Boston, MA 08/13/2014 (wallstreetpr) – Rex Energy Corporation (NASDAQ:REXX) has announced about its new acquisition in its Butler Operated region. It acquired approximately 208,000 gross acres in the region. It made a definitive purchase agreement with an affiliate of Royal Dutch Shell plc (ADR) (NYSE:RDS.A) known as SWEPI, LP.
The acquisition details
It got a 100% interest in 208,000 gross acres prospective for the different areas including Upper Devonian/Burkett, Marcellus and Utica Shales in Pennsylvania and Ohio. The acquisition is valued at $120 million in cash. The deal will end by next month. The new assets are spread over in Beaver, Lawrence, Butler, Mercer, Armstrong and Venango counties in Columbiana and Pennsylvania and Mahoning counties in Ohio. With the latest acquisition, Rex will hold approximately 298,000 gross acres in its Butler Operated Region.
The key points
The latest acquisition will allow Rex Energy Corporation (NASDAQ:REXX) to achieve ~230% expansion in Butler Operated Area and ~200% expansion of Appalachian Basin assets. It will own ~ 83% net revenue interest and ~100% working interest from the acquisition. It can opt for an immediate increase of its existing identified liquids-rich locations. The expansion can be around 24%. It will have the possession of assets of ~16 MMcf/d. It is set to achieve the additional production of ~13 MMcf/d from its assets in various stages of development.
The growth ahead
The new acquisition will allow the Rex Energy Corporation (NASDAQ:REXX) to get a large contiguous acreage position in Utica area. It has got the takeaway capacity agreements that will allow getting the full benefits of the newly acquired assets. The acquisition is a value deal on both per location and acre basis. It has plans to add one or two rigs in next year. Overall, the new deal provides a strong base for the future strategic expansion