Rex Energy Corp. continued drilling to hold its acreage with production in the third quarter, saying 61% of its Moraine East properties in Western Pennsylvania and all but one unit in the Warrior North area of Eastern Ohio should be secured by the end of the year.

The company laid out its plan to hold acreage in late 2015 and has been working to accomplish it ever since (see Shale Daily, Nov. 11, 2015). CEO Tom Stabley told analysts during a call to discuss third quarter results that the work should be finished next year, setting the company up for growth. The company turned six wells to sales during the third quarter and management said it would likely run a one-rig program for most of next year.

“Of note for 2017, and given the timing of gathering in the Moraine East, we expect that there will be a break in our completion activities during the first quarter of 2017, placing most of the wells into sales during the second half of the year,” he said.

Rex acquired its Moraine East assets in a larger 2014 deal with an affiliate of Royal Dutch Shell plc for $120 million (see Shale Daily, Aug. 13, 2014). The properties sit to the north of Rex’s core legacy acreage in Butler County, PA. Joint ventures with Benefit Street Partners LLC and ArcLight Capital Partners LLC have helped it to protect acreage in the Marcellus, Utica and Upper Devonian shales.

The company produced 197.8 MMcfe/d in the third quarter, up slightly from the 194.3 MMcfe/d it produced in the year-ago quarter. The period’s volumes declined from the 199.1 MMcfe/d Rex produced in 2Q2016 (see Shale Daily, Aug. 4). Stonehenge Energy Resources II LP commissioned a high pressure gathering system during the third quarter, helping decrease field pressures in the Moraine and stabilizing flow rates (see Shale Daily, Sept. 12). The company had delays in starting up the system earlier this year.

Rex also started shipping 130 MMBtu/d in November on Dominion Transmission Inc.’s Lebanon West II pipeline, which expands service from the MarkWest Liberty Bluestone Interconnection in Butler County to the Lebanon-Texas Gas Interconnection with Texas Transmission Corp. in Warren County, OH (see Daily GPI, Sept. 29). The new infrastructure allows Rex to access premium markets in the Midwest and on the Gulf Coast.

“With the commissioning of this line, the company will now transport approximately 50% of our natural gas volumes to the Gulf Coast and Midwest, where we expect to receive pricing that averages approximately 10 cents off Henry Hub,” Stabley said. “We will continue to sell the remaining 50% of our natural gas volumes at Dominion Southpoint.”

Including hedges, Rex’s realized gas price during the third quarter was $1.65/Mcf, down from $2.57/Mcf in the year-ago period and $2.73/Mcf in 2Q2016. Year/year revenue increased to $34 million from $29.7 million. The company reported net income of $4.8 million (5 cents/share) for the third quarter, compared to a net loss of $97.1 million (minus $1.80) in the year-ago period.