PostRock Acquires Oklahoma Properties
October 15 2013 - 7:00AM
PostRock Energy Corporation (Nasdaq:PSTR) today
announced that it was acquiring approximately 22,000 net acres of
leasehold in Pottawatomie, Cleveland and McCain Counties in central
Oklahoma. The properties are being purchased for $10 million,
including $3.0 million of cash and $7.0 million of PostRock common
stock. Approximately 9,000 of the 22,000 net acres are held by
production. Currently, production approximates 50 net barrels
of oil equivalent ("BOE") per day from a variety of
formations. Producing depths range from 3,000 to 6,000
feet. Closing is expected within 30 days, with an effective
date of July 1, 2013.
PostRock estimates that the net proved reserves being acquired
total 574,000 BOE, of which 95% is oil and 60% is classified
developed. On that basis, acquisition cost equates to $17 per
BOE of proved reserves. The Company believes there is
significant potential to develop additional reserves in multiple
reservoirs. The most significant is the Woodford, a formation which
is believed to range from 200 feet to 300 feet in thickness at
depths of 4,500 feet to 6,500 feet across the entirety of the
acreage.
Commenting, Terry W. Carter, President and Chief Executive
Officer of the Company, said: "This transaction is an important
step in our effort to add oil reserves and development
opportunities in central Oklahoma. The acquisition brings our
leasehold position in this area to more than 34,000 net
acres. It adds production, proved reserves and meaningful
upside potential from historically productive reservoirs as well as
significant upside potential from the Woodford. With this
acquisition, we believe we could have as many as 200 potential
drilling locations with exposure to more than 10 million BOE's of
recoverable reserves. Importantly, the sellers' willingness to
become major stockholders in the Company through the transaction is
a significant third party endorsement of how far the Company has
come."
PostRock Energy Corporation is engaged in the acquisition,
exploration, 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 minor oil and gas
producing properties in the Appalachian Basin.
Forward-Looking Statements
Opinions, forecasts, projections or statements, other than
statements of historical fact, are forward-looking statements that
involve risks and uncertainties. Forward-looking statements in this
announcement are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to be correct. Actual results may
differ materially due to a variety of factors, some of which may
not be foreseen by PostRock. These risks and other risks are
detailed in the Company's filings with the Securities and Exchange
Commission, including risk factors listed in the Company's Annual
Report on Form 10-K and other filings with the SEC. The Company's
filings with the SEC may be found at www.pstr.com or www.sec.gov.
By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes
after the date of this release.
CONTACT: David J. Klvac
EVP & Chief Financial Officer
dklvac@pstr.com
(405) 815-4304
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