Rex Energy will buy about 208,000 acres from Royal Dutch Shell, which will more than double its acreage in Butler County.
Rex announced in a news release that it will buy the land for Marcellus, Upper Devonian/Burkett and Utica shale natural gas exploration for about $120 million cash.
The land to be bought is in Butler, Armstrong, Beaver, Lawrence, Mercer and Venango counties, as well as Columbiana and Mahoning counties in Ohio.
The deal will give Rex Energy about 298,000 acres in the area, marking a 230 percent expansion.
Currently, Rex has about 76,000 acres leased in the county and about 90 wells, primarily in southwestern Butler County. Shell has 90,825 acres leased in the county, which Rex will acquire.
“We are proud to announce this acquisition, which is a milestone for Rex Energy,” said Rex CEO Tom Stabley.
Most of Rex’s new acreage is located in northwestern Butler County.
“That’s where Shell primarily operated,” Stabley said.
Rex will be communicating with its new landowners soon. The leases that landowners signed with Shell will transfer to Rex upon closing. The terms of the leases will remain the same.
Shell has four wells that have been drilled and are producing and 20 wells that have been drilled but are not producing yet. Stabley said Rex will start work on about half of those wells at first. Work on the second half will begin later in 2015.
The deal is expected to close in September.