1. 1. Greene County Acreage Acquisition Supplemental Slides April 12, 2016
2. 2. 2 www.riceenergy.com Checks all of the boxes for an attractive acquisition Core acreage in our focus counties Contiguous to existing footprint in central Greene County ~27,400 net undeveloped Marcellus acres / ~23,500 net undeveloped Utica acres ~3,200 gross acres of fee minerals are currently leased to RICE and are generating royalty cash flow Ability to use midstream platform to enhance value Acreage ideally located for RMP to provide midstream services through connection to existing system No existing midstream dedication RICE captures midstream value through RMP LP and GP ownership Extends runway for future RMP distribution growth Attractive return profile consistent with existing assets Economic returns of ~40% at strip pricing(1) Comparable geology with acreage de-risked by adjacent well results Attractive NRI on acquired assets with total of ~6,200 acres owned in fee Manageable expiry profile Undeveloped leasehold is ~44% held by production/operations or in fee No change to RICEs 2016 capital budget $200MM Stalking Horse Bid Transaction Highlights __________________________ Note: Subject to purchase price adjustments. 1. Strip pricing as of 4/8/16 2. Peers include RRC, CNX, EQT and CVX RICE is uniquely positioned to acquire ANRs natural gas assets - highly complementary to existing upstream footprint and midstream infrastructure RICE Acreage Acquisition Acreage LEGEND RICE Producing Wells Peer Producing Wells(2) SW Marcellus Core Deep PA Utica Core Greene Washington PENNSYLVANIA OH PA WV
3. 3. 3 www.riceenergy.com Expanding Core Dry Gas Position 56,000 Pro Forma 247,900 Marcellus OH Utica PA Utica Net Drilling Locations(2) * Stacked Pay on PA Acreage 72,500 669 215 155 143 119,400 __________________________ 1. Strip pricing as of 4/8/16. 2. Net undeveloped locations as of 12/31/15, pro forma for the Greene County Prospective Acquisition. See slide entitled Additional Disclosures on detail regarding RICEs methodology for the calculation of locations. 3. Calculated as $200 million of total purchase price less $20 million attributed to the value of royalty rights (at assumed 5.0x multiple on 2015 royalty payments) divided by 27,400 net Marcellus acres. Strategic assets complementary to existing portfolio and extend inventory of high-return locations 92,000 12/31/15 197,000 49,000 * 56,000 * Developed ~27,400 net core Marcellus acres complementary to existing position Adds 182 net core drilling locations 37% increase in Marcellus locations ~44% acreage HBP, held by operations or owned in fee Marcellus single well returns of ~40% at strip(1) Stacked potential: ~23,500 net PA Utica acres provides additional inventory upside and optionality Adds 50 net core drilling locations 48% increase in PA Utica locations Development natural extension for RICE Can utilize infrastructure from Marcellus production ~3,200 gross acres owned in fee that is leased to RICE and is generating royalty cash flow today Royalty acres on producing and non-producing acreage on RICE leased acreage in Greene county ~$4MM of 2015 cash flow Implied per acre purchase price of ~$6,600 per Marcellus acre(3) represents a compelling transaction multiple compared to recent Marcellus transactions Pro-Forma E&P Assets Net Acres
4. 4. 4 www.riceenergy.com Advantaged Midstream & Downstream Solutions Increases Core Acreage Dedication to RMP by 25% WEST VIRGINIA OH PA WV Greene Washington PENNSYLVANIA Beaver Brooke Legend RMP Gathering Pipeline to be Constructed RICE Acreage RMP Gathering Pipeline 3rd Party Dedicated to RMP RMP Water Pipeline RMP Water Pipeline to be Constructed RMP Water Interconnect Acquisition Acreage Acreage will be dedicated to Rice Midstream Partners (NYSE: RMP) Increases RMPs core dedication to ~142,000 gross acres Marcellus acreage dedication has increased by 70% since IPO Acreage within close proximity to RMPs existing infrastructure RMP experienced in constructing and operating dry gas midstream systems in central Greene County, PA Adjacent to RMPs Greene County gathering system with connections into TCO, DTI,TETCO Access to interstate pipelines through RICEs substantial long-term firm transport to premium markets 933 MMBtu/d FT on TETCO,TCO and DTI with firm paths to premium Midwest and Gulf Coast markets Flexible optionality to produce into improving local markets RICE captures midstream cash flows through ~38% LP ownership plus ~92% ownership of IDRs in RMP TETCO TCO TETCO
