Rex purchases 207,000 net acres from Shell in deal that increases Appalachian leasehold

Oct. 16, 2014
Rex Energy Corp. has signed a $120 million deal to acquire 207,000 net acres prospective to the Marcellus, Upper Devonian Burkett, and Utica shales in Pennsylvania and Ohio from Swepi LP, an affiliate of Royal Dutch Shell PLC.

Rex Energy Corp. has signed a $120 million deal to acquire 207,000 net acres prospective to the Marcellus, Upper Devonian Burkett, and Utica shales in Pennsylvania and Ohio from Swepi LP, an affiliate of Royal Dutch Shell PLC.

The deal will increase Rex Energy's leasehold in its Butler Operated Area to about 298,000 gross acres.

Rex will hold 100% working interest in the acquired leasehold, which includes acreage in Armstrong, Beaver, Butler, Lawrence, Mercer, and Venango counties in western Pennsylvania, and Columbiana and Mahoning counties in northeast Ohio.

The leasehold now produces 3 MMcfd to sales, and another 13 MMcfd is expected to be placed into sales in 2015. Another 13 MMcfd will be available soon from wells in various stages of development.

Some of the Swepi acreage, about 50,000 net acres,

is in the liquids-rich Moraine East area in Butler County. Rex said the leasehold is a complementary fit with its legacy Butler acreage position and holds attractive drilling targets in the Marcellus and Upper Devonian.

The company plans to drill 15-22 wells in this area in 2015.

About 66,100 net acres of the Shell leasehold is prospective to the dry-gas portion of the Utica in western Lawrence County. Rex said Chesapeake Energy Corp. is active in the area to the north, and Hilcorp Energy Co. is active to the south. Next year, Rex expects to drill two-three wells to test the resource potential of this area.

The deal is expected to close in September and carry a retroactive effective date of Jul. 1.