Rex Energy Announces 2013 Proved Reserves
Estimated Proved Reserves
The following table summarizes the company's proved reserves and Finding and Development Costs as of December 31, 2013 , 2012 and 2011.
| 12/31/2011 | 12/31/2012 | 12/31/2013 | Average | |
| Proved Reserves (MMcfe)1 | 366,188 | 618,050 | 849,785 | -- |
| Production (Mcfe) | 14,220 | 24,557 | 33,850 | -- |
| Drill-Bit Capital Deployed (millions)2, 3 | -- | |||
| Drill-Bit Finding and Development Cost ($/Mcfe) 2 | ||||
| All-In Capital Deployed (millions)2, 4 | -- | |||
| All-In Finding and Development Cost ($/Mcfe) 2 |
| 1 Values obtained from certified reports from |
| 2 A non-GAAP measure. A further discussion of Finding and Development Cost and components thereof is included in the appendix attached to this release |
| 3 Exploration and development capital employed |
| 4 Includes all exploration and development capital, leasing and other corporate capital spending |
| 5 Excludes capital expenditures related to Keystone Clearwater Solutions |
Below is a reconciliation of the changes in the company's proved reserves between December 31, 2012 and December 31, 2013 (SEC pricing for the twelve months ended December 31, 2013 was the West Texas Intermediate posted price of $93.42 /Bbl for oil and NGLs and Henry Hub spot price of$3.67 /MMbtu for natural gas, adjusted for contractual agreements).
| Natural Gas | Oil | C3+ NGLs | Ethane | Total | |
| (MMcf) | (Mbbl) | (Mbbl) | (Mbbl) | (MMcfe) | |
| Balance - | 371,716 | 9,376 | 11,422 | 20,258 | 618,050 |
| Extensions and discoveries | 189,151 | 595 | 10,182 | 9,775 | 312,460 |
| Production1 | (23,447) | (914) | (820) | -- | (33,850) |
| Acquisition & divestitures | -- | 1 | -- | -- | 6 |
| Revisions to previous estimates | (16,137) | (438) | 1,484 | (6,171)2 | (46,881) |
| Balance - December 31, 20133 | 521,283 | 8,620 | 22,268 | 23,862 | 849,785 |
| Proved Developed Reserves as of December 31, 20134 | 212,061 | 7,743 | 7,868 | 8,454 | 356,452 |
| 1 Unaudited 2013 production figures for the twelve months ended |
| 2 Approx. 6.2 MMbbl of ethane revisions are based upon reducing ethane yield from 80% to 55% ethane recovery due to market conditions as of |
| 3 Total proved reserves increased 37% as compared to |
| 4 Proved developed reserves as of |
The following table summarizes Rex Energy's total proved reserves by region as of December 31, 2013 :
| Proved Reserves by Asset Area | |||||
| PDP | PDNP | PUD | Total | PV10(1) | |
| (MMcfe) | (MMcfe) | (MMcfe) | (MMcfe) | (M$) | |
| Appalachia Basin | |||||
| Butler Operated Area | 208,254 | 4,304 | 397,851 | 610,409 | |
| Warrior Prospects | 41,020 | -- | 36,461 | 77,481 | 45,525 |
| 56,317 | -- | 54,767 | 111,084 | 96,074 | |
| All Other Appalachia | 2,668 | -- | -- | 2,668 | 2,384 |
| Illinois Basin | 41,711 | 2,178 | 4,254 | 48,143 | 189,360 |
| Total | 349,970 | 6,482 | 493,333 | 849,785 | 668,657 |
| 1 PV-10 is a non-GAAP financial measure because it excludes the effect of income taxes and asset retirement obligations. A further discussion of PV-10 as well as a reconciliation to the most directly comparable GAAP measure is included in the appendix attached to this release. |
Below is a summary of the number of net wells by proved reserve classification for the company's Appalachian Basin as of December 31, 2011 , 2012 and 2013.
| Total Company Net Appalachia Basin Wells1 | |||
| 12/31/2011 | 12/31/2012 | 12/31/2013 | |
| PDP | 37.1 | 53.6 | 85.0 |
| PDNP | 2.1 | 0.4 | 0.7 |
| PUD | 49.8 | 58.1 | 85.6 2 |
| Total | 89.0 | 112.1 | 171.3 |
| PUD:PD Ratio | 1.27 | 1.08 | 1.00 |
| 1Includes Marcellus, |
| 2 Includes ~ 9 Ohio Utica wells |
The proved undeveloped to proved developed ratio for the period ending December 31, 2013 is 1.00 to 1.
