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Additional Information
Market: NASDAQ
Sector: Oil & Gas Exploration & Production
EPIC: PSTR
Latest Price: 3.41  (-0.87% Descending)
52-week High: 8.16
52-week Low: 2.35
Market Cap: 32.16M
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PostRock Energy Corporation
www.pstr.com

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.

Full PostRock Energy Corporation profile here
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PostRock surges more than 70% on $60m investment by PE firm White Deer Energy

2nd Sep 2010, 7:38 pm
PostRock surges more than 70% on $60m investment by PE firm White Deer Energy

Oil and natural gas company PostRock Energy (Nasdaq:PSTR) is up more than 70% on the Nasdaq today on the announcement of a $60 million equity investment in the company by energy-focused private equity firm White Deer Energy.

As part of the investment, PostRock's debt will be reduced and its credit agreements restructured.

White Deer will purchase $60 million of the company's 12% cumulative redeemable preferred stock. The preferred stock has a 7.5 year term and is able to be redeemed 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 .5 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 PostRock's closing price on September 1, 2010 (the last day prior to the announcement).

PostRock will use the proceeds of the investment to reduce debt and fund future growth. Post transaction, the company's debt will be approximately $200 million, drawn against $225 million of current availability under a revolving credit facility, a $15 million amortizing term loan and a $43.5 million loan secured by certain Appalachian assets.

The investment and the debt restructuring are expected to close simultaneously in approximately three weeks, subject to various closing conditions.

As part of the transaction, White Deer has allotted an additional $30 million to invest in PostRock to further expand the company through acquisitions.

As part of the deal, White Deer will be entitled to vote with the common stock on all matters; it has, however, agreed to limit its vote to 45% for a period of time.

White Deer has appointed Thomas J. Edelman, James D. Bennett and Nathan M. Avery as directors of the company, expanding the total number of people on the board to 12.

"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," said president and CEO of PostRock, David C. Lawler.

PostRock Energy 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.

The company`s shares stood at $4.85 on the Nasdaq as of 2:37pm ET on Thursday - representing a 62.2% surge in share price.

White Deer Energy has $821 million of capital commitments, and targets investments of between $50 to $120 million in 8 to 10 portfolio companies.

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