OKLAHOMA CITY, Nov. 4, 2013 (GLOBE NEWSWIRE) -- 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.
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 firstname.lastname@example.org (405) 815-4304
Source:PostRock Energy Corporation