5. 5. 5 www.riceenergy.com Sale Process and RICE Competitive Advantages Rice Energy expects to be named as stalking horse bidder for the Alpha assets and has signed an Asset Purchase Agreement, which will be filed with the bankruptcy court to seek courts approval Stalking horse bidder selected after a broad marketing process led by sellers financial advisor Pursuant to standard bankruptcy court proceedings, there will be a public auction process to follow The potential acquisition represents an asset transaction for Rice Energy with a tax basis step-up Rice Energy is buying natural gas assets only, which will be free and clear of any legal liabilities associated with the coal assets 363 SALE PROCESS OVERVIEW As the stalking horse bidder, Rice Energy is strategically better positioned than other potential bidders for the assets Contiguous acreage adjacent to existing position in Greene County Midstream advantage with existing infrastructure in close proximity and RMP to provide midstream support and interconnectivity Knowledge of assets and geologically similar to existing Marcellus/Utica acreage Rice Energy has deep expertise in operating in areas with coal mining activities Successful JV with Alpha prior to IPO Purchase price includes bid protections, which include a break-up fee and expense reimbursement Rice Energy has had substantial input in negotiating the Asset Purchase Agreement and has had the ability to perform substantial due diligence on the assets and the sale process generally RICE ADVANTAGES
6. 6. 6 www.riceenergy.com Rice Energy Strategy Allocate 100% of Capital to Core Assets with Attractive Returns Protect Returns and Balance Sheet through FT Portfolio and Systematic Hedging Strategically Position Midstream to Maximize Value Promote Operational Excellence through Innovation, Safety and Environmental Stewardship Long-Term ShareholderValue Creation Maintain a Strong Balance Sheet
7. 7. 7 www.riceenergy.com Appendix
8. 8. 8 www.riceenergy.com Financial Strength Healthy balance sheet, ample liquidity and robust hedges 2016 budget focused on balance sheet and E&P returns while creating significant future midstream value Healthy Balance Sheet: Expect to exit 2016 at ~3.0x E&P leverage with no dependence on drop downs or capital markets Ample Liquidity: $1.4B of liquidity(1): $1.1B E&P and $300MM RMH Robust & Attractive Hedges: 87% of 2016 production hedged at $3.26/MMBtu; majority of 2017 production hedged at $3.14/MMBtu Highly concentrated acreage position in the most economic areas of the Marcellus and Utica Shale Core Locations(2): 669 net undeveloped Marcellus wells + 215 net undeveloped OH Utica wells + 155 net undeveloped PA Utica wells Resilient Economics: Development and operating cost declines have driven avg. breakeven PV-10 to ~$2.15/MMBtu (~15% lower than 2015) Compelling Returns in Challenging Market: ~40% Pre-Hedge IRRs at strip pricing(3) Midstream is a valuable and differentiated element of the RICE story #1 Gatherer in the Dry Gas Core: 275,000 acres(4) dedicated from 3 of the 5 most active operators in SW Appalachia Unique Financial Advantages: ~$1.0B of midstream monetizations and financings to date with ~$1.3B of estimated remaining drop down inventory and GP Holdings with expected future value of $1.0B+ High Growth MLP: RMP expects 20% distribution growth with current asset base while maintaining 1.3x-1.5x coverage in 2016 Firm Transportation (FT) Portfolio is right-sized for RICEs production growth and basis outlook Right-Sized: FT covers >80% of 2016 production and decreases to ~60% by 2020 Right Exposure: Expect local basis to improve from $0.75 in 2016 (30% of production) to $0.50 in 2020 (~40% of production) Well Positioned to Navigate Environment __________________________ 1. As of 12/31/2015 pro forma for the preferred equity transaction of $375 million. 2. Net undeveloped locations as of 12/31/15, pro forma for the Greene County Prospective Acquisition. See slide entitled Additional Disclosures on detail regarding RICEs methodology for the calculation of locations. 3. Strip pricing as of 4/8/16. See Economics slide for more detailed assumptions used to generate single well economics. 4. Excludes ~49K net PA Utica acres dedicated to RMP from RICE and additional PA Utica acreage dedicated to RMP from EQT.
