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Rex's Marcellus Acreage Boosts Reserves

Rex Energy Corp.’s proved reserves increased 37% to 849.8 Bcfe at the end of 2013, mostly due to its Marcellus Shale operations in central and western Pennsylvania, the company said.

Rex said 39% of its proved reserves consisted of oil, natural gas liquids (NGL) and condensate, assuming 55% ethane recovery. It replaced 923% of its estimated 2013 production and reported a reserve life of 25 years at year-end 2013.

Proved reserves were up from 618 Bcfe in 2012, while the company's proved developed reserves increased to 356.5 Bcfe year/year from 257.9 Bcfe at year-end 2012. Rex has steadily reported improving results from some of its wells in both Ohio and Pennsylvania as it tests new drilling methods (see Shale Daily,Jan. 16).

Gordon Douthat, a financial analyst at Wells Fargo Securities, said Rex's Tuesday report was a strong one and cited an investor presentation the company also released Tuesday as an indication that Rex continues to make positive strides in the Appalachian Basin. In the presentation, Rex increased its type curves for wells in its Warrior South and Warrior North prospects in Ohio's Utica Shale.

In the Warrior South, where Rex has acreage in Belmont, Noble and Guernsey counties, the company updated its type curve to 2 million boe. In the Warrior North, where Rex has wells in Carroll County, it moved it to 1.2 million boe. Both type curves were up from 1 million boe.

In all, Rex's Butler operated area in western Pennsylvania accounted for roughly 72% of the company's proved developed, proved developed non-producing and proved undeveloped reserves, where it reported 610.4 Bcfe. In its Warrior prospects in Ohio, the company recorded 77.4 MMcfe in total reserves and across a stretch of central and southwest Pennsylvania it recorded a little more than 111 Bcfe.

The company said the pre-tax value of its reserves at year-end 2013 was about $669 million, up from $510 million the year before.

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