Cecil Township, Pennsylvania-based independent producer Rice Energy has been on the proverbial roll for more than 18 months.
The company raised more than $1 billion in its IPO, it continues to successfully expand operations in the Marcellus and Utica Shale plays, and is a definite crowd favorite at conferences when sharing its success story.
Unfortunately, low commodity prices are not a respecter of good companies. Rice on Thursday reported second-quarter production jumped by triple digits, but it lost $69.68 million, nearly nine times more red ink than the year-ago $7.92 million loss.
Year-over-year production increases were huge. Natural gas production more than doubled, to 47.56 billion cubic feet (Bcf), and oil/natural gas liquids production jumped to 90,000 barrels from 1,000 Bbls.
Net production averaged 529 million cubic feet-equivalent per day (MMcfe/d), a 120% year-over-year increase.
“We had a tremendous quarter operationally, significantly surpassing our expected production by consistently turning wells online on time or ahead of schedule,” said Daniel J. Rice IV, CEO of Rice. “I am proud of our team’s collaborative efforts, evidenced by our strong quarterly results in spite of a challenging commodity price market.”
“Rice Energy is proving that core dry gas acreage in Appalachia can be profitably developed in a sub-$3/Mcf world, despite wide basis differentials and weak benchmark pricing issues,” said Tim Rezvan, an energy analyst with Sterne Agee CRT, in a Wednesday flash note.
Quarterly expenses also rose substantially, leading to a $46.17 million loss, vs. a 24.42 million in operating income one year ago. Operating revenues rose to $112.89 million, from $91.94 million.
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