Rice Energy Reports Fourth Quarter and Full Year 2013 Results; Provides Operational Update and 2014 Guidance

CANONSBURG, Pa., March 13, 2014 /PRNewswire/ -- Rice Energy Inc. (NYSE: RICE) today announced financial and operational results for the quarter and year ended December 31, 2013 and provided an update on its 2014 activities and guidance.

Unless otherwise indicated, information presented in this release gives pro forma effect to (i) our initial public offering and the completion of the corporate reorganization in connection with our initial public offering in January 2014 and (ii) the consummation of our acquisition of the remaining 50% interest in our Marcellus joint venture from Alpha Natural Resources, Inc. 

Highlights

  • Fourth quarter 2013 net production of 154 MMcf/d, representing a 120% increase relative to the fourth quarter of 2012 and a 20% sequential increase relative to the third quarter of 2013
  • Full year 2013 production of 126 MMcf/d, representing a 166% increase relative to 2012 production
  • Fourth quarter and full year 2013 Adjusted EBITDAX(1) of $39.2 million and $107.8 million, respectively
  • As of March 1, 2014, firm transportation portfolio covers approximately 330,000 MMBtu/d in 2014, 654,000 MMBtu/d in 2015 and 761,000 MMBtu/d in 2016
  • Previously announced agreement to acquire gathering assets for $110 million de-risks Marcellus takeaway plan and provides optionality for production acceleration
  • Currently running two horizontal rigs in Marcellus Shale and one horizontal rig in Utica Shale with 40 gross operated wells (approximately 230,000 net horizontal feet) in various stages of development today
  • Marcellus Shale leasehold position of 43,351 net acres and Utica Shale leasehold position of 46,488 net acres as of December 31, 2013

Commenting on the results, Daniel J. Rice IV, Chief Executive Officer, said, "2013 was a transformative year for Rice Energy. Over the course of the year we brought online 22 Marcellus wells totaling approximately 138,500 lateral feet with an average 60-day gross initial production rate of 11.0 MMcf/d and since year end we have turned online four additional Marcellus wells that averaged 11.8 MMcf/d per well for the initial 30 days. These results are a testament to the quality of our acreage and the proficiency of our shale-specific team.

"We measure our success, however, by our ability to make meaningful strides in the context of a long-term plan to maximize the value potential of our acreage positions in the cores of the Marcellus and Utica Shales. To that end, we believe we have further improved our positioning for long-term success with several key transactions. Our initial public offering in January 2014 was the second largest U.S. independent E&P IPO in history, providing us increased liquidity to pursue production growth and the ability to invest in strategic midstream and leasehold opportunities in order to support long-term value creation. Additionally, over the course of the last year we have selectively added to our robust portfolio of firm transportation contracts that now stands at 330,000 MMBtu/d, 654,000 MMBtu/d and 761,000 MMBtu/d of firm transportation in 2014, 2015 and 2016, respectively, supporting our ability to grow production and diversify our pricing exposure to Gulf Coast, Midwest and Northeast markets. Lastly, in February 2014, we bolstered the support for near-term production growth by entering into an agreement to acquire midstream assets in eastern Washington and Greene Counties.  We believe that these transactions collectively will strengthen our near-term execution and drive long-term value creation for shareholders."

2013 Results


For the Three
Months Ended
December 31, 2013


For the Year Ended
December 31, 2013


(Unaudited)

Production data (MMcf/d) – 100% natural gas

154



126


Average prices before effects of hedges per Mcf

$

3.90



$

3.89


Average prices after effects of hedges per Mcf(1)   

$

4.25



$

4.01


Average costs per Mcf:




Lease operating

$

0.33



$

0.36


Gathering, compression and transportation

$

0.52



$

0.55


Production taxes and impact fees

$

0.08



$

0.06


General and administrative

$

0.58



$

0.44


Depletion, depreciation and amortization

$

1.34



$

1.57


 

Estimated proved reserves at December 31, 2013 – Natural gas (Bcf)(2):




Total estimated proved reserves



602


Total proved developed reserves



250


Proved developed producing reserves



177


Proved developed non-producing reserves



73


Proved undeveloped reserves



352


Percent developed reserves



42

%

PV-10 of proved reserves (in millions)(3)   



$

709


                               

(1)

The effect of hedges includes realized gains and losses on commodity derivative transactions.

