Press Releases

Mar 06, 2009
Rex Energy Corporation Announces 2008 Results
STATE COLLEGE, Pa., March 6, 2009 (GLOBE NEWSWIRE) -- Rex Energy Corporation ("Rex Energy") (Nasdaq:REXX) today announced its 2008 results from continuing operations. Revenues, production, EBITDAX and cash flows from operations all grew to record highs during the year. Revenues grew to $68.0 million, up 31%. Production grew to 949,000 barrels of oil equivalent ("BOE"), up 5%. EBITDAX grew to $29.1 million, up 32%. Cash flows from operating activities grew to $32.4 million, up 85%. The company recorded a loss from continuing operations, consistent with generally accepted accounting principles ("GAAP"), for the year of $41.0 million. The loss adjusted to be comparable to analyst estimates, was $9.8 million, or $0.28 per share. (EBITDAX and adjusted loss comparable to analyst estimates are non-GAAP financial measures. Please see the accompanying definitions and tables for the reconciliation of each of these non-GAAP measures. The company has classified all 2008 and prior period amounts related to its operations in the Southwestern Region as discontinued operations due to its anticipated sale of these assets during the first quarter of 2009. Please see the accompanying tables for the reconciliation of the reported GAAP amounts to the amounts that would have been reported if Southwestern Region operations were included in continuing operations.)

Benjamin W. Hulburt, Rex Energy's President and CEO, commented, "2008 was a tremendous year of growth for the company. During 2008, we commenced chemical injection in our Lawrence Field ASP Flood Project, increased our Marcellus Shale acreage by 107% to approximately 62,000 net acres and successfully drilled at least one vertical test well in each of our core Marcellus Shale operational regions. In addition, we grew our revenues by 31%, our EBITDAX by 32%, and our production by 5% year-over-year. Also, we expanded our operations team throughout 2008 adding valuable personnel with significant years of experience in their respective fields."

Hulburt continued, "While the current economic climate is certainly challenging, Rex Energy is positioned to not only endure, but to continue to grow through 2009. At year-end we had only $15 million drawn on our line of credit with an $80 million borrowing base, $7 million of cash, and approximately 86% of our current production hedged through 2010 at average floor prices of $62.95 per barrel and $7.29 per Mcf. Additionally, we expect to receive approximately $17 million in net proceeds from the sale of our Southwestern Region assets during the first quarter of 2009, at which time we expect to be essentially debt free."

In a final comment, Hulburt stated, "Our primary focus in 2009 is to commence horizontal drilling on our Marcellus Shale prospective acreage and continue to build infrastructure to support our Marcellus well production. We remain very encouraged by our initial vertical well results, and are pleased to announce that our most recent vertical well in southwestern Pennsylvania tested at a peak rate of 1.8 million cubic feet per day with an average rate of 1.4 million cubic feet per day over a 24 hour period."

Production for the year totaled 949,000 BOE, of which approximately 82% was attributable to oil. Wellhead oil and natural gas prices, after adjustment for cash settled derivatives, were $75.52 per barrel and $8.90 per Mcf respectively in 2008. Production in the fourth quarter of 2008 totaled 246,928 BOE, an increase of approximately 4% over the previous quarter and 5% when compared to the fourth quarter of 2007. Wellhead oil and natural gas prices, after adjustment for cash settled derivatives, were $62.75 per barrel and $7.85 per Mcf respectively in the fourth quarter of 2008.

Revenues in 2008 were $68.0 million, representing a 31% increase from 2007 revenues of $52.0 million. Revenues for the fourth quarter of 2008 were $14.8 million, representing a 2% increase from revenues of $14.5 million in the fourth quarter of 2007.

