Exhibit 99.1

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report.  The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance.  We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur.  See “Cautionary Statement Regarding Forward-Looking Statements.”  Also, see the risk factors and other cautionary statements described in “Item 1A.  Risk Factors” included elsewhere in this Annual Report.  We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

Overview of Our Business

Rice Energy is an independent natural gas and oil company focused on the acquisition, exploration and development of natural gas, oil and NGL properties in the Appalachian Basin.  As a result of changes to our operations and organizational structure in 2016, we now manage our business in three operating segments - the Exploration and Production segment, the Rice Midstream Holdings segment and the Rice Midstream Partners segment.  These segments are managed separately due to their distinct operational differences.  The Exploration and Production segment is responsible for the acquisition, exploration and development of natural gas, oil and NGLs.  The Rice Midstream Holdings segment is engaged in the gathering and compression of natural gas, oil and NGL production for us and third parties in Belmont and Monroe Counties, Ohio.  The Rice Midstream Partners segment is engaged in the gathering and compression of natural gas, oil and NGL production in Washington and Greene Counties, Pennsylvania, and in the provision of water services to support the well completion services of us and third parties in Washington and Greene Counties, Pennsylvania and Belmont County, Ohio.

As a result of certain reorganizations and transactions that occurred during 2014, 2015 and 2016, our historical financial condition and results of operations for the periods presented in this Annual Report may not be comparable, either from period to period or going forward.  For example, information for the period from January 1, 2014 until January 29, 2014, as contained within the year ended December 31, 2014 pertains to the historical financial statements and results of operations of Rice Drilling B LLC, our accounting predecessor.  Such periods reflect only our 50% equity investment in our Marcellus joint venture.  From and after our acquisition of the remaining 50% interest from Alpha Holdings on January 29, 2014, the results of operations of our Marcellus joint venture are consolidated into our results of operations.

In connection with the RMP IPO in December 2014, we contributed to RMP all of our gas gathering and compression assets in Washington and Greene Counties, Pennsylvania in exchange for, among other things, common and subordinated units representing a 50% limited partner interest and all of the incentive distribution rights in RMP.  Indirectly, through Midstream Holdings, we own and control the general partner of RMP, and, as such, the results of operations of RMP are consolidated into our results of operations.  However, while our results of operations consolidate the results of operations of RMP for periods subsequent to December 22, 2014, they give effect to the noncontrolling interest in RMP held by its public unitholders.

Also in connection with the RMP IPO, we entered into various gas gathering and compression agreements and water distribution services agreements, both intercompany and, in the case of certain gas gathering and compression services in Pennsylvania, with RMP.  Prior to December 22, 2014, with certain limited exceptions, the Rice Midstream Holdings segment and the Rice Midstream Partners segment did not charge fees for providing such services to our Exploration and Production segment.  From December 22, 2014 through October 31, 2015, the Rice Midstream Holdings segment charged the Exploration and Production segment water services fees according to the water services agreements entered into in connection with the RMP IPO.  Beginning on November 1, 2015, as a result of the closing of the acquisition of PA Water and OH Water by RMP, the Rice Midstream Partners segment charges the Exploration and Production segment water services fees according to certain water services agreements entered in connection with the acquisition.  These gathering and water services fees are eliminated through consolidation.

Following completion of the Vantage Acquisition, we operate Vantage through Rice Energy Operating.  As part of the consideration for the Vantage Acquisition, the Vantage Sellers were issued common units in Rice Energy Operating.  In connection with the issuance of such membership interests to the Vantage Sellers, us and the Vantage Sellers entered into the Third A&R LLC Agreement.  Under the Third A&R LLC Agreement, we control all of the day-to-day business affairs and decision making of Rice Energy Operating without approval of any other member, unless otherwise stated in the Third A&R LLC Agreement.  As such, we, through our officers and directors, are responsible for all operational and administrative decisions of Rice Energy Operating and the day-to-day management of Rice Energy Operating’s business.  Pursuant to the terms of the Third A&R LLC Agreement, we cannot, under any circumstances, be removed or replaced as the sole manager of Rice Energy Operating, except by our own election so long as it remains a member of Rice Energy Operating.

Sources of Revenues

The substantial majority of our revenues are derived from the sale of natural gas and do not include the effects of derivatives.  Our revenues may vary significantly from period to period as a result of changes in volumes of production sold or changes in realized prices.  Our gathering, compression and water services revenues are primarily derived from our gathering and compression contracts in addition to fees charged to outside working interest owners.

