Rex Energy Corp fka REXXQ

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Rex Energy Corp.: Two Major Moves in Span of Week (REXX, DTI)

By Ryan Hotchkiss | September 21, 2016 — 3:20 PM EDT



























Three weeks after selling its Illinois Basin oil assets to Campbell Development Group LLC, Rex Energy Corp. (REXX) announced plans to expand considerably its natural gas distribution into the Mid-West and the Gulf Coast. After agreeing on a deal with Campbell to relinquish over 76,000 acres in the Ohio Basin, Rex Officials told its shareholders of its distribution plans adding that a full 50% of its natural gas production in Pennsylvania will eventually go to the southern region. (See also: Penny Stocks to Watch for September 2016.)

In exchange for $40 million up front and a potential $10 million more if commodity prices rice, Rex accepted the deal with Campbell and followed up by signing a deal with Dominion Transmission Inc. (DTI) five days later. The deal Rex struck with Dominion is for the use of its Lebanon West II natural gas pipeline. This pipeline is a means for Rex to service the Mid-West’s Warren County, Ohio with 130 MMBtu/d.

However, the company’s move to begin large scale distribution between the Mid-West and the Gulf Coast will not happen all at once. Rex stated that reaching goal of distributing 50% of its production to the Gulf Coast will take until April of 2017 as it waits completion of transportation.

Rex is awaiting completion of a high-pressure gathering system. The purpose of the system is actually to decrease the pressures of the current operation and provide a more measured delivery.

But, even after making two major moves this week, investors seemed not to take notice of Rex Energy Corp. Its stock dropped from opening price to .51 by mid-morning, climbed back to a daily high of .55 by mid-afternoon and finally settled in at .53 by closing for a modest .13% one-day increase.

Still, in the midst of energy’s drop of 3.12% drop, Rex’s day was a relative success.


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