OKLAHOMA CITY, June 16, 2011 (GLOBE NEWSWIRE) -- PostRock Energy Corporation (Nasdaq:PSTR) ("PostRock" or the "Company") today announced that it had completed its previously announced sale of West Virginia assets to Magnum Hunter Resources Corporation (NYSE:MHR). In the sale, a total of $44.6 million was realized. The $4.3 million just received, in combination with approximately 141,000 newly issued shares of PostRock common stock, are being delivered to a lender to fully satisfy and discharge the Company's non-recourse loan. PostRock expects to recover the stock's $843,000 value when funds escrowed in earlier phases of the sale are released in mid-2012. Subsequent to the sale, PostRock's Appalachian assets consist of 400 gross (373 net) wells capable of production and an associated 163 mile gathering system located primarily in Ritchie County, West Virginia. The wells are located on approximately 9,291 net acres classified as developed. An additional 26,815 net undeveloped acres are held, also primarily in Ritchie County. At year end 2010, 9.0 Bcfe of net proved reserves were attributed to these properties. They currently produce approximately 1.9 Mmcfe of gas a day.
Giving effect to the elimination of the non-recourse facility, PostRock's debt totaled $196.0 million, including $186.0 million outstanding on its $225 million borrowing base facility and $10 million of pipeline debt. As it is being amortized at the rate of $1.0 million a month, the pipeline debt will be retired shortly.
Jack T. Collins, the Company's Executive Vice President and Chief Financial Officer, said, "We were delighted to conclude our Magnum Hunter sale and, as a result, to reduce our debt while simplifying the Company's capital structure. These transactions go a long way towards putting the financial issues related to PostRock's predecessor companies behind us."
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 3,000 wells and nearly 2,200 miles of gas gathering lines in the Basin. It also owns a 1,120 mile interstate natural gas pipeline, which transports natural gas from northern Oklahoma and western Kansas to Wichita and Kansas City.
The PostRock Energy Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7221
CONTACT: Jack Collins Chief Financial Officer (405) 702-7460 North Whipple Manager, Corporate Development & Investor Relations (405) 702-7423