STATE COLLEGE, Pa., Dec. 3, 2008 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) ("Rex Energy") provided an operational update today on its Marcellus Shale activities and 2009 capital budget.
The company is pleased to announce initial flow rates for its first two vertical test Marcellus Shale wells completed in Westmoreland County, Pennsylvania. These wells, drilled in the deeper portion of the Marcellus play, had peak flow rates of 400 and 1,200 Mcf per day respectively before being turned into sales. Each well continues to stabilize at daily production rates of 300 - 500 Mcf per day, and the high operating pressures suggest increased production is likely with further production facility optimization. The company's third vertical test well in Westmoreland County has been drilled and will be completed by mid-December.
In Clearfield County, Pennsylvania the company has recently completed drilling its first vertical test well encountering approximately 150 feet of Marcellus Shale formation. The company expects to complete the well in late December. Additionally, in Butler County, Pennsylvania area, the company participated in the drilling of two additional vertical wells with its partner. Both wells are expected to be completed during the first quarter of 2009 following installation of the company's gas processing facility.
The company also announced today that due to the current economic and commodity price environment, its Board of Directors has approved a revised 2009 capital budget for exploration and development activities of $49 million. The revised 2009 budget reflects the company's desire to maintain a conservative balance sheet while still making progress on its highest potential projects -- Marcellus Shale development in the Appalachian Region and the Lawrence Field ASP flood in the Illinois Region. During 2009, the revised capital budget will be allocated approximately 70% to Marcellus Shale drilling and 30% to the Lawrence Field ASP flood project.
"The revised budget approved today will enable the company to drill and complete 6-8 horizontal wells in the Marcellus Shale and begin ASP chemical injection on two 40-acre units in the Lawrence Field ASP project. We believe that this revised budget provides a favorable balance between maintaining the company's liquidity and continuing to grow our production, reserves and cash flow. The revised budget allocates the majority of our 2009 capital to our Marcellus Shale drilling activities where we believe we have the best opportunity for significant near term production and cash flow growth. At the same time we will be continuing to make progress on our Lawrence Field ASP project, albeit at a slightly slower pace than previously planned, where we continue to believe there is very significant long term potential," stated Rex Energy's President and Chief Executive Officer, Benjamin W. Hulburt.
"In these challenging times, Rex Energy's strong balance sheet represents a significant competitive advantage and we will continue to monitor the economic and commodity price environment throughout the year and to accelerate or delay our activities in order to preserve our liquidity position," stated Thomas C. Stabley, Executive Vice President and Chief Financial Officer.
FORWARD-LOOKING STATEMENTS
Except for historical information, statements made in this release, including those relating to significant potential, future earnings, cash flow, capital expenditures, production growth and planned number of wells, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the company's future performance are subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the volatility of oil and gas prices, the costs and results of drilling and operations, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, litigation, uncertainties about reserve estimates, environmental risks and the occurrence of any unanticipated acquisition opportunities. The company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the company's filings with the Securities and Exchange Commission, which are incorporated by reference.
The company's internal estimates of reserves may be subject to revision and may be different from estimates by the company's external reservoir engineers at year end. Although the company believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
About Rex Energy Corporation
Rex Energy Corporation is an independent oil and gas company operating in the Illinois Basin, the Appalachian Basin and the Southwestern Region of the United States. The company has pursued a balanced growth strategy of exploiting its sizable inventory of lower risk developmental drilling locations, pursuing its higher potential exploration drilling prospects and actively seeking to acquire complementary oil and natural gas properties.
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