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PennEnergy Resources to Buy State College-Based Rex Energy for $600 Million

by on August 30, 2018 7:43 PM

A Pittsburgh company will pay $600.5 million to acquire the assets of State College-based oil and gas producer Rex Energy, which filed for bankruptcy protection earlier this year.

PennEnergy Resources announced on Thursday that its acquisition of Rex, headquartered on Walker Driver, has been approved by the United States Bankruptcy Court for the Western District of Pennsylvania.

Closing is scheduled for Sept. 28. The assets include $29.5 million in cash accounts held by Rex used "to collateralize firm transportation contracts that will be released to PennEnergy at close," according to a PennEnergy news release.

In March, Rex sold off wells in Westmoreland, Centre and Clearfield counties before announcing in May it would sell its remaining assets and begin proceedings under Chapter 11 of the bankruptcy code.

According to the Pittsburgh Post-Gazette, Rex's major holdings are wells in Butler County, as well as interests elsewhere in western Pennsylvania and Ohio, and like other shale drillers, it has struggled with low natural gas prices.

PennEnergy President Greg Muse said in a statement that most of Rex's assets are contiguous to the Pittsburgh company's existing operations.

 “Almost all of the combined assets of the two companies are in the core of the Marcellus Shale, and with nearly 20-years of drilling inventory we have the opportunity to continue delivering growth at attractive rates of returns for many years to come,” said Richard D. Weber, chairman and CEO of PennEnergy.

PennEnergy, which will operate 329 horizontal producing shale wells, believes that with the acquisition it will be the 10th largest natural gas producer in Pennsylvania and third largest with headquarters in the commonwealth. 

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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