Rex has entered into a purchase and sale agreement with an undisclosed private company to acquire approximately 26,900 gross (18,700 net) acres in the DJ Basin for approximately $18.7 million. The acreage is located in close proximity to the Silo Field, a producing Niobrara oil field in Laramie County, Wyoming. The acquisition is expected to close in the next thirty days subject to Rex Energy's due diligence review.
Benjamin W. Hulburt, Rex Energy President and CEO, commented, "I am extremely pleased to be acquiring this acreage in the Niobrara oil fairway in the DJ Basin. After this acquisition is closed, Rex Energy will control approximately 11,800 gross (6,700 net) prospective Niobrara Shale acres in Weld County, Colorado and 48,500 gross (32,400 net) acres in Laramie County, Wyoming. Our average acreage cost in the DJ Basin is still relatively low at $600 per acre. We plan to begin our horizontal Niobrara Shale well drilling program during July 2010. Although this play is not yet at the stage where we can update our production guidance through the end of this year and into 2011 to account for this significant new oil asset, we believe our Niobrara position has the potential to be a very significant growth driver for the company."
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