In a lean commodity price environment, Rex Energy Corp. is focused on financing a drilling program active enough to hold down its acreage in Western Pennsylvania and Eastern Ohio heading into 2016.

CEO Thomas Stabley told investors during a third quarter earnings call Tuesday that the company is “exploring a variety of structural financial instruments” to “provide additional funds to continue the company’s expected one-rig program in 2016.” Stabley said the company is considering buying back a portion of its unsecured bonds to generate additional capital or forming a joint venture (JV).

Stabley said the Pennsylvania-based exploration and production (E&P) company has identified about 30-35 wells it needs to drill in order to hold by production (HBP) its current assets, with most of those wells in the Moraine East acreage in northern Butler County, PA, that the company acquired as part of a deal last year with Royal Dutch Shell plc affiliate SWEPI LP (see Shale Daily, Aug. 13, 2014). Also included in that total is about eight wells the company needs to drill in its Warrior acreage in Eastern Ohio.

“Drilling those targeted 30 wells is really something we need to do to protect the company’s assets. Does that mean we can’t cut back the number of wells and potentially let some acreage expire? That’s certainly an option for us. It’s not our preference,” Stabley said. “So I think we’re working really hard on finding that right JV partner to allow us to HBP the asset.”

Rex is tentatively forecasting $95-145 million in capital expenditures (capex) in 2016. Earlier this year, Rex trimmed its 2015 capex budget by 30% through a JV with ArcLight Capital Partners LLC that netted it $67 million in exchange for a 35% working interest in 32 wells in Moraine East and its core Butler operated area in Butler County (see Shale Daily, March 31).

During the third quarter, Rex completed the sale of its water subsidiary Keystone Clearwater Solutions LLC, which, combined with reimbursement for previous pipeline expenditures in Moraine East, netted the company $71.1 million (see Shale Daily, June 22).

The company has also been exploring a potential sale of its legacy assets in the Illinois Basin (see Shale Daily, April 20), though Stabley indicated Tuesday that a deal by year’s end is unlikely.

As Rex continues to look for ways to monetize its assets during the pricing downturn, the company said it has also cut down on its costs per well.

For its most recent eight wells, the company averaged 10.5 drilling days and an average lateral length of 6,250 feet, compared to a 13-day average for the first nine wells of 2015 at an average lateral of 5,300 feet. The company’s total well cost for a 5,000-foot lateral dropped to $5.2 million in 3Q2015, down from $5.5 million in the previous quarter.

The company said it has completed 16 wells in Moraine East with average laterals of more than 6,000 feet. Those wells are expected to be placed into sales sometime in 1Q2016.

Rex also placed into sales its first test of the Pennsylvania Utica, the Patterson 2H well in Lawrence County, which has produced at a 24-hour sales rate of 11.4 MMcf/d at a restricted choke.

In 3Q2015, Rex produced 17.87 Bcfe, up from 15.6 Bcfe in 3Q2014. Production included 10.7 Bcf of natural gas, 268,775 bbl of oil and condensate, 498,256 bbl of natural gas liquids and 423,478 bbl of ethane.

For the quarter, Rex reported a net loss of $94.7 million (minus $1.80/share), including $139.8 million in impairments. That’s compared to a net income of $5.6 million (11 cents/share) in the year-ago period. In terms of liquidity, the company reported $3.2 million in cash with $69 million of its $350 million borrowing base outstanding under its credit facility.