PennEnergy offers $600M for Rex
Pittsburgh Post-Gazette
After rescheduling its bankruptcy auction four times in a week, Rex Energy Corp. called off the event all together and declared PennEnergy Resources LLC the winning bidder.
Moon-based PennEnergy has agreed to pay $600.5 million for Rex, a State College-based shale driller that filed for bankruptcy protection in May.
The acquisition must still gain the approval of the bankruptcy judge. A hearing on the sale agreement is scheduled for Thursday.
PennEnergy’s CEO Rich Weber said Rex’s acreage, mostly in Butler County, is continuous to his company’s assets “and we’re very familiar with it.”
The sale agreement, filed publicly on Monday, also contemplates a settlement with several landownersgroups that are suing Rex for allegedly shirking its payment obligations in more than 100 oil and gas leases. The various plaintiffs wouldget about $1 million to split.
Rex, whose regional headquarters is in Cranberry, went public in 2007. Like others in the industry, it has struggled with low natural gas prices and had tried to restructure out of court to no avail before defaulting on debt payments and filing for bankruptcy.
In addition to its wells in Butler County, it also has interests in properties in a dozen Western Pennsylvania counties and in several counties in Ohio.
Would-be buyer PennEnergy started in 2011 as the brainchild of former Atlas Energy executives Mr. Weber and Greg Muse and with a $300 million investment from private equity firm EnCap Investments.
It now has around 70 employees, Mr. Weber said. The same management group also operates a midstream company started in December 2016.
Having started with a slice of Beaver County where shale gas is rich with natural gas liquids, PennEnergy has expanded to a second focus area that includes eastern Butler County and western ArmstrongCounty where gas is dry.
The acquisition of Rex would more than double PennEnergy’s gas and liquids production, according to data from the Pennsylvania Department of Environmental Protection.