Earnings from continuing operations for the year reflected a loss of $41.0 million in 2008 compared with a loss from continuing operations of $15.5 million in 2007. Adjusted earnings comparable to analyst estimates, a non-GAAP financial measure of net income which excludes deferred tax benefits, dry hole and impairment expenses, gains or losses on the sale of assets, unrealized gains or losses from financial derivatives and non-cash compensation expenses, reflected a loss of $9.8 million in 2008 as compared to a loss of $1.4 million in 2007. Earnings from continuing operations for the fourth quarter of 2008 reflected a loss of $32.6 million compared with a loss from continuing operations of $10.9 million in 2007. Adjusted earnings comparable to analyst estimates in the fourth quarter of 2008 reflected a loss of $18.1 million in 2008, a decrease from income of $449,000 in the fourth quarter of 2007.

EBITDAX from continuing operations, a non-GAAP financial measure, was $29.1 million in 2008, up from $22.1 million in 2007, which represented an increase of 32%. EBITDAX in the fourth quarter of 2008 was $5.7 million, representing a decrease of 10% compared to the fourth quarter of 2007.

As previously announced, the company's proved reserves, as of December 31, 2008 were 11.0 million barrels of oil equivalent ("MMboe"), of which 53% was attributable to oil and 47% was attributable to natural gas. Of the 11.0 MMboe of total proved reserves, 65% are categorized as proved developed and 35% are proved undeveloped. Proved reserves as of December 31, 2008 were based on year-end benchmark prices of $41.00 per barrel and $5.71 per Mcf. The present value of future cash flows before income taxes from continuing operations as of December 31, 2008, discounted at 10% (SEC PV10, a non-GAAP measure), totaled $84.0 million. Revisions to the SEC's oil and gas reporting disclosures, effective for registration statements filed on or after January 1, 2010 and annual reports on Form 10-K for fiscal years ending on or after December 31, 2009, will allow for the valuation of reserves using the year's average commodity price rather than the current practice of utilizing commodity pricing on December 31, 2008. Under the SEC rule change, Rex Energy's proved reserves at December 31 would have been approximately 16.9 MMboe, and the present value of future cash flows before income tax would have totaled approximately $415.6 million.

Capital expenditures in 2008 were $136.6 million, of which $49.6 million was spent on the acquisition and leasing of undeveloped properties; $29.4 million was spent for developmental activities; $23.5 million was spent on the Lawrence Field ASP Flood Project in the Illinois Basin; $15.2 million was spent for Marcellus Shale exploratory drilling in the Appalachian Basin; $9.4 million was spent on buildings, equipment, and vehicles; $5.0 million was spent on the acquisition of proved oil and gas properties; and $4.5 million was spent on drilling and recompletions in the Southwestern Region.

The company's capital budget in 2009 is currently $48.6 million. The company is continuing to prepare for its 2009 Marcellus Shale drilling program, which is expected to consist of six to eight net horizontal wells during the year. The company expects to commence drilling its first horizontal well in southwestern Pennsylvania during the first quarter of 2009. In the Illinois Basin, the company is continuing to work with its third party consultants to analyze the results of its two Alkali-Surfactant-Polymer ("ASP") pilots and design its first operational ASP development unit following the completion of the pilot analysis. This analysis is expected to be completed by the end of the first quarter of 2009. Upon completion of the pilot analysis, the company may update its 2009 capital budget to adjust for any changes in the size or scope of planned ASP related activity to be commenced during the year. Rex Energy will continue to monitor commodity prices and service costs throughout the year and remain flexible to adjust capital spending in order to continue to maintain a conservative balance sheet.

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.

The Rex Energy logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5489

Forward-Looking Statements

Except for historical information, statements made in this release, including those relating to significant potential, future earnings, cash flow, capital expenditures, production growth and planned number of wells, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the company's future performance are subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the volatility of oil and gas prices, the costs and results of drilling and operations, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, litigation, uncertainties about reserve estimates, environmental risks and the occurrence of any unanticipated acquisition opportunities. The company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the company's filings with the Securities and Exchange Commission, which are incorporated by reference.

