Rice Midstream Partners Citi MLP Conference August 19 20, 2015 1
Investment Highlights Premier E&P Sponsorship with RICE 144K net acres in the dry gas cores of the Marcellus and Utica with 13+ year inventory in each area Top-tier well results generate single-well returns of approximately 50% (1) ; PV10 breakevens below $3 NYMEX 100% of 2015 production covered by firm sales and transportation & 88% of 2H15 production hedged at weighted avg. floor price of $3.72 / MMBtu Strategically Located Midstream Assets 100% of RMP acreage dedications are located within the dry gas core of the Marcellus Shale RICE s concentrated position + multi-well pad drilling = minimal RMP capex to meaningfully increase gathering capacity Gathering system tied into multiple takeaway pipelines that access favorable markets outside of Appalachia Rapid Organic Growth RMP s strong 2015 expected throughput growth of ~60% driven by high quality sponsor Significant growth expected from contracted third party dedications from top tier producers Expectations unchanged from IPO despite drop in gas prices Attractive Drop Down Potential RMP has a ROFO on RICE s OH gas gathering system and PA and OH fresh water distribution systems RICE OH gathering expects to grow throughput to ~200 MDth/d in 2015 Expect to continue to grow third party gathering and water dedications Predictable Cash Flow Profile 1. Assumes $3.50 NYMEX. MLP cash flow driven by scalable dry gas throughput and protected with 100% fixed fee contracts Prolific assets and balance sheet strength positions RMP for continued growth through organic development and accretive acquisitions Visible, top tier distribution growth profile driven by disciplined and aligned sponsor, attractive drop-down candidates, and high-quality third party dedications 2
3 Premier E&P Sponsorship RICE RICE owns 100% of the GP and IDRs and a 50% LP ownership, creating alignment between RMP and RICE DE Rice Midstream Holdings LLC $300MM Credit Facility Rice Midstream Management LLC (General Partner) IDRs OH Gathering & Compression PA Water OH Water Public Unitholders 50% LP interest Non-economic GP Interest 50% LP interest ROFO Assets PA Gathering & Compression $450MM Credit Facility
4 RMP: High Growth MLP in Prolific Appalachian Basin Marcellus Gathering and Compression PA gas gathering system of 4.1 MMDth/d design capacity Oversized to accommodate future growth 2Q15 throughput of 655 MDth/d w/ 15% 3 rd party Gathering throughput driven by SW PA technical leaders ~85% of 2015E estimated throughput from RICE operated volumes, and ~15% from 3 rd party, primarily EQT RMP constructing ~30 miles of gathering pipeline in 2015 RMP installing compression for RICE in 2H15 that will start generating revenue in 2016 2015 capex budget of $180MM ($85MM gathering and $90MM compression) RMP received favorable PLR from the IRS that constitutes water services as qualifying income Legend Jefferson OHIO RMP Gathering Pipeline RMP Gathering Pipeline to be Constructed RICE Acreage 3 rd Party Dedicated to RMP Brooke RICE Acreage Dedicated to 3 rd Party Brooke Ohio Beaver Washington SYSTEM MAP Beaver Greene PENNSYLVANIA Gathering System Information Marshall OH Fayette PA 12/31/14 Dedicated Gross Acreage 2Q 2015 Throughput (MDth/d) 2015E EBITDA ($MM) 2015E Capex ($MM) PA Gathering 86,000 655 $ 55 60 $ 180 Wetzel Concentrated, Prolific Position to Drive Targeted 20% Distribution Growth WV WEST VIRGINIA
RMP Gathering System Build-out 5 SUMMARY RMP s midstream system has grown significantly since 2013 As of 12/31/14, constructed 81 miles of gathering pipelines System oversized to accommodate future growth: Mileage: 111 miles by YE15 Total Design Capacity 4.1 MMDth/d Substantially all of RICE s drilling locations within the RMP dedication will be within 2 miles of the completed PA gathering system Washington 2011 2012 Washington Greene Greene 2013 2014 2015E Washington Washington Washington Greene Greene Greene Gathering Pipeline RICE Acreage 3 rd Party Dedicated to RMP RICE Acreage Dedicated to 3 rd Party
