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PostRock Announces Additional White Deer Investment

Stocks in this article: PSTR

OKLAHOMA CITY, Dec. 18, 2012 (GLOBE NEWSWIRE) -- PostRock Energy Corporation ("PostRock" or the "Company") (Nasdaq:PSTR) today announced that its Board had approved what is expected to be a final $13 million investment by White Deer Energy L.P. ("White Deer"). That brings White Deer's total investment in PostRock to $92.5 million. The investment is expected to fund on Thursday, December 20 th. White Deer agreed to acquire 4,577,464 shares of common stock at a price of $1.42 per share, yesterday's consolidated closing bid price. Simultaneously, White Deer agreed to purchase $6,500,000 of 12% cumulative redeemable preferred stock and 4,577,464 warrants to purchase common stock at a price of $1.42 a share. The specific terms of the investment are almost identical to White Deer's August investment. Proceeds will reduce debt.

The Company also updated the status of its hedge position. On November 27 th, PostRock monetized the last of its preexisting 2013 NYMEX gas swaps for $15.4 million. Combined with the recent previously announced hedge monetization, a total of $30.2 million of proceeds was realized in November. All of the proceeds were used to reduce debt. On December 12 th, the Company entered into new natural gas swaps covering periods from April 2013 through 2016. The following table summarizes its current hedge position.

  2013 2014 2015 2016
Natural Gas Hedges        
NYMEX Gas Swaps        
Volume (MMBtu) 3,747,285 4,324,032 3,755,184 3,765,840
Weighted Average Price ($/MMBtu) $3.95 $3.95 $3.95 $3.96
Southern Star Basis Swaps        
Volume (MMBtu) 9,000,003 -- -- --
Weighted Average Price ($/MMBtu) ($0.71) -- -- --
         
Oil Hedges        
NYMEX Oil Swaps        
Volume (Bbls) 65,892 61,680 58,164 53,892
Weighted Average Price ($/Bbl) $101.70 $97.00 $93.40 $91.10

The White Deer investment and the hedging transactions have positioned the Company to finalize a new credit facility. That transaction is expected to close later this week.

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