The following table provides detail of our operating revenues from the consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014.

NYMEX Henry Hub prompt month contract prices are widely-used benchmarks in the pricing of natural gas.  The following table provides the high and low prices for NYMEX Henry Hub prompt month contract prices and our differential to the average of those benchmark prices for the periods indicated.

(1)              Differential is calculated by comparing the average NYMEX Henry Hub price to our volume weighted average realized price per MMBtu before hedges, including 50% of the volumes sold by our Marcellus joint venture for the period from January 1, 2014 through January 28, 2014, contained within the year ended December 31, 2014. The remainder of the year ended December 31, 2014 reflects 100% of the volumes sold by our Marcellus joint venture.

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We sell a substantial majority of our production to two natural gas marketers, Sequent and BP.  For the year ended December 31, 2016, sales to Sequent and BP represented 25% and 24% of our total sales, respectively.  If our natural gas marketers decided to stop purchasing natural gas from us, our revenues could decline and our operating results and financial condition could be harmed.  Although a substantial portion of production is purchased by these customers, we do not believe the loss of these customers would have a material adverse effect on our business, as other customers or markets would be accessible to us.

For the year ended December 31, 2016, our Exploration and Production segment accounted for 87% of our operating revenues.  While we anticipate that the Rice Midstream Holdings segment and the Rice Midstream Partners segment will continue to represent a meaningful portion of our operating revenues in future periods, we expect that a substantial majority of our operating revenues will remain attributable to our Exploration and Production segment.

Principal Components of Our Cost Structure

·                  Lease operating expense.  These are the day to day operating costs incurred to maintain production of our natural gas producing wells.  Such costs include field personnel costs, produced water disposal, maintenance and repairs.  Cost levels for these expenses can vary based on supply and demand for oilfield services.

·                  Gathering, compression and transportation.  These are costs incurred to bring natural gas to the market.  Such costs include fees paid to third parties who operate low- and high-pressure gathering systems that transport our natural gas.  We often enter into firm transportation contracts that secure takeaway capacity that includes minimum volume commitments, the cost for which is included in these expenses.

·                  Midstream operation and maintenance.  These are costs incurred to operate and maintain our low- and high-pressure natural gas gathering and compression systems and our water services assets used to support well completion activities and to collect and recycle or dispose of flowback and produced water.

·                  Incentive unit expense.  These costs represent non-cash compensation expense for incentive units awarded to certain of our employees by NGP Holdings and Rice Holdings.  In connection with our IPO and related corporate reorganization, the holders of incentive units in REO contributed a portion of their incentive units to Rice Holdings and NGP Holdings in return for substantially similar incentive units in such entities.  This resulted in the incentive units being deemed to have been modified, and the performance conditions were considered to be probable of occurring.  Therefore, their fair values were measured and compensation expense from the date of initial grant through December 31, 2016 has been recognized in the year ended December 31, 2016.  The payment obligation as it relates to the incentive units resides with NGP Holdings and Rice Holdings and has not been, and will not be borne by us.  In April 2016, NGP Holdings settled its remaining incentive unit obligation in connection with our April 2016 Equity Offering.  No future expense will be recognized related to the NGP Holdings incentive units.

·                  General and administrative expense.  These costs include overhead, including payroll and benefits for our corporate staff, costs of maintaining our headquarters, costs of managing our exploration and production operations, midstream operations, franchise taxes, audit and other professional fees and legal compliance expenses.  General and administrative expense also includes stock-based compensation expense related to awards granted under our long-term incentive plan.  Please see “Note 16- Stock-Based Compensation” in the notes of the consolidated financial statements under Item 8 of this Annual Report.

·                  Depreciation, depletion and amortization.  Depreciation, depletion and amortization (“DD&A”) includes the systematic expensing of the capitalized costs incurred to acquire, explore and develop natural gas.  As a “successful efforts” company, we capitalize all costs associated with our acquisition and development efforts and all successful exploration efforts and allocate these costs to each unit of production using the units of production method.