3 rd Party Midstream Dedications RMP Overview SYSTEM MAP 3 rd party gathering dedications ~21,000gross acres dedicated 2Q 2015 production of 100 MDth/d (15% of total RMP throughput) Contracted high quality 3 rd party operators with active development programs 3 rd party dedications differentiate RMP from other recent E&P sponsored MLP IPOs Legend Jefferson RMP Gathering Pipeline RMP Gathering Pipeline to be Constructed RICE Acreage 3 rd Party Dedicated to RMP Brooke RICE Acreage Dedicated to 3 rd Party Brooke Beaver Beaver PENNSYLVANIA OHIO Washington Ohio 3 rd Party Dedication Summary PA Dedicated Acreage 21,000 Gatherer RMP Greene Shipper EQT/AR/RRC 2Q 2015 Throughput (MDth/d) 100 Marshall OH Fayette PA Contract Term ~11 years (wtd. avg) (1) Gathering/Compression Fee $0.44/$0.05 1. Calculated based on weighted average historic throughput. 6 WEST VIRGINIA RMP s Assets are Well Positioned to Capture 3 rd Party Growth WV
RMP Second Quarter 2015 Financial Summary 7 Solid second quarter results supported by strong throughput growth, well capitalized balance sheet and ample liquidity Financial Summary Second quarter average daily throughput of 655 MDth/d 18% increase from 1Q average throughput Adjusted EBITDA of $16.7MM Distributable Cash Flow of $15.1MM DCF coverage ratio of 1.38x Distributions Increased distribution to $0.1905 / unit for 2Q15 $0.003 / unit increase Expect to increase distributions by $0.003 / unit in 3Q & 4Q with targeted 4Q15 distribution of $0.1965 / unit 5% increase above MQD of $0.1875 / unit 20% distribution growth target in 2016 Operating Metrics Liquidity as of June 30, 2015 Three Months Ended ($ in millions, except per unit data) June 30, 2015 Affiliate gathering volumes (MDth/d) 555 Third-party gathering volumes (MDth/d) 100 Total gathering volumes (MDth/d) 655 Total operating revenues $19.7 Total operating expenses $6.8 Total operating income $12.9 Adjusted EBITDA $16.7 Distributable cash flow $15.1 DCF / unit $0.2624 Distribution declared $11.0 Distribution / unit $0.1905 DCF coverage ratio 1.38x $30MM drawn under our revolving credit facility Three Months Ended ($ in millions) June 30, 2015 Revolver capacity $ 450 Less: Borrowings 30 Plus: Cash and cash equivalents Liquidity $ 420
RMP Financial Overview CAPITALIZATION AND LIQUIDITY AT 6/30/15 2015 GUIDANCE (1) $ in millions, except per share data, as of 6/30/15 Common Units 29 Subordinated Units 29 Total Units Outstanding (MM) 58 Price as of 6/30/15 $ 17.36 Market Capitalization $ 998 Cash - Revolving credit facility 30 Debt - Enterprise Value $ 1,028 2015 Capital Budget (in millions) Gas Gathering $ 85 Compression $ 90 Total Expansion Capex $ 175 Maintenance Capex $ 5 Total Capital Expenditures $ 180 Leverage Statistics Debt / EBITDA 0.5x EBITDA / Interest nm Debt to EBITDA Covenant 4.75 Guidance Adjusted EBITDA (in millions) $55 $60 % Third Party 20% Distributable Cash Flow (in millions) $48 $53 Average DCF Coverage Ratio 1.1x 1.2x Annualized Distribution (2) ($ per unit) $0.7680 Liquidity Summary Revolving credit facility $ 450 Less: amount drawn 30 Availability under RCF $ 420 Plus: cash on hand - Liquidity as of 6/30/15 $ 420 RMP Units Owned % of RMP Units - Public 50% % of RMP Units - RICE 50% % of RMP IDRs - RICE 100% 1. As of February 17, 2015, unless otherwise stated. 2. As of August 6, 2015. 8
Industry-Leading Throughput Growth 2Q 2015 throughput of ~887 MDth/d through RICE and RMP midstream systems (21% 3 rd Party), 33% increase from 1Q15 throughput RMP System: 655 MDth/d (15% 3 rd Party) RICE OH System: 232 MDth/d (38% 3 rd Party) RMP and RICE OH Midstream Historical Throughput Dth/d 1,000,000 Average Throughput (MDth/d) 2010 2011 2012 2013 2014 1Q 2015 2Q 2015 Throughput 4 18 61 176 409 668 887 QoQ / YoY Growth 405% 238% 188% 133% 13% 33% 800,000 600,000 400,000 200,000 0 RMP - Rice Operated (PA) RMP - 3rd Party (PA) RICE - Rice Operated (OH) RICE - 3rd Party (OH) 1. PA 3 rd party volumes as of April 2014 close of Momentum asset acquisition. (1) 9
