After months of trying to find another way, Rex Energy Corp. is filing for bankruptcy.
The State College-based oil and gas company whose major holdings are leases and shale wells in Butler County, disclosed in its quarterly report with the Securities & Exchange Commission that it could not come to an agreement with its lenders after missing a debt payment in late April.
Rex said it would be seeking protection under Chapter 11 of the bankruptcy code imminently.
As of the end of last year, the company had 105 full-time employees. Only 17 of them work in the field as Rex uses independent contractors and consultants to do a lot of the drilling, fracking and associated work.
Founded in 2007, Rex has been shedding assets and looking for capital for some time now. Last year, it sold a substantial portion of its Ohio acreage to Antero Resources Corp. Earlier this year, it sold its interest in wells in Westmoreland, Centre and Clearfield counties.
Last month, the company’s stock was delisted from the Nasdaq.
In its quarterly report, Rex disclosed that it defaulted on its loan not just by skipping an interest payment, but also by failing to provide its lenders with timely financial statements and other information.
It also reported that it has combined each 10 shares of its common stock into one share, thereby shrinking by 10 times the number of shares outstanding.
“We believe the outlook for our business is favorable despite the continued uncertainty of natural gas and oil prices,” management wrote in the quarterly report. “We continue to focus on maintaining financial flexibility while pursuing an active, technology-driven drilling program to develop and maximize the value of our existing acreage as market conditions continue to evolve.”
The company still plans to drill and complete several wells for the remainder of the year, it said.
Nevertheless, the uncertain future of the company’s finances and the oil and gas market may cause Rex to lose a substantial portion of the value of its assets, the company cautioned.
Anya Litvak: alitvak@post-gazette.com or 412-263-1455.
First Published: May 17, 2018, 7:04 p.m.