Marcellus’ Rice Family Plans Third Energy-Focused SPAC

The Marcellus Shale’s Rice family is planning a third SPAC to buy a company in the E&P, power generation, energy infrastructure or critical metals and minerals sector.

Rice Acquisition 3, a special purpose acquisition corporation (SPAC), plans to sell 25 million units in a $250 million raise, according to the S-1 filing with the Securities and Exchange Commission (SEC).

The units are expected to trade on the NYSE as KRSP.U.

Joint book-running managers are Barclays and Jefferies.

The SPAC’s sponsors, which will underwrite operating costs until consummation of an acquisition, are Rice Investment Group (RIG) and Mercuria, an energy, metals and other commodity trading firm.

RIG, formed in 2007 by the Rice family, sold their Marcellus producer Rice Energy in 2017 for $8.2 billion to EQT Corp.

EQT’s stock floundered, though, resulting in the Rice family winning 80% of EQT shareholders’ support in July 2019 to take over the E&P’s board and management, which included installing Toby Rice as president and CEO.

The stock improved from $16 at the time of the proxy vote to $52 on Aug. 29 and reached an all-time high of $61.02 in June.

While Toby Rice leads EQT, RIG reported in the Rice 3 filing that he “will not participate in the management of us or our sponsor.”

But, it added, “the experience of certain members of our team at EQT demonstrates our ability to rapidly transform a business plagued by poor operational performance into a peer leader.”

Rice I and Rice II

In targeting the energy industry for Rice 3, the SPAC reported in the S-1, “Electricity demand is projected to grow nearly 50% by 2040, driven primarily by new industrial demand and AI computing needs.

“We believe this rapid growth requires a multi-pronged strategy of developing natural resources, rapidly deploying reliable power generation both on- and off-grid, constructing new energy infrastructure and securing U.S. dominance in data centers, metals and mining, and manufacturing.”

RIG’s first SPAC, Rice I, began trading in October 2020 and bought Archaea Energy, a renewable gas producer, 11 months later.

Thirteen months after, BP Plc bid $26 per share for Archaea in a $4.1 billion deal that closed in December 2022.

RIG’s Rice II began trading in June 2021, just prior to Rice I’s acquisition of Archaea. In 2023, it bought NET Power, a clean energy tech operator in the power generation sector for $2 billion.

Shares traded at more than $16 in mid-2023 but closed at $2.55 on Aug. 29.

Management, board

Kyle Derham, Rice 3’s CEO, is a RIG partner and was CFO at Rice I and CEO at Rice II. He holds a board seat at Net Power. He also led the Rice family’s 2019 proxy campaign. Prior, he was a vice president at Rice Energy and Rice Midstream, an associate at First Reserve and an investment banker at Barclays.

Story Continues

Jamie Wilmot Rogers, Rice 3’s CFO, was a senior vice president at Rice Energy. For Rice II, he was CFO and, for Rice I, he was chief accounting officer.

Anne Cameron, chief strategy officer, is Mercuria’s head of public investments and manages its Mercuria Capital Strategies portfolio. Prior, she was co-head of equities at Hartree Partners and an E&P and midstream equity analyst for BNP Paribas and J.P. Morgan.

Brian Falik, Mercuria’s global CIO, is a board nominee. Prior to joining Mercuria, he was global head, energy capital, for Noble Group and held posts at LS Power Group, Credit Suisse, Lehman Brothers and Bank of America.

Also a board nominee, Kate Jackson, was senior vice president and CTO at RTI International Metals and CTO at Westinghouse Electric. She holds board seats at EQT, Portland General Electric and Cameco Corp.

Mark Leland, another board nominee, was interim president and CEO at Deltic and holds a board seat at PotlatchDeltic Corp. He has also held board seats at Kinetik Holdings, Kayne Anderson Acquisition, EQT’s Equitrans midstream unit, Oiltanking Partners and El Paso Pipeline.

David Savett, also a nominee, is a senior adviser to Mercuria and a managing partner at Dock Square Capital, which he co-founded. Prior, he worked in commodities at Credit Suisse and in energy investment banking at Bank of America.

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