Valuable Drop Down Opportunities Overview Assets include OH gas gathering and PA/OH water services OH Gathering 2Q15 throughput of 232 MDth/d 38% 3 rd Party Gathering throughput driven by SE OH technical leaders ~75% of 2015E estimated throughput from RICE operated volumes, ~25% from GPOR Build-out is currently ahead of schedule OH trunkline completed as designed in 2Q with 2.6 MMDth/d of capacity PA water system fully operational providing access to 9.2 MMGPD OH water system expected to be fully inservice by YE2015, providing 14.7 MMGPD RMP received favorable PLR from the IRS that constitutes water services as qualifying income RICE Retained Midstream Gathering System Information 12/31/14 Dedicated Gross Acreage 2Q 2015 Throughput (MDth/d) 2015E EBITDA ($MM) (1) 2015E Capex ($MM) (1) 57,000 232 $ 35 40 $ 210 1. Calculations include water and gathering throughput in EBITDA and Capex. Legend OHIO RICE Ohio Gathering Pipeline RICE Ohio Gathering Pipeline to be Constructed RICE Water Pipeline RICE Water Pipeline to be Constructed RICE Water Interconnects RICE Acreage 3 rd Party Dedicated to RICE RICE Acreage Dedicated to 3 rd Party 3 rd Party Dedicated to RMP Monroe Harrison 10 Belmont Jefferson Overview of Assets Ohio Marshall Wetzel Hancock Brooke Beaver PENNSYLVANIA Washington Greene WEST VIRGINIA Building Significant Drop Down Potential Fayette
RICE Overview 11
Concentrated, Core Assets COMPANY TOTAL CORE ASSETS Highly concentrated position of ~144,000 net acres in the cores of the lowest breakeven gas shale plays in the U.S. ~1,230 net undeveloped locations (1) 529 MMcfe/d net 2Q15 production from 114 net wells Breakeven NYMEX PV-10 of $2.35-$3.05 / MMBTU Legend RMP Gathering Pipeline RMP Gathering Pipeline to be Constructed RICE OHIO Gathering Pipeline RICE OHIO Gathering Pipeline to be Constructed RICE Acreage 465 BBtu/d hedged in 2H15 at $3.72 / MMBtu PENNSYLVANIA ~88,600 net Marcellus acres, <10% developed 495 net undeveloped Marcellus locations (1) Harrison Harrison Jefferson Hancock Beaver Marcellus Core 382 net undeveloped Upper Devonian locations (1) 98 net producing wells (95 Marcellus, 3 Upper Devonian) Completed first Pennsylvania Utica well Utica Core Belmont Brooke Ohio Washington OHIO ~55,500 net Utica acres, <5% developed 356 net undeveloped Utica locations (1) 16 net (10 net operated) producing Utica wells Monroe Marshall Greene Fayette Wetzel RICE FT & MIDSTREAM Monroe Utica Stack Potential Fayette FT: 1.3 MMDth/d of firm capacity: 73% to Gulf Coast/TCO/ Midwest markets in 2015 80% by Q4 17 Monongalia RMP Midstream by YE2015: 4.1 MMDth/d gas gathering capacity OH PA RICE Midstream by YE2015: 2.6 MMDth/d gas gathering capacity and ~24 MMGPD of water distribution WV 1. Net undeveloped locations as of 12/31/14. Approximately 77,000 net acres in the Marcellus Shale is also prospective for the Geneseo (Upper Devonian) Shale. The Upper Devonian and the Marcellus Shale are stacked formations within the same geographic acreage and footprint. See slide entitled Additional Disclosures on detail regarding RICE s methodology for the calculation of locations. 12
Deep Inventory of High Returning Projects Low breakevens between $2.35-$3.05/MMBtu = profitable returns throughout the commodity price cycle Inventory and Returns Summary IRR 200% 175% 150% 125% 124% 121% 171% 168% 132% 100% 87% NYMEX ($/MMBtu) 75% 50% Realized (FT+Basis+BTU $/mcf) (1) 32% 56% 49% 25% 13% 24% 27% 7% 8% $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $1.84 $2.32 $2.80 $3.28 $3.75 $4.23 53% 81% 88% Net Locations 356 139 302 NYMEX PV-10 Breakeven ($/MMBtu) (2) $2.60 $3.05 $2.35 Note: See appendix for summary of assumptions used to generate single well IRRs. 1. Basis assumption = 9% of NYMEX, Firm Transportation cost ( FT ) assumption = $0.52/MMBtu and Heat content uplift ( BTU ) assumption = 1050 MMBtu/Mcf. Marcellus heat content = 1050, W. Greene = 1090, Utica Dry = 1080. 2. See appendix for a detailed explanation of adjusted midstream fees. Marcellus 750 economics assume E&P is burdened by 50% of the gathering and compression fee (RICE owns a 50% LP interest in RMP and owns 100% of the IDRs). W. Greene economics assume E&P is burdened by 100% of the gathering and compression fee (RICE acquired W. Greene assets which were previously dedicated to a third party).utica Dry 750 economics assume E&P is not burdened by gathering and compression fee (RICE owns 100% of RICE s OH midstream assets). 13
