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Exploration & Production | Midstream - Pipelines

Rex Inks Marcellus Gas Transport Deal with Dominion, Texas Gas

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   |    Wednesday,April 30,2014

Rex Energy Corporation has reported the execution of two separate binding Precedent Agreements with Dominion Transmission, Inc. and Texas Gas Transmission, LLC, respectively, to transport natural gas volumes from Rex's Butler Operated Area in Butler County, Pennsylvania to the Midwest and Gulf Coast.

Tom Stabley, Chief Executive Officer of Rex Energy, commented: "We are very pleased to announce our success in securing pipeline takeaway capacity for our Butler Operated Area to the Gulf Coast. With these new agreements in place, we have established takeaway capacity for all of our expected production from the upcoming Bluestone II processing facility and a portion of the production expected from the future Bluestone III and Bluestone IV processing facilities in our Butler Operated Area. We continue to believe that Rex's proactive approach to midstream solutions, further demonstrated by today's announcement, is an integral part of our ability to maximize value from our Appalachian Basin assets."

The transportation agreement executed with Dominion will allow for expanded capacity on approximately 235 miles of existing pipeline, referred to as the Lebanon West II Project, from Rex's Butler Operated Area to the Lebanon Interconnect located in Warren County, Ohio. Under this agreement, Rex has secured firm transportation for 130,000 MMbtu per day of natural gas for a period of 20 years beginning in late 2016. This project will allow Rex to move its residue gas west from its Butler Operated Area to access premium markets in both the Midwest as well as the Gulf Coast.

In addition, Rex recently executed a transportation agreement with Texas Gas that will allow for expanded capacity on approximately 690 miles of existing pipeline, known as the Ohio-Louisiana Access Project, from the Lebanon Interconnect in Warren County, Ohio to the Gulf South Bosco Meter (which will access the Perryville Exchange) in Perryville, Louisiana. Pursuant to this agreement, Rex has secured firm transportation for 100,000 MMbtu per day for a period of 20 years beginning in 2016. Once this expansion is complete, Rex will be able to transport its residue gas south from the Lebanon Interconnect to access premium Gulf Coast markets, including future LNG export facilities constructed in the Gulf of Mexico.

Stabley added: "These transportation agreements represent a significant milestone for Rex Energy. With a clear path secured to access premium markets for our natural gas production, we believe we have strategically positioned Rex to capitalize on strong price realizations for natural gas at the Gulf Coast for years to come."