Rex Energy 8-K Rex Energy Provides Operational Update

Rex Energy

Rex Energy

DJ Basin Niobrara Play

DJ Basin Niobrara Play

Tudor Pickering Holt Conference

Tudor Pickering Holt Conference

Denver, Colorado

Denver, Colorado

March 24, 2011

March 24, 2011

Rex Energy Corporation | 476 Rolling Ridge Drive | State College, PA 16801

P: (814) 278-7267 | F: (814) 278-7286

E: InvestorRelations@RexEnergyCorp.com

www.rexenergy.com

Together We Can Make A Difference

Exhibit 99.2

Area of Rex

Niobrara Activity

Paleogeography of North America: Niobrara Time

Paleogeography of North America: Niobrara Time

2

Introduction to the Denver Basin

Introduction to the Denver Basin

3

Vertical wells thru 1980’s (58)

Horizontal drilling initiated in 1990, thru 2000 (91)

Silo Historic Field Production

Silo Historic Field Production

4

•

with

Amoco’s

attempts

at

deeper

zones;

plugged

back

&

completed

into

lower

Kn

(Ft.

Hayes);

later

completed

in

(B-C

intervals);

Afterward

the

B-C

zones

become

the

“target”.

Spacing

was

initially

on

160’s

(approximately).

•

wells

drilled

from

1980-1989

(shown)

•

(highlighted

in

red;

within

what

turns

out

to

be

the

sweet

spot)

•

1980’s

wells

were

fracture-stimulated:

oil/gelled

water

emulsions

w/

1-4

ppg

sand;

Kn

thought

to

be

water-sensitive

due

to

illite/kaolinite/smectite

clays

The red dot is a static reference point that

can be used to understand the areal

growth of the field after 20 years.

Silo Field Development –

Silo Field Development –

1980’s

1980’s

5

Silo

Field

“discovery”

began

in

1980

the upper Kn in 1984

Overall: 58 vertical

Two

vertical

wells

of

the

1980’s

vintage

reached

cum

production above

200

MBO

91 horizontal

wells drilled during the 1990’s & 3 in the 2000’s.

Fourteen of the horizontals have cum production over 200 MBO (pink)

Wells

are

now

draining

~

640’s.

Some

have

4.5”

liners.

16 total wells achieved cum production in excess of 200 MBO

Horizontal wells are now completed with 30,000 bbl slickwater fracs and wax

balls as diverters (not modern multi-stage w/ huge volumes proppant)

58 verticals + 91 horizontals + 28 dry holes

= 177 total attempts  as listed by IHS

Currently, there are only 41 active wells, 5 of which are verticals. 

These 41 wells have produced 65% of the field’s production.

Four horizontal wells exceeded 400 MBO

Silo Field Development –

Silo Field Development –

1990’s -

1990’s -

Present

Present

6

14 of 16 exceeding 200 MBO horizontals

Probability Distribution of Cumulative Production

Probability Distribution of Cumulative Production

7

Deliberate choke-back period

in first 12-18 months

Well IP’d at 290 BOPD!

EUR will exceed 555 MBO

Econ Limit defined by LOE 

Life of 20-30 yrs

The LEMASTER-STATE 12-3H is the highest-ranking well in terms of cumulative production.

Drilled in 1992 with a lateral length of 4000 ft.

Distinct hyperbolic decline evident; dual-perm flow through fractured micro-darcy matrix

LeMaster State –

LeMaster State –

Best Well in Silo Field

Best Well in Silo Field

8

Vertical Well

Horizontal Well

Niobrara Production at Silo Field

Niobrara Production at Silo Field

9

100 BOPD

100 BOPD

Niobrara Production at Silo Field

Niobrara Production at Silo Field

10

Cumulative Production Bubble Map:

Significant production in open fractures

And faults associated with a salt edge

From Sonnenberg and Weimer, 1993

Herrington #1 FMI Log Showing Chalk

Herrington #1 FMI Log Showing Chalk

Development and Fracture Orientation

Development and Fracture Orientation

11

EOG Jake #02-01H

W-DB-029(enlarged)

Salt

lumps

2D Seismic Line Through the EOG Jake

2D Seismic Line Through the EOG Jake

Area Showing Salt Outliers and Faulting

Area Showing Salt Outliers and Faulting

12

Salt Lumps

3D Seismic Line Through East Silo Area

3D Seismic Line Through East Silo Area

Showing Salt Outliers  and Faulting

Showing Salt Outliers  and Faulting

13

Niobrara Overview

Niobrara Overview

~65,000 gross (45,000 net) acres

•

3 horizontal wells drilled (infill and Matrix Porosity

results)

DJ Basin Niobrara Summary

•

Thick “Source Rock”

–

300+ ft. 

•

High total organic content (TOC’s) of 2-10%

•

Strong matrix contribution from high porosity chalks

•

Production likely influenced by faults and fractures

•

Mature over large areal extent

•

Expected well costs of $3.5 -

$4.2 MM

DJ Basin

Rex Energy

Silo State 41-22H

IP: 67  BOE/d

Rex Energy

Herrington Farms 1H

IP: 202 BOE/d

1. Assumptions

based

on

full

development

program.

Individual

well

results

may

vary

significantly.

Not

proved.

See

“Hydrocarbon

Volume

Estimates”

on

page

3.

14

Silo

Field

Rex Energy

Shapley 14-45H

Drilling

REX

Leasehold

Rex Energy

BJB #1H Appears

Non-Commercial

Niobrara Challenges and Opportunities

Niobrara Challenges and Opportunities

15

Challenges

Learning Curve Has Been Steep:

•Lost Circulation Issues while maintaining well control

o

Need to drill underbalanced without damaging the formation with LCM

•Normally Pressured to Slightly Under Pressured Reservoir

o

Wells will not flow-back for extended periods of time/Need Artificial Lift

•

Frac and Completion Designs

o

Packer/Sleeve completions dictate sand control issues

o

Extensive clean-out issues /Emulsion issues

Opportunities

•Pick Better Locations thru 3-D

•Get thru the turn and horizontal leg quicker

•Look to put the wells on pump ASAP

•Completion

Designs-

Continued

Optimization

of

frac

designs

o

Complete with dual sleeves that open and close to let the well come in “Natural”

o

Frac after initial decline rate is observed

o

Plug and perf

o

Fluid types

o

Sand Concentration