Diverse Market Exposure FT portfolio includes 1.3 MMDth/d (1.2 Bcf/d) of firm capacity to premium North American markets, including recently added 320 MDth/d on TETCO s Access South project with firm path to the Gulf Coast and estimated in-service date of November 2017 (1). Gulf Coast demand growth will be ~3x larger than NE demand growth (2) Canadian Markets Midwest (MDth/d) 2015 2016 2017 78 107 57 Midwest Markets Canada (MDth/d) 2015 2016 2017 4 25 75 Northeast (MDth/d) 2015 2016 2017 283 201 191 Gulf Coast (MDth/d) 2015 2016 2017 325 500 603 RICE Acreage Appalachian Markets TCO (MDth/d) 2015 2016 2017 123 85 85 RICE Firm Capacity Commitments(MDth/d) Project Pipeline Start Date Volume Market TEAM South TETCO Sept 2014 270 Gulf Coast Westside Expansion CGT/TCO Nov 2014 125 TCO, Gulf Coast Rockies Express REX Aug 2015 175 Midwest/Canada/Gulf Coast Union Town to Gas City TETCO Sept 2015 87 Midwest/Gulf Coast OPEN TETCO Sept 2015 50 Gulf Coast ET Rover Rover July 2017 100 Canada Access South TETCO Nov 2017 320 Gulf Coast Gulf Coast Demand/Exports by 2020: +17 to 19 Bcf/d (2) 1. Conversion of Dth to Mcf assumes 1,050 Btu factor. 2. Source: Company Filings, TPH Estimates Gulf Coast Markets 14
Appalachian Rigs at 6 Year Lows: Rice Remains Strong 200 180 160 Appalachia Rig Counts (1) : 2007-2015 Early 2012 Peak of 175 Rigs August 2015: 70 Rigs Activity migrated to most economic counties 140 # of Rigs 120 100 80 January 2010 71 Hz Rigs August 2015 71 Hz Rigs Ohio Pennsylvania RICE Acreage 60 10+ Rigs 40 20 PA Marcellus 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 West Virginia 6-9 Rigs 3-5 Rigs 1-2 Rigs Top Ten Active Operators 0 5 10 15 Rig Count 20 25 30 35 Peer 1 10 2 Peer 2 Peer 3 Peer 4 6 6 10 8 11 Laid Down From Peak Active Rice Energy 5 2 Peer 6 4 4 Peer 7 4 5 Peer 8 3 30 Peer 9 3 3 Peer 10 3 2 (1) RigData + Baker Hughes Rig Reports RICE s core position allows for steady, economic development even in today s environment 15
16 Second Quarter 2015 Financial Summary Solid second quarter results supported by well-capitalized balance sheet and ample liquidity Financial Summary 2Q15 net production of 529 MMcfe/d; 20% increase from 1Q15 61% of 2Q15 production sold to premium, non-appalachian mkts. Record adjusted EBITDAX of $97MM; 93% increase from 2Q14 Record opex of $0.62 / Mcfe, a 10% decrease from 1Q15 Financial & Operating Statistics 6/30/2015 Total production (MMcfe/d) 529 % Gas 99% % Operated 90% % Marcellus 77% Capitalization at 6/30/2015 ($ in millions) 6/30/2015 Cash Rice Energy $ 251 Rice Midstream Holdings 6 Rice Midstream Partners - Total consolidated cash $ 257 Long-term debt Rice Energy E&P credit facility $ - 6.25% Senior notes due 2022 900 7.25% Senior notes due 2023 397 Total Rice Energy debt 1,297 Rice Midstream Holdings revolver 97 Rice Midstream Partners revolver 30 Total consolidated debt $ 1,424 Net debt 1,167 Actual ($MM) $ / Mcfe NYMEX Henry Hub price ($/MMBtu) $ 2.72 Average basis impact ($/MMBtu) (0.61) Firm transportation fuel & variables ($/MMBtu) (0.13) Btu uplift (MMBtu/Mcf) 0.10 Pre-hedge realized price ($/Mcf) 2.08 Realized hedging gain ($/Mcf) 0.89 Post-hedge realized price ($/Mcf) 2.97 Net firm transportation sales 0.01 Adjusted realized price ($/Mcf) $ 2.98 Lease operating $ 11 0.23 Gathering, compression and transportation 17 0.35 Production taxes and impact fees 2 0.04 General and administrative 20 0.42 Depletion, depreciation and amortization 76 1.58 Adjusted EBITDAX $ 97 Shareholders equity $ 1,954 Total capitalization $ 3,378
