Struggling Rex Energy Gets JV Partner, Slashes Budget Again
Rex Energy, our little energy company that could (and does) continue to drill in the Marcellus/Utica, is struggling. Rex has, like all companies, been hit with low commodity prices for natural gas, a shortage of pipelines to get the gas to markets, and consequently has scaled back on plans for 2015. Although Rex had a great 2014 with production up some 66% over 2013, in December the company announced they would trim the 2015 budget by 44% over 2014 (see Rex Energy Reduces 2015 Marcellus/Utica Drilling Budget by 44%). In February Rex was included in a list of 19 companies on one analyst’s “death list”–meaning they owe a lot more money than they bring in–in Rex’s case they owe 5 times as much as they bring in annually (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Shortly after that, Rex put 28K PA acres up for sale in their non-core area, to raise cash (see Rex Energy Looks to Sell 28,300 Marcellus Acres in Bid to Raise $). And that brings us to yesterday, when Rex announced they are slashing their drilling budget again, by another 30%, and they’ve taken on a joint venture partner for some of their acreage in a bid to keep drilling…
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