Rex Energy Corporation announced the results of its recent Ohio Utica Shale wells and provided an update on its operations.
Appalachian Basin — Warrior North Prospect, Carroll County, Ohio
The G. Graham 1H, located in Carroll County, Ohio, was placed into sales from its 60-day resting period and produced at a five-day sales rate of 1,710 Boe/d (41% NGLs, 30% gas, 29% condensate), assuming full ethane recovery and a natural gas shrink of 36%. The well went on to average a 30-day sales rate of 1,256 Boe/d (46% NGLs, 33% gas, 21% condensate), assuming full ethane recovery and a natural gas shrink of 36%. The well produced with an average casing pressure of 2,364 psi during the five-day sales period and 1,672 psi during the average 30-day sales period on a 24/64 inch choke. The well was drilled to a total measured depth of 12,098 feet with a lateral length of approximately 3,973 feet and was completed in 27 stages, utilizing the company's "Super Frac" completion technique. Based on composition analysis, the gas being produced is approximately 1,262 BTU.
The G. Graham 2H, located in Carroll County, Ohio, was drilled to a total measured depth of 11,776 feet with a lateral length of approximately 3,572 feet and was completed in 24 stages. The G. Graham 2H was completed utilizing a proprietary third party completion technique and preliminary results were below the company's expectations. The company is continuing to evaluate the results of the completion technique and will provide an update once its review is complete. Going forward, the company plans to utilize its "Super Frac" completion technique on all of its currently planned completions in the Appalachian Basin.
"We are pleased with the results of the G. Graham 1H, our second announced well in our Warrior North Prospect," commented Tom Stabley, Rex Energy's Chief Executive Officer. "It is our belief that the initial sales from the G. Graham 1H are among the best results in Carroll County to date. With over 110 additional locations on our approximately 16,000 net acres in Carroll County, we believe this result further demonstrates the potential value of our acreage position in our Warrior North Prospect."
During the second quarter of 2013, the company completed the two-well Brace West pad utilizing the company's "Super Frac" completion technique with an average lateral length of approximately 4,400 feet and currently expects the two Brace West wells to be placed into sales in early July 2013.
Appalachian Basin — Warrior South Prospect, Guernsey, Noble & Belmont Counties, Ohio
In the Warrior South Prospect, Rex Energy has recently placed its first three wells into sales. The company encountered additional delays in placing these wells into sales primarily due to inclement weather which delayed pipeline construction by the third party midstream provider. The company plans to provide sales rates for these three wells once they are available.
Additionally, the company is currently drilling the fourth well of the five-well J. Anderson pad in the Warrior South Prospect. The five wells on the J. Anderson pad are expected to be drilled with an average lateral length of approximately 4,250 feet and to be placed into sales in late 2013. Following the completion of drilling operations, the rig will move back to the Warrior North Prospect for the remainder of 2013.
Appalachian Basin — Butler Operated Area, Pennsylvania
In the Butler Operated Area, the company has added two Upper Devonian Burkett wells to its Ballie Trust pad. The Ballie Trust pad, which previously included four planned Marcellus wells, will be expanded to include two Upper Devonian Burkett wells for a total of six wells. The expanded Ballie Trust pad will include two laterals in the Upper Devonian Burkett, which will be stacked vertically above the laterals in the Marcellus. The six wells on the pad are expected to have an average lateral length of approximately 4,400' feet, which represents the company's longest average lateral length for all wells drilled from a single pad to date in the Butler Operated Area. The company is not increasing its capital expenditure budget for 2013 at this time as it believes the incremental cost from the two additional wells is offset by decreased drilling and completion costs from operational efficiencies in the Appalachian Basin. Because Rex Energy currently expects these wells to be placed into service late in 2013, the company is not increasing its full year production guidance for 2013 at this time.
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