Utica Shale

Rex Energy Reports Success Of Cheeseman #1H Utica Shale Well

Rex Energy (REXX) reported the successful completion of the company’s first well into the Utica Shale formation.  The well was drilled and completed in the dry gas area of the play in Butler County, Pennsylvania.

The Cheeseman #1H well had a twenty four hour production test rate of 9.2 million cubic feet per day of natural gas.  The well was drilled with a 3,551 foot lateral and completed with a twelve stage hydraulic fracturing operation.

Rex Energy did not disclose the cost of the Cheeseman #1H well and said that it would discuss development plans for the Utica Shale once the company sets its 2012 capital budget.

Rex Energy - More Details On Utica Shale Development From Conference Call

Rex Energy (REXX) held a conference call on August 3, 2011, and discussed additional operational details on the company’s expanding Utica Shale position.

Rex Energy is moving a rig to drill the horizontal leg of a Utica Shale test well in Butler County, Pennsylvania.  This rig just finished a six well pad drilling operation into the Marcellus Shale and Burkett Shale in Pennsylvania.

The name of the Utica Shale well is Cheeseman and Rex Energy expects results from this well in the fourth quarter of 2011.  The Cheeseman well is eleven miles south of the Zion well drilled and completed by Range Resources (RRC)

Rex Energy said that the Warrior Prospect has approximately 80 net drilling locations based on 4,000 foot laterals, with 1,000 foot spacing between the laterals.  Union Drilling (UDRL) will construct a new rig to be used by Rex Energy to develop the play.

Rex Energy comments on Utica Shale Geology

• Utica Shale is Ordovician age and is the source rock for the overlying Silurian sandstones and Cambrian carbonates and sandstones in Ohio.
• Although the total organic carbon content from 2.4% to 3.7% is low compared to other shale plays, the thickness of the shale makes up for this. The Utica Shale in eastern Ohio is 150 feet thick and the Point Pleasant Formation is 140 feet thick.
• The Utica Shale is mature enough in the area that Rex Energy is involved with to produce wet gas.

Rex Energy To Purchase Utica Shale Leases In Ohio

Rex Energy (REXX) announced an 11,000 net acre position in Ohio that is prospective for the Utica Shale.  The company said that the leases at the Warrior Prospect are subject to a title review before closing.

Rex Energy is actually targeting the Point Pleasant formation, which lies between the Utica Shale and the Trenton Limestone. The company said that the target formation is approximately 140 feet thick with porosities ranging between 8% and 12%. Total organic content of the Point Pleasant is between 2.4% and 3.7%.

Rex Energy agreed to pay $40 million or $3,600 per acre for this Utica Shale leasehold, which is located in Carroll County.  The company said that the acreage is in the liquids rich area of the Utica Shale and development will start in 2012.

Rex Energy has acreage prospective for the Utica Shale on other properties under lease, and the acquisition will increase the company’s total leasehold to 83,500 gross or 57,900 net acres.  The company is drilling a Utica Shale test well in Butler County, Pennsylvania and plans to conduct hydraulic fracturing operations on this well in the third quarter of 2011.