Rex Energy Corp. enters into exploration agreement with Williams in the Marcellus shale

Rex Energy Corp. announced an agreement with a subsidiary of Williams to pursue the development of the Marcellus shale. Under the terms of the agreement, Williams will acquire a 50% interest in Rex Energy's leasehold interests in Westmoreland, Clearfield, and Centre Counties in Pennsylvania, covering approximately 44,000 net acres for approximately $33 million, which will be paid through a "drill to earn" structure.

The participation and exploration agreement effectively provides that, for Williams to earn its 50% interest in the project areas, Williams will bear 90% of all costs and expenses incurred in the drilling and completion of all wells jointly drilled in the project areas until such time as Williams has invested $74 million ($33 million on behalf of Rex

Energy and $41 million for Williams' 50% share of the wells). Subject to certain termination rights contained in the agreement, Williams must fund all of the carry prior to December 31, 2011 or make a cash payment to Rex Energy for the remaining carry amount that has not been incurred at that time.

After Williams funds its initial carry, the parties will share all costs of joint venture operations in accordance with their participating interests, which are expected to be on a 50/50 basis. Additionally, Williams reimbursed Rex Energy approximately $3.6 million for Williams' share of certain expenses incurred in the joint venture project areas that Rex Energy previously paid. Rex Energy will continue to operate the project areas through the end of 2009 and Williams will operate thereafter.

In Rex Energy's Butler County project area, the company is pleased to announce that it has closed on the acquisition of the 50% interest previously owned by its joint venture partner in certain areas of Butler County, Pennsylvania for $4.2 million. This acquisition gives Rex Energy a 100% interest in these areas and increases the company's position by 6,500 net acres to approximately 21,250 net acres in this project area. These additional acres are primarily located in the immediate vicinity of the company's four producing Marcellus shale vertical wells, the company's recently drilled and completed Marcellus shale horizontal well, and the company's natural gas processing plant.