Energy Stocks Gaining; Rice Energy Slipping After Buying Pennsylvania Pipeline Network for $110 Mln


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Energy stocks were higher Thursday, with the NYSE Energy Sector Index climbing about 0.6% while shares of energy companies in the S&P 500 were 0.6% higher as a group. Crude oil for March delivery was up 21 cents at $100.58 per barrel. March natural gas rose 29 cents to $5.11 per 1 million BTU, adding to earlier gain after a government inventory report found a larger pull last week than market experts were expecting.

In company news, Rice Energy ( RICE ) shares fell Thursday after the oil and gas company late Wednesday announced a $110 million cash transaction to acquire gathering assets in the Marcellus Shale formation in Pennsylvania.

The assets to be acquired from M3 Midstream include 28 miles of pipeline in eastern Washington county, along with permits and rights of way needed to construct a 30-inch pipeline stretching over 18 miles connecting the existing pipeline with the Texas Eastern Gas Co. pipeline operated by Spectra Energy ( SE ).

The existing pipeline system is supported by long-term contracts with other gas and oil companies covering approximately 20,000 acres. Once fully constructed, the acquired pipelines will have an aggregate capacity of over 1 billion cubic feet per day. The deal is expected to close next month, with a March 1 effective date.

RICE shares were down 0.8% at $23.69 apiece in recent trade, retreating again after a quick stay on positive ground earlier today. The company went public on Jan. 24, pricing an upsized initial public offering of 50 million shares at $21 apiece. The company sold 30 million shares in the IPO, pocketing about $594.5 million in net proceeds after paying underwriter discounts and other offering expenses.

In other sector news,

(+) IO, (+26.0%) Oilfield services firm earns $0.33 per share during Q4, ex items, crushing analyst estimates looking for $0.06 profit. Revenue grows 26% over year-ago levels to $173.1 mln, topping expectations by $46.6 mln.

(-) CJES, (-3.5%) Earns $0.13 in Q4, down from $0.56 per share last year and trailing estimates by $0.16 per share. Revenue declines 7% year over year to $265.4 mln, missing Street view by $14.01 mln.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities
Referenced Symbols: RICE , SE

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