(2)

Our estimated pro forma proved reserves and PV-10 were determined using a 12-month average price for natural gas consistent with requirements established by the SEC. The prices used in the reserve reports prepared by our independent petroleum engineers yield weighted average wellhead prices, which are based on index prices and adjusted for energy content, transportation fees and regional price differentials. The index price and the equivalent wellhead price as of December 31, 2013 were $3.67 per MMBtu and $3.90 per Mcf, respectively.

(3)

PV-10 is a non-GAAP financial measure and generally differs from standardized measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. Our pro forma standardized measure was approximately     $443.7 million as of December 31, 2013. Neither PV-10 nor standardized measure represents an estimate of the fair market value of our natural gas properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such entities.

Financial Results

Our production volumes were 14.2 Bcf for the quarter ended December 31, 2013, with natural gas price realizations, including the effect of hedges, of $4.25 per Mcf.  For the quarter ended December 31, 2013, per unit cash production costs (lease operating; gathering, compression, and transportation; and production taxes and impact fees) were $0.93 per Mcf, depreciation, depletion and amortization expense was $19.0 million and loss on derivative instruments was $20.4 million.  These factors contributed to a net loss of $8.7 million ($0.07 per diluted share) for the quarter ended December 31, 2013. 

Our production volumes were 45.9 Bcf for the year ended December 31, 2013, with natural gas price realizations, including the effect of hedges, of $4.01 per Mcf.  For the year ended December 31, 2013, per unit cash production costs were $0.97 per Mcf, depreciation, depletion and amortization expense was $71.9 million and restricted unit expense was $32.9 million.  These factors contributed to a net loss of $16.5 million ($0.13 per diluted share) for the year ended December 31, 2013. 

2013 and 2014 Operational Highlights

During the fourth quarter of 2013, we averaged 154 MMcf/d of net production, an increase of 120% over the prior year's comparable quarter and 20% over the third quarter of 2013. The sequential period production growth was the result of three pads consisting of seven new Rice-operated Marcellus wells being turned into sales in the fourth quarter of 2013.  The following table provides certain operational data as of March 1, 2014 related to the seven wells added in the fourth quarter of 2013.





Aggregate Periodic Flow
Rates (MMcf/d)

0-90 Days





Wells per
Pad


Average Lateral Length (Feet)




D&C ($/Foot)

3


6,317


34.6


$

1,309

1


3,800


8.5


$

2,032

3


9,000


47.2


$

1,165

The following table provides certain operational data related to our proved developed producing Marcellus Shale wells as of December 31, 2013.  We are the operator of each of these wells. 









Periodic Flow Rates (MMcf/d) (1)



Year(s)


Wells
Turned
Into Sales


Average
Wells per Rig
Move


Average
Lateral Length
(Feet)


0-90


91-180


181-360


361-720


D&C
($/Foot) (2)

2010-2011


6


1.4


3,281


5.5


6


4.4


2.9


$

2,341

2012


9


2


5,731


9


10


6.8


N/A


$

1,609

2013


22


2.1


6,286


11.1


10.3


9.2


N/A


$

1,461

Total


37


1.9


5,664


9.7


9.3


6.3


2.9


$

1,640

 

(1)

   Based on production data through March 1, 2014.

(2)

   D&C costs are shown gross of our working interest's proportionate share.

Financial Position and Liquidity

Pro forma for our initial public offering, we had $311.9 million of total debt, $347.0 million of cash and cash equivalents on hand, and $317.1 million available and zero drawn under our revolving credit facility.

First Quarter 2014 Operational and Hedging Update

Despite the severe weather experienced in Ohio and Pennsylvania during the first two months of 2014, we have been able to maintain high levels of producing well uptime. In addition, we brought online a four-well Marcellus pad (average lateral length of 6,691 feet) in Washington County, Pennsylvania.  These wells are producing in line with management expectations, with a combined 30-day average gross production rate of 47.1 MMcf/d (average 11.8 MMcf/d per well) and a combined day 30 spot production rate of 53.8 MMcf/d (average 13.4 MMcf/d per well) on a restricted-choke program.

