PennEnergy Resources to acquire Rex Energy assets

Aug. 31, 2018
PennEnergy Resources LLC, Pittsburgh, Pa., will acquire substantially all the assets of Rex Energy Corp., State College, Pa., for $600.5 million in a cash deal. Nearly all the combined assets are in the core of the Marcellus shale area with 20 years of drilling inventory, the company said. Rex Energy filed for voluntary bankruptcy and announced plans to sell its Appalachian basin-focused assets in May.

PennEnergy Resources LLC, Pittsburgh, Pa., will acquire substantially all the assets of Rex Energy Corp., State College, Pa., for $600.5 million in a cash deal. Nearly all the combined assets are in the core of the Marcellus shale area with 20 years of drilling inventory, the company said.

Rex Energy filed for voluntary bankruptcy and announced plans to sell its Appalachian basin-focused assets in May (OGJ Online, May 18, 2018).

On a combined basis, PennEnergy Resources will operate 329 horizontal producing shale wells and will control 203,500 gross leasehold acres, primarily in the Pennsylvania counties of Butler, Beaver, and Armstrong, north of Pittsburgh. Independent petroleum consultants Wright & Co. Inc. estimated total combined net proved reserves of 8.5 tcf of natural gas equivalent, of which 1.7 tcfe are proved developed producing.

With combined gross production of 700 MMcfed and net production of 450 MMcfed, PennEnergy Resources believes it will be the 10th largest gas producer in Pennsylvania and the third largest headquartered in the state.

Most of the assets to be acquired are contiguous to PennEnergy Resources’ existing operations, said Greg Muse, PennEnergy Resources president and chief operating officer. The company plans to operate 2 horizontal rigs on the combined properties, he said.

The assets acquired include cash accounts of $29.5 million held by Rex Energy used to collateralize firm transportation contracts that will be released to PennEnergy Resources at close.