Rex Energy Acquires Acreage In Pennsylvania and Ohio

Rex Energy (State College, Pa.) has entered into an agreement with an affiliate of Royal Dutch Shell to acquire a 100% interest in about 208,000 acres in the Marcellus, Upper Devonian/Burkett, and Utica shales in Pennsylvania and Ohio. The purchase price is reported at $120 million in cash. The transaction was expected to close in August. The assets are located in Armstrong, Beaver, Butler, Lawrence, Mercer, and Venango counties in Pennsylvania and Columbiana and Mahoning counties in Ohio. The acreage, combined with recent leasing, will bring Rex Energy’s position in its Butler Operating Area to about 298,000 acres.
The acquisition is aimed at positioning the company for multi-year development of about 400 potential liquids-rich drilling locations, an immediate increase of approximately 24% over existing identified liquids-rich locations. Assets include 16 MMcfd currently being produced or available to produce and estimated proved reserves of 21 Bcfe (billion cubic feet equivalent).

The deal also features contiguous acreage in the dry-gas area of the Utica Shale for future development, and in-place infrastructure and takeaway capacity agreements. About 65% of the acreage has leases with options to extend, with the remaining acreage held either by operators or with manageable lease expirations.