Rex Energy Corporation (NASDAQ:REXX) provided an update on its Moraine East Joint Development Agreement and Appalachian Basin operations.
Moraine East Area Joint Development Agreement
In the Moraine East Area, the company’s joint development partner, Benefit Street Partners L.L.C. (“BSP”) has elected into the next 12 wells in the development program. BSP’s election increases the total capital commitment to date by BSP from $51.6 million to $98.1 million and BSP’s total well participation in the Moraine East Area to 30 wells. With the additional capital commitment from BSP, the company expects full year 2016 net operational capital expenditures to be approximately $35.5 million.
“The increased $45.7 million capital commitment from BSP, plus the proceeds from the recently announced Illinois Basin sale, will provide Rex Energywith over $80 million of additional liquidity in 2016,” said Tom Stabley, President and CEO of Rex Energy. “The liquidity will enable Rex Energy to continue our plan to hold the majority of our Appalachian Basin acreage by production by mid-year 2017.”
Moraine East Area Operations
Rex Energy completed its 20th well in the Moraine East Area, the Kleaver 2HB. The well, which has the longest lateral to date for the company at approximately 10,200 feet, was drilled in approximately 9.5 days – a new record for the company. Rex Energy is currently drilling the third of four wells on the Baird pad; the four wells have a planned average lateral length of approximately 7,200 feet. In addition, the company has reached an agreement with its gathering partner in the Moraine East Area to reduce its overall minimum daily volume commitment in the region.
Butler Operated Area Well Costs
Through additional cost control and operational efficiencies, the company has further reduced its cost to drill and complete a 6,000 foot lateral on a four-well pad. The average drilling and completion cost is now $5.0 million, a 6% reduction from the previously reported average of $5.3 million. The company continues to focus on cost control measures and anticipates that it will be able to achieve further cost reductions and efficiencies in 2016.
Warrior North Prospect
The company placed the three wells on the Goebeler pad into sales; the wells were drilled to an average lateral length of approximately 7,500 feet and completed with an average of 43 stages. The preliminary results from the Goebeler pad are encouraging, and management anticipates providing sales rates on the second quarter 2016 earnings conference call. The company is currently completing the two-well Perry pad, with an average lateral length of approximately 6,650 feet, and expects to place the wells into sales during the third quarter. (Original Source)
Shares of Rex Energy are up over 7% to $0.86 in pre-market 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 $0.77 and its 200-day moving average is $0.89.
On the ratings front, REXX has been the subject of a number of recent research reports. In a report issued on June 15, Wells Fargo analyst Gordon Douthat maintained a Hold rating on REXX. Separately, on March 17, KLR Group’s John Gerdes reiterated a Hold rating on the stock and has a price target of $1.75.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gordon Douthat and John Gerdes have a total average return of 17.2% and 4.1% respectively. Douthat has a success rate of 42.1% and is ranked #582 out of 3977 analysts, while Gerdes has a success rate of 53.8% and is ranked #607.
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.