9. 9. 9 www.riceenergy.com 0.0 x 1.0 x 2.0 x 3.0 x 4.0 x 5.0 x 6.0 x 7.0 x 8.0 x 9.0 x 0.0 x 5.0 x 10.0 x 15.0 x 20.0 x 25.0 x RICE Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 EV / 2016E EBITDA Net Debt / 2016E EBITDA Peer Median 12.7x Peer Median 4.1x EV/2016EEBITDA NetDebt/2016EEBITDA RICE trades at AttractiveValuation Relative to Peers RICE trades at a 3.9x discount to peers despite a strong financial position, core assets and growing cash flow The median EBITDA multiple implies a $29.12 RICE stock price, an 86% premium to current price(1) __________________________ Note: Peer group includes AR, CNX, COG, EQT, GPOR, RRC, and SWN. Not pro forma for proposed RICE equity issuance and acquisition. 1. Figures based on IBES consensus EBITDA and YE 2016 net debt, pro forma for equity offerings. Stock price as of 4/08/16. 2016E EBITDA Growth Positive Negative Positive Positive Positive Negative Negative Negative % Hedged in 2016 87% 60% 100% 42% 68% 5% 71% 14%
10. 10. 10 www.riceenergy.com 647 800 247 400 175 401 894 1,200 2013 2014 2015 2016E PA OH $0.43 $0.31 $0.26 $0.55 $0.38 $0.36 $0.38 $0.38 $0.38 $0.44 $0.43 $0.34 $1.80 $1.50 $1.34 2013 2014 2015 LOE and Taxes FT Gathering G&A 127 274 552 720 2013 2014 2015 2016E 249 644 1,015350 662 685 599 1,306 1,700 2013 2014 2015 PD PUD $2,457 $1,651 $1,450 2014 2015 2016E $1,439 $1,237 $1,181 $1,150 2013 2014 2015 2016E Track Record of Low-Cost Growth PER UNIT CASH COSTS ($/MCFE)(1)UTICA D&C COSTS ($/FT.)MARCELLUS D&C COSTS ($/FT.) MIDSTREAM THROUGHPUT (MDTH/D)NET PRODUCTION (MMCFE/D)PROVED RESERVES (BCFE) __________________________ 1. E&P segment costs. RICE gathering agreements in OH and PA began in 2015. Gathering fee per Mcfe applied to 2013 and 2014 to show a comparison on apples to apples basis.
11. 11. 11 www.riceenergy.com 25% 47% 77% 114% 159% 23% 49% 83% 124% 173% 25% 50% 75% 100% 125% 150% 175% 200% $2.50 $3.00 $3.50 $4.00 $4.50 Attractive SingleWell Economics Net Locations (2) 669 168 (3) HHUB PV-10 Breakeven ($/MMBtu) $2.08 $2.18 DRY GAS SINGLE WELL ECONOMICS RICE continues to drive down D&C and operating costs to maximize returns Inventory currently generates ~40% returns at strip(1); HHUB PV10 breakevens of $2.08-$2.18 HHUB __________________________ Note: See appendix for summary of assumptions used to generate single well IRRs. Marcellus 750 and Utica 1,000 economics assume E&P is burdened by 50% of the gathering and compression fee and 50% of water completion fees (RICE owns a 41% LP interest in RMP, 100% of RICE Ohio Midstream and 100% of RMP IDRs). 1. Strip as of 4/8/16. 2. Pro forma for the Greene County Prospective Acquisition. 3. Excludes ~47 wet OH Utica net undeveloped locations and ~155 dry gas PA Utica net undeveloped locations. Dotted lines represent previously reported economics NYMEX ($/MMBtu) IRR
12. 12. 12 www.riceenergy.com 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 250 500 750 1,000 1,250 1,500 1,750 2,000 Days Online Peer Susquehanna, PA (Marcellus) Peer Utica Peer Belmont Peer Monroe Rice Utica 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 250 500 750 1,000 1,250 1,500 1,750 2,000 Days Online Peer Marcellus Rice Greene Rice Washington Rice Geneseo UTICA & SUSQUEHANNA, PA HISTORICAL PRODUCTION(2)WASHINGTON & GREENE COUNTY HISTORICAL PRODUCTION(1) Differentiated Long-Term Production perWell __________________________ 1. Data for RICE based on actuals through 12/31/15, peer data based on Pennsylvania Department of Environmental Protection production reports through 11/30/15. 2. Data for RICE based on actuals through 12/31/15, peer data based on Ohio Department of Natural Resources report through 9/30/15. Our drilling and completion techniques have yielded greater production profile per well than our peers Cumulative Production (Bcfe) RICE has 5 of the top 10 wells based on cumulative production RICE has the top 8 Utica wells based on average rate Cumulative Production (Bcfe)
