Constellation Energy Partners Announces Settlement of the PostRock Litigation
March 31 2014 - 7:25PM
Business Wire
Constellation Energy Partners LLC (NYSE MKT: CEP) today
announced that the PostRock Litigation has been settled. The
PostRock Litigation was between CEP, certain of its current and
former managers and executive officers, Constellation Energy
Partners Management, LLC (“CEPM”), a wholly owned subsidiary of
PostRock Energy Corporation (NASDAQ: PSTR), Sanchez Energy Partners
I, L.P. (“SEPI”) and Sanchez Oil & Gas Corporation (“SOG”).
Following the consummation of the settlement, SEPI will be the sole
holder of CEP’s Class A units and it is expected that by the end of
2014 CEPM will have little or no continuing ownership interest in
CEP.
“With the settlement of the PostRock Litigation, CEP can resume
developing what we believe will be a transformative relationship
with Sanchez Oil & Gas,” commented Stephen R. Brunner,
President and Chief Executive Officer of CEP. “We expect that the
relationship will provide CEP with additional asset acquisition
opportunities, a means to achieving enhanced deal flow, and an
opportunity to leverage the skills and personnel of Sanchez Oil
& Gas, a proven operator with an outstanding technical team and
experience that spans across multiple basins in the U.S.”
As a result of the settlement, the Class A units acquired by
SEPI in the August 2013 transaction have been returned to CEP and
cancelled; CEPM transferred 100% of its CEP Class A units to SEPI
and also transferred 414,938 of CEP’s Class B units to SEPI in
exchange for an aggregate payment of $1.0 million; and CEP paid
$6.5 million to CEPM. In addition, pursuant to the terms of the
settlement, CEPM agrees to sell its remaining Class B units
over the next nine months, with SEPI providing up to a $5.0 million
backstop payment to CEPM to the extent the proceeds received by
CEPM from such sale do not meet or exceed a specified amount.
As a result of the settlement, the settling parties agree to
file a stipulation in the Court of Chancery of the State of
Delaware seeking to lift the preliminary injunction issued on
December 3, 2013 and dismiss the PostRock Litigation with
prejudice. The settlement agreement includes mutual releases
between the plaintiffs and defendants.
Additional Information
Additional information about the PostRock Litigation and
settlement can be found in the company’s filings with the
Securities and Exchange Commission and on the company’s Web site
(http://www.constellationenergypartners.com).
About the Company
Constellation Energy Partners LLC is a limited liability company
focused on the acquisition, development and production of oil and
natural gas properties, as well as related midstream assets.
Forward-Looking Statements
We make statements in this news release that are considered
forward-looking statements within the meaning of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as
amended. These forward-looking statements are largely based on our
expectations, which reflect estimates and assumptions made by our
management. These estimates and assumptions reflect our best
judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to be
reasonable, they are inherently uncertain and involve a number of
risks and uncertainties that are beyond our control, including,
without limitation, whether the court will approve the settlement
discussed in this news release. In addition, management's
assumptions about future events may prove to be inaccurate.
Management cautions all readers that the forward-looking statements
contained in this news release are not guarantees of future
performance, and we cannot assure you that such statements will be
realized or the forward-looking events and circumstances will
occur. Actual results may differ materially from those anticipated
or implied in the forward-looking statements due to factors listed
in the "Risk Factors" section in our SEC filings and elsewhere in
those filings. All forward-looking statements speak only as of the
date of this news release. We do not intend to publicly update or
revise any forward-looking statements as a result of new
information, future events or otherwise. These cautionary
statements qualify all forward-looking statements attributable to
us or persons acting on our behalf.
Constellation Energy Partners LLCInvestor Contact:Charles C.
Ward, 877.847.0009orGeneral Inquiries:
877.847.0008www.constellationenergypartners.com
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