Cecil-based Rice Energy to go public
Rice Energy Inc., a Cecil drilling company owned by the family of a former Wall Street investment manager, is planning to go public.
Rice announced on Monday it has submitted confidentiality papers with federal regulators to starts the process for an initial public offering in the first three months of 2014. The company did not provide other details, and officials did not reply to requests for comment.
The company is using new rules by the Securities and Exchange Commission that allow companies with less than $1 billion in annual revenue to withhold details of their IPO plans until shortly before the sale — a process made famous by Twitter.
The shale gas boom and the surging stock market have fueled a rush of IPOs in the energy sector as small and mid-sized companies that are drilling for unconventional oil and natural gas nationwide look to take advantage of investor interest and potential higher valuations.
Antero Resources Corp., which drills in Appalachia, had one of the year's most successful offerings, raising $1.57 billion with a stock price that jumped 18 percent to $52.01 when it made its debut in October. The stock closed on Monday at $54.30.
Rice has 82 wells in Pennsylvania, all unconventional, with about half of them in a joint venture with Alpha Natural Resources Inc. Alpha has agreed to sell its 50 percent stake in the joint venture as part of the deal.
It will receive a $300 million package — $200 million in Rice common stock plus $100 million in cash — for what it estimated as 7,500 acres and $30 million of initial investment in 2010.
“We are very pleased with the value that has been created by this joint venture in such a short period of time,” Alpha Chairman and CEO Kevin Crutchfield said in a statement. “We believe this achievement is a testament to both the quality of our Marcellus acreage and the operational excellence of the Rice Energy team.”
Rice has a history of connections to high finance. Its founder is Daniel J. Rice III, the former energy portfolio manager at BlackRock, the world's largest asset manager.
He retired from that post in 2005 to avoid the appearance of a conflict of interest because of those dual roles. BlackRock had never reported Rice's moonlighting to investors.
All the Alpha Shale Resources LP wells, the joint venture, are in Greene County, with nearly all of the rest of Rice's wells in southern Washington County, according to state environmental records.
Only 29 of the wells were producing in the first half of 2013, according to state records. They pumped out 24.6 billion cubic feet of natural gas over 3,540 days in that six-month period, according to the most recent records available.
Timothy Puko is a staff writer for Trib Total Media.