13. 13. 13 www.riceenergy.com Most Efficient Growth in Appalachia __________________________ 1. Horizontal Marcellus and Utica wells only. Data for RICE based on actuals through 1/31/2016, peer data based on Pennsylvania Department of Environmental Protection and Ohio Department of Natural Resources production reports through September 30, 2015. RICE production excludes acquired CHK wells. Peers: APC, AR, CHIEF, CHK, COG, CNX, EQT, GPOR, NFG, RRC, SWN & TLM. RICEs peer-leading production growth is driven by a focus on well quality, not quantity RICE reached over 850 MMcfe/d of gross operated production with fewer wells than every other operator(1) in Appalachia Chart below demonstrates RICEs ability to rapidly grow production w/ a clear path to 1 Bcf/d & beyond w/ ~1,200+ wells left to drill MMcf/d PRODUCTION VERSUS WELLS - TOP PRODUCERS IN APPALACHIA(1) SW Appalachia Operators NE Appalachia Operators 153 Operated Wells ProducingWell Count
14. 14. 14 www.riceenergy.com 0 20 40 60 80 100 120 140 160 180 200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 7 4 3 3 2 2 2 1 1 1 14 8 4 5 4 12 7 4 10 6 0 5 10 15 20 25 Peer 1 Peer 2 Rice Energy Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Asset Quality Industry High Grading to Quality Top Ten Active Operators Laid Down From Peak Active March 2016: 34 Rigs Rig Count PA Marcellus & Utica Pennsylvania West Virginia Ohio Nov 2008 34 Rigs Appalachia Rig Counts(1): 2007 - 2016 RICE Acreage #ofRigs __________________________ 1. RigData + Baker Hughes Rig Reports. RICEs footprint is located in the epicenter of remaining activity in Appalachia due to best in class economics Early 2012 Peak of 175 Rigs March 2016 34 Rigs Acquisition Acreage Current Rig
15. 15. 15 www.riceenergy.com Pennsylvania Utica: A Natural Extension for Rice RICE OH Utica >40 MMcfe/d RICE PA Utica Peer Results 60-70 MMcfe/d Peer Results 10-30 MMcfe/d Point Pleasant Core __________________________ 1. RigData January 2016 Report. RICE OHIO UTICA RICE PENNSYLVANIA UTICA 16 Producing Wells 1 Producing Well RICE Belmont County, OH RICE Greene County, PA 10,500 12,000 13,0009,5007,500 OH WV Guernsey Belmont Marshall Washington / Greene PA The Utica core extends directly underneath RICEs Pennsylvania assets. Initial RICE and Industry wells point to massive resource potential. Peer Results 40-60 MMcfe/d Wet Gas Dry Gas Dry Gas Dry GasRICE Deep Utica Well In Sales, 12 MMcfe/d choked Expect flat production for 700+ days EQT Tests 42 73 MMcfe/d RRC Test 59 MMcfe/d CNX Test 61 MMcfe/d RICE Acreage Current Rig(1) Deep Test Report Porosity 6% 12% 0% Washington RICE PA Utica: One well placed online in August 2015 Lateral Length: 5800 Initial Pressure: 10,000 psi Expect to be competitive with Marcellus/OH Utica returns at $15MM well costs CNX Test 61 MMcfe/d Acquisition Acreage Greene
16. 16. 16 www.riceenergy.com 2.0 4.0 6.0 8.0 10.0 12.0 14.0 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 MMcf/d YearsRevised Marcellus 750' Type Well Previous Marcellus Type Well Marcellus Type Curve Updated Restricted Rate __________________________ Note: See appendix for summary of assumptions used to generate single well IRRs. MARCELLUS SINGLE WELL TYPE CURVE Cumulative Production Current Prior Var. 1 Year 3.4 3.8 (0.4) 2 Year 5.2 5.6 (0.4) 5 Year 8.1 8.2 (0.1) 10 Year 10.6 10.3 0.3 EUR 15.1 13.9 1.2 TYPE CURVE UPDATES RICE revised Marcellus type well to reflect latest production history, which resulted in an increase to EURs 136 operated wells online Updated choke management program to maximize long-term production & PV-10 Updated economic assumptions including D&C, operating and FT costs Operating costs decreased ~40% FT costs decreased ~25% D&C / foot decreased 8% Type curve reflects more aggressive choke management program to drive increased EURs on longer laterals Marcellus Current Prior Var. (%) EUR (Bcf / 1,000') 2.16 1.98 9% Lateral Length 7,000 7,000 EUR (Bcf) 15.1 13.9 9% Interwell Spacing (ft) 750 750 Choke (MMcf/d per 1,000') 1.50 1.85 (19%) Flat Time (days) 180 150 20% 1-Year Cum. (Bcf) 3.4 3.8 (12%) 2-Year Cum. (Bcf) 5.2 5.6 (8%) 5-Year Cum. (Bcf) 8.1 8.2 (2%) 10-Year Cum. (Bcf) 10.6 10.3 4% IRR ($3.50 HHUB) 77% 46% 67% PV-10 ($ mm) ($3.50 HHUB) $10.1 $5.8 74%
