CANONSBURG, Pa., Feb. 17, 2015 /PRNewswire/ -- Rice Energy Inc. (NYSE: RICE) ("Rice Energy") today announced its 2015 capital budget and guidance. Estimated capital investments and financial guidance include:

• 2015 estimated net production of 450 – 470 MMcfe/d, an expected increase of 64 – 72% over 2014 net production 
• 2015 annual capital budget of $890 million, compared to $1.1 billion invested in 2014, excluding acquisitions 
• $680 million of budgeted Marcellus and Utica E&P activities to be funded entirely with $712 million of liquidity exiting 2014 and expected 2015 cash flow 
• $210 million of budgeted retained midstream investments to be funded entirely with newly created $300 millionmidstream credit facility 
• 84% of forecasted 2015 production hedged at an average price of $3.60/MMBtu, based on mid-point of guidance 
• 100% of forecasted 2015 production covered by firm transportation with approximately 65% of estimated production delivered to markets outside Appalachia

Commenting on the 2015 capital budget and guidance, Daniel J. Rice IV, Chief Executive Officer, said, "Our 2015 capital budget reflects both our disciplined approach to managing our business and our prudent investment strategy. This allows us to focus our efforts on driving shareholder value through continued successful development of our low-cost, high-returning Marcellus and Utica shale assets. We have reduced our drilling and completion budget by approximately 40% from our previous preliminary capital spend plans, while lowering our production forecast by only 8%, decreasing exposure to unhedged local prices. During 2015, the majority of our production is contracted for delivery to premium markets outside of Appalachia, and approximately 84% of our expected production is hedged to protect our revenues and cash flows. Finally, we're entering 2015 with sufficient liquidity to fund our entire 2015 development program."

2015 Capital Budget 

We plan to allocate our capital investments according to the table below:

Exploration and Production 

In Pennsylvania, we expect to spud 43 gross (39 net) horizontal Marcellus wells (100% operated) and turn to sales 31 gross (26 net) horizontal Marcellus wells with an average lateral length of 7,100 feet. In addition, we are currently drilling our first Pennsylvania Utica well, which we expect to complete and turn to sales in the second half of 2015. In Ohio, we expect to spud 19 gross (12 net) horizontal Utica wells and turn to sales 12 gross (7 net) horizontal Utica wells with an average lateral length of 9,500 feet. On our non-operated properties in Ohio, we expect to spud 38 gross (9 net) horizontal Utica wells and turn to sales 15 gross (2 net) horizontal Utica wells with an average lateral length of 7,200 feet. We are currently operating two horizontal rigs in Pennsylvania and two horizontal rigs in Ohio. We plan to release one Ohio horizontal rig at the end of its contract in mid-2015 and operate three horizontal rigs for the remainder of 2015. 

Our leasehold budget is focused on acreage additions within our existing core position and to extend lateral lengths for wells in our long-term development plan.

Retained Midstream 

We plan to invest $210 million to continue the build out of our Ohio gas gathering system and to expand our fresh water distribution systems in Ohio and Pennsylvania. By the end of 2015, we expect our Ohio gas gathering system will be 50 miles in length with total system capacity of 2.6 MMDth/d. In addition, by year end 2015, we expect our fresh water distribution systems will be fully operational and capable of delivering up to 9.2 MMgpd for our well completion operations in Pennsylvania and 16.5 MMgpd for our well completion operations in Ohio.

2015 Financial and Operational Guidance

Our 2015 average daily net production is expected to be between 450 – 470 MMcfe/d (100% natural gas, 93% operated). This range represents a 64 – 72% increase over 2014 average daily net production and is driven by our continued successful development of the Marcellus Shale in Pennsylvania and the Utica Shale in Ohio. Our 2015 retained midstream Adjusted EBITDA⁽³⁾ is expected to range between $35 and $40 million, with 10% attributable to third party business.

Our 2015 guidance is based on the key assumptions in the table below:

Commodity Hedge Position

For calendar 2015, we currently have 405 BBtu/d of NYMEX Henry Hub and Appalachia hedge contracts at a weighted average floor price of $3.71 per MMBtu. In addition, we have 120 BBtu/d of basis hedge contracts consisting of 58 BBtu/d of Gulf Coast basis contracts at an average price of ($0.18) per MMbtu, 37 BBtu/d of TCO basis contracts at an average price of ($0.42) per MMBtu, and 25 BBtu/d of Dominion South basis contracts at an average price of ($0.79) per MMBtu. The weighted average floor price of our 405 BBtu/d 2015 hedge portfolio, including our basis swaps, is $3.60 per MMBtu, representing 84% of our 2015 expected production, based on the midpoint of guidance.