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·                  Interest expense.  We have financed a portion of our working capital requirements and property acquisitions with borrowings under our revolving credit facilities and our Notes.  As a result, we incur interest expense that is affected by the level of drilling, completion and acquisition activities, as well as fluctuations in interest rates and our financing decisions.  We will likely continue to incur significant interest expense as we continue to grow.  To date, we have not entered into any interest rate hedging arrangements to mitigate the effects of interest rate changes.

·                  Gain on derivative instruments.  We utilize commodity derivative contracts to reduce our exposure to fluctuations in the price of natural gas.  We recognize gains and losses associated with our open commodity derivative contracts as commodity prices and the associated fair value of our commodity derivative contracts change.  The commodity derivative contracts we have in place are not designated as hedges for accounting purposes.  Consequently, these commodity derivative contracts are recorded at fair value at each balance sheet date with changes in fair value recognized as a gain or loss in our results of operations.  Cash flow is only impacted to the extent the actual settlements under the contracts result in making a payment to or receiving a payment from the counterparty.

·                  Income tax expense.  We are a corporation under the Internal Revenue Code, subject to federal income taxes at a statutory rate of 35% of pretax earnings.  The reorganization of our business into a corporation in connection with the closing of our IPO required the recognition of a deferred tax asset or liability for the initial temporary differences at the time of our IPO.  The resulting deferred tax liability of approximately $162.3 million was recorded in equity at the date of our IPO.  Based on our deductions primarily related to intangible drilling costs (“IDCs”), we could potentially generate significant net operating loss assets and deferred tax liabilities.  We may report and pay state income or franchise taxes in periods where our IDC deductions do not exceed our taxable income or where state income or franchise taxes are determined on another basis.

How We Evaluate Our Operations

In evaluating our financial results, we focus on production, revenues, per unit cash production costs and general and administrative (“G&A”) expenses.  We also evaluate our rates of return on invested capital in our wells, and we measure the expected return of our wells based on EUR and the related costs of acquisition, development and production.

We believe the quality of our assets combined with our technical and managerial expertise can generate attractive rates of return as we develop our core acreage position in the Marcellus and Utica Shales.  Additionally, by focusing on concentrated acreage positions, we can build and own centralized midstream infrastructure, including low- and high-pressure gathering lines, compression facilities and water pipeline systems, which enable us to reduce reliance on third-party operators, minimize costs and increase our returns.

Consolidated Results of Operations

Below are some highlights of our consolidated financial and operating results for the years ended December 31, 2016, 2015 and 2014:

·                  Our natural gas, oil and NGL sales were $653.4 million, $446.5 million and $359.2 million in the years ended December 31, 2016, 2015 and 2014, respectively.

·                  Our production volumes were 304.4 Bcfe, 201.3 Bcfe and 97.7 Bcfe in the years ended December 31, 2016, 2015 and 2014, respectively.

·                  Our gathering, compression and water services revenues were $101.1 million, $49.2 million and $5.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

·                  Our per unit cash production costs were $0.63 per Mcfe, $0.68 per Mcfe and $0.67 per Mcfe in the years ended December 31, 2016, 2015 and 2014, respectively.

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The following tables set forth selected operating and financial data for the year ended December 31, 2016 compared to the year ended December 31, 2015 and the year ended December 31, 2015 compared to the year ended December 31, 2014:

(1)        The effect of hedges includes realized gains and losses on commodity derivative transactions.

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Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

Total operating revenues.  The $276.8 million increase in total operating revenues was mainly a result of a 51% increase in natural gas, oil and NGL production from 201.3 Bcfe in 2015 to 304.4 Bcfe in 2016.  During 2016, we turned 70 gross (63 net) wells into sales, of which 14 gross (14 net) wells were acquired in the Vantage Acquisition.  The increase in operating revenues was slightly offset by a decrease in realized prices.  Our realized price in 2016 was $2.14 per Mcf compared to $2.21 per Mcf in 2015, in each case before the effect of hedges.  Operating revenues were also positively impacted by a $51.9 million, or 105%, increase in gathering, compression and water service revenues year-over-year.  This increase primarily relates to an increase in third-party volumes and revenues on our gathering contracts.  In addition, post-acquisition revenue associated with the Vantage Acquisition was $51.6 million for the period from October 19, 2016 through December 31, 2016.

Lease operating expenses.  The $6.2 million increase in lease operating expenses was attributable to an increase in our production base in 2016 as compared to the prior year.  However, on a per unit basis, lease operating expenses decreased from $0.22 for the year ended December 31, 2015 to $0.17 for the year ended December 31, 2016.  The decrease on a per unit basis was attributable to improved efficiencies, primarily relating to production water recycling and reduced flowback periods.

