With an eye towards Appalachian basin — i.e., the Marcellus shale — Rex Energy (REXX) continues to churn out steady and growing natural gas production. For the first quarter of this year, Rex’s production averaged 75.6 million net cubic feet per day of natural gas equivalent, exceeding the upper end of management’s guidance.
But the small-cap E&P firm isn’t resting on its laurels.
Rex has continued to acquire fields in the Marcellus as well as the Utica. The firm has allocated more than 30% of its $255 million capex spending for the year towards the Utica. Recent equity and asset sales should provide the company with sufficient liquidity to complete aggressive drilling plans through 2014 in the field.
Combining rising natural gas prices with newly completed infrastructure — courtesy of pipeline firm MarkWest Energy Partners, LP (MWE) — and Rex could be one of the best small-cap ways to play the Appalachian Basin and its natural gas riches.