© 2015 The Texas Lawbook.
By Brooks Igo
(Feb. 23) – Rice Energy Inc. announced yesterday that it closed a $375 million strategic midstream equity investment by EIG Global Energy Partners.
Houston lawyers from Vinson & Elkins and Kirkland & Ellis advised on the transaction.
The initial funding by EIG into Rice Midstream Holdings LLC (RMH) is in exchange for $375 million of Series B Units in RMH and common units representing an 8.25 percent limited partner interest in Rice Midstream GP Holdings LP (GP Holdings).
GP Holdings is a newly-formed subsidiary of RMH that holds all of the common units, subordinated units and incentive distribution rights in Rice Midstream Partners LP previously held by RMH.
The Canonsburg, Pa.-based company said in the press release that EIG’s investment will provide it with ample liquidity to fully fund its 2016 exploration and production capital expenditures.
Rice was counseled by a V&E corporate team led by Doug McWilliams. He received assistance from counsel Dan Spelkin and senior associates Daniel Elizondo and Brett Riesenfeld.
RMH will use approximately $75 million of the initial $375 million investment from EIG to repay all outstanding borrowings under its revolving credit facility and to pay transaction fees and expenses, according to the statement.
The remaining $300 million will be distributed to Rice Energy to fund a portion of its 2016 development program in the Marcellus and Utica Shales, the press release said.
EIG committed an additional $125 million, subject to designated drawing conditions precedent, to RMH for a period of 18 months.
Kirkland & Ellis advised EIG on the $500 million equity commitment, on behalf of EIG managed funds, to RMH.
Houston managing partner Andy Calder and John Pitts co-led the deal team. They were assisted by capital markets partner Matt Pacey and debt finance partners Will Bos and Mary Kogut.
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