Introduction
Rex Energy was once a notable player in the American energy sector, particularly known for its operations in the Appalachian Basin. Founded in 2007, the company focused on the exploration and production of natural gas and natural gas liquids. Despite its promising start and significant investments in shale formations like the Marcellus and Utica, Rex Energy faced financial challenges that led to its bankruptcy in 2018. This article explores the company’s history, operations, financial trajectory, and the factors contributing to its eventual downfall.
Company Overview
Rex Energy Corporation was established in March 2007 and was headquartered in State College, Pennsylvania. The company operated primarily in the Appalachian Basin, focusing on the Marcellus Shale, Utica Shale, and Barnett Shale formations. Rex Energy employed hydraulic fracturing techniques to extract natural gas and natural gas liquids. At its peak, the company reported production levels of 195 million cubic feet of natural gas equivalent per day in 2016.
In 2016, Rex Energy’s estimated proved reserves totaled 108 million barrels of oil equivalent, comprising 56.8% natural gas, 41.5% natural gas liquids, and 1.7% natural-gas condensate. The company’s strategy centered on increasing production and proven reserves within its operational regions.
Operational History
Rex Energy’s operations were concentrated in the Appalachian Basin, with a focus on unconventional resource plays. The company utilized advanced drilling and completion techniques to optimize production from shale formations. In addition to its core operations, Rex Energy engaged in various transactions to expand and streamline its asset base.
Notably, in August 2014, Rex Energy acquired assets from Royal Dutch Shell for $120 million, enhancing its position in the Butler Operated Area. Conversely, the company also divested non-core assets, such as the sale of its water services subsidiary, Keystone Clearwater Solutions, to American Water Works for $130 million in June 2015.
Financial Performance
Despite strategic acquisitions and divestitures, Rex Energy faced financial headwinds. In 2016, the company reported a net loss of $176 million, with revenues of $139 million. The challenging commodity price environment and high operational costs contributed to the company’s financial struggles.
Rex Energy’s financial difficulties culminated in its filing for Chapter 11 bankruptcy protection in May 2018. Subsequently, in August 2018, the company’s assets were acquired by PennEnergy Resources, marking the end of Rex Energy’s independent operations.
Legacy and Impact
Rex Energy’s journey reflects the volatility and risks inherent in the energy sector, particularly for companies operating in the shale industry. While the company made significant contributions to natural gas production in the Appalachian region, its financial challenges underscore the importance of prudent fiscal management and adaptability in a dynamic market.
Quick Bio Table
| Company Name | Rex Energy Corporation |
| Founded in | March 2007 |
| Headquarters | State College, Pennsylvania |
| Industry | Oil and Gas Exploration and Production |
| Operational Regions | Appalachian Basin (Marcellus, Utica, Burke Shale) |
| Peak Production | 195 million cubic feet of natural gas equivalent per day (2016) |
| Bankruptcy Filed | May 2018 |
| Acquired By | Penn Energy Resources (August 2018) |
FAQs
Q1: What was Rex Energy’s primary focus?
A: Rex Energy primarily focused on the exploration and production of natural gas and natural gas liquids in the Appalachian Basin, utilizing hydraulic fracturing techniques.
Q2: Why did Rex Energy file for bankruptcy?
A: The company faced financial difficulties due to a challenging commodity price environment and high operational costs, leading to a net loss and eventual bankruptcy filing in 2018.
Q3: Who acquired Rex Energy’s assets?
A: In August 2018, PennEnergy Resources acquired the assets of Rex Energy following its bankruptcy proceedings.
Q4: What impact did Rex Energy have on the energy sector?
A: Rex Energy contributed to natural gas production in the Appalachian region and highlighted both the potential and risks associated with shale resource development.
Q5: Where was Rex Energy headquartered?
A: The company was headquartered in State College, Pennsylvania.
