State College, PA-based
Rex Energy Corp.
) announced the pricing of its $325 million aggregate principal
amount of 6.25% senior notes due 2022 at a price of 100% of par.
The company increased the offering size from the previously
announced $250 million principal amount. The closing of the
offering is expected to occur on Jul 17, 2014, subject to certain
The energy explorer plans to use the net proceeds from this
offering - approximately $318.8 million after the initial
purchasers' discount and estimated offering expenses - to pay back
in full the outstanding borrowings under its revolving credit
facility as well as for corporate purposes.
Rex Energy, which went public in 2007, is a publicly traded
exploration and production company engaged in the acquisition,
finding and development of oil and gas properties in the U.S. The
company's operations are concentrated primarily in the liquids-rich
acreage of the Appalachian and Illinois regions.
Having done a stellar job at raising volumes and reserves, analysts
are predicting strong earnings growth for Rex Energy over the next
couple of years. The 2014 Zacks Consensus Estimate is 85 cents,
representing 143% earnings per share growth over 2013. Next year's
average forecast is $1.33, corresponding with 56% growth. Moreover,
Rex Energy continues to employ a conservative financial policy and
a proactive hedging program.
However, as is the case with other exploration and production
firms, Rex Energy's results are directly exposed to oil and gas
prices, which are inherently volatile and subject to complex market
forces. Realized prices could differ significantly from our
estimates, thereby affecting the company's revenues, earnings and
As a result, Rex Energy currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
However, some better-ranked domestic upstream energy stocks include
Swift Energy Co.
Midstates Petroleum Company Inc.
WPX Energy Inc.
). All the firms hold a Zacks Rank #1 (Strong Buy).
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