Rex Energy Corp. is past the halfway point in its Marcellus Shale work plan but now needs a new CEO to guide the second half.
So far this year, the State College, PA-based company has drilled 19 wells on its 60,300-acre leasehold in Butler County, north of Pittsburgh, through a 70/30 joint venture with Summit Discovery Resources II LLC, a subsidiary of Japan's Sumitomo Corp. (see Daily GPI, Sept. 1, 2010). Rex is also partnered on 15 wells drilled by Williams in Westmoreland and Clearfield counties.
Rex budgeted $95 million for a 54-well drilling program in the Marcellus this year, including $70 million for its 34 operated wells, with the goal of producing as much as 48.5 MMcfe/d by the end of the year. The company said it is spending about $4.7 million on each well in the Marcellus -- about $2.2 million per well on hydrofracking and $1.9 million per well on drilling.
Last Friday Rex said Dan Churay would be leaving the company after seven months as CEO. Churay took over for former CEO Benjamin Hulbert in November 2010 after several years with the company and oversaw a significant ramp-up in Marcellus operations. Chairman Lance Shaner is serving as interim CEO while the company seeks a permanent replacement.
Rex is currently running three rigs in Butler County.
Using the UDI 54 rig, Rex completed hydraulic fracturing (hydrofracking) operations last last year and earlier in the year on four of the five wells at its Drushel pad, reporting an average five-day flow rate of 3.8 MMcfe/d (see Shale Daily, May 9; Feb. 18).
In May Rex completed hydrofracking at the three-well Talerico pad, reporting an average five-day flow rate of 4.4 MMcfe/d. Those wells are now selling gas and liquids through the Sarsen cryogenic gas processing plant operated by Keystone Midstream Services, a joint venture of Sumitomo, Rex and Stonehenge Energy Resources LP. Since then Rex completed drilling at the seven-well Grosick pad. Those wells are now awaiting hydrofracking while drilling is under way at the first of three wells at Carson pad.
Rex is currently permitting the four-well Bricker pad.
Using the UDI 52 rig, Rex recently completed drilling and hydrofracking at the two-well McElhinney pad, but those wells are currently shut in. Rex also completed drilled at the three-well Behm pad and those wells are awaiting hydrofracking while the rig is drilling the first of three wells at the Grahm pad. Rex is constructing the two-well Meyer pad for drilling later this year.
Using the Bronco 10 rig, Rex is now drilling the fourth of six wells at the Gilliand pad -- including a Burkett test well in the Upper Devonian Shale, located above the Marcellus -- and is preparing its first Utica test well at the one-well Cheeseman pad.
In addition to its operated assets, Rex holds a 40% minority interest in a three-rig program operated by Williams in Westmoreland and Clearfield Counties, east and northeast of Pittsburgh, respectively. Rex said Williams recently completed hydrofracking three wells at the five-well Uschak No. 2 pad and hopes to bring them online in mid-June. The other two wells are in service.
Rex recently traded 3,000 gross acres in Westmoreland County to Williams in return for a similar sized plot in Butler County. Rex said it preferred the Butler acreage because it was contiguous to its existing wet gas leasehold in the area.