Rex Energy Corporation (NASDAQ:REXX) announced that it entered into a purchase and sale agreement with Campbell Development Group, LLC (“Campbell”) pursuant to which Campbell will acquire the company’s Illinois Basin assets. Rex Energy is selling its entire interest in the basin and expects to receive proceeds at closing of approximately $40 million (prior to customary closing and post-closing adjustments) with the potential for additional proceeds of up to $10 million over the next three years based on commodity prices during that time frame. Included in the sale are approximately 76,000 net acres in Illinois, Indiana and Kentucky; the assets are currently producing approximately 1,700 net barrels per day. Proceeds from the sale are expected to be used to pay down the revolving line of credit and for general corporate purposes. Rex Energy is undergoing its regularly scheduled borrowing base redetermination, and, pro forma for theIllinois Basin asset transaction, currently expects to maintain its borrowing base at $190 million. The company expects the transaction to close in the third quarter of 2016, subject to customary closing conditions and required approvals.
“First and foremost, I would like to thank all of our Illinois Basin employees for their hard work and dedication throughout the years,” said Tom Stabley, Rex Energy’s President and Chief Executive Officer. “The sale of the Illinois Basin assets is another important step for Rex Energy toward improving our liquidity position and providing greater capital efficiency as we continue with the development of our core Appalachian Basin assets, in particular our Moraine East Area.” (Original Source)
Shares of Rex Energy rose over 7% to $0.86 in after-hours trading. REXX has a 1-year high of $5.60 and a 1-year low of $0.49. The stock’s 50-day moving average is $0.80 and its 200-day moving average is $0.91.
On the ratings front, KLR Group analyst John Gerdes reiterated a Hold rating on REXX, with a price target of $1.75, in a report issued on March 17. The current price target represents a potential upside of 118.8% from where the stock is currently trading. According to TipRanks.com, Gerdes has a yearly average return of 3.5%, a 52.1% success rate, and is ranked #691 out of 3884 analysts.
Rex Energy Corp. is an independent energy company, which engages in acquisition, production, exploration and development of oil, natural gas and natural gas liquids with properties concentrated in the Appalachian and Illinois regions of the United States. The Illinois Basin focuses on the implementation of enhanced oil recovery on properties as well as conventional oil production. The Appalachian Basin focuses on Marcellus Shale drilling projects. The company operates its business through two segments: Exploration & Production and Field Services. The Exploration & Production segment engages in the exploration, acquisition, development and production of oil, natural gas and Liquids. The Field Services segment operates and manages water sourcing, water transfer and water disposal services, primarily in the Appalachian Basin.