Ample Liquidity and Financial Flexibility RICE is capable of funding 100% of 2015 capital plan with liquidity on-hand Favorable credit metrics & covenants ensure flexibility Cash & Revolver Capacity 6/30/15 $MM Cash Available Revolver $1,000 $800 $600 $400 $200 Leverage Metrics as of 06/30/15 $796 $251 $545 (1) ~$1B liquidity (excl. CFFO) v. remaining 2015 capex of ~$320MM $209 $203 $420MM liquidity (excl. CFFO) v. remaining 2015 capex of ~$105MM Rice Energy Rice Midstream Holdings Rice Midstream Partners (E&P) Debt/EBITDA Covenant NONE 4.25x 4.75x 2Q15 Debt/RR EBITDA 3.2x 1.8x 0.5x EBITDA/Interest Covenant 2.5x 2.5x 2.5x LTM EBITDA/Interest 4.5x NM NM $420 $420 (1) E&P segment cash balance. 17
RMP Market Snapshot Rice Midstream Partners LP (NYSE: RMP) $ millions, except per share data, as of 07/31/15 Common Units 29 Subordinated Units 29 Total Units Outstanding (MM) 58 Price as of 07/31/2015 $16.67 Market Capitalization $959 Cash (1) Revolving credit facility (1) 30 Debt Enterprise Value $989 Distribution / Unit $0.1905 Yield 4.57% 52 Week Price Range High $17.94 Low $13.16 Rice Energy Inc. (NYSE: RICE) $ millions, except per share data, as of 07/31/15 Management Ownership 30% Shares Outstanding (MM) 136 Price as of 07/31/2015 $18.05 Market Capitalization $2,460 Cash (1) $257 Revolving credit facilities (1) 97 6.25% Senior notes due 2022 900 7.25% Senior notes due 2023 397 Enterprise Value $3,597 52 Week Price Range High $30.10 Low $16.57 RMP Units Owned % of RMP Units - Public 50% % of RMP Units - RICE 50% % of RMP IDRs - RICE 100% Website: www.ricemidstream.com Website: www.riceenergy.com Investor Contact: Julie Danvers Julie.Danvers@RiceMidstream.com Investor Contact: Julie Danvers Julie.Danvers@RiceEnergy.com 1. As of June 30, 2015. 18
Appendix 19
Efficient Capital Allocation Drives Strong 2015 Growth D&C & Land Capital Expenditures 2015E E&P Guidance Net Wells Turned to Sales (1) Average Net Daily Production $MM 900 800 700 600 500 400 300 200 100 0 $225 $545 $830 $200 $680 $250 $120 $220 $380 $340 2012 2013 2014 2015E PA D&C OH D&C Land Wells 50 40 30 20 10 0 10 21 43 7 36 41 10 31 2012 2013 2014 2015E PA OH MMcfe/d 500 400 300 200 100 0 47 127 274 495 2012 2013 2014 2015E Midstream Capital Expenditures 2015E Consolidated Midstream Guidance (2) Daily Throughput 2015E Midstream EBITDA $MM 400 $390 MDth/d 900 812 $MM 60 $58 300 200 $300 $150 $210 750 600 450 401 200 50 40 30 $38 100 0 $45 $50 $45 $150 $180 2012 2013 2014 2015E RMP Rice Retained Midstream 300 150 Note: 2014 Pro Forma for ASR transaction. 1. Does not include wells from the Greene County Acquisition. 2. Consolidated midstream includes Rice Midstream Holdings and Rice Midstream Partners. 0 612 20 175 10 61 0 2012 2013 2014 2015E RMP Rice Retained Midstream Published Guidance 20 RMP Rice Retained Midstream
Midstream System Statistics Marcellus (PA) RMP Assets at IPO Utica (OH) Gathering and Compression Statistics Gathering and Compression Statistics YE14 YE15 YE14 YE15 Gathering and Compression Statistics Gas Gathering Pipeline Mileage (miles) 81 111 Gas Gathering Pipeline Mileage (miles) 21 50 Design Gathering Capacity (MMDth/d) 3.2 4.1 Design Gathering Capacity (MMDth/d) 0.5 2.6 Acreage Dedications Acreage Dedications RICE 65,000 RICE 37,400 3rd Party 21,000 3rd Party 19,600 Total Acreage Dedications 86,000 Total Acreage Dedications 57,000 Midstream Fees Paid by RICE to RMP ($/Dth) (1) (1) (2) Midstream Fees Paid by RICE to RICE OH ($/Dth) Gathering $0.30 Gathering $0.30 Compression (per stage of compression) $0.07 Compression (per stage of compression) $0.07 3rd Party Midstream Fees ($/Dth) 3rd Party Midstream Fees ($/Dth) Gathering (3) $0.44 Gathering undisclosed Compression (4) $0.05 Compression undisclosed Water Distribution System Statistics Water Distribution System Statistics YE15 YE15 Connected Water Sources (MMGPD) 11 Connected Water Sources (MMGPD) 15 Water Services Fee Paid by RICE ($/gallon) $0.05 Water Services Fee Paid by RICE ($/gallon) $0.06 1. Fees will be annually escalated based upon changes in the Consumer Price Index. Compression fees are derived on a per stage basis 2. Assumes that gathering and compression fees for OH services are equivalent to those to be paid by RICE to RMP for gathering and compression for Pennsylvania assets. 