STATE COLLEGE, Pa. -- Natural gas company Williams said Monday that it will pay $33 million for half of Rex Energy's interest in three Pennsylvania counties to develop natural gas wells in the Marcellus Shale.
Tulsa, Okla.-based Williams will earn its 50 percent interest by incurring 90 percent of the costs associated with drilling and completing wells until it has invested $33 million on behalf of Rex and $41 million in its own costs and expenses. Williams has until the end of 2011 to fulfill its funding obligations.After that investment, the companies will share the costs.
State College-based Rex has leases on 44,000 acres in Westmoreland, Clearfield and Centre counties.
The deal is Williams' second recent transaction in the Marcellus Shale, a massive area that spans from northern West Virginia, much of Pennsylvania and into New York. On June 1, Williams entered a midstream joint venture that owns 1,800 miles of intrastate natural gas gathering lines servicing 6,900 Appalachian Basin wells.Rex also announced that it has closed the deal to acquire the 50 percent stake owned by its joint venture partner of property in Butler County, Pa., for $4.2 million.
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