Rex Energy has completed its Marcellus Shale joint venture transaction with Summit Discovery Resources II, a wholly owned subsidiary of Sumitomo Corporation.
After final adjustments made during the due diligence period, Rex Energy sold approximately 13,000 net acres and a partial interest in certain producing Marcellus Shale wells and associated mid-stream assets.
At closing, Sumitomo paid approximately $99.5m in cash to Rex Energy, including a reimbursement for leasing expenses incurred to date in the amount of approximately $7.6m.
Rex Energy also reported that its most recent jointly owned horizontal Marcellus Shale well was put into production in Westmoreland County, Pennsylvania by Williams Production Appalachia.
Rex Energy expects Williams to fracture stimulate its next well in the area during the first week of October 2010.
Williams is currently expanding the company’s jointly owned gathering system in the area to accommodate the increased production, the first phase of which is expected to be completed in March 2011.
After the closing with Sumitomo, Rex Energy now owns a 40% interest in the Westmoreland County project area.
In central Pennsylvania, the company’s two jointly owned wells, which were drilled and completed in 2009, were put into production.
Additionally, Williams is currently drilling the first of two Marcellus Shale wells to be drilled and completed in Clearfield County, Pennsylvania during 2010.
After the closing with Sumitomo, the Rex Energy now owns a 40% interest in the company’s central Pennsylvania project area.
In Butler County, Pennsylvania, where Rex Energy is the operator of all of its Marcellus Shale drilling activities, the company currently has six Marcellus Shale wells drilled and awaiting completion.
The company’s jointly owned cryogenic gas processing plant remains on schedule to begin operations in mid-October 2010.
In Rex Energy’s Niobrara Shale operations, the company has completed drilling its first horizontal well in Laramie County, Wyoming, and is currently in the process of fracture stimulating the well.
The company is also in the process of drilling a second horizontal Niobrara Shale well in Laramie County, which it expects to fracture stimulate in November 2010.