We now have “the rest of the story” for Rex Energy for second quarter 2015. Last week Rex released a partial update for 2Q15. At the time we used the production numbers they released with the prices they received for that production to calculate simple, back-of-the-envelope numbers for revenue, predicting Rex would show a revenue slide of around 16% from 2Q14 to 2Q15 (see Rex Energy 2Q15: Production Up 61%, MDN Provides Missing Rev # s). Yesterday Rex released their financials for 2Q15. How’d we do? Seems our estimate was rather rosy. Rex’s revenue went down 37% year over year–due to the lower commodity prices they received ($72.9 million in 2Q14 to $45.8 million in 2Q15). Rex’s revenue slide is typical of drillers across the country. However, when you factor in all of Rex’s expenses, the picture becomes a bit cloudier. Rex’s net income (net loss) year over year was minus 1,990% ($8.96 million for net income in 2Q14 compared to to minus $151.8 million in 2Q15). But when you scratch beneath the surface you find Rex took a one-time “impairment” hit of $117.8 million in 2Q15. What’s that? Essentially the value of their leases and assets went down–on paper. That $117.8 million “loss” was not a cash loss–just an accounting loss on paper. If you remove the impairment charge from the mix, Rex’s net income for 2Q15 would have been minus $34.0 million, a “mere” 279% decrease year over year…