We maintain a natural gas hedging program and have continued to add to our derivative positions. Please see the "Derivatives Information" table at the end of this press release for more detailed information about our derivative position as of March 1, 2014.

2014 Capital Budget and Guidance

Our updated capital budget for 2014 is expected to be $1,230 million, consisting of the following:

  • $430 million for drilling and completion in the Marcellus Shale;
  • $150 million for drilling and completion in the Utica Shale;
  • $385 million for leasehold acquisitions; and
  • $265 million for midstream infrastructure development.

This represents a 96% increase over our $629 million 2013 capital budget.  The 2014 updated capital budget excludes $100 million of cash paid with respect to the purchase of the remaining interests in our Marcellus joint venture and approximately $110 million expected to be paid for our previously-announced agreement to acquire midstream assets. 

Of the $580 million 2014 drilling and completion budget, approximately 85% is related to Rice Energy-operated drilling and approximately 74% is allocated to the Marcellus Shale.  Furthermore, approximately $200 million of the drilling and completion budget is for wells that Rice plans to begin producing in 2015.  We anticipate running two horizontal rigs in the Marcellus Shale and one horizontal rig in the Utica Shale throughout 2014. 

Assuming the execution of the $1,230 million capital plan discussed above, we anticipate that 2014 average net daily production will be between 260 MMcf/d and 310 MMcf/d (100% natural gas), representing a 106% to 146% increase over 2013 average net daily production.  This increase is expected to be driven primarily by increasing development of our core Marcellus Shale acreage in southwestern Pennsylvania.  Furthermore, in 2014, we anticipate that we will spud 43 net and initially produce 37 net horizontal Marcellus Shale wells, and that we will spud 13 net and initially produce 7 net horizontal Utica Shale wells.  The production guidance presented above is based on the key assumptions in the table below.


2014 Guidance


Low


High

Forecasted average daily production (MMcf/d)

260



310


Forecasted natural gas as a percentage of production

100%



Heat content (Btu/Scf)

1,050



Average costs per Mcf:




Lease operating

$

(0.40)



$

(0.35)


Gathering, compression and transportation

$

(0.55)



$

(0.45)


Production taxes and impact fees

$

(0.03)



$

(0.02)


Cash general and administrative (in millions)

$

40.0



$

35.0


Conference Call

Rice Energy will host a conference call on March 13, 2014 at 10 a.m. ET (9 a.m. CT) to discuss fourth quarter and full year 2013 earnings and operational results and to provide 2014 guidance.  Interested parties are invited to participate on the call by dialing (888) 323-9686 (Conference ID:  RICE ENERGY) at least 15 minutes prior to the start of the call.  A replay of the call will be available on the Rice Energy website for a fourteen-day period following the call.

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 in this release, that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as our future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, market conditions, references to future success, references to intentions as to future matters and other such matters 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, incident to the exploration for and development, production, gathering and sale of natural gas and oil. These risks include, but are not limited to: commodity price volatility; inflation; lack of availability of drilling and production equipment and services; environmental risks; drilling and other operating risks; regulatory changes; the uncertainty inherent in estimating natural gas reserves and in projecting future rates of production, cash flow and access to capital; and the timing of development expenditures.  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.

RICE ENERGY INC.

PRO FORMA CONDENSED

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2013

(Unaudited)









(in thousands)

Historical
Rice Drilling B


Consolidation of
Marcellus JV
Pro Forma
Adjustments


Reorganization
and Offering Pro
Forma
Adjustments


Pro Forma
Rice Energy Inc.

