Once it finishes drilling to hold acreage this year in Ohio and Western Pennsylvania, Rex Energy Corp. said Wednesday it may begin targeting more natural gas liquids (NGL) production in 2018 following a bump in prices during the fourth quarter.

During 4Q2016, realized NGL prices before the effects of hedging averaged 56% of West Texas Intermediate (WTI) oil prices. Including hedges, the company's fourth quarter realized liquids price was $25.39/bbl, up from the $24.44/bbl in the year-ago period. The improvements, Rex management said, were driven largely by an increase in prices at the Mont Belvieu processing complex near Houston and better NGL differentials in the Northeast.

"As more takeaway comes out of the basin for those liquids, it can only benefit Rex for those incremental barrels that now don't have to leave the basin," CEO Tom Stabley said, referring to  recently approved pipelines such as Mariner East 2 and the ethane that's left Appalachia for overseas markets in the last year. "That's what you're seeing in the liquids pricing, particularly on the differentials being mostly driven by the cost to get to market." Rex now expects full-year 2017 liquids prices to average 50-55% of WTI, an improvement from its previous guidance of 43-48%.

The company has been working for much of the last year to hold acreage in the Moraine East area of Western Pennsylvania and its Warrior North area in Carroll County, OH. It rolled out a two-yearfinancial and operational plan in January highlighting its growth strategy and a clearer plan to boost liquidity and reduce debt.

Rex sold its Illinois Basin and noncore Utica assets in Southeast Ohio last year, and it's hoping to sell nonoperated properties in Westmoreland, Clearfield and Centre counties, PA, this year. Stabley said the company implemented new completion techniques in the Warrior North last year that will help it save more money, as more efficiencies have lowered well costs to $6.2 million from $7.1 million.

Several of the company's most recent Warrior North wells are performing above the year-end 2016 type curve. Increased sand concentrations, different fluid compositions and revised target landing zones in the Point Pleasant formation have helped increase estimated ultimate recoveries in the field for a 6,500 foot lateral to 1.9 million boe from 1.6 million boe. The new type curve is conservative, management said, adding that the company would need more data from its new completions to better understand their effects.

The company produced 194.9 MMcfe/d in the fourth quarter, up 12% from the year-ago period, excluding the Illinois Basin assets that it sold. NGLs accounted for 38% of the period's production, similar to 4Q2015.

Rex's realized natural gas price for the fourth quarter was $2.42/Mcf, including hedges, up from $2.33/Mcf in the year-ago quarter, which helped the company narrow its loss for the period. Rex reported a net loss of $67.4 million (minus 69 cents/share) on revenues of $48 million during the fourth quarter. That's compared to a net loss of $100.5 million (minus $1.85/share) on revenues of $27.4 million in 4Q2015.

For the full-year, the company reported production of 195.3 MMcfe/d, or 6% more than it produced in 2015. The company reported a net loss of $108.8 million (minus $1.37/share) on revenues of $139 million, compared with a net loss of $372.9 million (minus $6.85) in 2015.