Nov. 06--Rice Energy is boosting capital spending and accelerating production despite a prolonged downturn in the industry that has forced a pullback by other shale gas drillers.
"We're investing in the same areas today as we were when gas prices were much higher. And I think we may be the only company in Appalachia whose strategy and focus has remained the same during this price cycle," Daniel V. Rice IV said Thursday during a call with analysts to discuss the company's latest financial results.
The Cecil-based company raised its 2015 capital budget for exploration and production to $730 million from $680 million. The company is paring spending slightly in the Marcellus shale because of improved efficiencies in its operations. But it is increasing spending by nearly 30 percent in the Utica shale, which is beginning to get more attention from gas drillers.
The Utica is less explored in Pennsylvania -- development has centered on Ohio -- but it could hold as much or more recoverable gas than the Marcellus, a government report found this year. Rice said it began selling gas in late August, three months ahead of schedule, from its first operated Utica well in Pennsylvania.
The company said gains from the Utica and from Marcellus wells coming online sooner than expected helped boost gas production by 147 percent during the third quarter. Production started at 14 Marcellus wells, eight of which came online about four months early, the company said.
The increased production helped Rice swing to a profit in the quarter. The company earned $59 million, or 43 cents per share, compared with a loss of $6.9 million, or 5 cents per share, in the same period last year. Revenue rose to $143.6 million from $79.1 million.
The company also announced that Rice Midstream Partners, a limited partnership formed by Rice Energy, bought the water services business of a Rice Energy subsidiary, Rice Midstream Holdings LLC, for $200 million, but that sale took place after the third quarter.
Tory N. Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or firstname.lastname@example.org.
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