Rex Energy to acquire Shell affiliate properties in Marcellus, Utica
STATE COLLEGE, Pa. -- Rex Energy Corporation today announced the acquisition of approximately 208,000 gross (207,000 net) acres in the company' s Butler Operated Area.
Rex Energy has entered into a definitive purchase agreement with SWEPI, LP, an affiliate of Shell, to acquire a 100% interest in acreage prospective for the Marcellus, Upper Devonian/Burkett and Utica shales in Pennsylvania and Ohio for approximately $120 million in cash, subject to customary closing adjustments. The transaction is expected to close in September.
The assets to be acquired are in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in Pennsylvania, and Columbiana and Mahoning counties in Ohio. The additional acreage, combined with recent leasing, will bring Rex Energy' s position in its Butler Operated Area to approximately 298,000 gross acres.
Roughly 208,000 gross acres, representing a ~230% expansion of its Butler Operated Area and ~ 200% expansion of its Appalachian basin assets (large contiguous acreage position adjacent to existing Butler Operated Area)
Acquiring ~100% working interest and ~ 83% net revenue interest
Acquisition and future bolt-on leasing expected to position the company for a multi-year development plan of approximately 400 potential liquids-rich drilling locations (~241 liquids-rich locations at closing) on 750-ft spacing between laterals, or an immediate increase of approximately 24% over existing identified liquids-rich locations
Assets include ~16 MMcfd either producing or available to produce with minimal capital investment; estimated proved reserves of ~ 21 Bcfe from these wells
Additional expected production of ~13 MMcfd available from wells in various stages of development
Large contiguous acreage position in dry gas Utica area provides for future development program
Infrastructure and takeaway capacity agreements in place (~80 MMcfd of firm transportation) allow for full-scale development of newly acquired assets
Attractive acquisition value metrics on both a per-acre and per-location basis
Over 65% of acreage has leases with options to extend; remaining acreage is either held by operations or has manageable lease expirations
Planning to add one to two rigs in 2015 to the newly acquired acreage