About Rex Energy Corporation
Forward-Looking Statements
Certain statements made in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may contain words such as "expected", "expects", "scheduled", "planned", "plans", "anticipates" and similar words. These statements are based on management's experience and perception of historical trends, current conditions, and anticipated future developments, as well as other factors believed to be appropriate. We believe these statements and the assumptions and estimates contained in this release are reasonable based on information that is currently available to us. However, management's assumptions and the company's future performance are subject to a wide range of business risks and uncertainties, both known and unknown, and we cannot assure that the company can or will meet the goals, expectations, and projections included in this release. Any number of factors could cause our actual results to be materially different from those expressed or implied in our forward looking statements, including (without limitation):
- economic conditions in
the United States and globally; - domestic and global demand for oil, NGLs and natural gas;
- volatility in oil, NGL, and natural gas pricing;
- new or changing government regulations, including those relating to environmental matters, permitting, or other aspects of our operations;
- the geologic quality of the company's properties with regard to, among other things, the existence of hydrocarbons in economic quantities;
- uncertainties inherent in the estimates of our oil and natural gas reserves;
- our ability to increase oil and natural gas production and income through exploration and development;
- drilling and operating risks;
- the success of our drilling techniques in both conventional and unconventional reservoirs;
- the success of the secondary and tertiary recovery methods we utilize or plan to employ in the future;
- the number of potential well locations to be drilled, the cost to drill them, and the time frame within which they will be drilled;
- the ability of contractors to timely and adequately perform their drilling, construction, well stimulation, completion and production services;
- the availability of equipment, such as drilling rigs, and infrastructure, such as transportation, pipelines, processing and midstream services;
- the effects of adverse weather or other natural disasters on our operations;
- competition in the oil and gas industry in general, and specifically in our areas of operations;
- changes in our drilling plans and related budgets;
- the success of prospect development and property acquisition;
- the success of our business and financial strategies, and hedging strategies;
- conditions in the domestic and global capital and credit markets and their effect on us;
- the adequacy and availability of capital resources, credit, and liquidity including, but not limited to, access to additional borrowing capacity; and
- uncertainties related to the legal and regulatory environment for our industry, and our own legal proceedings and their outcome.
The company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on the company's risks and uncertainties is available in the company's filings with the Securities and Exchange Commission (SEC).
Note on Hydrocarbon Volumes and Estimates
The estimates of proved reserves in this release are based on a reserve report of our independent external reserve engineers as of December 31, 2013 . "Proved reserves" are estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions (see Rule 4-10(a) of Regulation S-X for the SEC definition of "proved reserves"). The SEC permits publicly-reporting oil and gas companies to disclose "proved reserves" in their filings with the SEC . SEC rules also permit the disclosure of "probable" and "possible" reserves. Rex Energy discloses proved reserves but does not disclose probable or possible reserves. We use certain broad terms and other descriptions of volumes of potentially recoverable hydrocarbons in our public statements. These broad classifications do not constitute "reserves" as defined by the SEC and we do not attempt to distinguish these classifications from probable or possible reserves as defined by SEC guidelines. We are prohibited from disclosing hydrocarbon quantities that do not constitute reserves in documents filed with the SEC .