17. 17. 17 www.riceenergy.com 5.0 10.0 15.0 20.0 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 MMcf/d YearsOhio Utica 1,000' Type Well Previous Utica Type Well Utica Type Curve Updated Restricted Rate __________________________ Note: See appendix for summary of assumptions used to generate single well IRRs. UTICA SINGLE WELL TYPE CURVE TYPE CURVE UPDATES RICE revised Utica type well to reflect latest production history 16 operated wells online RICE has observed interference between wells spaced at 750, and believe 1,000 spacing may be the optimal development spacing to maximize PV-10 in the current environment Updated economic assumptions including D&C, operating and FT costs Operating costs decreased ~40% FT costs decreased ~25% D&C / foot decreased 3% Choke management extends flat time from 9 months to 12 months. Incorporated historical decline data. Cumulative Production Current Prior Var. 1 Year 5.8 5.2 0.6 2 Year 9.0 7.8 1.2 5 Year 12.5 11.3 1.2 10 Year 15.2 14.2 1.0 EUR 21.0 19.9 1.1 Utica Current Prior Var. (%) EUR (Bcf / 1,000') 2.33 2.50 (7%) Lateral Length 9,000 8,000 13% EUR (Bcf) 21.0 20.0 5% Interwell Spacing (ft) 1,000 750 33% Choke (MMcf/d per 1,000') 1.80 1.87 (4%) Flat Time (days) 365 270 35% 1-Year Cum. (Bcf) 5.8 5.2 12% 2-Year Cum. (Bcf) 9.0 7.8 16% 5-Year Cum. (Bcf) 12.5 11.3 11% 10-Year Cum. (Bcf) 15.2 14.2 7% IRR ($3.50 HHUB) 83% 56% 48% PV-10 ($ mm) ($3.50 HHUB) $13.7 $10.3 33%
18. 18. 18 www.riceenergy.com 77% 83% 25% $10.1 $13.7 $4.7 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Marcellus OH Utica Dry OH Utica Wet PV10($MM) IRR Economics Adjusted for Gathering Ownership at $3.50 HHUB IRR PV10 Economics ECONOMIC ASSUMPTIONSPV10 & IRRS (1) D&C costs revised lower Operating costs reduced ~40% Average demand fee updated for royalty charge-back Western Greene locations included in Marcellus; Utica interwell spacing increased to 1,000 __________________________ 1. Economics assume E&P is burdened by 50% of the gathering and compression fee and 50% of water completion fees (RICE owns a 41% LP interest in RMP, 100% of RICE Ohio Midstream and 100% of RMP IDRs). 2. D&C costs are fully burdened by water completion fees of ~$50 per lateral foot in the Marcellus and ~$65 per lateral foot in the Utica. 3. Pro forma for the Greene County Prospective Acquisition. and $27/bbl NGLs (2) Marcellus Utica Dry Utica Wet Type Well Assumptions Spacing 750 1,000 1,000 Lateral Length 7,000 9,000 9,000 EUR (Bcf/1,000') 2.16 2.33 1.83 NGL Yield (bbls/mmcf) 26 Gas Shrink 11% Pre-Processed EUR (Bcfe) 15.1 21.0 16.5 Post-Processed EUR (Bcfe) 15.1 21.0 17.2 % Gas 100% 100% 85% Heat Content (Btu/Scf) 1,050 1,080 1,159 Initial Choke (MMcf/d per 1,000') 1.50 1.80 1.41 Flat Period (days) 180 365 180 D&C Assumptions D&C ($MM) $8.0 $13.0 $13.0 D&C per Lateral ($ per foot) $1,150 $1,450 $1,450 Operating Expenses (NRI Gas) Fixed Operating Expenses ($/well/month) $6,692 $6,692 $6,692 Variable Operating Expenses ($/Mcf) $0.11 $0.11 $0.11 Other Costs/Expenses (NRI Gas) Well Impact Fee? Yes No No Severance Taxes ($/Mcf) $0.04 $0.04 Avg. Royalty 18% 20% 20% Gathering, Processing and Compression (NRI Gas) Gathering, Compression, Processing Fees ($/Dth) $0.45 $0.46 $1.00 NGL Fractionation and Transport ($/bbl) $5.80 Adjusted Gathering and Compression Fees ($/Dth) $0.23 $0.23 $1.00 Midstream Adjustment 50% 50% Firm Transportation and Basis (NRI Gas) Basis + Fuel (Variable) % of Gas Price (9%) Wtd. Avg Reservation Fee + Commodity Fee (Fixed) $/Dth ($0.42) All-In Assuming $3.50 HHUB (NRI) ($0.75) Inventory Net Undeveloped Locations 487 168 47 NRI Undeveloped Horizontal Feet (MM ft) 2.8 1.2 0.3 Economics Summary (Adj. for Midstream Ownership In Each Area, $3.50 HHUB, $27/bbl NGLs) PV-10 Single Well $10.1 $13.7 $4.7 IRR 77% 83% 25% Payback (Months) 16 14 35 Breakeven Realized ($/Dth) $2.08 $2.18 $2.85 669 3.9 16.5% (3) (3)
