Rex Energy has agreed to acquire a large swath of acreage in Pennsylvania and Ohio for the Marcellus, Upper Devonian/Burkett and Utica Shales.
The company will pay around $120m to SWEPI, an affiliate of Royal Dutch Shell, to acquire a 100% interest in about 208,000 gross acres in its Butler operated area.
Rex Energy will acquire the assets located in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in Pennsylvania.
The transaction, which is expected to be completed in September 2014, also includes assets in Columbiana and Mahoning counties in Ohio.
The deal increases Rex Energy’s Butler footprint to around 298,000 gross acres.
Rex Energy intends to add one to two rigs in 2015 to the newly acquired acreage. The transaction provides a platform for future expansion.
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By GlobalDataThe company said the large contiguous acreage position in the dry gas Utica area provides for a future development programme.
Rex Energy CEO Tom Stabley said: "The proximity of the Shell acreage to our Butler operated area, combined with our solid operating history, strong recent production results and the attractive economics of our projects in the area, made this transaction a natural fit for Rex Energy.
"With this transaction, we can strategically expand our development programme in the Butler operated area, which we believe will bring significant upside benefits to Rex Energy."