The company's internal estimates of reserves may be subject to revision and may be different from estimates by the company's external reservoir engineers at year end. Although the company believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.

                       REX ENERGY CORPORATION
                     CONSOLIDATED BALANCE SHEETS
                          ($ in Thousands)

                                            December 31,  December 31,
                                                2008          2007
                                             (unaudited)   (audited)
                                            ------------  ------------
  ASSETS
 Current Assets
  Cash and Cash Equivalents                 $      7,046  $      1,085
  Accounts Receivable                              5,840         8,805
  Short-Term Derivative Instruments                8,153            20
  Deferred Taxes                                      --         4,700
  Inventory, Prepaid Expenses and Other            3,068         1,388
                                            ------------  ------------
   Total Current Assets                           24,107        15,998
 Property and Equipment (Successful Efforts
  Method)
  Evaluated Oil and Gas Properties               196,118       171,095
  Unevaluated Oil and Gas Properties              65,564        31,834
  Other Property and Equipment                    19,388         4,397
  Wells and Facilities in Progress                29,629        10,457
  Pipeline                                         3,457         2,193
                                            ------------  ------------
   Total Property and Equipment                  314,156       219,976
  Less: Accumulated Depreciation, Depletion
   and Amortization                              (64,298)      (28,805)
                                            ------------  ------------
   Net Property and Equipment                    249,858       191,171
  Assets Held for Sale                            18,852        26,361
  Intangible Assets and Other Assets- Net          1,628         2,034
  Long-Term Derivative Instruments                 7,561            --
  Goodwill                                            --        32,700
                                            ------------  ------------
 Total Assets                               $    302,006  $    268,264
                                            ============  ============

  LIABILITIES AND EQUITY
 Current Liabilities
  Accounts Payable                          $      7,180  $      7,028
  Accrued Expenses                                 7,388         2,662
  Short-Term Derivative Instruments                   --        10,893
  Current Deferred Tax Liability                   2,785            --
  Current Portion of Long-Term Debt                   --            29
                                            ------------  ------------
   Total Current Liabilities                      17,353        20,612

  Senior Secured Line of Credit and
   Long-Term Debt                                 15,000        27,207
  Long-Term Derivative Instruments                 1,476        18,843
  Long-Term Deferred Tax Liability                11,995        30,300
  Other Deposits and Liabilities                   7,322           345
  Liabilities Related to Assets Held for
   Sale                                            1,838         1,223
  Future Abandonment Cost                         15,174         5,297
                                            ------------  ------------
 Total Liabilities                          $     70,158  $    103,827
 Commitments and Contingencies
 Owners' Equity
  Common Stock, $.001 par value per share,
  100,000,000 shares authorized and
  36,569,712 shares issued and outstanding
  on December 31, 2008 and 30,794,702
  shares issued and outstanding on
  December 31, 2007                                   37            31
  Additional Paid-In Capital                     291,133       175,170
  Accumulated Deficit                            (59,322)      (10,640)
  Other Comprehensive Income                          --          (124)
                                            ------------  ------------
   Total Owners' Equity                          231,848       164,437
                                            ------------  ------------
 Total Liabilities, Minority Interests and
  Owners' Equity                            $    302,006  $    268,264
                                            ============  ============


                              REX ENERGY CORPORATION
                CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
          (Unaudited, $ and Shares in Thousands Except per Share Data)

                                                           Rex Energy
                                                           Corporation
                                                          Consolidated
                 Rex Energy    Rex Energy    Rex Energy   and Combined
                 Corporation   Corporation  Corporation    Predecessor
                Consolidated  Consolidated  Consolidated    Companies
                    Three Months Ended             Years Ended
                       December 31,                December 31,
                --------------------------  --------------------------
                    2008          2007          2008          2007
                ------------  ------------  ------------  ------------
 OPERATING
  REVENUE
  Oil and
   Natural Gas
   Sales        $     13,248  $     18,721  $     84,013  $     58,133
  Other Revenue           30            24           123           101
  Realized Gain
   (Loss) on
   Derivatives         1,537        (4,223)      (16,167)       (6,198)
                ------------  ------------  ------------  ------------
   TOTAL
    OPERATING
    REVENUE           14,815        14,522        67,969        52,036

