“Well, I could be wrong, but I believe diversity is an old, old wooden ship”


Rice’s acquisition of Vantage Energy comes with Barnett exposure, giving Rice some supply diversity outside of the Northeast. Gross gas production for Vantage averaged almost 500 MMcf/d in 2016, and 35% of that supply was produced in North Texas. The remaining 65% of their gas production was produced in Green County, PA adjacent to Rice’s position in that area. Rice is one of the few companies with exposure to Marcellus in-basin market prices in 2020. Rice’s firm transport (FT) portfolio includes 1.1 Bcf/d of contracted capacity by 2020, which compares to their expected production (prior to the Vantage acquisition) of between 1.3-2.2 Bcf/d by 2020. This indicates that Rice contracted FT capacity to cover 60% of their expected production (mid-point) by 2020. If the basin has a surge in production above available takeaway, Rice could be exposed to a weak future basis market. However, at this point, the basin looks to be long capacity in the future, so the gamble of not securing the total production profile with FT may just pay off. Rice’s major upcoming capacity commitments are TETCO Access South and ETP’s Rover, both with in-service dates of 4Q2017. (Tickers: RMP, RICE)

About The Author Justin Carlson

I have over 10 years of experience in data analysis, research, and consulting across the energy sector. I currently serve as Vice President of Research and Managing Director at East Daley Capital, an energy assets research firm that is changing how investors look at midstream energy risk with an asset-driven information service that combines proprietary research with a trusted team of unbiased, experienced energy analysts. My insights and analysis bring greater transparency to the energy financial market by quantifying potential risks by asset and enabling investors to make more informed and accurate projections and investments. Prior to joining East Daley Capital, I was a senior manager at Platts, a division of McGraw Hill Financial, which acquired Bentek Energy, where I was a senior member of the leadership team.