Big news; Rex buys Shell's holdings

Rex Energy is expanding in Pennsylvania and Ohio with the acquisition of about 208,000 acres from Royal Dutch Shell for $120 million in cash in a deal that stands to increase the company’s footprint in the Appalachian Basin by 200 percent, the State College-based driller said Tuesday.

Rex Energy said it struck a deal with affiliate of Shell called SWEPI to acquire a 100 percent interest in 208,000 acres in the Marcellus, Upper Devonian/Burkett and Utica shales in Pennsylvania and Ohio.

The acreage is in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in Pennsylvania and Columbiana and Mahoning counties in Ohio, which the company calls its “Butler operated area.”

http://powersource.post-gazette.com/powersource/companies-powersour...

Hat  tip to Philip Thackery.

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Permalink Reply by Trapper on September 2, 2014 at 2:38pm
Hopefully Rex will be a good partner.
You're welcome Mike.
Permalink Reply by Nancy LeNau on September 2, 2014 at 2:56pm

Very Informative Post.....Thank you Trapper !

Permalink Reply by Trapper on September 2, 2014 at 3:09pm
Glad you liked it Nancy.
Rex sounds like they care about the landowners. Refreshing after almost 3 yrs. of being with Shell and getting Zero feedback from them.
Permalink Reply by Patrick Donnelly on September 16, 2014 at 7:39am

I believe REX has some really well placed and highly valuable midstream assets as well.  Acquiring acreage around their pipe makes a lot of sense given their competitive advantge.

Permalink Reply by Philip Thackray on September 16, 2014 at 8:07am

Patrick,

Rex has no mid-stream assets.  They sold what they had to MarkWest and now MarkWest does everything beyond the well pad itself.

Phil

Permalink Reply by Patrick Donnelly on September 21, 2014 at 8:45am

My bad Philip.  I know Rocky Mountain express (thought that was REX) has a major pipe in OH and is adding capacity.  Assumed they had a bunch of midstream in the area.  my bad.  But strategically having control of midstream gives e/p players with well placed, resource rich land a huge competitive advantage.  especially when there is an obvious dearth of capacity.

Permalink Reply by Philip Thackray on September 21, 2014 at 8:56am

Patrick,

I'm in Forward Township, Butler County and am in the middle of the Rex and XTO operations so I have followed things quite closely.

Rex started out owning their local pipelines and their cryogenic plant outside of Evans City, PA.  MarkWest paid them $500 million for the Rex infrastructure that was in place and MarkWest has been doing the pipelines and processing mid-stream work ever since.  XTO on the other hand built all there own gathering lines and cryogenic plant - which I had the opportunity to tour last summer.

Regards,

Phil

Permalink Reply by J.R. Ewing on September 18, 2014 at 4:15am
I was contacted by a land man yesterday representing Rex. He was talking about possible gas line routes from the Renick well in Center Township heading south west. He showed me a map of Center Township Butler County with a 640 acre unit grid pretty much over the whole North End of the Township. His plan is to drill five wells in each of the units. He said they were going to start drilling on the Renick pad by the end of the year and would continue drilling in the area after that. He also said that Rex's goal is to drill 300 to 400 wells in Butler County within five years. Great news indeed!

Regards.
Permalink Reply by Robert Allingham on September 18, 2014 at 11:18am

Thanks for the info J.R.. Did the map show possible pad sites? I'm across the street (route 308) from Renick well site and just wondering ways they could reach me and my neighbors.

Permalink Reply by J.R. Ewing on September 18, 2014 at 12:09pm
He had a few pads penciled in on his map. I noticed the one off of Rider Church Road where Al Shear's old property was first.I was concentrating on looking west of the Renick pad near our property. I only got to see the map for a short time. The other couple pads I noticed were south west of the Renick pad. He had some of the well laterals drawn on the units of the map I saw. The spacing was very close,it looked like it was in the 500 to 600 foot range. I read an article that Rex had tested spacing like that in Ohio and was successful. He said they were going to jump on the Renick pad right away since it was ready, then keep drilling like crazy for the next five years. He said that the well pads would follow the gas line from our area and go south west towards the processing plants near Evan city. I hope that helped Robert.
Permalink Reply by Robert Allingham on September 19, 2014 at 3:09am

Thanks again J.R.- That helped a lot. Good luck to you and your neighbors. Bob A.

Permalink Reply by Jim Litwinowicz on September 19, 2014 at 4:18pm

More good new. Rex will be very aggressive in drilling their leases. Can't wait to see the results. 

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