OKLAHOMA CITY, March 2, 2011 (GLOBE NEWSWIRE) -- PostRock Energy Corporation (Nasdaq:PSTR) ("PostRock" or the "Company") today announced its results for the fourth quarter and year ended December 31, 2010. Before turning to the results, the Company noted the following key events that took place during 2010.
- PostRock was formed out of three predecessor entities.
- White Deer Energy L.P., a private equity fund, invested $60 million in the Company.
- The Company's credit agreements were restructured.
- Certain Appalachian assets were sold for $28 million, another $11.7 million were sold in early 2011.
- Debt was reduced by $109.1 million, another $9.3 million was paid down in early 2011.
- 163 wells were completed and 292 returned to production in the Cherokee Basin.
- Proved reserves rose 80.3%, reaching 134.9 Bcfe at year-end.
- Operating costs were reduced to $2.39 a Mcfe.
Revenues fell to $103.9 million, a 2.0% decline from the prior year as the impact of lower production and reduced pipeline revenue was largely offset by higher oil and gas prices. Production declined 9.4% to 53.9 Mcfe a day, primarily due to a lack of development drilling in late 2008 and 2009. Average prices for the year, excluding hedging gains, increased 21.5% to $4.47 per Mcfe. Realized hedging gains during the year totaled $31.9 million. Interstate pipeline revenue decreased $8.3 million, or 44.5%, to $10.1 million due to the expiration of a significant contract at the end of October 2009.Production costs, including lease operating expenses ("LOE"), gathering, and severance and ad valorem taxes fell 16.1% to $47.0 million. The decline was comprised of a $6.6 million reduction in LOE and gathering costs and a $2.4 million reduction in production taxes. The cost reductions resulted from an increased focus on operating efficiencies in the Cherokee Basin. Severance and ad valorem taxes fell as a result of lower gas prices. Production costs totaled $2.39 per Mcfe, a 7.3% drop from 2009. During the year, the Company recovered $5.8 million of the cost to operate the gathering system through third party gathering fees. LOE net of this gathering cost recovery was $2.09 per Mcfe. Pipeline operating expense decreased 4.0% to $6.3 million. General and administrative expenses fell 36.6% to $26.4 million, reflecting a significant reduction in non-recurring expenses and savings realized following White Deer's investment.