 OPERATING
  EXPENSES
  Production and
   Lease
   Operating
   Expenses            6,095         5,441        26,511        22,361
  General and
   Administrative
   Expense             4,303         2,946        15,185         7,793
  Impairment
   Expense            71,349            --        71,349            --
  (Gain) Loss on
   Sale or
   Disposal of
   Oil and Gas
   Properties             42            10         6,468           (12)
  Exploration
   Expense               866         1,238         3,261         1,238
  Depreciation,
   Depletion,
   Amortization
   and Accretion      23,543         5,552        37,904        17,804
                ------------  ------------  ------------  ------------
   TOTAL
    OPERATING
    EXPENSES         106,198        15,187       160,678        49,184
                ------------  ------------  ------------  ------------

   INCOME (LOSS)
    FROM
    OPERATIONS       (91,383)         (665)      (92,709)        2,852

 OTHER INCOME
  (EXPENSE)
  Interest
   Income                  8            12           328            15
  Interest
   Expense              (316)         (361)       (1,342)       (5,646)
  Unrealized
   Gain (Loss)
   on Derivatives     55,858       (17,155)       43,746       (26,250)
  Other Income
   (Expense)            (107)            3          (168)          (18)
                ------------  ------------  ------------  ------------
   TOTAL OTHER
    INCOME
    (EXPENSE)         55,443       (17,501)       42,564       (31,899)

 NET LOSS FROM
  CONTINUING
  OPERATIONS
  BEFORE MINORITY
  INTEREST AND
  INCOME TAXES       (35,940)      (18,166)      (50,145)      (29,047)
 Minority Share
  of Net Loss             --            --            --         6,152
                ------------  ------------  ------------  ------------
 LOSS FROM
  CONTINUING
  OPERATIONS
  BEFORE INCOME
  TAX                (35,940)      (18,166)      (50,145)      (22,895)
 Income Tax
  Benefit              3,378         7,222         9,167         7,365
                ------------  ------------  ------------  ------------
 NET LOSS FROM
  CONTINUING
  OPERATIONS         (32,562)      (10,944)      (40,978)      (15,530)
 Income (Loss)
  from
  Discontinued
  Operations,
  Net of Income
  Taxes               (7,741)          373        (7,704)         (681)
                ------------  ------------  ------------  ------------
    NET LOSS    $    (40,303) $    (10,571) $    (48,682) $    (16,211)
                ------------  ------------  ------------  ------------

 Earnings per
  common
  share(1):
 Basic and
  Diluted - loss
  from
  continuing
  operations    $      (0.89) $      (0.36) $      (1.18) $      (0.37)
 Basic and
  Diluted - loss
  from
  discontinued
  operations           (0.21)         0.01         (0.22)         0.02
                ------------  ------------  ------------  ------------
 Basic and
  Diluted - net
  loss          $      (1.10) $      (0.35) $      (1.40) $      (0.35)
 Basic and
  Diluted -
  weighted
  average shares
  of common stock
  outstanding         36,570        30,795        34,582        30,795

 (1) Earnings per common share for 2007 represents a loss from
     continuing operations of $11,304 and a gain from discontinued
     operations of $644 for the 5 month period ending December 31, 2007


                          REX ENERGY CORPORATION
                  CONSOLIDATED OPERATIONAL HIGHLIGHTS
                             (Unaudited)

                             Three Months Ended       Years Ended
                                December 31,          December 31,
                            --------------------  --------------------
                              2008        2007      2008       2007
                            ---------  ---------  ---------  ---------

