New York, December 06, 2012 -- Moody's Investors Service assigned a B3 rating to Rex Energy Corporation (REXX) proposed $250 million senior notes due 2020. Moody's also assigned a B2 Corporate Family Rating (CFR) and Probability of Default Rating (PDR), and an SGL-3 Speculative Grade Liquidity (SGL) rating. The outlook is stable.

Net proceeds from the notes offering will be used to repay all outstanding debt under REXX's senior secured revolving credit facility and second lien term loan and for general corporate purposes.

Issuer: Rex Energy Corporation

..Assignments:

Corporate Family Rating, Assigned B2

Probability of Default rating, Assigned B2

Speculative Grade Liquidity Rating, Assigned SGL-3

US$250 million Senior Unsecured Regular Bond/Debenture, Assigned B3

US$250 million Senior Unsecured Regular Bond/Debenture, Assigned LGD5-76%

RATINGS RATIONALE

The B2 CFR reflects REXX's small size, limited production base, high capital requirements through 2015 and execution risks surrounding its aggressive development program concentrated in the Marcellus and Utica Shale plays in the Appalachian Basin. The B2 CFR is supported by REXX's significant reserve, production and cash flow growth potential that should be realized as it transitions towards liquids-rich production. REXX also benefits from a high level of operational control that affords both operational and financial flexibility, an active commodity hedging program and adequate liquidity that should support development and production growth.

REXX's operations are concentrated on its Marcellus and Utica Shale drilling prospects in the Appalachian Basin, and in the Illinois Basin where the company has conventional oil production and is implementing enhanced oil recovery projects. Over the past year, the company has shifted its operating focus toward liquids-rich production in the Appalachian Basin. This shift is supported by extensive drilling by the industry and de-risking of the Utica Shale play and has proven transformative with the company growing its proved reserve base to over 102 million barrels of oil equivalent (MMboe) and its liquids mix rising to approximately 40%. The company's average daily production has increased 66% from year-end 2011 to 10,800 boe per day for the nine months ending September 2012.

The SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity. Pro forma the notes offering, REXX will have approximately $72.5 million cash on hand and full availability under its $240 million borrowing base revolver, which expires in September 2015. Balance sheet cash and liquidity provided by its credit facility should be sufficient to fund projected out-spending of cash flow through mid-2014. The revolving credit facility contains financial covenants that require a minimum current ratio of 1.0x, a minimum EBITDAX / interest coverage ratio of 3.0x and maximum total debt / EBITDAX leverage ratio of 4.25x. The company should remain in compliance with these covenants through the end of 2013.

The B3 senior unsecured note rating reflects both the overall probability of default of REXX, to which Moody's assigns a PDR of B2, and a loss given default of LGD5-76%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B2 CFR under Moody's Loss Given Default Methodology.

The stable outlook assumes REXX will manage its growth without meaningfully weakening its liquidity profile.

It is unlikely that REXX will be upgraded in the near term due to its modest average daily production volumes. Successful execution of its Appalachian development projects will dictate upward ratings progression. An upgrade would be considered if production can be sustained above 20,000 boe per day and maximum debt to average daily production is less than $25,000 per boe.

A downgrade would be consider if REXX's debt to average daily production rises towards $30,000 boe or liquidity tightens.

The principal methodology used in rating Rex Energy was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Rex Energy Corporation (REXX) is an exploration and production (E&P) company with operations concentrated in the Appalachian Basin and the Illinois Basin. REXX is head-quartered in State College, Pennsylvania.

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Michael Somogyi Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Steven Wood MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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