At current gas prices, we do not expect to invest any material amount of capital in our extensive Cherokee Basin gas reserves. However, the recent rise in gas prices combined with ongoing operating cost reductions may cause us to test a small number of projects. We expect material natural gas development to become attractive once gas prices reach the $4.50 to $5.00 per Mcf level.
Commenting, Terry W. Carter, the Company's President and CEO, said, "While our Cherokee Basin oil projects are very modest in size, they are low risk and we have a significant inventory of them. I am pleased to report that production from the Cherokee Basin wells is, on average, slightly ahead of expectations while costs are coming down. With the Cherokee Basin oil development program now running smoothly, we will begin to focus on our Central Oklahoma acreage. These projects are expected to have a more significant impact on the Company's overall reserves and production. If we can build on our recent production and development trend, we believe we can begin to materially enhance the value of our shareholders' investment."
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.
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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
. 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
Chief Financial Officer