Gathering, compression and transportation.  Gathering, compression and transportation expense for 2016 of $123.9 million was mainly comprised of $105.1 million of transportation contracts with third parties and $19.3 million of gathering charges from third parties.  The $39.1 million, or 46%, increase in expense was primarily attributable to a

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51% increase in production volumes, as well as increased firm transportation expense for the year ended December 31, 2016.

Exploration.  The increase in exploration expense year over year of $12.0 million was primarily due to leasehold write-offs, mainly associated with expired leaseholds.

Midstream operation and maintenance.  The $6.2 million increase in midstream operation and maintenance expense in 2016 compared to the prior year was primarily due to on and off pad water transfer costs and water procurement, in addition to increased expenses following the Vantage Midstream Asset Acquisition primarily associated with water transfer and pipeline maintenance costs.  On a per unit basis, midstream operation and maintenance expense was $0.08 for the years ended December 31, 2016 and 2015.

Incentive unit expense.  Incentive unit expense increased $15.7 million in 2016 compared to 2015.  In 2016, the $51.8 million expense consisted of $24.5 million of non-cash compensation expense related to the Rice Holdings incentive units and $27.3 million of compensation expense related to a cumulative adjustment to equal the cumulative cash payment made by NGP Holdings to NGP Holdings incentive unitholders.  In 2015, the $36.1 million expense consisted of $33.7 million of non-cash compensation expense related to the Rice Holdings incentive units and $26.7 million related to payments made to certain holders of NGP Holdings incentive units, offset by $24.3 million of non-cash income related to the fair market value adjustment for the NGP Holdings incentive units which was largely driven by the decline in our stock price as of December 31, 2015.  No future expense will be recognized related to the NGP Holdings incentive units as a result of the April 2016 settlement of the remaining NGP Holdings incentive unit obligation.  See “Item 1.  Financial Statements-Notes to Consolidated Financial Statements-14.  Incentive Units” for additional information.

Impairment of gas properties.  For the years ended December 31, 2016 and 2015, we recorded $20.9 million and $18.2 million, respectively, in impairment expense related to our gas properties.  In 2016, we recognized $20.9 million of impairment expense in the consolidated statement of operations related to lease expirations on non-core assets.  In 2015, we determined that the carrying value of our Upper Devonian proved property was not fully recoverable and as a result, we recognized a $10.9 million impairment expense to write-down such proved properties to fair value.  In addition, we recognized $7.3 million of impairment expense in 2015 due to changes in our development plans and lease expirations.

Impairment of goodwill.  The $294.9 million impairment of goodwill in 2015 related to a full impairment of goodwill associated with our Exploration and Production segment.  In performing the annual goodwill impairment analysis, management considered the negative industry and market trends, including the decline in commodity prices and overall market performance of our peers and ourselves, to be the primary reasons of impairment.

Impairment of fixed assets.  The $23.1 million impairment expense in 2016 was primarily related to a $20.3 million impairment for pipeline assets that were decommissioned.

General and administrative expense.  For the year ended December 31, 2016, general and administrative expense (before stock compensation expense) increased $10.3 million, or 12%, primarily due to the additions of personnel to support our growth activities and related salary and employee benefits.  At December 31, 2016, we had 467 employees, a 26% increase compared to December 31, 2015.  Additionally, general and administrative expenses increased year-over-year due to an increase in rent expense primarily related to our office leases.  On a per unit basis, general and administrative expense (before stock compensation expense) decreased by 26%, from $0.43 per Mcfe during the year ended December 31, 2015 to $0.32 per Mcfe during the year ended December 31, 2016, primarily due to a 51% increase in production.  Slightly offsetting the increase in general and administrative expenses was an increase in allocated employee time to capital projects due to increased production.

Included in general and administrative expense is stock compensation expense of $21.3 million and $16.5 million for the years ended December 31, 2016 and December 31, 2015, respectively.  The increase is primarily attributable to increased compensation expense associated with restricted stock unit and performance stock unit awards.  Please see “Note 16-Stock-Based Compensation” in the notes to the consolidated financial statements in Item 8 of this Annual Report for further information on these awards.

