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New Processing Has Rex Energy On Track in Western Pennsylvania

Additional processing capacity that came online in May helped Rex Energy Inc. meet its second quarter goals of placing 10 wells into sales in western Pennsylvania and producing between 125-135 MMcfe/d.

The company said Monday that it was able to tie-in 10 of 11 wells that were completed and awaiting an expansion at MarkWest Energy Partners LP's Bluestone II processing facility in Evans City, PA. A 120 MMcf/d expansion there commenced operations in May, with 100 MMcf/d dedicated to Rex's Butler Operated Area (see Shale DailyJune 2).

Rex said earlier this year that it hoped to place 10-15 wells into sales during the second quarter with the new processing capacity (see Shale Daily, April 30). The Butler wells were performing consistently with the company's type curve for the area, averaging 48% liquids. Higher pressure from the new wells, however, has created midstream constraints that will require additional field compression to serve older, low-pressure wells in the area.

Still, Rex said it estimates second quarter production will be 128 MMcfe/d, in-line with its previous forecast of 125-135 MMcfe/d. The company also started ethane sales from the Butler Operated Area during the second quarter, averaging 1000 b/d of ethane, which will soon increase to 5,000 b/d in order to meet committed volumes for the remainder of the year.

In its Warrior North Prospect in Carroll County, OH, Rex said drilling and completion operations have been finished at both the six-well Grunder pad and the three-well Jenkins pad, with sales expected to begin this quarter. In its Warrior South Prospect, Rex is currently drilling the six-well J. Hall pad in Guernsey County, OH, which is expected to be completed in the fourth quarter when sales will begin.

The company drilled most of those wells with more than 5,000 foot laterals and it continues to tinker with lateral down spacing on some of its wells in the Utica and Marcellus shales (see Shale DailyJan. 16Nov. 11, 2013).

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