Form 8-K REX ENERGY CORP For: Jan 03

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 3, 2017

 

 

Rex Energy Corporation

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware		001-33610		20-8814402
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)
366 Walker Drive State College, Pennsylvania				16801
(Address of principal executive offices)				(Zip Code)

Registrant’s Telephone Number, including area code: (814) 278-7267

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01.

Entry into a Material Definitive Agreement.

Purchase and Sale Agreement

On January 3, 2017, R. E. Gas Development, LLC (“Rex”), a wholly owned subsidiary of Rex Energy Corporation (the “Company”), together with its joint interest owners MFC Drilling, Inc. (“MFC”), ABARTA Oil & Gas Co., Inc. (“ABARTA”) (Rex, MFC, and ABARTA, together, the “Sellers”) entered into a Purchase and Sale Agreement (the “PSA”) with Antero Resources Corporation (“Antero”) pursuant to which the Sellers will sell to Antero substantially all of their jointly owned oil and gas interests in Noble, Guernsey, and Belmont Counties, Ohio. These interests comprise Rex’s Warrior South development area. The effective date for transactions under the PSA is October 1, 2016.

The PSA includes representations, warranties, covenants and agreements as well as various provisions for purchase price and post-closing adjustments customary for transactions of this type. Total consideration for the transaction is expected to be $50 million, with approximately $30 million net to Rex, subject to customary closing and post-closing adjustments. The sale assets include 14 gross wells with associated production of 15 Mmcfe/d, with 9 Mmcfe/d net to Rex, and approximately 6,200 gross acres, with 4,100 acres net to Rex. This acreage is considered non-core to Rex. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions and required approvals. The Company expects to use the proceeds from the transaction to pay down its revolving line of credit and for general corporate purposes.

The foregoing description of the PSA is qualified in its entirety by reference to the text of the agreement, a copy of which the Company plans to file as an exhibit to its Quarterly Report on Form 10-Q for the period ending March 31, 2017. The Company intends to request confidential treatment for certain portions of the PSA, which will be omitted from the exhibit.

 

Item 7.01.

Regulation FD Disclosure.

On January 4, 2017, the Company issued a press release announcing the PSA with Antero. A copy of the press release is included as Exhibit 99.1 to this Form 8-K.

The information in this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Rex Energy Corporation Press Release dated January 4, 2017.

[Signature page to follow]

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 4, 2017

Exhibit 99.1

 

Rex Energy Announces Sale of Ohio Utica Warrior South Asset

STATE COLLEGE, Pa., January 4, 2017 (GLOBE NEWSWIRE) – Rex Energy Corporation (Nasdaq: REXX) (“Rex Energy”) today announced that it entered into a purchase and sale agreement with Antero Resources Corporation (“Antero”) pursuant to which Antero will acquire the company’s Ohio Utica assets in the Warrior South Area. Rex Energy is selling its entire interest in the assets and expects to receive net proceeds at closing of approximately $30.0 million (subject to customary closing and post-closing adjustments). The assets that are being divested are non-core and were not included in the company’s future development plans. Included in the sale are 14 gross wells and approximately 4,100 net acres in Guernsey, Noble and Belmont Counties in Ohio; the assets are currently producing approximately 9.0 Mmcfe/d. Rex Energy expects to use the proceeds from the sale to pay down the revolving line of credit and for general corporate purposes. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions and required approvals.

Upon the closing of the transaction, the company has received approval from its bank lenders to maintain the existing $190 million borrowing base under its revolving credit facility.

“Rex Energy routinely evaluates our asset portfolio to align our development plans with the strategic deployment of capital,” said Tom Stabley, Rex Energy President and Chief Executive Officer. “With limited opportunity to expand our development in Warrior South, and high quality assets located in near proximity to Antero’s operations, we view this transaction as a win-win for both parties.”

Mr. Stabley continued, “This transaction is another in a series of initiatives we’ve undertaken in the last 12 months to strengthen our balance sheet and enhance Rex’s liquidity position. Once completed, the sale of the Warrior South assets plus our previous sale of the Illinois Basin and other non-core assets will have generated over $71 million of additional liquidity.”

The company plans to update the market regarding its 2017 and 2018 development, capital, and financial plans and production projections in conjunction with or shortly following the closing of the Warrior South sale.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties, such as financial market conditions, changes in commodities prices and the other risks discussed in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and other subsequent filings with the Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statements, which are made only as of the date hereof. Rex Energy has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company’s expectations.

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About Rex Energy Corporation

Headquartered in State College, Pennsylvania, Rex Energy is an independent oil and gas exploration and production company with its core operations in the Appalachian Basin. The company’s strategy is to pursue its higher potential exploration drilling prospects while acquiring oil and natural gas properties complementary to its portfolio.

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For more information contact:

Investor Relations

(814) 278-7130

[email protected]

 

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