Rex Energy Announces Two-year Financial And Operational Plan

(RTTNews) - Rex Energy Corp. (REXX) announced its two-year financial and operational plan and provided a financial update.

Rex Energy's net operational capital expenditures for 2017 are expected to be in the range of $70.0 - $80.0 million, with approximately 80% allocated to the development of the Marcellus and Upper Devonian Burkett shales in the Moraine East and Legacy Butler Operated Areas. Approximately 20% is allocated to the development of the Utica Shale in the Warrior North Area. The 2017 capital budget is expected to be funded through cash flow from operations and asset divestitures.

The company plans to run one drilling rig in its Butler Operated and Ohio Utica Warrior North Area and expects to drill 21.0 gross (11.1 net) wells, complete 26.0 gross (12.7 net) wells and place into sales 23.0 gross (11.2 net) wells.

Average daily production is estimated to be in the range of 194.0 - 204.0 MMcfe/d, representing year-over-year growth of approximately 5% to 10% as compared to the company's full-year 2016 production guidance.

Full-year 2018 net operational capital expenditures are expected to be in the range of $20.0 - $40.0 million, with approximately 100% of the net operational capital expenditures allocated to the development of the Marcellus and Upper Devonian shales in the Moraine East and Legacy Butler Operated Areas. The 2018 capital budget is expected to be funded through cash flow from operations and cash on the balance sheet.

The company plans to run one drilling rig in its Butler Operated Area and expects to drill four gross (2.8 net) wells, complete six gross (3.8 net) wells and place into sales nine gross (5.3 net) wells.

For full-year 2018, Rex Energy estimates that average daily production will be in the range of 223.0 - 233.0 MMcfe/d, representing 15% - 20% year-over-year growth as compared to the midpoint of 2017 production guidance. Liquids production is expected to account for approximately 45% of the company's 2018 production at the midpoint of guidance.

With the plan to fund 2017 and 2018 net operational capital expenditures from cash flow from operations and asset divestitures, the company expects to grow its EBITDAX by approximately 80% - 85% in 2017 and 10% - 15% in 2018. The targeted increase in EBITDAX assumes current strip pricing as of December 31, 2016 and is driven by expected production growth of 5% - 10% in 2017 and 15% - 20% in 2018 combined with hedging at favorable pricing.

The company anticipates reducing its debt-to-EBITDAX ratio by approximately 35% - 40% in 2017 and 15% - 20% in 2018, on a year-over-year basis and a total reduction of approximately 50% from year-end 2016 to year-end 2018.