 Production:
  Oil (Bbls)                  201,495    196,490    776,185    769,911
  Natural gas (Mcf)           272,598    228,640  1,036,891    786,095
   Total (BOE)(a)             246,928    234,597    949,000    900,927

 Average daily production:
  Oil (Bbls)                    2,190      2,136      2,121      2,109
  Natural gas (Mcf)             2,963      2,485      2,833      2,154
   Total (BOE)(a)               2,684      2,550      2,593      2,468

 Average sales prices before
  derivatives:
  Oil (per Bbl)             $   55.65  $   86.57  $   95.63  $   68.07
  Natural gas (per Mcf)     $    7.47  $    7.48  $    9.43  $    7.28
   Total (per BOE)(a)       $   53.65  $   79.80  $   88.53  $   64.53

 Average NYMEX prices(b)
  Oil (per Bbl)             $   58.51  $   90.68  $   99.74  $   72.31
  Natural gas (per Mcf)     $    6.38  $    6.97  $    8.89  $    6.83

 (a) Natural gas is converted at the rate of six Mcf to one BOE and
     oil is converted at a rate of one Bbl to one BOE
 (b) Based upon the average of bid week prompt month prices


                        REX ENERGY CORPORATION
                   REGIONAL OPERATIONAL HIGHLIGHTS
                             (Unaudited)

                                 Production and Revenue by Basin
                            ------------------------------------------
                             Three Months Ended       Years Ended
                                December 31,          December 31,
                            --------------------  --------------------
                              2008        2007      2008        2007
                            ---------  ---------  ---------  ---------

 Appalachian
  Revenues before
   derivatives- Natural gas
   ($ in Thousands)         $   2,035  $   1,710  $   9,783  $   5,725
  Volumes (MCF)               272,598    228,640  1,036,891    786,095
  Average price before
   derivatives              $    7.47  $    7.48  $    9.43  $    7.28

 Illinois
  Revenues before
   derivatives- Oil ($ in
   Thousands)               $  11,213  $  17,011  $  74,230  $  52,408
  Volumes (BBL)               201,495    196,490    776,185    769,911
  Average price before
   derivatives              $   55.65  $   86.57  $   95.63  $   68.07


                        REX ENERGY CORPORATION
                       OIL AND GAS DERIVATIVES
                             (Unaudited)

                          % of Current
    Year        Volume     Production   Average Floor  Average Ceiling
    ----      ----------  ------------  -------------  ---------------

     Oil
     ---
    2009      635 MBbls       85%         $ 63.17          $ 74.77
    2010      588 MBbls       82%         $ 62.71          $ 79.31

 Natural Gas
 -----------
    2009       950 Mmcf       95%          $ 7.01           $ 8.91
    2010       960 Mmcf      100%          $ 7.56          $ 10.48
    2011       720 Mmcf       78%          $ 8.00          $ 14.75


Non-GAAP Financial Measures

EBITDAX

"EBITDAX", for any defined period, the sum of net income for such period plus the following expenses, charges or income to the extent deducted from or added to net income in such period: interest, income taxes, depreciation, depletion, amortization, accretion, unrealized losses from financial derivatives, exploration expenses, and other similar non-cash charges, minus all non-cash income, including but not limited to, income from unrealized financial derivatives, added to net income. EBITDAX, as defined above, is used as a financial measure by Rex Energy's management team and by other users of its financial statements, such as the company's commercial bank lenders, to analyze such things as:
  • Rex Energy's operating performance and return on capital in comparison to those of other companies in its industry, without regard to financial or capital structure;
  • The financial performance of the company's assets and valuation of the entity, without regard to financing methods, capital structure or historical cost basis;
  • Rex Energy's ability to generate cash sufficient to pay interest costs, support its indebtedness and make cash distributions to its
  • The viability of acquisitions and capital expenditure projects and the overall rates or return on alternative investment opportunities
EBITDAX is not a calculation based on GAAP financial measures and should not be considered as an alternative to net income (loss) in measuring the company's performance, nor used as an exclusive measure of cash flow, because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions, and other sources and uses of cash, which are disclosed in the company's statements of cash flows.

