2009-08-05-2009-08-01-2010-03-05

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
0MM
Description

Companies merged, gaining 500,000 net acres in the Cherokee Basin in KS, OK, 198 Bcfe proved, 59MMcf/d.

Facing a going-concern crisis last year and de-listing from the Nasdaq exchange, the three-related upstream Quest entities, Quest Resource Corp., Oklahoma City, (Nasdaq: QRCP), Quest Energy Partners LP (Nasdaq: QELP) and Quest Midstream Partners LP, have completed their recombination to create a new publicly traded corporation named PostRock Energy Corp.

PostRock paid 0.0575 per share of Quest Resources, 0.2859 share of Quest Energy, and 0.4033 share of Quest Midstream. Approximately 23% of the new company is owned by former Quest Resources equity holders, 33% by former Quest Energy equity holders, and 44% by former Quest Midstream equity holders.

The new PostRock trades on the Nasdaq Global Market under the symbol "PSTR."

Following the merger, PostRock is the largest producer of gas in the Cherokee Basin of southeastern Kansas and northeastern Oklahoma with more than 2,800 wells and 2,200 miles of gas-gathering pipelines, including some 400 gas and oil producing wells and undeveloped acreage in the Appalachian Basin. Additionally, it holds more than 1,100 miles of pipelines in Oklahoma, Kansas and Missouri.

PostRock president and chief executive David C. Lawler says, "We believe the recombination will make our company more competitive by allowing us to increase our development activity, further reduce costs, improve operational efficiency and simplify our organizational structure."

Stifel, Nicolaus & Co. Inc. provided a fairness opinion to the conflicts committee of Quest Energy. Mitchell Energy Advisors LLC provided a fairness opinion to Quest Resources. Morgan Stanley was financial advisor to Quest Midstream. Berenson & Co. was financial advisor to each Quest entity in restructuring current debt obligations.

The move was an effort to shore up embattled operations following a prolonged legal battle with former chief executive Jerry Cash, who Quest accused of embezzling some $10 million from the companies. The suit was settled out of court, but the parent company emerged facing going-concern issues.