Assets








Current assets:








Cash

$

31,612



$

(88,701)



$

630,000



$

347,011







(35,500)









(190,400)




Restricted cash

8,268







8,268


Accounts receivable

31,765



12,827





44,592


Receivable from affiliate

2,244



10





2,254


Prepaid expenses and other

863



93





956


Total current assets

74,752



(75,771)



404,100



403,081










Investments in joint ventures

49,814



(49,760)





54


Gas collateral account

3,700



295





3,995


Proved natural gas properties, net

270,523



320,000





590,523


Unproved natural gas properties

457,836







457,836


Property and equipment, net

5,972



83





6,055


Deferred financing costs, net

12,292



851





13,143


Other non-current assets

4,921



366,042





370,963


Total assets

879,810



561,740



404,100



1,845,650










Liabilities and members'/stockholders' capital





Current liabilities:








Current portion of long-term debt

20,120







20,120


Accounts payable

51,219



20,024





71,243


Royalties payable

9,393



6,831





16,224


Accrued interest

250



16





266


Accrued capital expenditures

16,753



1,775





18,528


Other accrued liabilities

8,283



2,048





10,331


Leasehold payable

18,606



69





18,675


Derivative liabilities

965



2,427





3,392


Payable to affiliate

6,148



11





6,159


Operated prepayment liability

1,201







1,201


Total current liabilities

132,938



33,201





166,139










Long-term liabilities:








Long-term debt

406,822



75,400



(190,400)



291,822


Leasehold payable

1,675



69





1,744


Deferred tax liability



57,118



(96,487)



(39,369)


Restricted units

36,306







36,306


Other long-term liabilities

3,422



712





4,134


Total liabilities

581,163



166,500



(286,887)



460,776










Members'/stockholders' capital

298,647



395,240



690,987



1,384,874


Total liabilities and members'/stockholders' capital

$

879,810



$

561,740



$

404,100



$

1,845,650


 

 

RICE ENERGY INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2013

(Unaudited)









(in thousands, except per share data)

Historical
Rice Drilling B


Consolidation of
Marcellus JV Pro
Forma
Adjustments


Reorganization
and Offering Pro
Forma
Adjustments


Pro Forma
Rice Energy Inc.

Revenues:








Natural gas sales

$

27,628



$

27,739



$



$

55,367


Other revenue

238







238


Total revenues

27,866



27,739





55,605










Operating expenses:








Lease operating

2,587



2,095





4,682


Gathering, compression and transportation

2,751



4,619





7,370


Production taxes and impact fees

600



596





1,196


Exploration

8,167







8,167


Restricted unit expense

(7,181)







(7,181)


General and administrative

7,001



1,256





8,257


Depreciation, depletion and amortization

9,600



9,450





19,050


Loss on impairment of natural gas properties



146





146


Loss from sale of interest in gas properties

4,230







4,230


Total expenses

27,755



18,162





45,917










Operating income

111



9,577





9,688


Interest income (expense)

(4,882)



(403)



1,523



(3,762)


Other income (expense)

(10)



106





96


Loss on derivative instruments

(9,807)



(10,581)





(20,388)


Amortization of deferred financing costs

(470)



(57)





(527)


Equity in income (loss) of joint ventures

123



(30)





93


Income (loss) before income taxes

(14,935)



(1,388)



1,523



(14,800)


Income tax benefit





6,140



6,140










Net income (loss)

$

(14,935)



$

(1,388)



$

7,663



$

(8,660)


Earnings per share—basic







$

(0.07)


Earnings per share—diluted







$

(0.07)


RICE ENERGY INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2013

(Unaudited)









(in thousands, except per share data)

Historical
Rice Drilling B


Consolidation of
Marcellus JV Pro
Forma
Adjustments


Reorganization
and Offering Pro
Forma
Adjustments


Pro Forma
Rice Energy Inc.

Revenues:








Natural gas sales

$

87,847



$

90,677



$



$

178,524


Other revenue

757







757


Total revenues

88,604



90,677





179,281










Operating expenses:








Lease operating

8,309



8,193





16,502


Gathering, compression and transportation

9,774



15,663





25,437


Production taxes and impact fees

1,629



1,258





2,887


Exploration

9,951







9,951


Restricted unit expense

32,906







32,906


General and administrative

16,953



3,256





20,209


Depreciation, depletion and amortization

32,815



39,071





71,886


Loss on impairment of natural gas properties



146





146


Loss from sale of interest in gas properties

4,230







4,230


Total expenses

116,567



67,587





184,154










Operating income (loss)

(27,963)



23,090





(4,873)


Interest income (expense)

(17,915)



(880)



