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8-K - FORM 8-K - PostRock Energy Corp | h75878e8vk.htm |
EX-4.2 - EX-4.2 - PostRock Energy Corp | h75878exv4w2.htm |
EX-4.3 - EX-4.3 - PostRock Energy Corp | h75878exv4w3.htm |
EX-4.1 - EX-4.1 - PostRock Energy Corp | h75878exv4w1.htm |
EX-99.2 - EX-99.2 - PostRock Energy Corp | h75878exv99w2.htm |
EX-10.3 - EX-10.3 - PostRock Energy Corp | h75878exv10w3.htm |
EX-10.2 - EX-10.2 - PostRock Energy Corp | h75878exv10w2.htm |
EX-10.1 - EX-10.1 - PostRock Energy Corp | h75878exv10w1.htm |
Exhibit 99.1
For Immediate Release
PostRock Announces $60 Million Investment by White Deer Energy
OKLAHOMA CITY September 2, 2010 PostRock Energy Corporation (NASDAQ: PSTR) (PostRock or
the Company) today announced that White Deer Energy L.P. (White Deer) has agreed to invest $60
million of equity in the Company. White Deer is a recently formed energy private equity firm. In
connection with the investment, PostRocks debt will be reduced and its credit agreements
restructured.
White Deer will purchase $60 million of the Companys 12% cumulative redeemable preferred stock.
The preferred stock has a 7 1/2 year term and is callable after one year at par plus 10%. The
Company has the option to pay the preferred dividends in cash or in kind until July 2013. In
addition, White Deer will receive 7 1/2 year warrants to purchase $60 million of common stock. The
exercise price of the warrants was set at $3.15 per share, which represents an approximate 5%
premium to PostRocks closing stock price on September 1, 2010.
PostRock will use the proceeds to reduce debt and fund future growth. The investment and the debt
restructuring are expected to close simultaneously in approximately three weeks, subject to the
satisfaction or waiver of various closing conditions. As part of the transaction, White Deer has
reserved an additional $30 million to invest in PostRock on mutually acceptable terms to fund
future growth.
White Deer will be entitled to vote with the common stock on all matters based on its pro forma
interest in the Company giving effect to the exercise of its warrants. However, it has agreed to
limit its vote to 45% for a period of time. White Deer will designate Thomas J. Edelman, James D.
Bennett and Nathan M. Avery as directors, expanding the Board to twelve. NASDAQ granted the
Company a financial viability exception from the requirement to obtain shareholder approval of the
transaction. PostRocks Audit Committee approved the exemption request and the Board obtained a
fairness opinion on the transaction.
After the transaction, the Companys debt will be comprised of approximately $200 million drawn
against $225 million of current availability under a revolving credit facility, a $15 million
amortizing term loan secured by the KPC Pipeline and a $43.5 million loan secured solely by certain
Appalachian assets and non-recourse to PostRock. Robert W. Baird & Co. has been retained to sell
those Appalachian assets. The revolver will mature June 30, 2013 and bear interest at LIBOR +
3.5% to 4.0%, depending on utilization. The pipeline loan will amortize over 18 months and bear
interest at LIBOR + 3.75%. The non-recourse loan will mature June 30, 2013 and bear interest at
LIBOR + 4.0%.
Commenting, David C. Lawler, the Companys President and CEO, said, We are delighted with White
Deers pending investment and our debt restructuring. The transaction represents the conclusion of
a two-year effort to restructure and recapitalize the Company. During this challenging period, we
reduced operating costs, kept our capital projects on budget and maintained a strong production
base. We have now partnered with a world class team of investors whose capital enables us to
materially improve our financial position. We want to thank our banks for their support throughout
this effort. White Deers
principals have a long and impressive track record in guiding the profitable growth of independent
oil and gas companies. With their support, we can now begin to aggressively pursue long-term
growth opportunities and the creation of meaningful shareholder value. Specifically, we will seek
to become the most efficient producer in our focus area and then start to pursue acquisitions.
Thomas J. Edelman, Managing Partner of White Deer, said, We are very pleased with this investment
and to be associated with PostRock and its management team. David Lawler has done an exceptional
job in preserving shareholder value and providing leadership under extraordinarily difficult
circumstances. We look forward to working closely with him, his officers and the Board. Given the
Companys strategic position in the Cherokee Basin and its ability to focus on becoming a low cost
and profitable producer, we have every confidence that our investment, and that of all PostRock
shareholders, will have the opportunity to provide exceptional returns.
PostRock Energy Corporation is engaged in the acquisition, exploration, development, production and
transportation of oil and natural gas primarily in the Cherokee Basin of Kansas and Oklahoma. The
Company owns and operates over 2,800 wells and nearly 2,200 miles of gas gathering lines in the
Basin. In addition, it owns 1,100 miles of interstate gas pipelines in Oklahoma, Kansas and
Missouri.
White Deer Energy is an energy private equity fund focused on the exploration & production,
oilfield service and equipment and midstream sectors of the oil and gas industry. With $821 million
of capital commitments, the Fund is a long-term investor targeting equity investments of $50 to
$120 million in 8 to 10 portfolio companies. With offices in Houston and New York, White Deer has
a combination of industry expertise and capital that makes it an exceptionally attractive partner
for rapidly growing North American energy companies.
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 PostRock 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 PostRocks
filings with the Securities and Exchange Commission, including risk factors listed in PostRocks
Annual Report on Form 10-K and other filings with the SEC. You can find PostRocks filings with the
SEC at www.pstr.com or www.sec.gov. By making these forward-looking statements, PostRock undertakes
no obligation to update these statements for revisions or changes after the date of this release.
Company Contacts:
Jack Collins
Chief Financial Officer
(405) 702-7460
Jack Collins
Chief Financial Officer
(405) 702-7460
North Whipple
Manager, Corporate Development & Investor Relations
(405) 702-7423
Manager, Corporate Development & Investor Relations
(405) 702-7423