Earnings up for Rex Energy as company strikes two deals to ship natural gas from Marcellus

State College, Pa-based driller Rex Energy said it signed two deals that will send Marcellus Shale natural gas to the higher priced markets in the Midwest and Gulf Coast.

Rex Energy’s announcement of two separate agreements with Dominion Transmission Inc. and Texas Gas Transmission to transport natural gas from Rex Energy’s operations in Butler County comes on the heels of the company’s first quarter earnings report.

Rex Energy reported net income of $8.9 million on revenue of $96.6 million for the first quarter of 2014, up from a loss of $2.8 million on revenue of $47.5 million during the same period last year.

The driller said it reached record quarterly production of 122.2 million cubic feet equivalent per day of natural gas.

The pipeline deal with Richmond, Va.-based Dominion will allow the pipeline system to be expanded capacity on about 235 miles of existing pipeline, known as the Lebanon West II Project, between Butler County and Warren County, Ohio.

Under this agreement, Rex has secured firm transportation for 130,000 million cubic feet per day (MMcf/d) of natural gas for 20 years beginning in 2016. This project will allow Rex to move gas west from Butler County to access premium markets in both the Midwest and the Gulf Coast.

In addition, Rex struck a deal with Texas Gas Transmission, an interstate pipeline that originates on the Gulf Coast and spans states in the South and Midwest. The agreement will allow for expanded capacity on 690 miles of existing pipeline, known as the Ohio-Louisiana Access Project, from Warren County, Ohio to Perryville, Louisiana.

Under the agreement, Rex has secured firm transportation for 100,000 MMcf/d for 20 years beginning in 2016. When the pipeline expansion is complete, Rex will be able to transport gas to Gulf Coast markets, including future LNG export facilities constructed in the Gulf of Mexico.

Texas Gas Transmission is owned by Houston-based Boardwalk Pipeline Partners.

Stephanie Ritenbaugh: sritenbaugh@post-gazette.com, 412-263-4910

Join the conversation:

To report inappropriate comments, abuse and/or repeat offenders, please send an email to socialmedia@post-gazette.com and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner. Thank you.

<--Google analytics Ends-->