Rex-Sumitomo JV Closes Marcellus Shale Transaction
Rex has closed its previously announced Marcellus Shale joint venture transaction with Summit Discovery, a wholly owned subsidiary of Sumitomo. After final adjustments made during the due diligence period, Rex Energy sold approximately 13,000 net acres and a partial interest in certain producing Marcellus Shale wells and associated mid-stream assets. At closing, Sumitomo paid approximately $99.5 million in cash to Rex Energy, including a reimbursement for leasing expenses incurred to date in the amount of approximately $7.6 million. Additionally, the cash payment included a reimbursement for drilling related expenses incurred to date in the amount of approximately $7.5 million, which was applied against the drilling carry. As of the closing, the remaining drilling carry balance was approximately $51.2 million, which will be used to cover 80% of Rex Energy's costs to drill and complete additional Marcellus Shale wells within the areas of mutual interest identified in the joint venture agreement.
Benjamin W. Hulburt, Rex Energy President and CEO, commented, "We are very excited to have closed on this important transaction for Rex Energy. At closing, we had $75.0 million in debt drawn on our senior credit facility. With the cash proceeds of $99.5 million, we are now in a positive net cash position. As we previously announced, even after the sale of a portion of our proved reserves, our borrowing base was increased to $125 million due to our continued success in growing our proven reserve base. In addition to being in a positive net cash position, the next $51.2 million of our Marcellus Shale drilling and completion expenses are covered by our Sumitomo drilling carry balance."