OKLAHOMA CITY, Dec. 27, 2010 (GLOBE NEWSWIRE) -- PostRock Energy Corporation (Nasdaq:PSTR) ("PostRock" or the "Company") today announced that it has entered into a definitive agreement with Magnum Hunter Resources Corporation (NYSE Amex:MHR) ("MHR") to sell certain assets in Wetzel and Lewis Counties, West Virginia for aggregate consideration of $39.75 million. The consideration for the sale will consist of 50% cash and 50% MHR common stock. PostRock will use the sale proceeds to repay debt secured by the subject assets.
The sale is subject to certain conditions and scheduled to close in two phases, each of which is expected to be completed by mid-January 2011. The first closing contemplates the sale of the Wetzel County assets for $28 million and the second closing contemplates the sale of the Lewis County assets for $11.75 million. Aggregate consideration is subject to adjustment based on title, indemnities and certain other matters.
Commenting, David C. Lawler, PostRock's President and CEO, said, "This sale represents another critical step in our strategy to improve our balance sheet through the reduction of debt and to sharpen our focus on our core area of operations in the Cherokee Basin."
PostRock Energy Corporation is engaged in the acquisition, exploration, development, production and transportation of oil and natural gas primarily in the Cherokee Basin of Kansas and Oklahoma. The Company owns and operates over 2,800 wells and nearly 2,200 miles of gas gathering lines in the Basin. In addition, it owns 1,100 miles of interstate gas pipelines in Oklahoma, Kansas and Missouri.
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 PostRock 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 PostRock's filings with the Securities and Exchange Commission, including risk factors listed in PostRock's Annual Report on Form 10-K and other filings with the SEC. You can find PostRock's filings with the SEC at www.pstr.com or www.sec.gov. By making these forward-looking statements, PostRock undertakes no obligation to update these statements for revisions or changes after the date of this release.
CONTACT: PostRock Energy Corporation Jack Collins, Chief Financial Officer (405) 702-7460 North Whipple, Manager, Corporate Development & Investor Relations (405) 702-7423