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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Replies to This Discussion
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Permalink Reply by Chris Crawley on
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I'm not so sure this is good news. Rex doesn't have the deep pockets that Shell has so I'm thinking a lot of our leases are going to expire and not be renewed with Rex. It looks like Shell just wanted out and made Rex take it all ($598.00/ac.including all existing wells ). Just doing some simple math on the acreage Rex would need to spend over $1B in the next 2 yrs to HBP the leases, I suspect Rex will keep what they really wanted and try and unload the balance for a healthy profit.
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Permalink Reply by Philip Thackray on
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Chris,
What are the renewal clauses like on the original SWEPI leases?
Phil
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Permalink Reply by Chris Crawley on
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I didn't have an original lease with SWEPI directly. I was in the original Mt Jackson group that signed for $3K/ac 5 yrs w/5yr renewal for same bonus, pugh clauses, etc. due to expire 9/16.
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Permalink Reply by Jim Litwinowicz on
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Rex is a smaller outfit but they have been very active in S Butler Co and even have a well near Ellwood City. Perhaps they have additional funding to do what they need to do.
I do know that Rex is one of the companies that originally negotiated on the Mt Jackson group so they have knowledge of the area and are confident in it. They also have some infrastructure in place in s Butler.
They cannot drill it all in two years and will probably have to resign many landowners. Will they offer all landowners or pick and chose? If so, will they resign at the same terms or make lower offers with different terms? Will they sell some to Hilcorp or other players? Guess we will all have to wait and see.
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Permalink Reply by Rick on
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Rex has three very hard hitting wells in Noble county! Noble H1&H2 plus Guernsey H3 I believed their called! The pipeline runs along my property in Beaver twp. Noble county, Ohio to a big transit line. Plenty of money being pumped from them wells.
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Permalink Reply by Philip Thackray on
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Permalink Reply by DMS on
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Great news! Here is a PDF from the Rex Energy website...
http://www.rexenergy.com/documents/ButlerOperatedAreaAcquisition-Su...
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Permalink Reply by DMS on
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I agree...this looks very promising for those of us in the BCLG!! Their initial development area seems to cover most, if not all of us, in the group...
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Permalink Reply by Barry D on
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This can't be correct,
Ron (who knows everything, Not) told us that Shell would sell this acreage to Hilcorp.
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Permalink Reply by gary smith on
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probably means shell is getting ready to get out. they can see tom wolf coming in Pennsylvania, elected by the cities,to tax everybody.
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Permalink Reply by Jed Clampett on
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But does this sale indicate bad things for the cracker plant ? Maybe two separate divisions of big Shell, but you would thing they would rather be vertically integrated than rely on buying feedstock on the open market.
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