FOR IMMEDIATE RELEASE ENRD

WEDNESDAY, APRIL 4, 2007 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

United States Announces Clean Air Act

Settlement with Two Oil and Gas
Companies in Illinois
WASHINGTON – The United States government and the state of Illinois today
reached a Clean Air Act (CAA) settlement with oil producers Rex Energy Operating
Corp. and PennTex Resources Illinois, Inc. which will result in reduced emissions
from the companies’ facilities in Illinois. The settlement is the result of an exposure
investigation which was initiated in response to citizen complaints, and requires the
two companies to implement preventative measures and controls that will reduce
harmful hydrogen sulfide emissions at their facilities.

Beginning in June 2006, the EPA and the Agency for Toxic Substances and Disease
Registry monitored hydrogen sulfide concentrations at five residences, an
elementary school, and two parks in Bridgeport and Petrolia, Ill. The monitoring
data indicated that hydrogen sulfide concentrations posed a risk to public health.
Hydrogen sulfide is a colorless gas that is malodorous at very low concentrations,
deadly at very high concentrations, and can cause detrimental health effects at
intermediate concentrations.

In a complaint filed at the same time as the consent decree, the U.S. alleged that the
companies were required to take action at their oil production facilities because air
pollution sources were causing or contributing to hydrogen sulfide emissions that
were presenting an imminent and substantial endangerment to public health or
welfare or the environment under the Emergency powers section of the CAA. “The
emissions reductions achieved through today’s settlement are evidence of the
continued progress we are achieving with industry, through the cooperative
enforcement efforts of federal and state governments,” said Matthew J. McKeown,
Acting Assistant Attorney General for the Justice Department’s Environment and
Natural Resources Division.

“I am pleased that the companies stepped up to begin addressing this problem that
had plagued the community for far too long,” said Mary Gade, Regional
Administrator for U.S. EPA Region 5. “The hydrogen sulfide emissions were of
great concern to me because the people who live and work in the area deserve to be
able to breathe clean air.” Rex Energy Operating Corp., headquartered in State
College, Pa., operates numerous affiliated oil and gas companies including PennTex
Resources Illinois, Inc., in Bridgeport and Petrolia. PennTex owns and operates four
fields in southern Illinois and Indiana, covering about 20,000 acres. The largest field
is located in Lawrence County, Ill., and contains 1,300 oil production wells, some
of which are located on or near residential properties.

The crude oil and brine water mixture from the Lawrence County well-field
contains high concentrations of dissolved and associated gases, including hydrogen
sulfide. At a typical production well, crude oil and brine water are pumped to the
surface through pipes to a receiver tank located at “gathering facilities” or tank
farms. There, the crude and brine water separate. The crude oil then flows by
gravity into a stock tank where it is off loaded by the crude oil purchasers’ tank
trucks. The brine water flows into a different tank and eventually is injected back
into a well to force out more oil and water in the production wells. During this
process, hydrogen sulfide escapes from the oil and water and is released to the air.

Once fully implemented, Rex Energy and PennTex will reduce their emissions of
the harmful air pollutants by installing flares to incinerate the hydrogen sulfide, to
install better controls at the gathering facilities, and to take other steps to minimize
hydrogen sulfide emissions from eight of their facilities.

The consent decree was lodged in U.S. District Court for the Southern District of
Illinois. The consent decree will be subject to a 30-day public comment period and
subsequent judicial approval, and is available on the Justice Department Web site at
http://www.usdoj.gov/enrd/Consent_Decree.html.

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