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Rex Energy Announces Closing of Midstream Asset Sale, Update on First Ohio Utica Well and Commissioning of MarkWest's Bluestone Plant(May 29, 2012)
STATE COLLEGE, Pa., May 29, 2012 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) announced today that it, together with its partners in Keystone Midstream Services, LLC (Keystone), has closed on the previously announced sale of Keystone to a subsidiary of MarkWest Energy Partners L.P. (MarkWest). The sale of Keystone includes two cryogenic gas processing plants, the Sarsen Plant and the newly commissioned Bluestone Plant, with a combined 90 MMcf/d of capacity, a gas gathering system and associated field compression in Butler County, Pennsylvania. Simultaneous with the closing, affiliates of Rex Energy and its non-operating partner, Sumitomo Corporation, entered into a new, long-term gathering, processing and NGL fractionation arrangement with MarkWest.
Rex Energy Chief Executive Officer, Tom Stabley, commented, "The closing of the Keystone Midstream sale marks the beginning of a new relationship between Rex Energy and MarkWest. This transaction not only significantly improves Rex Energy's balance sheet; it is also a major step forward in our strategy to maximize the potential of our Butler and Ohio Utica operated assets."
Update on Ohio Utica Well
Rex Energy has completed drilling its first Ohio Utica well, the Brace #1H, located in Carroll County. The well encountered approximately 135 feet of Point Pleasant formation and approximately143 feet of overlying Utica Shale formation. The vertical hole was plugged back and the well was drilled to a total measured depth of 12,332 feet with a lateral length of approximately 4,170 feet. Fracture stimulation is currently scheduled for June 2012. Rex Energy intends to shut in the well for approximately 60 days following fracture stimulation to allow for dissipation of frac water before flowing the well back. The rig is in the process of moving back to the Butler operated area where it is scheduled to drill one Utica well in Lawrence County, Pennsylvania, the Hufnagel #1.
BlueStone Plant Commissioned
Rex Energy is also pleased to announce the commissioning of the Bluestone cryogenic processing plant located in Butler County, Pennsylvania. Once fully operational, the Bluestone plant will have a full inlet capacity of 50 MMcf/d and will not require additional field compression. First gas sales at the plant are expected by June 1, 2012.
In preparation for the commissioning of the plant, Rex Energy completed fracture stimulation operations on the five Marcellus wells at the Gilliland pad in May. In addition, this pad also contains the company's first Upper Devonian Burkett well, the Gilliland #11HB. These six wells, along with the two-well Carson pad, are expected to be turned into sales ratably as the plant ramps up operations over the next 45-60 days.
Upcoming Conference Schedule and Updated Corporate Presentation
Management will present at the RBC Global Energy and Power Conference in New York at the Ritz Carlton on June 5, 2012. Webcast information for this event, if available, will be posted in the Investor Relations section of the Rex Energy website, www.rexenergy.com, under Events & Presentations. Webcasts will remain available for 30 days after the event.
The company also expects to post its updated corporate presentation on Monday, June 4, 2012. The updated presentation will be posted to the Investor Relations section of the Rex Energy website under Events & Presentations.
About Rex Energy Corporation
Rex Energy is headquartered in State College, Pennsylvania and is an independent oil and gas exploration and production company operating in the Appalachian and Illinois Basins within the United States. The company's strategy is to pursue its higher potential exploration drilling prospects while acquiring oil and natural gas properties complementary to its portfolio.
The Rex Energy Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5489
Except for historical information, statements made in this release, including those relating to projected impact of the merger transaction on the financial results of the company, strategic plans for Butler operated assets and Ohio Utica assets, planned drilling and fracture stimulation activities, and timing of any projected operations of and sales into the Bluestone plant are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are indicated by words such as "expected", "expects", "anticipates" and similar words. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the company's future performance are subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including (without limitation) the following:
adverse economic conditions in the United States and globally;
domestic and global demand for oil and natural gas;
sustained or further declines in the prices the company receives for oil and natural gas;
the effects of government regulation, permitting and other legal requirements;
the geologic quality of the company's properties with regard to, among other things, the existence of hydrocarbons in economic quantities;
uncertainties about the estimates of the company's oil and natural gas reserves;
the company's ability to increase production and oil and natural gas income through exploration and development;
the company's ability to successfully apply horizontal drilling techniques and tertiary recovery methods;
the number of well locations to be drilled, the cost to drill and the time frame within which they will be drilled;
the effects of adverse weather on operations;
drilling and operating risks;
the ability of contractors to timely and adequately perform their drilling, construction, well stimulation, completion and production services;
pipeline and capacity restraints in the midstream, or other external limitations on the company's ability to place its production into sales;
the availability of equipment, such as drilling rigs and transportation pipelines;
changes in the company's drilling plans and related budgets;
the adequacy of capital resources and liquidity including (without limitation) access to additional borrowing capacity;
the difficult conditions in the domestic and global capital and credit markets;
uncertainties or conditions related to the merger and related transactions; and
uncertainties associated with our legal proceedings and the outcome.
The company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on the company's risks and uncertainties is available in the company's filings with the Securities and Exchange Commission.
For more information, please visit our website:
CONTACT: Tom Stabley
Chief Executive Officer and Chief Financial Officer
Manager, Investor Relations
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