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DD&A.  The $45.7 million increase in DD&A expense was a result of an increase in production driven by a greater number of producing wells in 2016 compared to 2015.  As of December 31, 2016, we had 282 net producing Appalachian wells, an 97% increase when compared to the number of producing wells as of December 31, 2015.  In addition, the increase in DD&A was the result of an increase in midstream assets placed in service in 2016 as compared to the prior year and the related depreciation of those assets.  As of December 31, 2016, we had 251 miles and 129 miles of gas gathering and water pipeline, respectively, an increase of 50% and 15%, respectively, when compared to the prior year.  On a per unit basis, DD&A expense decreased $0.39, or 24%, from $1.60 for the year ended December 31, 2015 to $1.21 for the year ended December 31, 2016.

Acquisition expense.  The $4.9 million increase in acquisition expense was primarily attributable to costs associated with the Vantage Acquisition.

Interest expense.  The $12.2 million increase in interest expense was primarily attributable to a full year recognition of expense associated with the prior year issuance of $400.0 million of the 2023 Notes.  In addition, interest expense increased due to higher average borrowings on our revolving credit facilities during 2016 as compared to 2015 in order to fund our capital expenditures.

(Loss) gain on derivative instruments.  The $220.2 million loss on derivative contracts in 2016 was due to net cash receipts of $210.5 million on the settlement of maturing contracts and offset by a $430.8 million unrealized loss.  The $273.7 million gain on derivative contracts in 2015 was due to net cash receipts of $193.9 million and a $79.8 million unrealized gain.

Income tax benefit (expense).  The $154.3 million decrease in income tax expense year-over-year was driven by our net pre-tax loss, creating an income tax benefit for the year ended December 31, 2016.

Noncontrolling interest.  The $2.4 million decrease in net income attributable to noncontrolling interest was attributable to a $54.5 million loss from noncontrolling interest associated with the 16.49% of membership interests in Rice Energy Operating the Vantage Sellers received in connection with the Vantage Acquisition.  Offsetting the loss from noncontrolling interest was a decrease in Rice Energy Operating’s indirect ownership in RMP from 41% as of December 31, 2015 to 26% as of December 31, 2016.  The decrease in ownership percentage year-over-year was primarily attributable to RMP’s June 2016 and October 2016 equity offerings.  In addition, the increase in RMP’s net income year-over-year from $52.5 million in 2015 to $121.6 million in 2016 contributed to the $20.9 million net income in noncontrolling interest balance as of December 31, 2016.

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Total operating revenues.  The $111.2 million increase in total operating revenues was mainly a result of an increase in natural gas, oil and NGL production in 2015 compared to 2014.  The increase in production was a result of increased drilling and completion activity in 2015, mainly in Washington County, Pennsylvania and Belmont County, Ohio.  The impact of increased production volumes on operating revenues was offset by a decrease in realized prices.  Our realized price in 2015 was $2.21 per Mcf compared to $3.65 per Mcf in 2014, in each case before the effect of hedges.  Additionally, operating revenues were positively impacted by a $43.7 million increase in gathering, compression and water service revenues year-over-year.  This increase primarily relates to increased third-party volumes and revenues on new gathering contracts.  The increase in operating revenues for 2015 were offset by a $22.8 million decrease year-over-year in firm transportation sales, net, from the sale of unutilized capacity as we further utilize our existing contracts for our own operated production.

Lease operating expenses.  The $19.4 million increase in lease operating expenses is attributable to an increase in the number of producing wells in 2015 as compared to 2014.  However, lease operating expenses per unit of production decreased year-over-year due to improved efficiencies, primarily relating to production water recycling.

Gathering, compression and transportation.  Gathering, compression and transportation expense for 2015 of $84.7 million is mainly comprised of $68.2 million of transportation contracts with third parties, $8.3 million of gathering charges from third parties and $4.2 million of charges from our working interest partners on our

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non-operated wells.  The $49.1 million increase in expense was primarily attributable to increased firm transportation contracts in 2015 compared to 2014, which is consistent with increased production.

Midstream operation and maintenance.  The $12.4 million increase in midstream operation and maintenance expense in 2015 compared to 2014 was primarily due to additional contract labor costs, additional leases and on compression equipment and utility costs incurred as a result of our continued midstream build-out.

