Rice Energy Inc. (NYSE: RICE) has executed a purchase and sale agreement whereby Rice Poseidon Midstream LLC, a wholly owned subsidiary of the company, has agreed to acquire gathering assets in eastern Washington and Green counties, Pennsylvania, from M3 Appalachia Gathering LLC, a wholly owned subsidiary of M3 Midstream LLC, for $110 million in cash.
The assets to be acquired consist of a 28-mile gathering system in eastern Washington County, Pennsylvania, and the permits and rights of way in Washington and Greene counties, Pennsylvania, necessary to construct an 18-mile gathering system connecting the northern system to the Texas Eastern pipeline. The northern system is supported by long-term contracts with acreage dedications covering approximately 20,000 acres from third parties. Once fully constructed, the acquired systems are expected to have an aggregate capacity of over 1 Bcf/d.
The transaction will have a March 1, 2014, effective date, and is expected to close in March.