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UPDATE 2-Rice Energy to buy Vantage for about $2.7 bln as M&A picks up

Published 2016-09-26, 05:40 p/m
© Reuters.  UPDATE 2-Rice Energy to buy Vantage for about $2.7 bln as M&A picks up
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(New throughout, adds Monday's DTE deal, details on others)

HOUSTON Sept 26 (Reuters) - Oil and gas producer Rice Energy Inc RICE.N said on Monday it will buy Vantage Energy for about $2.7 billion, in what has become the most active month for acquisitions in the energy sector since oil prices sank two years ago.

Rice Energy shares slid 4.2 percent to $26 in after market trading after it said it would pay about $1.02 billion in cash, issue about 39.1 mln shares worth about $980 million and assume about $700 million in debt.

The deal follows others this month by EOG Resources Inc (NYSE:EOG) EOG.N , which is buying privately-held Yates Petroleum Corp for $2.5 billion, and Enbridge of Canada's plans to buy pipeline company Spectra Energy Corp (NYSE:SE) SE.N of Houston in an all-stock deal valued at about $28 billion. would buy assets including about 85,000 net core Marcellus acres in Pennsylvania, with rights to deeper Utica Shale on about 52,000 net acres and 37,000 net acres in the Barnett Shale. Net production from these assets was 399 million cubic feet equivalent per day in the second quarter.

Rice Energy said it would sell some of the acquired core midstream assets, including 30 miles of dry gas gathering and compression assets, to Rice Midstream Partners LP RMP.N for $600 million.

Rice Energy also raised its 2016 capital budget forecast to $735 million from $660 million due to the acquisition, which is expected to close in the fourth quarter.

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Evercore advised Rice Energy while Latham & Watkins LLP served as its legal counsel.

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