Rex Energy Corporation Provides Operational Update For ASP Flood Pilot Projects and Marcellus Shale Activitiesadmin
Rex Energy Corporation provided an operations update today on its two major projects, the ASP flood pilot projects in the Illinois Basin and the Marcellus Shale project in the Appalachian Basin.
In the company’s Alkali-Surfactant-Polymer (“ASP”) flood project, injection of the ASP chemicals is continuing in the two pilot projects in the Lawrence field. The company’s Bridgeport Sandstone ASP pilot project is demonstrating an initial response to the ASP chemical injection as indicated by an increase in the oil cut ratio in the pilot wells. In addition, the company’s Cypress Sandstone ASP pilot is continuing to demonstrate a response to the ASP chemical injection. Although it remains premature to estimate the ultimate response or ultimate recoveries in either of the company’s ASP pilot projects, the company is continuing to analyze the results in each of these pilots and remains encouraged about the progress to date.
In the company’s Marcellus Shale projects, the company has drilled the first of three planned vertical test wells in Westmoreland County, Pennsylvania to a depth of approximately 9,000 feet. The average Marcellus Shale formation thickness in the first well is 165 feet, which exceeds the company’s original expectations by approximately 25 feet. The company is currently drilling the second test well in the project area and expects to begin fracture stimulation and completion procedures on the wells in early October 2008.
The company has also increased its net acreage position in its Marcellus Shale project areas to approximately 68,000 net acres. In addition, the company expects to complete the previously announced acquisition of an additional 12,000 net acres during late September or early October 2008. When this acquisition is completed, the company’s total acreage position in the Marcellus Shale project areas will be increased to approximately 80,000 net acres.
Finally, the company announced that it has received water withdrawal permits from the Susquehanna River Basin Commission (“SRBC”) for withdrawals of up to approximately 4 million gallons of water per day to be utilized in its Marcellus Shale drilling and completion activities. The water withdrawal permits are a key step in accelerating the company’s drilling program in its Marcellus Shale projects. The company is continuing to work closely with state and local officials on issues relating to water withdrawal and its other planned drilling and operational activities.
Rex Energy’s President and Chief Executive Officer, Benjamin W. Hulburt, commented, “I am very pleased with our progress in each of the company’s two largest projects, the Lawrence field ASP flood project and the Marcellus Shale project. The initial production response in our Bridgeport ASP pilot is another significant step in proving the ASP process in our Lawrence field. We are also encouraged with the log characteristics in our first of three planned vertical Marcellus Shale test wells drilled in Westmoreland County, Pennsylvania, as well as with the water withdrawal permits granted by the SRBC. Each of these achievements can enable us to continue to meet our 2008 and 2009 drilling plans. We continue to believe that the Marcellus Shale has the potential to be a significant opportunity for Rex Energy and its stockholders, as well as the citizens of Pennsylvania.”