Marcellus Shale Natural Gas Play in the Appalachian Basin:

The Marcellus Shale is a black, organic-rich shale deposited in portions of Pennsylvania, West Virginia and New York. The Marcellus Shale varies in thickness of approximately 75 feet in Butler County to about 165 feet in Westmoreland County to 200 feet in the Clearfield-Centre county area. While the Marcellus Shale in the Butler County area is thinner than other areas, it has the highest organic carbon content, porosity and permeability as compared to Rex's other areas of Marcellus development.

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Rex Energy operates and has a 70% working interest in the Butler Operated Area which is prospective for liquids-rich gas from the Marcellus Shale and the overlying Upper Devonian Burkett shale. In addition, Rex Energy has a 100% working interest in ~207,000 net acres that was recently acquired, which is prospective for the Marcellus Shale, Upper Devonian Shale and Utica Shale.

 

The natural gas produced in this area of the play has a BTU content of approximately 1,230 and 1,300 BTU in the northwest portion of Rex Energy's Butler Operated Area. This requires the gas to be processed through a cryogenic plant to make the gas pipeline-ready by separating the butanes and propanes from the natural gas stream. The natural gas liquid content of the Marcellus in Butler County commands a price premium to dry Marcellus gas in other areas of the Appalachian Basin.

 

In the Upper Devonian Burkett, Rex Energy has drilled seven wells in the Butler Operated Area to test the Upper Devonian Burkett Shale section which lies approximately 200-300 feet above the Marcellus. Rex's best well to date in the Upper Devonian Burkett, the Drushel 6HD, produced a 5-day sales rate of 7.3 million cubic feet per day of high BTU gas from a 4,036 foot lateral.

 

Rex Energy owns a 40% non-operated working interest in the Westmoreland, Clearfield and Centre County project areas. These dry gas producing areas are operated by WPX Energy.

 

Utica Shale/Point Pleasant Oil and Gas Play in the Appalachian Basin:

The Utica Shale is a 300 foot thick section of organic-rich, calcareous shale lithologically similar to the Eagle Ford Shale of south Texas. The Utica/Point Pleasant Shale lies approximately 4,000 feet below the Marcellus Shale and is prospective for wet gas and condensate in eastern Ohio and dry gas in western Pennsylvania. The Utica in areas east of Rex's Butler County acreage is believed to be too deep to economically exploit at this time.