Daniel Rice IV, and his brothers Toby and Derek, sprinted through the past decade. They started Rice Energy in 2007 while in their mid-20s with little to no management experience.
CEO Daniel had done energy investment banking and worked for an offshore drilling company. President and COO Toby had a petroleum engineering degree. Executive Vice President of Exploration Derek had a petroleum geology degree.
As Rice Energy grew, they brought in private equity investors. In 2014, they took the company public, along with Rice Midstream Partners. They were the youngest management team to have two public companies in the history of the New York Stock Exchange. Rice Energy grew from 150 to 550 employees, and this summer, EQT Corp. agreed to acquire Rice Energy for $6.7 billion.
“We started with essentially $30 million of our own money, and we grew it into this billion dollar enterprise with the same approach and the same enthusiasm that we had from the beginning,” Daniel says.
Disadvantages into advantages
Part of Rice Energy’s success has come from taking challenges — young executives and global competitors — and using those to its advantage.
“People that have the perception that we’re less experienced go out of their way to prove that they’re more experienced. They might talk more and divulge a lot more information than they need to,” he says.
The Rice brothers couldn’t afford to underestimate anyone. Instead, they asked questions and learned quickly.
During their IPO roadshow, they met the issue head on; their first slide called attention to their age to reassure potential investors.
Daniel says culture starts with the role models within an organization. If you want a fun, hip culture, the leaders have to embody that.
“It was easy because with Toby, Derek and I at the top, we built a team that shared our same philosophy, same behaviors, same attitudes toward people and toward the business,” he says. “For us, it was organic. We didn’t have to say these are going to be the values and we’re going to start acting like these values.”
Rice Energy attracted bright, driven and entrepreneurial minds who didn’t want to work for a stodgy, bureaucratic oil company run from Texas, Daniel says.
At the same time, their cutthroat global competitors were slow to make decisions. Rice Energy positioned itself as the landowner-friendly, family-owned oil and gas company. Not only did they get strong leases, Daniel says their nimbleness let them react quickly.
“We spend so much of our time protecting against the downside, knowing that we’ve built a fantastic team and a business plan to capture the upside,” Daniel says.
That’s not to say they didn’t face doubt.
“We didn’t have 10 or 15 or 20 years of experience doing what we were doing. We had one or two, max,” he says. “But we had confidence in our approach. We believed that the way we were doing things was going to be the best thing in the long run — and in retrospect, it has been.”