Rice Energy Announces 2016 Capital Budget and Guidance

CANONSBURG, Pa., Feb. 24, 2016

• E&P capital budget (including leasehold acquisitions) of $640 million, a 14% reduction from the prior year capital spend
• E&P capital budget funded entirely with cash on hand⁽¹⁾ and operating cash flow
• Clean balance sheet that exits 2016 with E&P leverage of approximately 3.0x and an undrawn revolver
• 2016 net production forecast of 700 – 740 MMcfe/d, a 27% – 34% increase over 2015 net production
• 87% of forecasted 2016 production (based on guidance midpoint) hedged at an average price of $3.26/MMbtu
• Healthy E&P cash operating margins of 55% - 65%
• Rice Midstream Holdings LLC ("RMH") capital budget of $155 million, a 38% reduction from 2015 levels
• Rice Midstream Partners LP (NYSE: RMP) ("RMP") capital budget of $150 million, a 12% reduction from 2015 investments
• Midstream value continuing to grow with expected RMH EBITDA of $40 - $45 million, a 100% increase above 2015 gathering and compression EBITDA, and RMP distribution growth of 20%

Commenting on the 2016 capital budget and guidance, Daniel J. Rice IV, Chief Executive Officer, said, "We believe that our 2016 capital budget highlights the resiliency of our assets and appropriately reflects the challenging time for our industry. Our capital budget has been established with a goal of generating healthy returns while maintaining a strong balance sheet throughout the year. We believe the combination of our 30% return wells at strip pricing, healthy balance sheet, disciplined hedging approach, and our right-sized firm transportation portfolio to favorable markets allows us to economically develop our E&P assets in a manner that drives value in both our E&P and midstream operations."

Further commenting on the 2016 capital budget and guidance, Grayson T. Lisenby, Chief Financial Officer, said, "As evidenced by our recently announced $375 million RMH preferred equity investment by EIG, the significant embedded value of our midstream assets continues to provide a meaningful financing lever despite the headwinds faced today. This equity investment positions us to maintain a healthy balance sheet in 2016 with the proceeds along with expected cash flow fully funding our 2016 E&P budget. Building off the momentum we created in 2015, our capital budget is front half of 2016 weighted, and we expect to exit 2016 with E&P leverage at approximately 3.0 times and an undrawn revolver. We've further protected our balance sheet and returns with 87% of our production hedged at $3.26 per MMbtu."

2016 Capital Budget