Rex Energy Goes to the Bank, Walks Out with $85M
Rex Energy, an independent oil and gas exploration and production (E&P) company headquartered in State College, PA focuses their drilling on the Marcellus/Utica Shale region. Rex announced on Monday they’ve expanded their credit line at the bank–from $240 million in borrowing capacity to $325 million (an $85 million increase). What does it mean?…
MDN does a pretty simple calculation: More money available to drill means there will be more drilling–in the Marcellus. Rex (like other companies) touts the increase in credit line as a vote of confidence from the banks and proof for investors that the company is a good investment. “Buy our stock!” is the unstated but obvious reason to publicly announce something like this. However, for landowners and businesses interested in working with (supplying to) Rex, it means Rex is expanding and doing more drilling–a good sign.
Here’s the short “buy our stock” press release Rex issued Monday:
Rex Energy Corporation announced today that it has entered into an amended and restated credit agreement to expand its borrowing base under the company’s senior secured credit facility from $240 million to $325 million. In addition, the company has extended the maturity of the senior secured credit facility from September 2015 to March 2018. Commitments by the bank group under the facility were raised from $240 million to $300 million, a 25% increase. The $300 million commitment level can be increased to $325 million at the company’s request for additional bank commitments. Under the terms of the amended and restated credit agreement, the bank group re-determines the borrowing base semi-annually utilizing the bank’s estimates of reserves and future oil and gas prices.
“We are very pleased to announce the increase in our borrowing base to $325 million, the highest level in the history of Rex Energy,” commented Tom Stabley, Rex Energy’s Chief Executive Officer. “We appreciate the confidence and support of our bank group. The increased borrowing base improves upon our already strong liquidity position and further enhances our ability to execute on our business plan.”
The bank group is comprised of KeyBank N.A., which continues to lead and serve as Administrative Agent of the facility; Royal Bank of Canada; SunTrust Bank; Bank of Montreal; Capital One, N.A.; Manufacturers and Traders Trust Company; Wells Fargo Bank, N.A.; U.S. Bank National Associates; and Union Bank, N.A.*
*Rex Energy Corporation (Apr 1, 2013) – Rex Energy Announces Increase of Borrowing Base to $325 Million and Upcoming Conference Schedule