3. Certain of RMP s third-party contracts provided for an increase in the gathering fee RMP will receive upon completion of construction of an 18-mile, 30 inch pipeline connecting its gathering system to TETCO, which was completed in November 2014. 4. Certain of RMP s 3rd party agreements, the per stage fees charged for compression varies depending on line pressure as opposed to being a flat fee per stage. Accordingly, the 3rd party compression fee is shown on a wtd avg based on historical throughput. 21
Right of First Offer RICE PA + OH Water Systems PA and OH Water Asset Description RICE is expanding two independent fresh water distribution systems to service PA and OH completions operations PA is in-service now and OH is partially in-service and will be fully constructed by YE2015 Oversized to accommodate expected 3 rd party business Water distribution system is a more cost efficient method to transport fresh water than trucking and minimizes operational delays due to greater certainty of water availability and elimination of truck traffic OVERVIEW OF ASSETS Hancock Beaver Carroll Jefferson Harrison Brooke Washington Belmont Ohio Allegheny Monongahela River Withdrawal Water Distribution System Information System YE2015 Connected Sources (MMGPD) Water Usage per Well (MMGal) (1) Monroe Ohio River Withdrawal Marshall OH Greene PA Pennsylvania 11 13 Ohio 15 16 Total 26 Water Pipeline Wetzel Water Pipeline to be Constructed RICE Acreage OH WV PA 1. In PA, water usage per well based on 7,000 lateral, 200 stage spacing (35 stages) and 378,000 gallons per stage. In OH, water usage per well based on 8,000 lateral, 200 stage spacing (40 stages) and 399,000 gallons per stage. 22
Marcellus Single Well Economics Type Well Versus Historical Production (Normalized for 7,000 Lateral) (1) Restricted Rate 16.0 Cumulative Production 1 year 3.8 Bcf 2 years 5.6 Bcf 5 years 8.2 Bcf 10 years 10.3 Bcf EUR 13.9 Bcf 14.0 MMcf/d 12.0 10.0 8.0 6.0 4.0 2.0 0.5 1.0 1.5 2.0 2.5 750' Avg. Historical Production 3.0 3.5 750 Type Well Years Online 4.0 Marcellus IRR Sensitivity IRR 200% 171% 150% 121% 81% 100% 50% NYMEX ($/MMBtu) 7% $2.50 $1.84 Realized (FT+Basis+BTU $/mcf) (2) 88% 49% 24% $3.00 132% 53% 8% $2.32 27% $3.50 $2.80 Marcellus $4.00 $4.50 $5.00 $3.28 $3.75 $4.23 W. Greene Net Locations 356 139 NYMEX PV-10 Breakeven ($/MMBtu) (3) $2.60 $3.05 Note: See appendix for summary of assumptions used to generate single well IRRs. 1. Excludes production from 500 inter-well spaced wells. Excludes six 750 spaced wells; five due to suboptimal spacing to offset producing wells and one well excluded because majority of lateral was drilling in suboptimal zone (2nd well in Company history). 2. Basis assumption = 9% of NYMEX, Firm Transportation cost ( FT ) assumption = $0.52/MMBtu and Heat content uplift ( BTU ) assumption = 1050 MMBtu/Mcf. Marcellus heat content = 1050, W. Greene = 1090. 3. See appendix for a detailed explanation of adjusted midstream fees. Marcellus 750 economics assume E&P is burdened by 50% of the gathering and compression fee (RICE owns a 50% LP interest in RMP and owns 100% of the IDRs). W. Greene economics assume E&P is burdened by 100% of the gathering and compression fee (RICE acquired W. Greene assets which were previously dedicated to a third party). 23
