PostRock Buys Stake in CEP
09 Agosto 2011 - 12:00AM
PostRock Energy Corporation (Nasdaq:PSTR)
("PostRock") today announced that it had purchased a majority of
Constellation Energy Group, Inc.'s (NYSE:CEG) interests in
Constellation Energy Partners LLC (NYSE:CEP). In the transaction,
PostRock acquired all 485,065 Class A Member Interests and
3,128,670 Class B Member Interests. In combination, the acquired
units represent a 14.9% interest in CEP. CEG's consideration
was comprised of $6.6 million of cash, 1 million shares of PostRock
common stock and warrants to acquire an additional 673,822 shares
of PostRock. Of the warrants, 224,607 are exercisable for one
year at an exercise price of $6.57 a share, 224,607 are exercisable
for two years at $7.07 a share and 224,608 for three years at $7.57
a share. The cash was funded with borrowings on PostRock's
bank facility.
In the transaction, PostRock received the right to appoint two
directors to CEP's Board. Because PostRock and CEP each have
the majority of their assets in the Cherokee Basin of Kansas and
Oklahoma, a series of discussions about this transaction and
possible future transactions have been held with CEP's Management
and Board in the course of the past six months. PostRock hopes
and believes a way can be found to allow the two entities to
cooperate to the benefit of their respective shareholders.
Commenting, Terry W. Carter, PostRock's President, said, "We
were disappointed not to be able to purchase CEG's entire stake as
announced in June. Unfortunately, we were unable to secure the
consent of CEP's independent directors to that transaction in a
timely fashion due to technical issues raised by their Delaware
counsel. We believe this transaction has eliminated their
concerns. We plan to continue to pursue increased efficiency
in the Cherokee Basin through cooperation with CEP and others."
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 3,000 wells and nearly
2,200 miles of gas gathering lines in the Basin. It also owns a
1,120 mile interstate natural gas pipeline, which transports
natural gas from northern Oklahoma and western Kansas to Wichita
and Kansas City.
The PostRock Energy Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7221
Forward-Looking Statements
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 the Company. 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 www.pstr.com or www.sec.gov.
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: Jack Collins
Chief Financial Officer
(405) 702-7460
North Whipple
Manager, Corporate Development & Investor Relations
(405) 702-7423
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