2,373



(16,422)


Other expense

(357)



(796)





(1,153)


Gain on derivative instruments

6,891



3,347





10,238


Amortization of deferred financing costs

(5,230)



(164)





(5,394)


Loss on extinguishment of debt

(10,622)







(10,622)


Equity in income (loss) of joint ventures

19,420



(19,330)





90


Income (loss) before income taxes

(35,776)



5,267



2,373



(28,136)


Income tax benefit





11,674



11,674










Net income (loss)

$

(35,776)



$

5,267



$

14,047



$

(16,462)


Earnings per share—basic







$

(0.13)


Earnings per share—diluted







$

(0.13)


 

 

RICE DRILLING B LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




December 31,

(in thousands)

2013


2012

Assets




Current assets:




Cash

$

31,612



$

8,547


Restricted cash

8,268




Accounts receivable

31,765



8,557


Receivable from affiliate

2,244



11,879


Prepaid expenses and other

863



321


Total current assets

74,752



29,304






Investments in joint ventures

49,814



30,976


Gas collateral account

3,700



5,843


Proved natural gas properties, net

270,523



159,988


Unproved natural gas properties

457,836



111,030


Property and equipment, net

5,972



2,622


Deferred financing costs, net

12,292



5,208


Other non-current assets

4,921




Total assets

$

879,810



$

344,971






Liabilities and members' capital




Current liabilities:




Current portion of long-term debt

$

20,120



$

8,814


Accounts payable

51,219



19,793


Royalties payable

9,393



1,960


Accrued interest

250



2,004


Accrued capital expenditures

16,753



2,359


Other accrued liabilities

8,283



5,585


Leasehold payable

18,606



3,954


Derivative liabilities

965



2,260


Payable to affiliate

6,148



2,482


Operated prepayment liability

1,201



11,553


Total current liabilities

132,938



60,764






Long-term liabilities:




Long-term debt

406,822



140,506


Leasehold payable

1,675



106


Restricted units

36,306



3,400


Other long-term liabilities

3,422



2,004


Total liabilities

581,163



206,780


Members' capital

298,647



138,191


Total liabilities and members' capital

$

879,810



$

344,971


ALPHA SHALE RESOURCES, LP

BALANCE SHEETS




December 31,

(in thousands)

2013


2012

Assets




Current assets:




Cash

$

11,299



$

4,445


Accounts receivable

14,842



5,716


Receivable from affiliate

10



1


Prepaid expenses and other

93



108


Total current assets

26,244



10,270






Gas collateral account

295



295


Proved natural gas properties, net

182,333



114,128


Property and other equipment, net

83



91


Deferred financing costs, net

851



387


Other non-current assets

1,010




Total assets

$

210,816



$

125,171






Liabilities and partners' capital




Current liabilities:




Accounts payable

$

20,024



$

18,953


Royalties payable

6,831



2,082


Accrued interest

16



413


Accrued capital expenditures

1,775



3,489


Other accrued liabilities

2,048



726


Leasehold payable

69



331


Derivative liabilities

2,427



138


Payable to affiliate

2,026



8,538


Total current liabilities

35,216



34,670






Long-term liabilities:




Long-term debt

75,400



29,200


Leasehold payable

69




Other long-term liabilities

712



542


Total liabilities

111,397



64,412


Partners' capital

99,419



60,759


Total liabilities and partners' capital

$

210,816



$

125,171


 

 

RICE DRILLING B LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS






Three Months Ended December 31,


Year Ended December 31,

(in thousands)

2013


2012


2013


2012

Revenues:

(Unaudited)





Natural gas sales

$

27,628



$

11,216



$

87,847



$

26,743


Other revenue

238



457



757



457


Total revenues

27,866



11,673



88,604



27,200










Operating expenses:








Lease operating

2,587



1,462



8,309



3,688


Gathering, compression and transportation

2,751



1,341



9,774



3,754


Production taxes and impact fees

600



217



1,629



1,382


Exploration

8,167



425



9,951



3,275


Restricted unit expense

(7,181)





