The joint venture will enable Rex to cut its capital expenditures in 2015 by 30% from an earlier projection to $135-145 million while continuing hold-by-production drilling in liquids-rich prospects of the Moraine East part of its Butler Operated area.
ArcLight will fund 35% of the costs of designated wells in a program with total consideration of $65 million, $16.6 million at closing. When performances of specific well groups meet financial targets, ArcLight’s working interest will revert to 17.5%.
The investment firm has the option to participate as a 20% working interest partner in 17 additional Moraine East wells in 2016.
Rex said it expects 2015 production to increase 23% from the 2014 rate to 185-195 MMcfd of gas-equivalent.