Incentive unit expense.  Incentive unit expense decreased $69.9 million in 2015 compared to 2014.  In 2014, the $106.0 million expense primarily consisted of $44.5 million and $41.7 million of non-cash compensation expense related to the Rice Holdings and NGP Holdings incentive units, respectively, $3.4 million of non-cash compensation expense related to extinguishment of the legacy incentive unit burden of Mr. Daniel J. Rice III and $16.4 million related to payments made to certain holders of NGP Holdings incentive units.  In 2015, the $36.1 million expense consisted of $33.7 million of non-cash compensation expense related to the Rice Holdings incentive units and $26.7 million related to payments made to certain holders of NGP Holdings incentive units, offset by $24.3 million of non-cash income related to the fair market value adjustment for the NGP Holdings incentive units which was largely driven by the decline in our stock price at December 31, 2015.  See “Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-14. Incentive Units” for additional information.

Impairment of goodwill.  The $294.9 million impairment of goodwill in 2015 related to a full impairment of goodwill associated with our Exploration and Production segment.  In performing the annual goodwill impairment analysis, management considered the negative industry and market trends, including the decline in commodity prices and overall market performance of our peers and ourselves, to be the primary reasons of impairment.

General and administrative expense.  The $41.5 million increase in general and administrative expense was primarily attributable to the additions of personnel to support our growth activities and related salary and employee benefits.  At December 31, 2015, we had 371 employees as compared to 290 employees at December 31, 2014.  Additionally, general and administrative expenses increased year-over-year as a result of the costs associated with our accounting system implementation and information technology projects to support our growth activities.  Included in general and administrative expense is stock compensation expense of $16.5 million and $5.6 million for the years ended December 31, 2015 and December 31, 2014, respectively.

DD&A.  The $166.5 million increase in DD&A expense was a result of an increase in production driven by a greater number of producing wells in 2015 compared to 2014, which is consistent with our expanded drilling program and increased production during the year.  In addition, the increase was the result of an increase in midstream assets placed in service in 2015 as compared to 2014 and the related depreciation of those assets.

Interest expense.  The $37.3 million increase in interest expense was a result of our issuance of $400.0 million of the 2023 Notes and borrowings under our revolving credit facilities to fund midstream capital expenditures in 2015.

Gain on purchase of Marcellus joint venture.  The $203.6 million gain on acquisition in the first quarter of 2014 was attributable to our acquisition of Alpha Holdings’ 50% interest in our Marcellus joint venture in connection with the closing of our IPO.  As a result of our acquisition of the remaining 50% ownership in our Marcellus joint venture, we were required to remeasure our equity investment at fair value, which resulted in the non-recurring gain.

Gain on derivative instruments.  The $273.7 million gain on derivative contracts in 2015 was due to net cash receipts of $193.9 million on the settlement of maturing contracts and a $79.8 million unrealized gain.  The $186.5 million gain on derivative contracts in 2014 was due to net cash payments of $18.8 million and a $205.3 million unrealized gain.

Equity in income (loss) of joint ventures.  The $2.7 million decrease in equity income of joint ventures is the result of our acquisition of the remaining 50% interest in our Marcellus joint venture in January 2014, as we consolidate the operations of our Marcellus joint venture subsequent to the acquisition.

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Income tax expense.  The $79.5 million decrease in income tax expense year-over-year was attributable to a decrease in taxable income and a lower estimated annual effective tax rate.

Noncontrolling interest.  The $22.8 million increase in net income attributable to noncontrolling interest was primarily attributable to us recognizing a full year of noncontrolling interest related to our investment in RMP as compared to the 10-day period in 2014.

Business Segment Results of Operations

As a result of changes to our operations and organizational structure in the first quarter of 2016, we now manage our business in three business segments:  Exploration and Production, Rice Midstream Holdings and Rice Midstream Partners.  We evaluate our business segments based on their contribution to our consolidated results based on operating income.  Please see “Note 8-Financial Results by Business Segment” in the notes to the consolidated financial statements in Item 8 of this Annual Report for a break-down of the operating results and assets of our business segments for the years ended December 31, 2016, 2015 and 2014.  All prior period results have been revised to reflect the new reporting segment structure.

