PostRock Sets 2013 Capital Budget
January 04 2013 - 6:00AM
PostRock Energy Corporation ("PostRock")
(Nasdaq:PSTR) today announced a $29.7 million capital budget for
2013. The budget includes $25.6 million for drilling and
recompletions, $600,000 for acreage and $3.6 million for
maintenance. Given the Company's improved financial position, the
budget represents a more than 40% increase over 2012 spending.
PostRock expects its 2013 development work to more than double oil
production. With minimal capital allocated to gas development, gas
production is expected to decline 13%. On a 22:1 price
equivalency basis, production is expected to increase approximately
5%. On a traditional 6:1 conversion, production is expected to
decline 7%.
At year-end, PostRock held approximately 420,000 net acres in
the Cherokee Basin and approximately 1,500 net acres in central
Oklahoma, with each providing opportunities for multi-year growth
in production and reserves. Approximately 70% of the 2013 budget
targets oil projects in the Cherokee while 25% is expected to
target oil projects in central Oklahoma. The remaining capital
will fund a limited number of oil recompletions in Appalachia as
well as maintenance expenditures. Lease operating expenses as
well as general and administrative expenses are expected to
continue to decrease. The Company expects to fund the 2013
capital budget with internal cash flow and availability under its
new revolving credit facility. At year-end, the Company had
$57.5 million of debt outstanding, leaving $32.5 million available
under the facility.
Commenting, Terry W. Carter, the Company's President and CEO,
said, "Our 2013 capital program should significantly increase our
oil production. On a price equivalency basis we began 2012
with only 7% of our production represented by oil. By December
31st, that had risen to 14%. We expect oil to comprise 27% of
production in 2013 and it should reach 32% by the end of the
year. While growing reserves and production, we will continue
to focus on reducing expenses. Once natural gas prices
recover, and we are confident they eventually will, we have a
significant opportunity to exploit the Company's sizeable inventory
of gas oriented development projects. As we look ahead, we are
confident that PostRock is well positioned to generate very
attractive shareholder returns."
PostRock Energy Corporation is engaged in the acquisition,
development and production of oil and natural gas, primarily in the
Cherokee Basin of Kansas and Oklahoma. The Company owns and
operates over 3,000 wells and nearly 2,200 miles of gas gathering
lines in the Basin. It also owns and operates oil producing
properties in central Oklahoma and oil and gas producing properties
in Appalachian.
Opinions, forecasts, projections and statements that are not
historical facts are forward-looking statements that involve risks
and uncertainties. Such statements in this announcement are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. While the Company believes
expectations reflected in these statements are reasonable, there is
no assurance they will prove correct. Actual results may differ
materially due to unforeseen factors. These risks and others are
detailed in the Company's filings with the Securities and Exchange
Commission which may be found at www.pstr.com or www.sec.gov. In
making forward-looking statements, the Company undertakes no
obligation to update them.
The PostRock Energy Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7221
CONTACT: North Whipple
Director, Finance & Investor Relations
PostRock Energy Corporation
nwhipple@pstr.com
(405) 702-7423
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