Marcellus Producer Plans Chapter 11 Liquidation
Rex Energy, an independent Marcellus producer holding, at the end of 2016, an estimated 650bn ft3 of proved gas and natural gas liquids reserves, said May 18 it has initiated a liquidation process under Chapter 11 protection.
“Over the past seven months, Rex Energy has been in deep discussion with our lenders and advisors to evaluate every aspect of our business and take proactive steps to overcome the challenges our industry continues to face,” CEO Tom Stabley said. “Ultimately, we decided that the best possible outcome was to put our remaining assets into the hands of owners with the financial strength necessary to position them for long-term growth and success. Chapter 11 provides an orderly process to achieve these goals in a way that maximizes value for our stakeholders.”
Last November, Rex Energy reported 3Q 2017 commodity revenues, including settlements from derivatives, of $46.6mn, a net loss of $47.1mn and outstanding debt of $155mn. Gas-equivalent production for the period averaged 182mn ft3/day-equivalent, consisting of 112mn ft3/day of natural gas, 5,100 b/d of natural gas liquids, 6,000 b/d of ethane and 700 b/d of condensate. It has not yet reported 4Q or 2017 annual results.
In March this year, it sold 8.2mn ft3/day of non-operated assets in Pennsylvania to XPR Resources for net proceeds of $17.2mn.
The company has secured a financing commitment of $100mn which, when combined with operating cash flow, will allow it to maintain normal operations and meet its ongoing financial commitments. It hopes to complete the sale process within the next four to five months.