Utica Single Well Economics Utica Dry Type Well Curve MMcf/d 20.0 15.0 10.0 5.0 Restricted Rate Cumulative Production 1 year 5.2 Bcf 2 years 7.8 Bcf 5 years 11.3 Bcf 10 years 14.2 Bcf EUR 20.0 Bcf IRR 1.0 2.0 3.0 4.0 Utica Type Well Years 200% 150% 100% NYMEX ($/MMBtu) 50% 20% Realized (FT+Basis+BTU $/mcf) (1) 36% IRR Sensitivity 56% 55% 13% 32% $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $1.84 $2.32 $2.80 $3.28 $3.75 $4.23 Utica Dry Utica Wet 24 87% 78% Net Locations 302 54 NYMEX PV-10 Breakeven ($/MMBtu) (2) $2.35 $2.05 Note: See appendix for summary of assumptions used to generate single well IRRs. 1. Basis assumption = 9% of NYMEX, Firm Transportation cost ( FT ) assumption = $0.52/MMBtu and Heat content uplift ( BTU ) assumption = 1080 MMBTU/Mcf. 2. See appendix for a detailed explanation of adjusted midstream fees. Utica Dry 750 economics assume E&P is not burdened by gathering and compression fee (RICE owns 100% of RICE s OH midstream assets). Utica Wet 750 economics assume E&P is burdened by 100% of the gathering and compression fees (RICE is currently in negotiations to dedicate its wet gas Utica acreage to a third party). Utica Wet 750 economics assume RICE pays a gathering and compression fee consistent with the fee RICE pays RICE OH midstream for gathering and compression. RICE is currently negotiating an agreement with a third party which may change single well economics. Utica wet economics assume $40/bbl for NGLs. 124% 106% 168% 138%
Efficient Production Growth Demonstrates Production Potential RICE s peer-leading production growth is driven by a focus on well quality, not quantity RICE reached 750 MMcfe/d of gross operated production with fewer wells than every other operator (1) in Appalachia Chart below demonstrates RICE s ability to rapidly grow production w/ a clear path to 1 Bcf/d & beyond w/ ~1,200+ wells left to drill MMcf/d Production versus Wells - Top Producers in Appalachia (1) 2,500 2,250 2,000 SW Appalachia Operators NE Appalachia Operators 1,750 1,500 1,250 126 Operated Wells 1,000 750 500 250 0 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 Producing Well Count 1. Horizontal Marcellus and Utica wells only. Data for RICE based on actuals through 7/31/2015, peer data based on Pennsylvania Department of Environmental Protection and Ohio Department of Natural Resources production reports through June 30, 2015. RICE production excludes acquired CHK wells. Peers: APC, AR, CHIEF, CHK, COG, CNX, EQT, GPOR, NFG, RRC, SWN & TLM. 25
2Q 2015 Adjusted EBITDA Reconciliation Three Months Ended Six Months Ended ($ in thousands) June 30, 2015 June 30, 2015 Adjusted EBITDA reconciliation to loss from continuing operations: Net income $ 12,330 $ 21,400 Interest expense 457 851 Depreciation expense 1,486 2,934 Amortization of intangible assets 408 816 Non-cash stock compensation expense 1,003 1,999 Amortization of deferred financing costs 144 288 Other expense 839 839 Adjusted EBITDA $ 16,667 $ 29,127 Cash interest expense (457) (851) Estimated maintenance capital expenditures (1,120) (2,240) Distributable cash flow $ 15,090 $ 26,036 Reconciliation of Adjusted EBITDA to Cash used in operating activities: Adjusted EBITDA $ 16,667 $ 29,127 Interest expense $ (457) $ (851) Other expense $ (839) $ (839) Changes in operating assets and liabilities which provided cash (13,133) (25,268) Net cash used in operating activities $ 2,238 $ 2,169 Note: Adjusted EBITDA is a supplemental non-gaap financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) attributable to us before non-controlling interest, interest expense or interest income; income taxes; write-down of abandoned leases; depreciation, depletion and amortization; amortization of deferred financing costs; amortization of intangible assets; equity in (income) loss of our joint ventures; derivative fair value (gain) loss, excluding net cash receipts on settled derivative instruments; non-cash stock compensation expense; (gain) loss from sale of interest in gas properties; (gain) loss on acquisition; acquisition expense; (gain) loss on extinguishment of debt; write-off of deferred financing costs; and exploration expenses. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles, or GAAP. 26