The following tables set forth selected operating and financial data for each business segment for the year ended December 31, 2016 compared to the year ended December 31, 2015 and the year ended December 31, 2015 compared to the year ended December 31, 2014:

Exploration and Production Segment

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Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

Total operating revenues.  The $206.9 million increase in natural gas, oil and NGL sales was mainly a result of an increase in production in 2016 compared to 2015, as discussed above.  In addition, post-acquisition revenue associated with the Vantage Acquisition was $51.6 million for the period from October 19, 2016 through December 31, 2016.  The increase in operating revenues was slightly offset by a decrease in realized prices.  Our realized price in 2016 was $2.14 per Mcf compared to $2.21 per Mcf in 2015, in each case before the effect of hedges.  Additionally, the increase in other revenue of approximately $18.0 million was primarily driven by our natural gas marketing activities.

Lease operating expenses.  The $6.4 million increase in lease operating expenses was attributable to an increase in our production base in 2016 as compared to the prior year.  However, on a per unit basis, lease operating expenses decreased from $0.22 for the year ended December 31, 2015 to $0.17 for the year ended December 31, 2016 due to improved efficiencies, primarily relating to production water recycling.

Gathering, compression and transportation.  Gathering, compression and transportation expense for 2016 of $232.5 million includes $127.9 million of affiliate and third party gathering fees and $105.1 million of transportation contracts with third parties.  The $82.5 million increase in gathering, compression and transportation expenses was mainly due to increased volumes under the gathering agreements with the Rice Midstream Partners segment and the Rice Midstream Holdings segment, as well as increased firm transportation expense for the year ended December 31, 2016.

Production taxes and impact fees.  Production taxes are directly related to natural gas, oil and NGLs sales.  The $6.3 million, or 82%, increase in production taxes for 2016 compared to 2015 is primarily related to the 49% increase in natural gas, oil and NGLs sales.

Exploration.  The increase in exploration expense year over year of $12.0 million was primarily due to leasehold write-offs, mainly associated with expired leaseholds.

Impairment of gas properties.  For the years ended December 31, 2016 and 2015, we recorded $20.9 million and $18.2 million, respectively, in impairment expense related to our gas properties.  In 2016, we recognized $20.9 million of impairment expense in the consolidated statement of operations related to lease expirations on non-core assets.  In 2015, we determined that the carrying value of our Upper Devonian proved property was not fully recoverable and as a result, we recognized a $10.9 million impairment expense to write-down such proved properties to fair value.  In addition, we recognized $7.3 million of impairment expense in 2015 due to changes in our development plans and lease expirations.

Impairment of goodwill.  The $294.9 million impairment of goodwill in 2015 related to a full impairment of goodwill associated with our Exploration and Production segment.  In performing the annual goodwill impairment analysis, management considered the negative industry and market trends, including the decline in commodity prices and overall market performance of our peers and ourselves, to be the primary reasons of impairment.

General and administrative expense.  For the year ended December 31, 2016, general and administrative expense (before stock compensation expense) decreased $2.8 million, or 4%, primarily due to a decrease in allocated costs associated with personnel and administrative expenses as the Rice Midstream Holdings segment and the Rice Midstream Partners segment continue to grow.  On a per unit basis, general and administrative expense (before stock compensation expense) decreased by 35%, from $0.34 per Mcfe during the year ended December 31, 2015 to $0.22 per Mcfe during the year ended December 31, 2016, primarily due to a 51% increase in production.  Included in general and administrative expense is stock compensation expense of $13.4 million and $11.0 million for the years ended December 31, 2016 and December 31, 2015, respectively.

DD&A.  The $42.0 million increase was a result of an increase in production and greater number of producing wells in 2016 compared to 2015.  As of December 31, 2016, we had 282 net producing Appalachian wells, an 97% increase when compared to the number of producing wells as of December 31, 2015.  On a per unit basis,

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DD&A expense decreased $0.38 per Mcfe, or 25%, from $1.53 for the year ended December 31, 2015 to $1.15 per Mcfe for the year ended December 31, 2016.

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Total operating revenues.  The $87.3 million increase in natural gas, oil and NGL sales was mainly a result of an increase in production in 2015 compared to 2014 as discussed above.  The impact of increased production volumes on operating revenues was offset by a decrease in realized prices.  Our realized price in 2015 was $2.21 per Mcf compared to $3.65 per Mcf in 2014, in each case before the effect of hedges.  The increase in operating revenues for 2015 were offset by a $22.8 million decrease year-over-year in firm transportation sales, net, from the sale of unutilized capacity as we further utilize our existing contracts for our own operated production.