19. 19. 19 www.riceenergy.com RICE 4Q 2015 Adjusted EBITDAX Reconciliation __________________________ Note: Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income (loss) before non- controlling interest; interest expense; income taxes; depreciation, depletion and amortization; amortization of deferred financing costs; amortization of intangible assets; derivative fair value (gain) loss, excluding net cash receipts on settled derivative instruments; non-cash stock compensation expense; non-cash incentive unit expense; exploration expenses; and other non-recurring items. Adjusted EBITDAX is not a measure of net income as determined by United States generally accepted accounting principles, or GAAP. 1. The adjustments for the derivative fair value (gains) losses and net cash receipts on settled commodity derivative instruments have the effect of adjusting net income (loss) for changes in the fair value of derivative instruments, which are recognized at the end of each accounting period because we do not designate commodity derivative instruments as accounting hedges. This results in reflecting commodity derivative gains and losses within Adjusted EBITDAX on a cash basis during the period the derivatives settled. 2. Add back non-controlling interest to Adjusted EBITDAX to calculate leverage metrics. 3. Add back RMP water distribution revenue from RICEs working interest share of the water fees that was eliminated in the RICE consolidation. Three Months Ended Year Ended ($ in thousands) December 31, 2015 December 31, 2015 Adjusted EBITDAX reconciliation to net income (loss): Net income (274,253)$ (267,999)$ Interest expense 24,009 87,446 Depreciation, depletion and amortization 94,787 322,784 Impairment of gas properties 18,250 18,250 Impairment of goodwill 294,908 294,908 Amortization of deferred financing costs 1,403 5,124 Amortization of intangible assets 408 1,632 Gain on derivative instruments (1) (89,019) (273,748) Net cash receipts on settled derivative instruments (1) 76,228 193,908 Acquisition expense 1,111 1,235 Non-cash stock compensation expense 4,847 16,528 Non-cash incentive unit (income) expense (9,773) 36,097 Income tax expense (6,217) 12,118 Gain from sale of interest in gas properties - (953) Exploration expense 1,212 3,137 Other expense 756 4,380 Non-controlling interest (6,504) (23,337) Adjusted EBITDAX 132,153$ 431,510$ Further Adjusted EBITDAX reconciliation: Adjusted EBITDAX 132,153$ 431,510$ Non-controlling interest (2) 6,504 23,337 Water revenue adjustment(3) 5,577 27,336 Further Adjusted EBITDAX 144,234$ 482,183$
20. 20. 20 www.riceenergy.com Cautionary Statements FORWARD-LOOKING STATEMENTS This presentation and the oral statements made in connection therewith may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, regarding Rice Energys strategy, future operations, financial position, estimated revenues and income/losses, projected costs, as amended, prospects, plans and objectives of management are forward-looking statements. These statements often include the words could, believe, anticipate, may, assume, forecast, position, predict, strategy, expect, intend, plan, estimate, project, budget, potential, or continue and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include estimates of Rice Energys reserves, expectations of plans, strategies, objectives and anticipated financial and operating results of Rice Energy, including as to Rice Energys drilling program, production, hedging activities, and capital expenditure levels. These forward-looking statements are based on Rice Energys current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Rice Energy assumes no obligation to and does not intend to update any forward looking statements included herein. You are cautioned not to place undue reliance on any forward-looking statements. Rice Energy cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond their control, incident to the exploration for and development, production, gathering and sale of natural gas, natural gas liquids 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; the timing of development expenditures; risks relating to joint venture operations; and the other risks described under Risk Factors in Rice Energys most recent Form 10- K, Form 10-Q and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Rice Energys actual results and plans could differ materially from those expressed in any forward-looking statements. This presentation has been prepared by Rice Energy and includes market data and other statistical information from sources believed by Rice Energy to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on Rice Energys good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although Rice Energy believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness. NON-PROVEN OIL AND GAS RESERVES The SEC permits oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions and certain probable and possible reserves that meet the SECs definition for such terms. We may use certain broader terms such as EUR (estimated ultimate recovery of resources), and we may use other descriptions of volumes of potentially recoverable hydrocarbon resources throughout this presentation that the SEC does not permit to be included in SEC filings. These broader classifications do not constitute reserves as defined by the SEC, and we do not attempt to distinguish these classifications from probable or possible reserves as defined by SEC guidelines. Our estimates of EURs have been prepared by our independent reserve engineers. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized, particularly in areas or zones where there has been limited or no drilling history. We include these estimates to demonstrate what we believe to be the potential for future drilling and production by the company. Actual locations drilled and quantities that may be ultimately recovered from our properties will differ substantially. In addition, we have made no commitment to drill all of the drilling locations which have been attributed to these quantities. Ultimate recoveries will be dependent upon numerous factors including actual encountered geological conditions, the impact of future oil and gas pricing, exploration and development costs, and our future drilling decisions and budgets based upon our future evaluation of risk, returns and the availability of capital and, in many areas, the outcome of negotiation of drilling arrangements with holders of adjacent or fractional interest leases. Estimates of resource potential and other figures may change significantly as development of our properties provide additional data and therefore actual quantities that may ultimately be recovered will likely differ from these estimates. Our forecast and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells, the undertaking and outcome of future drilling activity and activity that may be affected by significant commodity price declines or drilling cost increases. Certain of Rice Energy's wells are named after superheroes and monster trucks, some of which may be trademarked. Despite their size and strength, Rice Energy's wells are in no manner affiliated with such superheroes or monster trucks. Initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. In particular, production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates.
21. 21. 21 www.riceenergy.com Determination of Identified Drilling Locations as of December 31, 2015 (not pro forma for Greene County Prospective Acquisition): Net undeveloped locations are calculated by taking RICEs total net acreage and multiplying such amount by a risking factor which is then divided by RICEs expected well spacing. RICE then subtracts net producing wells to arrive at undeveloped net drilling locations. Undeveloped Net Marcellus Locations RICE assumes these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In the Marcellus, RICE applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of December 31, 2015,RICE had approximately 92,000 net acres in the Marcellus which results in 487 undeveloped net locations. Undeveloped Net Ohio Utica Locations RICE assumes these locations have 9,000 foot laterals and 1,000 foot spacing between wells which yields approximately 207 acre spacing. In the Ohio Utica, RICE applies a 10% risking factor to its net acreage to account for inefficient unitization. As of December 31, 2015,RICE had approximately 56,000 net acres prospective for the Utica in Ohio which results in 215 undeveloped net locations.This excludes ~2,500 net acres in Guernsey and Harrison Counties in Ohio. Undeveloped Net Pennsylvania Utica Locations RICE assumes these locations have 8,000 foot laterals and 2,000 foot spacing between wells which yields approximately 367 acre spacing. In the Pennsylvania Utica, RICE applies a 20% risking factor to its net acreage to account for inefficient unitization. As of December 31, 2015,RICE had approximately 49,000 net acres prospective for the Utica in Pennsylvania which results in 105 undeveloped net locations. Additional Disclosures