Rex Energy Corp. (NASDAQ: REXX) on Tuesday said it formed a 60/40 joint venture with Stonehenge Energy Resources LP.
The joint venture, which will build a high pressure gathering system and cryogenic gas processing plant in Butler County, PA, will operate through Keystone Midstream Services LLC and will initially invest up to $25 million to build the gathering system and processing plant.
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Rex owns 40 percent of Keystone Midstream and has contributed to the joint venture its gathering system in Butler County, PA. Stonehenge owns 60 percent of Keystone Midstream and has contributed to the joint venture the Sarsen Gas plant.
In conjunction with the formation of the joint venture, Rex Energy has entered into a gathering and processing agreement with Keystone Midstream.
Under the agreement, 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.
Shares of Rex rose 57 cents, or 4.8 percent, to $12.56 in midday trading.
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