Rice Energy Inc. (RICE) shares fell about 2% in early Thursday after the company, which is locked in a fight with an activist investor to block a planned merger with rival EQT Corp. (EQT), said its going ahead with the deal.

The firm's shares fell 55 cents, or 1.93% to trade at $27.95 shortly after trading opened. 

The company's results appeared strong, with a profit of 30 cents per share versus a FactSet average analyst estimate of 14 cents a share.

Rice CEO Daniel Rice said during a conference call on Thursday morning that, "we have full confidence in the benefits this transaction provides and are fully committed to closing the deal in the expected time frame, and delivering those benefits to our shareholders. The combination of two of the United States is the largest, lowest cost and most responsible natural gas producers will create an unparalleled leader in shale gas development in the largest U.S. natural gas producer. We believe that Rice and EQT together will realize the significant operation of synergies given the contiguous nature of our acreage positions in some of the most economic areas in the country."

He concluded that "we expect these resulting operational synergies of the combined company to include among other things to meaningfully increase Marcellus [indiscernible] thereby significantly reducing per foot well costs and increasing returns in [indiscernible] We're very excited about our future together with EQT and the benefit the transaction provides."

Rice's second-quarter operating revenues rose to $398.3 million versus $156 million a year ago and a $360.3 million FactSet analyst consensus.

The company cut capital budget 7% during the quarter while raising its land budget to $245 million from $225 million.

The report comes in the middle of Rice's fight with activist investor group Jana Partners, which is trying to block Rice's merger with EQT.

Jana Partners LLC's Barry Rosenstein on Monday, July 31, escalated his campaign to block oil and gas producer EQT Corp. (EQT) from completing its $6.7 billion acquisition of Rice Energy by suggesting in a letter that he may launch a director-election battle in the months to come.

"We also continue to believe that it may be necessary to add new board members who will do a better job of safeguarding shareholder interests, and thus we are prepared if necessary to nominate highly-qualified and independent nominees who have each made substantial personal investments in EQT's stock," Rosenstein wrote in a 10-page letter to EQT.

The letter comes after Jana Partners earlier this month launched a campaign urging EQT to cancel its Rice deal, which was announced on June 19. The activist fund had said previously that it wants the Pittsburgh-based company to spin off its pipeline operations as part of an effort to create two publicly-traded companies, one being a pure oil and gas exploration and production corporation.

The insurgent fund has a 5.8% stake in oil and gas producer. Along with its upstream holdings, EQT currently operates a large natural gas transportation business through its master limited partnership, or MLP, EQT Midstream Partners LP (EQM), which it is seeking to expand by acquiring the assets of Rice Energy's MLP, Rice Midstream Partners LP (RMP), through future drop-down transactions from EQT. Analysts working out the details of EQT's acquisition of Rice have placed a $1.8 billion valuation on the target's midstream assets.

Rice stood its ground in a press release unveiling earnings, not refer to Jana's actions and said the deal is going along as planned and is expected to close in the fourth quarter.

Jana Partners could launch a director election contest at EQT to block the deal, but the fund's initial goal is to get EQT investors to vote down the merger first. Already, the activist fund has recruited three dissident director nominees it could nominate at EQT's next annual meeting, a person familiar with the situation said earlier this week.