32,906




General and administrative

7,001



2,225



16,953



7,599


Depreciation, depletion and amortization

9,600



3,940



32,815



14,149


Write-down of abandoned leases



30





2,253


Loss from sale of interest in gas properties

4,230





4,230




Total operating expenses

27,755



9,640



116,567



36,100


Operating income (loss)

111



2,033



(27,963)



(8,900)










Other income (expense):








Interest expense

(4,882)



(1,686)



(17,915)



(3,487)


Other income (expense)

(10)



36



(357)



112


Gain (loss) on derivative instruments

(9,807)



2,026



6,891



(1,381)


Amortization of deferred financing costs

(470)



(1,680)



(5,230)



(7,220)


Loss on extinguishment of debt





(10,622)




Equity in income of joint ventures

123



1,668



19,420



1,532


Total other income (expense)

(15,046)



364



(7,813)



(10,444)


Net income (loss)

$

(14,935)



$

2,397



$

(35,776)



$

(19,344)


 

 

ALPHA SHALE RESOURCES, LP

STATEMENTS OF OPERATIONS






Three Months Ended December 31,


Year Ended December 31,

(in thousands)

2013


2012


2013


2012

Revenue:

(Unaudited)





Natural gas sales

$

27,739



$

11,828



$

90,677



$

26,284










Operating expenses:








Depreciation, depletion and amortization

8,031



2,322



25,008



9,411


Gathering, compression and transportation

4,619



3,295



15,663



6,671


Lease operating

2,095



1,841



8,193



3,331


Production taxes and impact fees

596



141



1,258



869


Loss on impairment of natural gas properties

146





146




General and administrative expenses

1,256



721



3,256



2,058


Total operating expenses

16,743



8,320



53,524



22,340


Operating income

10,996



3,508



37,153



3,944










Other income (expense):








Other income (expense)

106



(4)



(796)




Gain (loss) on derivative instruments

(10,581)



(74)



3,347



(74)


Amortization of deferred financing costs

(57)



(15)



(164)



(15)


Interest expense

(403)



(101)



(880)



(372)


Total other income (expense)

(10,935)



(194)



1,507



(461)


Net income

$

61



$

3,314



$

38,660



$

3,483


 

 

RICE DRILLING B LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS




Year Ended December 31,

(in thousands)

2013


2012

Cash flows from operating activities:




Net loss

$

(35,776)



$

(19,344)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:




Depreciation, depletion and amortization

32,815



14,149


Amortization of deferred financing costs

5,230



7,220


Loss from sale of interest in gas properties

4,230




Restricted unit expense

32,906




Write-off of unsuccessful exploratory well costs

8,143




Derivative instruments fair value (gain) loss

(6,891)



1,381


Equity in income of joint ventures

(19,420)



(1,532)


Write-down of abandoned leases and other leasehold costs



2,253


(Increase) decrease in:




Accounts receivable

(17,208)



(3,828)


Receivable from affiliate

9,635



(8,403)


Gas collateral account

643



(4,137)


Prepaid expenses and other

(541)



(212)


Cash receipts for settled derivatives

676



879


Increase (decrease) in:




Accounts payable

2,273



(30)


Royalties payable

7,432



775


Other accrued expenses

5,859



7,391


Payable to affiliate

3,666



424


Net cash provided by (used in) operating activities

33,672



(3,014)






Cash flows from investing activities:




Capital expenditures for natural gas properties

(463,128)



(109,149)


Investment in joint ventures



(9,957)


Capital expenditures for property and equipment

(2,259)



(867)


Proceeds from sale of interest in gas properties

6,792




Net cash used in investing activities

(458,595)



(119,973)






Cash flows from financing activities:




Proceeds from borrowings

435,500



44,361


Repayments of debt obligations

(160,760)



(10,152)


Restricted cash for convertible debt

(8,268)




Debt issuance costs

(12,194)



(1,913)


Capital contributions

195,977



96,782


Repurchase of restricted units

(2,267)



(1,133)


Return of capital



(800)


Net cash provided by financing activities

447,988



127,145






Net increase in cash

23,065



4,158


Cash at the beginning of the year

8,547



4,389


Cash at the end of the year

$

31,612



$

8,547


 

ALPHA SHALE RESOURCES, LP

STATEMENTS OF CASH FLOWS




Year Ended December 31,

(in thousands)

