PSTRQ PostRock Energy Corporation (CE)

PostRock Energy Corporation (Nasdaq:PSTR) today provided an update on its production and key operational improvements. Net oil production for April and May averaged approximately 590 Bbls per day, an increase of 38% from the first quarter and of over 90% from the second quarter of 2012. Monthly net oil sales currently lag production by approximately 11% due to on-lease inventory buildup as production facilities are constructed in the Cherokee Basin. Net gas production during the period averaged slightly less than 40 MMcf per day, a 3% decrease from the first quarter of 2013, as all development capital has been directed to oil projects since September 2011. However, based on a year-to-date 26:1 realized price equivalency ratio of oil to natural gas, production has increased about 5% thus far in the second quarter as compared to the first quarter. This trend is expected to continue throughout the year as development of the Company's oil opportunities proceeds.

Additionally, the Company's Cherokee Basin compression reconfiguration project is 20% complete, with full implementation expected by March 31, 2014. Total project cost is estimated at $7 million. When completed, site efficiencies are projected to reduce fuel use by 2.5 MMcf per day, equating to $3 million in additional annual net revenue at current gas prices, and reduce annual rental costs by $3.2 million. 

Commenting, Terry W. Carter, the Company's President and CEO, said, "Our ongoing oil development and cost improvement projects continue to add value for our shareholders.   The reduction of compression costs and fuel use not only increases cash flow to accelerate development of our multiyear oil project inventory, but also gets us nearer to achieving IRRs of 30% on natural gas development in the Cherokee Basin at gas prices near $4.50 per Mcf."

PostRock Energy Corporation is engaged in the acquisition, 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 oil and gas producing properties in Appalachia.

Opinions, forecasts, projections and statements that are not historical facts are forward-looking statements that involve risks and uncertainties. Such statements in this announcement are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. While the Company believes expectations reflected in these statements are reasonable, there is no assurance they will prove correct. Actual results may differ materially due to unforeseen factors. These risks and others are detailed in the Company's filings with the Securities and Exchange Commission which may be found at www.pstr.com or www.sec.gov. In making forward-looking statements, the Company undertakes no obligation to update them.

CONTACT: David J. Klvac
         EVP & Chief Financial Officer
         dklvac@pstr.com
         (405) 815-4304