Rex Energy Corp. exited 2014 producing 154.4 MMcfe/d, a 66% increase from the previous year that exceeded the high end of its guidance and came with gains in its core areas of western Pennsylvania and southeast Ohio, the company said Tuesday.
Efficient completions and greater certainty in its sales schedule at mid-year found the company increasing its 2014 guidance by 2 MMcfe/d to 146-150 MMcfe/d (see Shale Daily, July 29, 2014). Fourth quarter production was even stronger at 196 MMcfe/d and well above the 179-185 MMcfe/d it had forecast for the period.
The company said it's drilling longer laterals and pumping more sand per lateral foot. In its Butler Operated area in western Pennsylvania, Rex said it will place 11 Marcellus Shale wells online this quarter, all of which were pumped with 2,250 pounds per linear foot of sand, or 25% more than wells completed at mid-year 2014. It also said well costs have come down 5% from $6 million each to about $5.7 million, on operational efficiencies and decreasing costs from service providers adjusting for lower commodity prices.
Meanwhile, data from Rex's newly acquired Moraine East Area, which extended its legacy Butler area northward, indicates favorable geologic and reservoir characteristics, the company said.
"We are extremely pleased with the preliminary results from our first well in the Moraine East Area," CEO Tom Stabley said. "While we are in the early stages of development, initial results are consistent with our expectations for the area and appear to indicate that the Moraine East Area is analogous to the legacy Butler Operated Area. We look forward to further enhancements to the Moraine East Area, including potentially extending lateral lengths and increasing sand concentrations."
Rex acquired the Moraine East acreage as part of a larger $120 million deal with Royal Dutch Shell plc affiliate SWEPI LP in August (see Shale Daily, Sept. 16, 2014; Aug. 13, 2014). Rex said it had finished drilling its first well there, the Renick 5H, where it will complete three others on the pad by the end of the quarter. The company added that it has plans to complete up to 10 wells in the Moraine East this year.
Rex, which cut spending plans this year by 44% from 2014 levels (see Shale Daily, Dec. 24, 2014), said it currently has about 80% of its 2015 natural gas production hedged at an average price of $3.75/MMBtu, while 70% of its oil is hedged at $71.01/bbl.