Inside Rice Energy’s Stock Trends ahead of 1Q16 Results

What You Better Know about Rice Energy's Upcoming 1Q16 Results

(Continued from Prior Part)

Rice Energy’s 1Q16 stock performance

While Rice Energy’s (RICE) stock was mostly on a downtrend in 2015, its stock started declining more rapidly toward the end of 2015. This was because natural gas prices fell to multiyear lows at that time.

However, RICE’s stock has been rallying since February 2016, mirroring the rally in natural gas prices (UNG). YoY (year-over-year), RICE has declined by ~24%. Natural gas prices have declined by ~13% in the same period.

By comparison, the broader industry ETF, the Energy Select Sector SPDR ETF (XLE), has fallen by 18% in the same period. RICE’s natural-gas weighted peers EQT Corporation (EQT), Antero Resources (AR), and Noble Energy (NBL), fell by 19%, ~31%, and ~27%, respectively, in the same period.

These companies together make up 6.3% of the iShares US Oil & Gas Exploration & Production ETF (IEO).

RICE’s recent stock offering

On April 15, Rice closed its equity offering of ~29.9 million shares. After deducting underwriting discounts, commissions, and offering expenses, RICE received net proceeds of $312 million.

The company intends to use a portion of these proceeds to purchase Marcellus and Utica assets in central Greene County, Pennsylvania, from Alpha Natural Resources for $200 million. The remainder is to be used for general corporate purposes. A press release noted that “if the Alpha Acquisition is not consummated, Rice Energy intends to use the net proceeds for general corporate purposes, which may include funding a portion of its 2017 capital budget.”

Rice’s asset purchase

On April 12, Rice Energy announced that it had entered into a “stalking horse asset purchase agreement” to acquire 27,400 net undeveloped Marcellus acres from Alpha Natural Resources for $200 million. (A stalking horse bid is the initial bid placed on the assets of a bankrupt company by an interested buyer chosen by the bankrupt company.)

In the next and final part of this series, we’ll check in with analyst recommendations for RICE.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Rice Energy’s Earnings Forecast: What to Expect for 1Q16

• Part 2 - Understanding Rice Energy’s Production Guidance and Key Management Strategies

• Part 4 - The Word on the Street: What Analysts Are Saying about Rice Energy ahead of 1Q16 Results