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Rex Acquires Utica Shale Leases in Ohio

Rex Energy Corp. is joining the ranks of companies pursuing the Utica Shale of eastern Ohio. The State College, PA-based company recently acquired 11,000 net acres in Carroll County, OH, for an estimated $40 million and plans to continue acquiring acreage in preparation for a drilling program in 2012.

Carroll County is also the focal point for Chesapeake Energy Corp. in Ohio (see Shale Daily, Aug. 1).

For the remainder of 2011, Rex is focused on its Marcellus Shale assets in southwestern Pennsylvania.

Rex produced 35.2 MMcfe/d in the second quarter of 2011, an 87% increase year over year.

Through the first half of the year, Rex drilled 22 gross Marcellus wells in Butler County, north of Pittsburgh, completing 11 and placing 13 into service. The company plans to drill eight additional wells in Butler County this year -- six in the Marcellus, one in the Upper Devonian Shale and one in the Utica Shale.

Rex operates on its 60,300-acre leasehold in Butler County 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).

Based on recent production results and decline curve analyses, Rex recently increased its estimated ultimate recovery (EUR) figures for its wells in Butler County from 4.4 Bcfe to a range of 4.4 Bcfe to 5 Bcfe per well.

The company was processing 28.4 MMcf/d through its Sarsen plant in the region during June.

Through its 40% interest in a joint venture operated by Williams Appalachia, Rex also participated in drilling in Westmoreland County, east of Pittsburgh. Through the first six months of the year, Williams drilled 14 Marcellus wells, completing eight and placing eight into service. Williams plans to drill eight more wells this year.

The existing Westmoreland County wells are currently producing 21.8 MMcf/d and based on recent production figures Rex increased its EUR for those wells from 3 Bcfe to a range of 4 Bcfe to 5 Bcfe per well.

Williams and Rex also partner on a small program in Clearfield County in central Pennsylvania where Williams drilled three wells in the first half of the year and plans to drill one additional well in the second half of the year.

Rex currently expects to be producing between 37 MMcfe/d and 40 MMcfe/d by the end of the year.

Although Rex is among the more active companies in southwestern Pennsylvania, it is not reporting the profits of those by larger players in the region. Rex earned $3.4 million (8 cents/share) in the second quarter, but through the first six months of the year the company spent $61.1 million on just its Marcellus program (see Shale Daily, May 9).

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