Rex Energy Corp.'s (NASDAQ: REXX) Appalachia joint venture (JV) is getting a little boost—by nearly $50 million.
Benefit Street Partners LLC (BSP), Rex's partner in the Moraine East JV, has elected into the next 12 wells in the development program upping the total wells to 30. The move also increases the total capital commitment to date by BSP to $98.1 million from $51.6 million.
With the additional capital commitment from BSP, the company expects full year 2016 net operational capex to be about $35.5 million.
"The increased $45.7 million capital commitment from BSP, plus the proceeds from the recently announced Illinois Basin sale, will provide Rex Energy with over $80 million of additional liquidity in 2016," said Tom Stabley, president and CEO of Rex Energy, in a statement. "The liquidity will enable Rex Energy to continue our plan to hold the majority of our Appalachian Basin acreage by production by mid-year 2017."
Rex Energy completed its 20th well in the Moraine East Area, the Kleaver 2HB. The well was drilled in about 9.5 days—a new record for the company, according to the release. The well also has the longest lateral to date for the company at about 10,200 feet.
The company is currently drilling the third of four wells on the Baird pad in the Moraine East area. The four wells have a planned average lateral length of about 7,200 feet.
In addition, the company has reached an agreement with its gathering partner in the Moraine East Area to reduce its overall minimum daily volume commitment in the region.
In the Butler Operated area, the company has further reduced its cost to drill and complete a 6,000 foot lateral on a four-well pad through additional cost control and operational efficiencies.
The average drilling and completion cost is now $5 million, a 6% reduction from the previously reported average of $5.3 million. The company continues to focus on cost control measures and anticipates that it will be able to achieve further cost reductions and efficiencies in 2016.
In the Warrior North prospect, the company placed the three wells on the Goebeler pad into sales. The wells were drilled to an average lateral length of about 7,500 feet and completed with an average of 43 stages.
Rex said preliminary results from the Goebeler pad are "encouraging," and management anticipates providing sales rates on the second quarter 2016 earnings conference call.
The company is also currently completing the two-well Perry pad in the Warrior North Prospect, with an average lateral length of about 6,650 feet. The wells are expected to be placed into sales during the third quarter, the release said.
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