Sunday, October 24, 2010

Rex Energy Corp. - Niobrara Shale and Marcellus Shale Update

By Andrea:

Rex Energy Corporation (REXX) announced today that production during the third quarter 2010 was 20.3 Mmcfe per day which was within the company's guidance of 19.0 Mmcfe per day to 21.0 Mmcfe per day.

Rex Energy also provided an operational update on its Niobrara Shale operations. The company's first well, the Silo State 41-22, was a Rex Energy farm-in well located in the southern part of the Silo Field in Laramie County, Wyoming. The company drilled an approximate 4,000 foot lateral and encountered oil and gas shows while drilling. Rex Energy performed a 13 stage fracture stimulation in late September 2010 which went as planned. During load recovering, the tubing inside casing parted and the company is currently recovering the tubing. This has caused a delay in the completion. To date Rex Energy has recovered 15% of the fracture load. The company expects to resume load recovering shortly.

The well was located with the boundaries of the Silo Field, and Rex Energy anticipated some pressure depletion prior to drilling the well. The company expects to take several additional weeks to clean up the well. The Silo State 41-22 will provide Rex Energy with valuable information on the viability of infill drilling and drainage in the DJ Basin.

Rex Energy is now drilling the Herrington Farms 1H well, its second Niobrara Shale well, and is currently at 2,500 feet of the horizontal leg which is approximately half of the total planned lateral length. The well is in east Silo Field area and will be more representative of the company's 40,000 net acres in the DJ Basin. Rex Energy is encouraged by the continuous oil and gas shows while drilling and is pleased to report it has commenced oil sales from the drill site. The company expects to reach total depth of the well this weekend with completion planned for November 2010. Rex Energy currently has four more locations with approved permits.

In Butler County, Pennsylvania, Rex Energy is currently completing the second and third Marcellus Shale horizontal wells of the six which had been drilled and awaiting completion. The company expects to have all six wells completed by early November 2010 at which time their jointly owned cryogenic gas processing facility is expected to be operational.

Rex Energy is continuing to inject chemicals in its alkali-surfactant-polymer unit in the Lawrence Field, Illinois. The company has reached injection of approximately 8% of the pore volume. This amount remains on schedule with previously provided timelines.

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