Plant in Greene Co.

An interesting story from southwestern Pennsylvania. Vantage Energy has signed a $30 million deal with the Southwestern Pennsylvania Water Authority (SPWA) in Greene County to expand the SPWA’s water plant. The expansion will allow the plant to increase water deliveries from 9.2 million gallons per day to 16.1 million gallons. The expansion will also mean new water pipelines will be run to areas not previously covered by SPWA. Vantage will get access to water for its active drilling program in the county (they own 48,000 net acres in Greene County) along with some revenue from a surcharge that will be levied to other oil and gas drillers who want to purchase water from SPWA. The SPWA will get a major expansion and new pipelines to service residents in the county not currently served–along with a new revenue source in selling more water to drillers. The SPWA gets its water from the Monongahela River. Sounds like a good deal with winners all around–except last month Vantage Energy put itself up for sale (see Marcellus Driller Vantage Energy Puts Itself Up for Sale). So how does spending $30 million square with a company attempting to sell itself?…
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Marcellus Driller Vantage Energy Puts Itself Up for Sale

for sale signVantage Energy, a driller with operations in the Marcellus (in southwestern Pennsylvania) and in the Texas Barnett Shale, has had a bumpy ride over the past year or so. In 2014 Vantage planned to launch an initial public offering (IPO), hoping to raise $600 million–but later scraped that plan (see Vantage Energy Postpones IPO Citing Unfavorable Market Conditions). In December, the company was assessed a hefty fine by the PA Dept. of Environmental Protection (see Vantage Energy Fined $1M for Multiple Errors at Greene County Site). And in February of this year, Vantage had the dubious distinction of being one of the companies on David Fessler’s oil & gas company “death list” of companies with debts four times or higher than earnings (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). [MDN Note of Apology: The Vantage in David Fessler’s list is Vantage Drilling, NOT Vantage Energy–in no way connected to Vantage Energy. We regret the error!] So it was no surprise for MDN to read that Vantage has put itself up for sale. The company has hired Barclays to help find a suitor to buy them. Among the potential suitors are several Marcellus drillers…
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Vantage Energy Fined $1M for Multiple Errors at Greene County Site

The Pennsylvania Dept. of Environmental Protection has just slapped Vantage Energy with a $1 million fine for “more than a dozen violations of environmental regulations stemming from a landslide and illegal waste disposal at their Porter Street well pad in Franklin Township, Greene County, earlier this year.” The landslide at the well pad covered over portions of two nearby creeks. Then, to add insult to injury, about six months later two truckloads of frack wastewater got dumped on the landslide area being repaired. The wastewater ended up in the streams. But wait, there’s more! Vantage constructed a new access road next to the streams adversely affected–but Vantage didn’t have a permit to construct the road. Oy vey! Did they do anything right? According to the DEP, Vantage, “to its credit,” is making improvements in their procedures to prevent a future comedy of errors…
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Vantage Energy Postpones IPO Citing Unfavorable Market Conditions

Have shale-related initial public offerings (IPOs) lost some of their luster? Early this year Rice Energy, focused on the Marcellus and Utica Shale region, launched an IPO that brought in $924 million (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Eclipse Resources, another driller focused on the northeast, launched an IPO in June and raised $818 million (see the Bloomberg story Eclipse Resources Falls in Debut After IPO Priced at Low End). In July Vantage Energy, a Colorado company with major operations in the Marcellus, announced they would launch an IPO seeking $400. Then in September the number was revised up–the company felt like $601 million would be the goal of their IPO (see Vantage Energy IPO Target Goes from $400M to $601M). On Wednesday, Vantage announced they’re postponing the IPO, citing “unfavorable equity market conditions”…
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Vantage Energy IPO Target Goes from $400M to $601M

In July, Colorado-based Vantage Energy, with a major operation in the Marcellus Shale, filed paperwork with the Securities and Exchange Commission for an initial public offering (IPO) in which they said they want raise $400 million (see Marcellus Driller Vantage Energy Files for $400M IPO). That’s out the door. Yesterday, Vantage announced it is moving forward with an IPO later this month and they now hope to sell up to 23,550,000 shares of common stock and raise $601 million–a pretty healthy jump. Vantage owns 48,000 acres in the Marcellus Shale–in Greene County, PA. They also have a sizable stake in the Barnett Shale (in Texas). Vantage is a relatively young company, founded in 2006 by the former president of EnCana, Roger Biemans…
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Marcellus Driller Vantage Energy Files for $400M IPO

Colorado-based Vantage Energy, with a major operation in the Marcellus Shale, has filed paperwork with the Securities and Exchange Commission for an initial public offering (IPO) in which they hope to sell $400 million worth of stock. Vantage owns 48,000 acres in the Marcellus Shale–in Greene County, PA. They also have a sizable stake in the Barnett Shale (in Texas)…
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