Rex Energy Corporation (REXX) reported earnings for the fourth quarter of 2009, and held a conference call to discuss its operations in the Marcellus Shale in Pennsylvania. The company has put out a wide range of guidance on production growth for 2010 based on various scenarios that might occur during the year.
Marcellus Shale Production
“Our natural gas production from the Marcellus Shale continues to be the driving factor behind quarterly production growth. In the fourth quarter, natural gas and natural gas liquids production increased 91% compared to the same period in 2008 and 25% over the third quarter of 2009. We exited the fourth quarter with natural gas production up 69% and overall production up 7% when compared to 2008 active rates”
“We’ve laid out a range on production guidance for 2010. The assumptions are based on the 2010 capital budget plan with the cryogenic gas processing plant in Butler County, Pennsylvania, becoming operational in October of 2010. The only difference between the low case and the high case is the assumed 30 day average rate for our Marcellus Shale wells. The low case assumes 1.8 million cubic feet of gas per day and the high case assumes 3 million cubic feet of gas per day.”
“We feel good about our assumed range of production on our Marcellus wells and our production guidance for the year in the range of 57% to 79% over 2009 levels. Since nearly all of our production growth from our 2010 Butler County Marcellus wells will be realized in the fourth quarter when we complete the cryogenic plant, our projected 2010 exit rate is expected to be much higher and could range from 87% to 142% over our 2009 exit rate.”
Source: Seeking Alpha
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