Hillbilli Jacki made these comments:

Like many unfamiliar with Appalachian operations, the author fails to consider that much of the acreage lies within active or proposed longwall mine operations. Longwall mining also requires pipeline lying above the proposed section to be shut down and stabilized for the anticipated drop. A very expensive and intrusive operation, measured in years rather than weeks or months. Rice will expect a revenue flow to justify this acquisition, and may not get it all back anytime soon.

As a safety measure, coal always prevails over oil and gas operations. A fact that was ignored by many in this recent shale boom, to the costly detriment of many land agents. Wells that penetrate active or proposed mines are simply not allowed in the permitting process. Existing wells lying in the path of proposed mine operations must be plugged, since they can't be "moved". Proposed well locations will either need to be in a mined out area, or penetrate a solid piller of coal that will never be mined. Cooperation with the coal company or mining contractor is crucial, and that really needs to be considered when placing a value on this trade.

As for pipeline dedications, I expect at least a portion of the gas produced will need to go through EQT Midstream, because Rice's 1 BCF/d firm transportation deal will quickly be eclipsed by an acreage position of this magnitude. Is it still a good deal? Only time will tell, but it is certainly no bargain in this current price environment.

The impact will be determined by the coal owner/operator. They do not need a reason to deny a well permit that penetrates their coal. Period. The fact that there are NO wells in this acreage block indicates there must be some issues.

Prior experience in this part of Greene County showed this to be an active mining area; again it depends on the coal owner/operator. They can approve drilling permits, if they choose; but there has historically been some animosity between the respective entities.

With natgas taking market share away from coal in baseline power generation, I personally expect things to get worse. Out here coal is a huge consideration when buying or leasing acreage; always has been.

Co-operation between the coal and gas operators here is crucial, that's what made the Noble/Consol partnership so effective. Hopefully there will be similar dialogue between Rice and ANR.