Rex Energy has reported EBITDAX because it is a financial measure used by its existing commercial lenders, and because this measure is commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt. You should carefully consider the specific items included in the company's computations of EBITDAX. While Rex Energy has disclosed its EBITDAX to permit a more complete comparative analysis of its operating performance and debt servicing ability relative to other companies, you are cautioned that EBITDAX as reported by the company may not be comparable in all instances to EBITDAX as reported by other companies. EBITDAX amounts may not by fully available for management's discretionary use, due to requirements to conserve funds for capital expenditures, debt service and other commitments.

Rex Energy believes that EBITDAX assists its lenders and investors in comparing a company's performance on a consistent basis without regard to certain expenses, which can vary significantly depending upon accounting methods. Because the company may borrow money to finance its operations, interest expense is a necessary element of its costs and ability to generate cash available for distribution. Because Rex Energy uses capital assets, depreciation and amortization are also necessary elements of its costs. Additionally, the company is required to pay federal and state taxes, which are necessary elements of its costs. Therefore, any measures that exclude these elements have material limitations.

To compensate for these limitations, Rex Energy believes it is important to consider both net income (loss) determined under GAAP and EBITDAX to evaluate its performance.

The following table presents a reconciliation of the company's net (loss) from continuing operations to its EBITDAX from continuing operations for each of the periods presented ($ in thousands):

                                 Three Months Ended     Years Ended
                                   December 31,        December 31,
                                ------------------  ------------------
                                  2008      2007      2008      2007
                                --------  --------  --------  --------
 Net Loss From Continuing
  Operations                    $(32,562) $(10,944) $(40,978) $(15,530)
  Add Back Depletion,
   Depreciation, Amortization &
   Accretion                      23,543     5,552    37,904    17,804
  Add Back Non-Cash
   Compensation Expense            1,423       211     2,990       211
  Add Back Interest Expense          316       361     1,342     5,646
  Add Back Exploration and
   Impairment Expenses            72,215     1,238    74,610     1,238
  Less Interest Income                (8)      (12)     (328)      (15)
  Add Back (Gains) Losses on
   Disposal of Assets                 42        10     6,468       (12)
  Add Back Unrealized Losses
   (Gains) from Financial
   Derivatives                   (55,858)   17,155   (43,746)   26,250
  Less Minority Interest Share
   of Net Loss                        --        --        --    (6,152)
  Less Income Tax Benefit         (3,378)   (7,222)   (9,167)   (7,365)
                                --------  --------  --------  --------
 EBITDAX From Continuing
  Operations                    $  5,733  $  6,349  $ 29,095  $ 22,075


Earnings Comparable with Analyst Estimates

"Earnings Comparable with Analyst Estimates" means, for any period, the sum of net income for such period plus the following expenses, charges or income to the extent deducted from or added to net income in such period: minority interest share of net income which were acquired as part of the company's reorganization on July 31, 2007, deferred income taxes, unrealized gains or losses from financial derivatives, minus gains from unrealized financial derivatives, minus deferred income tax benefits, added to net income. Earnings Comparable with Analyst Estimates, as defined above, is used as a financial measure by Rex Energy's management team and by other users of its financial statements, to analyze its financial performance without regard to minority interests which were all acquired as part of the company's reorganization on July 31, 2007, non-cash deferred taxes and non-cash unrealized losses or gains from oil and gas derivatives. Earnings Comparable with Analyst Estimates is not a calculation based on GAAP financial measures and should not be considered as an alternative to net income (loss) in measuring the company's performance.

