PennEnergy Resources, a Pennsylvania-based natural gas producer, has agreed to acquire almost all the assets of its rival Rex Energy for $600.5m in an-cash deal.
Rex Energy, which is also based in Pennsylvania, had recently filed for bankruptcy. Its transaction with PennEnergy has been approved by the US Bankruptcy Court for the Western District of Pennsylvania.
The oil and gas exploration and production company primarily operates in the Appalachian Basin.
PennEnergy chairman and CEO Richard D. Weber said: “We are thrilled to have the opportunity to integrate the assets of Rex Energy into PennEnergy.
“Almost all of the combined assets of the two companies are in the core of the Marcellus Shale, and with nearly 20-years of drilling inventory we have the opportunity to continue delivering growth at attractive rates of returns for many years to come.”
The transaction, which is expected to be closed towards the end of next month, will help PennEnergy increase its operated horizontal producing shale wells to 329.
It will also expand the acreage held by the company to 203,500 gross leasehold acres, located mainly in the Butler, Beaver and Armstrong counties in Pennsylvania.
PennEnergy president and COO Greg Muse said: “Most of Rex’s assets are contiguous to our existing operations and offer us the opportunity to improve on our industry leading costs per unit and further our reputation for safe operations and environmental stewardship.
“We plan to operate two horizontal rigs on the combined properties and eagerly look forward to integrating the Rex operations.”
Founded in 2011, PennEnergy is engaged in acquisition and development of unconventional shale resources across the Appalachian Basin. The company holds nearly 91,000 acres of oil and gas leasehold in the southwest Pennsylvania.
PennEnergy is currently involved in production at 86 Marcellus and Upper Devonian wells. The natural gas producer is supported by $532m of equity commitments from EnCap Investments and Wells Fargo Energy Capital.