We believe the data we prepared and supplied to our external reservoir engineers in connection with their preparation of the 12/31/2013 reserve report, and the assumptions, forecasts, and estimates contained therein, are reasonable, however, we cannot assure that they will prove to have been correct. Estimates of reserves can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
| APPENDIX |
| REX ENERGY CORPORATION |
| NON-GAAP MEASURES |
Finding and Development Cost
Finding and Development Cost per unit of production is a non-GAAP metric used by the industry, investors and analysts to measure the company's ability to establish a long-term trend of adding reserves at a reasonable cost. Drill-Bit Finding and Development Cost is defined as the sum of total capital deployed, less lease acquisitions and other related expenditures, divided by total extensions and discoveries. All-In Finding and Development Cost is defined as the sum of total capital deployed divided by the sum of extensions, discoveries, acquisitions, divestitures, conversions, and revisions, less the prior period's production. The calculations presented by the company are based on unaudited costs incurred excluding estimated abandonment costs. For purposes of consistency with current calculations, we have revised certain amounts relating to prior period Capital Deployed and Finding and Development Cost. All financial results are unaudited.
| A tabular presentation of Drill-Bit and All-In Capital Deployed is included below ($ in millions): |
| 2011 | 2012 | 2013 | |
| Drill-Bit Capital Deployed | $ 192.8 | $ 176.9 | $ 283.3 |
| Acreage Acquisitions | 78.7 | 51.0 | 35.6 |
| Equity Method Investments, Noncontrolling Interests and Other1 | 30.9 | 11.0 | 18.7 |
| All-In Capital Deployed | $ 302.4 | $ 238.9 | $ 337.6 |
| 1. Includes capitalized interest, vehicles and corporate capital |
| A tabular presentation of Drill-Bit and All-In Finding and Development Costs is included below ($ in millions): |
| 2011 | 2012 | 2013 | |
| Drill-Bit Capital Deployed | $ 192.8 | $ 176.9 | $ 283.3 |
| Extensions and Discoveries (Bcfe) | 155.8 | 196.6 | 312.5 |
| Drill-Bit Finding and Development Cost ($/Mcfe) | $ 1.24 | $ 0.90 | $ 0.91 |
| 2011 | 2012 | 2013 | |
| All-In Capital Deployed | $ 302.4 | $ 238.9 | $ 337.6 |
| Extensions and Discoveries (Bcfe) | 155.8 | 196.6 | 312.5 |
| Production (Bcfe) | (14.2) | (24.6) | (33.8) |
| Acquisitions and Divestitures (Bcfe) | -- | 0.3 | -- |
| Revisions to Previous Estimates (Bcfe) | 22.9 | 79.6 | (46.9) |
| Subtotal (Bcfe) | 164.5 | 251.9 | 231.8 |
| All-In Finding and Development Cost ($/Mcfe) | $ 1.84 | $ 0.95 | $ 1.46 |
Reconciliation of Standardized Measure to PV-10
PV-10 is a non-GAAP metric used by the industry, investors and analysts to estimate of the present value, discounted at 10% per annum, of estimated future cash flows of our estimated proved reserves before income tax and asset retirement obligations The following table shows the reconciliation of PV-10 to our standardized measure of discounted future net cash flows, the most directly comparable GAAP measure, for the years ended December 31, 2011 , 2012 and 2013. Management believes that PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, we believe the use of a pre-tax measure is valuable for evaluating our company. PV-10 should not be considered as an alternative to the standardized measure of discounted future net cash flows as computed under GAAP.
| At | |||
| ($ in millions) | 2011 | 2012 | 2013 |
| Reconciliation of Standardized Measure to PV-10 | |||
| PV-10 | |||
| Less: Present value of future income tax discounted at 10%1 | (107.0) | (79.6) | (118.5) |
| Less: Present value of future asset retirement obligations discounted at 10%1 | (18.7) | (24.8) | (28.5) |
| Standardized measure of discounted future net cash flows | |||
| 1 For purposes of this reconciliation, we have used estimates of the effects of future income taxes and future abandonment costs (asset retirement obligations). These preliminary estimates may be revised in connection with the preparation of our financial statements for the year ended |
CONTACT: For more information contact:
Mark Aydin
Manager, Investor Relations
(814) 278-7249
maydin@rexenergycorp.com
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