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 plans on spending between $100 and $140 million in capital in 2010, most of which is directed towards development of the Marcellus Shale.
Marcellus Shale Capital Budget
“Our capital budget of $100 million to $140 million depending on additional Marcellus acreage and our 2010, drilling program should increase company production 50% to 80% year-over-year in 2010.”
“The majority of our capital budget is directed towards Marcellus Shale drilling, leasing and infrastructure development in 2010.”
“Our Marcellus Shale drilling to run two rigs across our three project areas, and to drill 19 gross horizontal Marcellus Shale wells. As briefly mentioned earlier, our initial capital budget is $100 million, however, we are continuing to aggressively lease additional Marcellus Shale acreage in select areas, and will adjust our capital budget upto $140 million if we are able to continue to lease at terms we consider to be reasonable in our main project areas.”
“Our second largest planned use of capital in 2010 is for the continued Marcellus Shale midstream development. The $20 million allocation will cover both the shared gathering system expense with Williams in Westmoreland in Central PA as well as our contribution to Keystone Midstream, our joint venture in Butler County, PA, covering the construction of a cryogenic gas processing plant and associated gathering lines.”
Source: Seeking Alpha
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