Stonehenge Energy Resources, a portfolio company of Energy Spectrum Capital, has formed a midstream joint venture with Rex Energy Corp. (Nasdaq: REXX). The effort is called Keystone Midstream Services, with Stonehenge holding a 60% stake.
Rex Energy Corporation (Nasdaq:REXX) announced today the formation of a midstream joint venture with Stonehenge Energy Resources, L.P. The joint venture will operate through the newly formed Keystone Midstream Services, LLC, a Delaware limited liability company (“Keystone Midstream”), and will initially invest up to $25.0 million to build a high pressure gathering system and cryogenic gas processing plant in Butler County, Pennsylvania.
Stonehenge Energy Resources, L.P. was formed in 2007 to design, build, own and operate midstream assets, such as natural gas gathering, treating and processing facilities. Stonehenge is a portfolio company of Energy Spectrum Capital, a leading private equity firm focused exclusively on the energy industry with over $1 billion in assets under management. The management team at Stonehenge has over 95 years of combined experience in the midstream sector of the natural gas industry.
Rex Energy owns 40% of Keystone Midstream and has contributed to the joint venture its existing gathering system in Butler County, Pennsylvania. Stonehenge owns 60% of Keystone Midstream and has contributed to the joint venture the Sarsen Gas Plant, a cryogenic gas plant with 40 Mmcf per day of processing capacity. In conjunction with the formation of the joint venture, Rex Energy has entered into a gathering and processing agreement with Keystone Midstream in which Rex Energy has reserved 20 Mmcf per day of capacity in the Sarsen Gas Plant in 2010 and 40 Mmcf per day of capacity thereafter. Stonehenge will manage the operations of Keystone Midstream.
Benjamin W. Hulburt, Rex Energy’s President and CEO, commented, “I am extremely pleased with the joint venture we formed with Stonehenge and believe it will further strengthen the dominant position we have in Butler County. Forming the Keystone Midstream joint venture significantly reduces Rex Energy’s capital investment in necessary infrastructure in Butler County and leverages the extensive midstream experience of the Stonehenge management team.”
About Rex Energy Corporation
Rex Energy Corporation is an independent oil and gas company operating in the Illinois Basin and the Appalachian Basin of the United States. The company has pursued a balanced growth strategy of exploiting its sizable inventory of lower risk developmental drilling locations, pursuing its higher potential exploration drilling prospects and actively seeking to acquire complementary oil and natural gas properties. For more information about the company, please visit www.rexenergy.com. Please note that the company routinely posts important information about the company under the investor relations section of its web site.