Marcellus Shale

Rex Energy Issues Marcellus Shale Second Quarter Of 2010 Update

Rex Energy (REXX) issued an operations update on its activities in the Marcellus Shale in Pennsylvania. The company has drilled nine horizontal wells in 2010 on its own operated acreage in Butler County. Four of these wells have been completed and the company plans to complete the other five Marcellus Shale wells during the third quarter of 2010.

Rex Energy reported that the Knauf #1H and Knauf #2H Marcellus Shale wells produced at a combined 24 peak rate of 6.7 million cubic feet equivalent per day.

The company is currently applying for an air permit for its cryogenic gas processing plant in the Marcellus Shale, and expects the plant to begin operations in October 2010. The plant will have the capacity to process 20-25 million cubic feet equivalent per day when it begins operations. This capacity will be increased to 40 million cubic feet equivalent per day.

Rex Energy is also involved with the Williams Companies (WMB) in a joint venture in the Marcellus Shale in Westmoreland and Clearfield County.

The Slavek Trust #1H was completed and produced at a 24-hour peak rate of 4.9 million cubic feet per day. The joint venture plans to drill two additional Slavek Trust wells.

Rex Energy Plans Increase In Marcellus Shale Capital Spending In 2010

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 

Marcellus Shale Drives Production Growth For Rex Energy

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