Rex Energy Corporation (NASDAQ:REXX) recently announced closing the sale of Ohio Utica Warrior South assets as per the purchase and sale agreement with Antero Resources Corporation. The sale made Antero richer by 14 gross wells, along with 4,100 net acres of Guernsey, Noble and Belmont Counties in Ohio.
The reason for sale, as stated by Rex Energy Corporation, is that these assets were non-core to the company and they were not meant for the development plans of company. The company will use the proceeds of this sale for bringing down the revolving line of credit for its corporate purposes.
About the deal
The assets are sold to Antero Resources Corporation at an approximate amount of $30.0 million. The divested assets are, currently, producing as much as 9.0 Mmcfe/d. The transaction, as expected, has been finalized in Q1 2017.
The company said that after this transaction, Rex Energy Corporation shall be able to maintain a borrowing base of $190 million as the revolving credit facility. Company’s President and CEO, Tom Stabley said, “Rex Energy routinely evaluates asset portfolio to align development plans with strategic deployment of capital.”
Divesting assets profitable for all
He said that there is a limited opportunity for expansion, as far as Warrior South asset is concerned. But, this will be a lucrative offer for Antero Resources Corporation. The reason is that there is “high quality assets located in near proximity to Antero’s operations,” which makes it an ‘everyone’s happy’ situation.
The CEO also added that the transaction proved company’s ability to maintain stronger balance sheet, while enhancing the liquidity potion. He added, “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 will soon be updating its financial plans, development, capital and production projections about 2017 and 2018. This will be updated soon, since the sale of Warrior South sale has been closed.