Rex Energy has reported Earnings Comparable with Analyst Estimates because it believes that this measure is commonly reported and widely used by investors as an indicator of a company's operating performance. You should carefully consider the specific items included in the company's computation of this measure. You are cautioned that Earning Comparable with Analyst Estimates as report by Rex Energy may not be comparable in all instances to that reported by other companies.

To compensate for these limitations, the company believes it is important to consider both net income determined under GAAP and Earnings Comparable with Analyst Estimates.

The following table presents a reconciliation of Rex Energy's net (loss) from continuing operations to its Earnings Comparable with Analyst Estimates for each of the periods presented ($ in thousands):

                                 Three Months Ended     Years Ended
                                   December 31,        December 31,
                                --------------------------------------
                                  2008      2007      2008      2007
                                --------  ------------------  --------

 Net Loss From Continuing
  Operations                    $(32,562) $(10,944) $(40,978) $(15,530)
 Adjustment for certain
  non-cash items
  Minority Interest Share of
   Loss                               --        --        --    (6,152)
  Unrealized (Gain) Loss on
   Derivatives                   (55,858)   17,155   (43,746)   26,250
  Exploration and Impairment
   Expense                        72,215     1,238    74,610     1,238
  Non-cash Compensation Expense    1,423       211     2,990       211
  (Gain) Loss on Sale or
   Disposal of Assets                 42        10     6,468       (12)
  Income Tax Benefit              (3,378)   (7,222)   (9,167)   (7,365)
                                --------  --------  --------  --------

 Net Income (Loss) From
  Continuing Operations Before
  Income Taxes Comparable to
  Analysts Estimates            $(18,118) $    448  $ (9,823) $ (1,360)


Discontinued Operations

On September 3, 2008, Rex Energy announced its plans to divest its operations in the Southwestern Region, which are located predominately in the Permian Basin. Pursuant to accounting rules for discontinued operations, the company has classified all 2008 and prior period amounts to its operations in the Southwestern Region as discontinued operations.

As of December 31, 2008, Rex Energy recorded an impairment charge of $8.7 million for the write-down of its Southwestern Region assets to the fair value associated with the sale. Summarized financial information for discontinued operations is set forth below ($ in thousands):

                                Three Months Ended     Years Ended
                                   December 31,        December 31,
                                ------------------  ------------------
                                  2008      2007      2008      2007
                                --------  --------  --------  --------

 Revenues:
  Oil and Gas Sales             $     10  $  1,523  $  6,051  $  5,392
  Other Revenue                       --        84       304       350
                                --------  --------  --------  --------
   Total Operating Revenue            10     1,607     6,355     5,742
                                --------  --------  --------  --------

 Costs and Expenses:
  Production and Lease Operating
   Expense                            30       703     1,799     2,116
  General and Administrative
   Expense                           227       236       907       794
  Exploration Expense of Oil and
   Gas Properties                      3         6     2,198     1,710
  Impairment Expense of Oil and
   Gas Properties                  8,729        --     8,729        --
  Depreciation, Depletion,
   Amortization and Accretion        (35)      207     1,565     1,817
  (Gain) Loss on Sale of Oil
   and Gas Properties                 --        --        41      (173)
  Unrealized Loss from
   Derivatives                       558        --       558        --
  Other Income                        --      (168)       (2)     (189)
                                --------  --------  --------  --------
   Total Costs and Expenses        9,512       984    15,795     6,075
                                --------  --------  --------  --------
 Income (Loss) from Discontinued
  Operations Before Income Taxes  (9,502)      623    (9,440)     (333)
  Income Tax (Expense) Benefit     1,761      (250)    1,736      (348)
                                --------  --------  --------  --------
 Income (Loss) From Discontinued
  Operations, net of taxes      $ (7,741) $    373  $ (7,704) $   (681)
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CONTACT: 
Rex Energy Corporation
Julia Williams, Investor Relations Coordinator
(814) 278-7130
jwilliams@rexenergycorp.com