Disclaimer 27 FORWARD-LOOKING STATEMENTS This presentation and the oral statements made in connection therewith may contain forward looking statements within the meaning of the securities laws. All statements, other than statements of historical fact, regarding Rice Midstream s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. These statements often include the words could, believe, anticipate, intend, estimate, expect, project and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include expectations of plans, strategies, objectives, and anticipated financial and operating results of Rice Midstream and RICE. These forward-looking statements are based on Rice Midstream's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Rice Midstream assumes no obligation to and does not intend to update any forward looking statements included herein. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading Risk Factors included in Rice Midstream s the most recent Form 10-K, Form 10-Q, and other filings with the Securities and Exchange Commission. These forward-looking statements are based on Rice Midstream s current belief, based on currently available information, as to the outcome and timing of future events. Rice Midstream cautions you that these forwardlooking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond their control, incident to the exploration for and development, production, gathering and sale of natural gas, natural gas liquids and oil. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating natural gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under Risk Factors in Rice Midstream s most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Rice Midstream s actual results and plans could differ materially from those expressed in any forward-looking statements. This presentation has been prepared by Rice Midstream and includes market data and other statistical information from sources believed by Rice Midstream to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on Rice Midstream s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although Rice Midstream believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness.
Additional Disclosures 28 Determination of Identified Drilling Locations as of December 31, 2014 Net undeveloped locations are calculated by taking RICE s total net acreage and multiplying such amount by a risking factor which is then divided by RICE s expected well spacing. RICE then subtracts net producing wells to arrive at undeveloped net drilling locations Undeveloped Net Marcellus Locations: RICE assume these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In the Marcellus, we apply a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 64,355 net acres in the Marcellus which results in 356 undeveloped net locations Undeveloped Net Western Greene County Locations: RICE assumes these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In Western Greene County, RICE applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 22,000 net acres in Western Greene County which results in 139 undeveloped net locations Undeveloped Net Upper Devonian Locations: RICE assumes these locations have 7,000 foot laterals and 1,000 foot spacing between wells which yields approximately 161 acre spacing. In the Upper Devonian, we apply a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 77,242 net acres prospective for the Upper Devonian which results in 382 undeveloped net locations Undeveloped Net Utica Locations: RICE assumes these locations have 8,000 foot laterals and 750 foot spacing between wells which yields approximately 138 acre spacing. In the Utica, RICE applies a 10% risking factor to its net acreage to account for inefficient unitization. As of 12/31/14, RICE had 55,000 net acres prospective for the Utica in Ohio which results in 356 undeveloped net locations. This excludes ~2,500 net acres in Guernsey and Harrison Counties in Ohio