Lease operating expenses.  The $19.4 million increase in lease operating expenses year-over-year was attributable to an increase in the number of producing wells in 2015 as compared to the prior year.  However, lease operating expenses per unit of production decreased year-over-year due to improved efficiencies, primarily relating to production water recycling.

Gathering, compression and transportation.  Gathering, compression and transportation expense for 2015 of $150.0 million includes $73.6 million of affiliate and third party gathering fees, $68.2 million of transportation contracts with third parties and $4.2 million of charges from our working interest partners on our non-operated wells.  The $112.6 million increase in gathering, compression and transportation expenses was mainly due to the gathering agreements with the Rice Midstream Partners segment and the Rice Midstream Holdings segment as well as increased firm transportation expense in 2015 compared to 2014, which is consistent with increased production.

Impairment of goodwill.  The $294.9 million impairment of goodwill in 2015 related to a full impairment of goodwill associated with our Exploration and Production segment.  In performing the annual goodwill impairment analysis, management considered the negative industry and market trends, including the decline in commodity prices and overall market performance of our peers and ourselves, to be the primary reasons of impairment.

General and administrative expense.  The $32.4 million increase in segment general and administrative expense year-over-year was primarily attributable to the additions of personnel to support our growth activities and related salary and employee benefits.  Included in general and administrative expense is stock compensation expense of $11.0 million and $4.5 million for the years ended December 31, 2015 and December 31, 2014, respectively.

DD&A.  The $156.3 million increase was a result of an increase in production and greater number of producing wells in 2015 compared to 2014.

Rice Midstream Holdings Segment

15

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

Total operating revenues.  The $36.6 million increase in total operating revenues was mainly the result of a 187% period over period increase in affiliate gathering volumes between the Exploration and Production segment and the Rice Midstream Holdings segment, as well as an increase in third-party gathering volumes, which include revenues associated with the contracts for Strike Force Midstream.

Midstream operation and maintenance.  Midstream operation and maintenance expense increased $0.9 million primarily due to pipeline maintenance expenses associated with Strike Force Midstream, which began operations in February 2016.

Impairment of fixed assets.  The $20.3 million impairment expense in 2016 was primarily related to pipeline assets that were decommissioned.

General and administrative expense.  The $7.7 million increase in segment general and administrative expense year-over-year (before equity compensation expense) was primarily attributable to costs associated with personnel to support the Rice Midstream Holdings segment.  Included in general and administrative expense is stock compensation expense of $5.0 million and $1.0 million for the years ended December 31, 2016 and December 31, 2015, respectively.  The increase was due to an increase in the allocation of our equity-based compensation expense to the Rice Midstream Holdings segment related to awards made under our equity-based compensation plans in 2016.

DD&A.  The $3.0 million increase in DD&A year-over-year was primarily the result of an increase in midstream assets placed in service in 2016 as compared to 2015 and the related depreciation on those assets.  As of December 31, 2016, the Rice Midstream Holdings segment had 92 miles of gathering system pipelines, a 71% increase from December 31, 2015 primarily due to the addition of gathering system pipeline assets associated with Strike Force Midstream.

16

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Total operating revenues.  The $26.5 million increase in total operating revenues year-over-year was mainly the result of an increase in volumes associated with the gathering contracts between the Exploration and Production segment and Rice Midstream Holdings segment (that were not in place for substantially all of 2014).

Midstream operation and maintenance.  Midstream operation and maintenance expense increased $2.0 million year-over-year which primarily related to contract labor and maintenance costs.

Incentive unit expense.  Incentive unit expense is allocated to the Rice Midstream Holdings segment based on our estimate of the expense attributable to the Rice Midstream Holdings segment’s operations.  The $5.3 million decrease in incentive unit expense year-over-year is consistent with the decrease in incentive unit expense to us.

General and administrative expense.  The $3.1 million increase in segment general and administrative expense year-over-year was primarily attributable to costs associated with the additions of personnel to support our growth activities and related salary and employee benefits.  Included in general and administrative expense is stock compensation expense of $1.0 million and $0.2 million for the years ended December 31, 2015 and December 31, 2014, respectively.

DD&A.  The $2.6 million increase in DD&A year-over-year was primarily the result of an increase in midstream assets placed in service in 2015 as compared to 2014 and the related depreciation on those assets.

Rice Midstream Partners Segment