Rex Energy has entered into a definitive purchase and sale agreement with Adventure Exploration Partners, LLC of Midland, Texas for the sale of its Southwestern Region assets for $18 million, subject to customary adjustments.
The assets consist of properties owned by the company in Texas and New Mexico, predominantly located in the Permian Basin. The sale includes approximately 10,000 net acres (15,000 gross acres), year-end 2007 proven reserves of 10.7 Bcfe, and approximately 1.6 MMcfe per day of production as of the end of the third quarter of 2008. The transaction is anticipated to close by February 27, 2009.
The sale of these non-core assets is part of the company's strategic plan to focus its efforts and capital investment in Marcellus Shale exploration in the Appalachian Basin and the Lawrence Field ASP flood project in the Illinois Basin.
Benjamin W. Hulburt, President and Chief Executive Officer of Rex Energy, stated, "The proceeds from this transaction will be used to augment our cash flows in the funding of our planned capital expenditures in 2009, and will further enable the company to maintain a conservative balance sheet in the current environment of volatile commodity prices and uncertain economic conditions.''
KeyBanc Capital Markets, Inc. served as the advisor to Rex Energy in connection with the transaction.
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