OKLAHOMA CITY, Oct. 15, 2013 (GLOBE NEWSWIRE) -- 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.
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.
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Source:PostRock Energy Corporation