Rex Energy has signed an agreement to sell its Illinois Basin assets in the US to Campbell Development Group in a transaction worth approximately $40m.
The company also expects to receive proceeds at closing of around $40m with the potential for additional proceeds of up to $10m over the next three years.
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As part of the deal, Rex Energy will sell about 76,000 net acres in Illinois, Indiana and Kentucky, all of which are producing about 1,700 net barrels per day at present.
The company will use the sale proceeds to pay down the revolving line of credit, as well as for general corporate purposes.
At present, Rex Energy is undergoing its regularly scheduled borrowing base redetermination, as well as pro forma for the latest asset transaction.
It currently expects to maintain its borrowing base at $190m.
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By GlobalDataThe transaction is subject to customary closing conditions and necessary approvals and is slated for completion in the third quarter of this year.
Rex Energy president and CEO Tom Stabley said: "First and foremost, I would like to thank all of our Illinois Basin employees for their hard work and dedication throughout the years.
"The sale of the Illinois Basin assets is another important step for Rex Energy toward improving our liquidity position and providing greater capital efficiency as we continue with the development of our core Appalachian Basin assets, in particular our Moraine East Area."
