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Rice Energy Inc. Message Board

  • debyron debyron Jul 15, 2014 3:57 PM Flag

    hold hold hold

    friend who works in energy sector for a large hedge fund says stay with Rice... near term buy out rumors in the works.... i will believe it when i see it.

    Sentiment: Hold

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    • I would not believe any buyout rumors. If you're the son(s) of a billionaire, you're already wealthy. The sons want to be successful, which would imply matching or coming close to the success of the father. I think they'll hold on for a good while.

      I know of at least one fairly successful U. Devonian well in the middle of Washington County, PA. I don't know of any in Greene County, but Range's maps lead to some high expectations for the UD there.

    • Few things working against the outfit now.
      1. This is strictly a dry gas E&P, since last presentation, when NG was at about 4.70, we are now barely above 4. Without NGL or condensate, there is no additional uplift to production. But dry does have some advantages over wet when one has to reject some NGLs when the NGL value is low.

      2. Midstream acquisition and additional build out at cost of about 375 million, and now and additional 336 million for the CHK deal, which again appears as only dry gas.

      3. The proposed 24+ million equity offering at a suggested $29.4 per share appears dead on arrival. More realistic would be at the original offering price at this point.

      4. Just to reflect back on point 1, I have seen some stacked potential, but for example in the Pa. Marcellus, there is no mention of the Utica.

      5. Assuming retracement guidelines, from the offering price to latest high, the price is well beyond 50% retracement, and appears that a 70% retracement is in order. So around 24.9 we should see support. But equity offering, if any, will likely stifle upward momentum. In the meantime, they have an acquisition to pay for and ongoing business to run in the face of falling NG prices. My guess, less equity offering, is a 20% to the upside from the 70% retrace level, which would get you to the 29-30 range in the near term, i.e., 1 qtr. timeframe. They’ll need a few more Bigfoot H’s to boost the price in the very near term.
      Own very small position now, may place a buy limit, to avoid catching a falling knife.

    • It's a recent IPO soon it seems unlikely to be buyout candidate.This is some very weird action. If you draw a linear regression line on this chart it's way, way oversold. It's good news all around except that gas prices are down a bit. So if the good news doesn't reflect in the price action, there is some news known by insiders. I'm holding and bought too soon but I hate sitting through a down draft with an unknown bottom. Not a good looking chart right now.

      Sentiment: Hold

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