Rex Energy Corp. rode the momentum it created heading into the end of 2017 and beat its guidance for the fourth quarter, reporting 205.3 MMcfe/d.
The company had guided for 195-205 MMcfe/d in the final period; it had reported 195.3 MMcfe/d in 4Q2016. Condensate and natural gas liquids (NGL) accounted for 40% of 4Q2017 output, compared with 38% a year earlier.
While asset sales and midstream constraints restrained some of the 2017 volumes, Rex managed to hit the midpoint of its forecast of 180-190 MMcfe/d, with full-year production of 184.5 MMcfe/d. Rex produced 195.3 MMcfe/d in 2016.
Over the last two years, the producer has sold noncore assets in the Illinois Basin and southeast Ohio to boost liquidity. It also is marketing other noncore assets in Pennsylvania’s Westmoreland, Clearfield and Centre counties.
Rex commissioned its fourth compressor station late last year in the Moraine East area, north of its legacy assets in Butler County, PA, to get more gas flowing. The Moraine and the Butler Operated area in western Pennsylvania are in a more developed area of the Marcellus Shale that once hosted more operators.
The company worked with a third party reservoir engineering firm last year to enhance its completion design. Rex management said last November the design would be more widely applied in western Pennsylvania, and it said at the time that it was starting to yield better results.
Rex has completed the four-well Kern pad in the Moraine East and is drilling the fourth of five wells on the Hofer pad to the south in its Butler Operated area. The company also is working to complete the seven-well Goebeler pad in its Warrior North area in Carroll County, OH.
Rex reported improved liquids prices at 72% of West Texas Intermediate (WTI) for the fourth quarter and 61% of WTI for the full-year. Realized natural gas prices before hedges continued to improve in the fourth quarter as well.
Gas prices increased to $2.39/Mcf from $2.23 in the year-ago period to $2.39. Gas realizations were also up significantly for the full-year, going to 2.74/Mcf from $1.64 in 2016. The gains, Rex said, were driven by more sales to the Gulf Coast and better differentials in the Northeast. Rex has not yet scheduled its 4Q2017 earnings release and conference call.