Rex Energy Corporation has announced that it entered into a purchase and sale agreement with Campbell Development Group, LLC pursuant to which Campbell will acquire the company's Illinois Basin assets. Rex Energy is to sell its entire interest in the basin and expects to receive proceeds at closing of approximately US$40 million (prior to customary closing and post-closing adjustments) with the potential for additional proceeds of up to US$10 million over the next three years based on commodity prices during that time frame. Included in the sale are approximately 76 000 net acres in Illinois, Indiana and Kentucky; the assets are currently producing approximately 1700 net bpd. Proceeds from the sale are expected to be used to pay down the revolving line of credit and for general corporate purposes. Rex Energy is undergoing its regularly scheduled borrowing base redetermination, and, pro forma for the Illinois Basin asset transaction, currently expects to maintain its borrowing base at US$190 million. The company expects the transaction to close in the third quarter of 2016, subject to customary closing conditions and required approvals.
"First and foremost, I would like to thank all of our Illinois Basin employees for their hard work and dedication throughout the years," said Tom Stabley, Rex Energy's President and Chief Executive Officer. "The sale of the Illinois Basin assets is another important step for Rex Energy toward improving our liquidity position and providing greater capital efficiency as we continue with the development of our core Appalachian Basin assets, in particular our Moraine East Area."
Adapted from a press release by Louise Mulhall
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