CANONSBURG, Pa., Dec. 21, 2015 /PRNewswire/ -- Rice Energy Inc. (NYSE: RICE) ("Rice") today announced that it has agreed to non-binding terms with an energy infrastructure fund to invest up to $500 million in preferred equity in Rice Midstream Holdings LLC ("RMH"), a wholly-owned subsidiary of Rice, and common equity in a new wholly-owned subsidiary of RMH, "GP Holdings", which will be formed to hold the common units, subordinated units and incentive distribution rights in Rice Midstream Partners LP (NYSE: RMP) currently held by RMH.
The closing of the transaction is expected to occur in the first quarter of 2016 and is subject to the completion of diligence, definitive documentation and satisfactory customary conditions precedent. At closing, Rice Energy plans to utilize $375 million, of which it intends to use a portion to repay all outstanding borrowings under RMH's revolving credit facility, and the remainder to fund Rice's 2016 development of its core Marcellus Shale and Utica Shale wells.
Commenting on the announcement, Grayson T. Lisenby, Chief Financial Officer, said, "This planned transaction strongly positions Rice to fully fund its 2016 E&P budget with cash on hand and operating cash flow. The undrawn commitment will provide flexibility to continue to grow our midstream business in the core of the Utica. Additionally, it will help illuminate the long-term value potential of our retained midstream enterprise. We look forward to finalizing this transaction and sharing additional details upon closing."
About Rice Energy
Rice Energy Inc. is an independent natural gas and oil company engaged in the acquisition, exploration and development of natural gas and oil properties in the Appalachian Basin. For more information, please visit our website at www.riceenergy.com.
Forward Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than historical facts included or incorporated herein that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as the closing of the investments in RMH and MLP Holdings on the terms outlined in this announcement and future capital expenditures (including the amount and nature thereof), are forward-looking statements. All forward-looking statements speak only as of the date of this release. Although we believe that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements.
We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. Furthermore, the investments in RMH and MLP Holdings and related transactions may not be completed as described or at all. Information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our Forms 10-K, 10-Q and 8-K. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
SOURCE Rice Energy Inc.