VANTAGE ENERGY MOVES FROM IPO TO ACQUISITION

Two weeks ago, Vantage Energy, a natural gas producer based near Centennial Airport, filed to raise $100 million in an initial public offering. Now, the company plans to sell the lion’s share of its holdings to Rice Energy, a Pennsylvania rival.

Back in May, Vantage outbid Rice for the natural gas holdings in Greene County, Pa., of bankrupt coal producer Alpha Natural Resources. Rice Energy will get its prize, but at a different price.

Rice Energy, through its subsidiary Rice Energy Appalachia LLC, agreed to pay $2.7 billion for Vantage Energy LLC and Vantage Energy Investment II LLC. The purchase price consists of $1.02 billion in cash, the assumption and retirement of $700 million in debt and $980 million in equity.

Vantage Energy will cede a 48,000 net acre position in the Marcellus shale formation in Greene County, and another 52,000 acres in the deeper Utica shale formation. The carbon resource rich area is close to major population centers and Rice Energy is expanding holdings in expectation of higher natural gas prices.

Rice Energy also will obtain 37,000 acres in the Barnett formation in northern Texas from Vantage, giving it a new basin to work in, and gas distribution and processing assets worth $600 million. The deal is expected to close before the end of the year.