OKLAHOMA CITY, May 28, 2014 (GLOBE NEWSWIRE) -- PostRock Energy Corporation (Nasdaq:PSTR) ("PostRock") today provided an operations update. During the last 75 days, the Company has completed twelve workovers in Central Oklahoma. The average total cost per workover was approximately $275,000 and, collectively, the workovers have a projected IRR in excess of 100% at current oil and gas prices. This has resulted in the Company's current oil production rising to an average of 700 net barrels per day, 18% over first quarter levels. Within the next week, the Company expects to finish drilling its initial Central Oklahoma horizontal well in Seminole County. The well targets the Hunton formation and, if successful, should be on production in June. A second horizontal well will be spudded immediately thereafter.
Additionally, the last compressor conversion on the Company's Cherokee Basin gathering system was completed and started up two weeks ago. This concluded an 18-month project that, on a cumulative basis, will result in annual savings of approximately $7.2 million at current gas prices.
PostRock also announced that the Company has engaged Robert W. Baird & Co. to pursue the sale of its West Virginia oil and gas assets. The package includes approximately 32,000 acres of leases and 407 gross wells. At December 31, 2013, the assets' proved reserves had a PV10 value, based upon a third-party engineering analysis, of $17.3 million. In 2013, the properties produced a net 1.5 MMcf of gas and 41 barrels of oil per day.
Commenting, PostRock's CEO, Terry W. Carter, said: "We are delighted with our continuing operational progress. Selling our Appalachia assets, along with the benefits of exiting our position in CEP, will allow us to redeploy capital to higher return projects, primarily focused on oil development in Central Oklahoma."
PostRock Energy Corporation is engaged in the acquisition, exploration, development, production and gathering of crude oil and natural gas. Its primary production activity is focused in the Cherokee Basin, a 15-county region in southeastern Kansas and northeastern Oklahoma, and in Central Oklahoma. The Company owns and operates over 3,000 wells and maintains nearly 2,200 miles of gas gathering lines primarily in the Cherokee 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 such expectations will prove correct. Actual results may differ materially due to a variety of factors, some of which may not be foreseen. These risks and other risks are detailed in the Company's filings with the Securities and Exchange Commission, including risk factors listed in the Annual Report on Form 10-K and other filings. The Company's SEC filings 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.
CONTACT: Company Contact: Stephen L. DeGiusti EVP, General Counsel & Secretary firstname.lastname@example.org (405) 702-7420
Source:PostRock Energy Corporation