Rex Energy has Already Drilled 4 Wells in Butler County, PA in 2010, On Track to Complete 6 More by Year’s End

The following operational updates about Rex Energy Corporation’s Marcellus drilling activity thus far in 2010, from a company press release:

Butler County, Pennsylvania Marcellus Project Area

Drilling and completion activity in Rex Energy’s Marcellus Shale project area in Butler County, Pennsylvania is continuing to progress on schedule. The two ‘Magill’ horizontal wells completed by the company earlier this year have been flow-testing for approximately 20 days. The combined peak 24 hour rate of the two Magill wells to date has been 5.9 MMcfe per day. The company expects these rates to continue to rise as additional water is returned to the surface. The company’s refrigeration processing plant, and therefore its gas sales in Butler County, Pennsylvania, is currently shut-in for pipeline maintenance. The company expects the plant and sales to resume during May 2010 and to connect the Magill wells to the plant at that time.

[Rex Energy President & CEO Benjamin] Hulburt remarked, “When we compare the initial flow rates of the Magill wells to our P. Knauff #1H well, our first horizontal Marcellus Shale well completed in Butler County, Pennsylvania during 2009, we are very encouraged by the results. The P. Knauff #1H well took approximately 90 days to achieve its peak rate, and thereafter, the rate remained relatively flat for the next 180 days. Although the results of the Magill wells are still preliminary, we are encouraged by what appears to be a similar profile.”

Mr. Hulburt further commented, “I am also very pleased to announce that the estimated cost to drill and complete the Magill wells was approximately $3.9 million per well, which is a significant improvement over the cost of our wells during 2009 and meets our budget expectations. For the year to date, we have finished drilling 4 horizontal wells in Butler County in an average of 24 days with average lateral extensions of 3,600 feet. We plan to fracture stimulate two wells in Butler County during the second quarter of 2010, and remain on track to drill and complete a total of ten wells in the county by year-end.”

The construction of the company’s jointly owned cryogenic processing plant in Butler County remains on schedule and the company expects that the plant will commence operations during the early part of the fourth quarter of 2010. The company anticipates that the final permits and approvals for the plant will be received during the second quarter of 2010 and believes that this will provide sufficient time to enable its partners to complete construction of the plant and bring Rex Energy’s production online during the fourth quarter of 2010.

Williams Joint Venture Marcellus Project Areas

In Westmoreland County, Pennsylvania, Rex Energy has finished drilling one horizontal well in the ‘Slavek Trust’ unit and is currently drilling a second well in the unit. The wells will be the last wells operated by Rex Energy in the joint venture project area before transferring operations to Williams. Concurrently, Williams has brought in their operated rig and is now drilling the third horizontal well in the Slavek Trust unit. Williams will serve as operator during the completion of these wells, which will mark the complete transition in operatorship of the joint venture to Williams.

In Clearfield County, Pennsylvania, Williams is continuing the construction of the company’s jointly owned gathering system, which is now anticipated to be completed in June 2010 with first production from its two jointly owned ‘Alder Run’ wells expected to occur in July 2010. Rex Energy owns a 50% working interest in the Alder Run wells. The company expects that the combined gross production from these wells will be six to seven MMcf per day.

*Rex Energy Corp. Press Release (May 4) – Rex Energy Corporation Announces First Quarter 2010 Results