Rex Energy enters Moraine East drilling JV
Rex Energy Corp., State College, Pa., has entered a joint venture agreement with an affiliate of ArcLight Capital Partners LLC for the joint development of 32 wells in western Pennsylvania.
The joint venture will enable Rex to cut its capital expenditures in 2015 by 30% from an earlier projection to $135-145 million while continuing hold-by-production drilling in liquids-rich prospects of the Moraine East part of its Butler Operated area.
ArcLight will fund 35% of the costs of designated wells in a program with total consideration of $65 million, $16.6 million at closing. When performances of specific well groups meet financial targets, ArcLight’s working interest will revert to 17.5%.
The investment firm has the option to participate as a 20% working interest partner in 17 additional Moraine East wells in 2016.
Rex said it expects 2015 production to increase 23% from the 2014 rate to 185-195 MMcfd of gas-equivalent.