At the beginning of 2014, Kyle Derham joined Rice Energy at an active and exciting time. The company IPOed that January when he signed on as vice president of finance. During his first year at Rice, the company issued more equity to finance an acquisition, executed its inaugural bond offering, and then took Rice’s midstream as-sets public through a master limited partnership.

“We did all that in 12 months, so it was very, very busy … but it was a lot of fun and very challenging,” Derham said.

This year, he transitioned into the role as vice president of corporate development handling M&A and strategy for Rice.

Born and raised in Charlotte, N.C., Derham entered the energy business with no prior experience, but his impressive background made up for it. He graduated in 2010 from The Wharton School at the University of Pennsylvania with a bachelor’s degree in finance. He interned at Barclays in Houston before his senior year and later joined the firm full time as an analyst in the global natural resources department. After two years at Barclays and prior to joining Rice, he worked as an associate at First Reserve, an energy private equity fund in Houston, focusing on the firm’s upstream investments.

When he’s not working a deal, Derham enjoys golf, skiing and music in his spare time.

Investor How did you get started in the energy industry?

Derham I grew up in North Carolina where there’s not much of an oil and gas industry, and I went to school in the Northeast. I was interested in investment banking so for me it was what industry do I want to get into? The reality is no industry consumes more capital than the energy space, particularly E&P companies. So I knew that if I went into banking and worked within an energy coverage group, that I’d always be busy.

Investor What do you enjoy about your position?

Derham I enjoy the people here. Within my role, the evolution of an acquisition allows you to work with every department within the company—the initial diligence phase, working with our land and operational teams, establishing the valuation by leveraging the skills of our finance team, and then eventually negotiating definitive docs with our legal team.

What’s great about Rice is the entire executive team is young and hungry, and so that culture filters down through the entire organization.

Investor What interesting deals have you been involved in at Rice?

Derham Vantage was the biggest and most transformative. It was a $2.7-billion deal, and we were able to flex Rice’s corporate structure with the upstream C-Corp acquiring the E&P assets and the midstream MLP acquiring the gathering and water assets.

That was a fun one to do and set the table for success going forward. The market was right, and we were able to raise equity to finance the transaction to keep the balance sheet underlevered.

Investor Rice IPOed in 2014—what was the experience like?

Derham 2014 was a critical year for the industry and for Rice. One thing Rice did well was taking the capital when it was available. Following the OPEC announcement, the equity markets were in disarray and we had to make the difficult decision to price our MLP IPO in December below the low-end of the offering range. It was a tough pill to swallow, but at the end of the day it was still an accretive transaction, provided capital to finance the next year’s capex program and kept the Rice growth story on track. The capital markets essentially shut-down for the next six months and, had we not executed the transaction, we would have been in a tough spot.

Investor What is Rice’s A&D strategy?

Derham Right now, we’re focused in Appalachia. We think Appalachia offers an extremely attractive risk-adjusted return profile. We’ve operated here for a while and know exactly what we’re going to get out of the wells that we develop. When you have that kind of knowledge vs. if you’re in a play that’s earlier in its development life cycle, you can be more aggressive when acquiring leasehold. We are most excited about deals that increase our NRI [net revenue interest] in units or extend laterals of existing development.

Investor Who were your mentors throughout your career?

Derham I’ve learn from a bunch of peers along the way. At Barclays, I worked for Greg Pipkin and Will Byers, neither of whom are at Barclays anymore, but they were guys that introduced me to the industry and taught me everything I know today.

Today, the Rice brothers and the rest of the executive team I certainly look up to. I think it’s an incredible accumulation of talent across the board. It’s pretty rare; our team is really great—an undervalued part of the story.

Investor Do you have any advice for the younger generation who want to get involved in the industry?

Derham From a career perspective, I usually tell folks they need to go somewhere where they are challenged on a day-to-day basis. The moment that you get comfortable or relaxed in a position is the moment you probably need to challenge yourself within the job or find something else. That’s why I made the move I made and it’s paid off. Especially early in your career, it’s all about challenging yourself and gaining experience as quickly as possible.

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