Rex Energy Corp. (NASDAQ: REXX) is planning to launch a one-for-10 reverse stock split of its common stock in order to maintain its listing on NASDAQ, the State College, Pa.-based company said May 5.
As a result of the reverse stock split, the number of outstanding shares of Rex Energy’s common stock will be reduced to about 9.9 million from about 99 million.
Rex Energy said the reverse stock split is intended to increase the market price per share of its stock to maintain its listing on NASDAQ, as well as broaden the range of potential investors in the company to include those who have share price minimum requirements that currently are not met.
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On May 4, Rex Energy announced its updated two-year financial and operational plan, which included a net debt-to-EBITDAX reduction of roughly 55%-65% by year-end 2018 driven by increased production growth and cash flow.
"Rex Energy's updated two-year plan remains consistent with the goals we set for the company—increased liquidity, increased production growth, enhancing cash flow and reduction to the company's overall debt metrics," Tom Stabley, president and CEO of Rex Energy, said in a statement on May 4. "We are deploying additional capital towards our highest return areas, utilizing existing pads and adding additional wells to pads already in the plan. This type of deployed capital will allow us to maximize our capital efficiency resulting in accelerated cash flow growth while reducing costs and enhancing our balance sheet through improved debt metrics."
The reverse stock split is expected to take place after market close on May 12 and begin trading on a split-adjusted basis on NASDAQ at the market open on May 15, according to the company release.
ComputerShare Trust Co. NA is Rex Energy’s transfer agent for the split.
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