2013


2012

Cash flows from operating activities:




Net income

$

38,660



$

3,483


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation, depletion and amortization

25,008



9,411


Amortization of deferred financing costs

164



15


Loss on impairment of natural gas properties

146




Derivative instruments fair value (gain) loss

(3,347)



74


(Increase) decrease in:




Accounts receivable

(9,126)



(5,067)


Receivable from affiliate



25


Gas collateral account



(295)


Prepaid expenses and other

15



55


Cash receipts for settled derivatives

4,627



64


Increase (decrease) in:




Accounts payable

69



347


Royalties payable

4,749



1,734


Other accrued expenses

928



1,050


Payable to affiliate

(6,512)



2,499


Net cash provided by operating activities

55,381



13,395






Cash flows from investing activities:




Capital expenditures for natural gas properties

(94,099)



(63,847)


Capital expenditures for property and other equipment



(12)


Net cash used in investing activities

(94,099)



(63,859)






Cash flows from financing activities:




Proceeds from borrowings

46,200



29,200


Debt issuance costs

(628)



(402)


Capital contributions



20,000


Net cash provided by financing activities

45,572



48,798






Net increase (decrease) in cash

6,854



(1,666)


Cash at the beginning of the year

4,445



6,111


Cash at the end of the year

$

11,299



$

4,445


 

Rice Energy Inc.
Supplemental Non-GAAP Financial Measure
(Unaudited)

Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income (loss) before interest expense or interest income; income taxes; write-down of abandoned leases; depreciation, depletion and amortization; amortization of deferred financing costs; equity in (income) loss of our joint ventures; derivative fair value (gain) loss, excluding net cash receipts on settled derivative instruments; non-cash compensation expense; (gain) loss from sale of interest in gas properties; and exploration expenses. Adjusted EBITDAX is not a measure of net income as determined by United States generally accepted accounting principles, or GAAP.

The following table presents a pro forma reconciliation of the non-GAAP financial measure of Adjusted EBITDAX to the GAAP financial measure of net income (loss).




Three Months Ended


Year Ended

(in thousands)

December 31, 2013


December 31, 2013

Adjusted EBITDAX reconciliation to net income (loss):




Net loss

$

(8,660)



$

(16,462)


Interest expense

3,762



16,422


Depreciation, depletion and amortization

19,050



71,886


Amortization of deferred financing costs

526



5,394


Equity in income of joint ventures

(93)



(90)


Derivative fair value (gain) loss (1)   

20,388



(10,238)


Net cash receipts on settled derivative instruments (1)  

4,966



5,302


Restricted unit expense

(7,181)



32,906


Income tax benefit

(6,140)



(11,674)


Loss from sale of interest in gas properties

4,230



4,230


Loss on impairment of natural gas properties

146



146


Exploration expenses

8,167



9,951


Adjusted EBITDAX

$

39,161



$

107,773




(1)

 The adjustments for the derivative fair value (gains) losses and net cash receipts on settled commodity derivative instruments have the effect of adjusting net income (loss) for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDAX on a cash basis during the period the derivatives settled.

 

Rice Energy Inc.

Derivatives Information

(Unaudited)


The table below provides data associated with our derivatives at March 1, 2014 for the periods indicated:










2014


2015


2016


2017

Natural Gas Swaps: (1)








Volume (BBtu/d)

162


92


99


60

Price ($/MMBtu)

$

4.12


$

4.16


$

4.20


$

4.24









Natural Gas Collars: (1)








Volume (BBtu/d)

10


70



Ceiling Price ($/MMBtu)

$

5.80


$

4.68


n/a


n/a

Floor Price ($/MMBtu)

$

3.00


$

3.91


n/a


n/a









Natural Gas Puts: (1)








Volume (BBtu/d)

23




Strike Price ($/MMBtu)

$

4.55


$


$


$

Put Premium ($/MMBtu)

$

0.45


$


$


$

                                                                                          

(1)

The index prices for the natural gas price swaps, collars and puts are based on the NYMEX – Henry Hub last trading day futures price.

 

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SOURCE Rice Energy Inc.



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