PostRock Closes Two Acquisitions
November 04 2013 - 7:00AM
PostRock Energy Corporation (Nasdaq:PSTR) today
announced that it closed two acquisitions on November 1, 2013.
The first was the previously announced acquisition of
approximately 22,000 net acres of leasehold in Pottawatomie,
Cleveland and McClain Counties in central Oklahoma. PostRock paid
$3.4 million of cash and issued 4,516,129 shares of its common
stock as consideration.
In the second transaction, PostRock acquired a 50% working
interest in 110 operated acres and three producing wells from one
of its working interest partners in Seminole County, Oklahoma.
PostRock now owns a 100% working interest in the properties.
Currently, production from the three wells is approximately 20
barrels of oil per day. PostRock paid $750,000 of cash as
consideration. PostRock estimates that the net proved reserves
acquired total 110,000 barrels of oil, of which approximately 40%
is classified developed. On that basis, acquisition cost equates to
$7 per barrel of proved reserves.
Commenting, Terry W. Carter, President and Chief Executive
Officer of the Company, said: "As previously announced, the
acquisition of properties in Pottawatomie, Cleveland and McClain
Counties is an important step in our effort to add oil reserves and
development opportunities in central Oklahoma. The working interest
acquisition in Seminole County increases our working ownership from
50% to 100% in three producing wells on 110 acres, all held by
production. We expect to begin development workovers on these wells
in November. Development workovers on wells in the Seminole County
field this year have cost approximately $325,000 with payouts
forecast to average approximately one year and rates of return
forecast to average more than 100%. Additionally, these properties
include one Hunton horizontal PUD and at least one possible
Woodford horizontal well."
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: Company Contact:
David J. Klvac
EVP & Chief Financial Officer
dklvac@pstr.com
(405) 815-4304
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