2011-06-30-2011-06-22

To acquire interests in Constellation Energy Partners LLC, which has 2,783 wells in AL, KS, OK & NE, gaining 41.2 MMcf/d, 169 Bcfe.

PostRock Energy Corp., Oklahoma City, Okla., (Nasdaq: PSTR) plans to purchase all of interests in Constellation Energy Partners LLC (NYSE: CEP) held by Constellation Energy Group Inc., Houston, (NYSE: CEG) for $22.5 million in cash and stock.

PostRock will pay $11.25 million in cash, $11.25 million in common stock and warrants to acquire an additional 1.5 million shares of PostRock common stock at a premium to market.

As of Dec. 31, Constellation Energy Partners has 2,783 net producing wellsin the Black Warrior Basin in Alabama, the Cherokee Basin in Kansas and Oklahoma, the Woodford shale in the Arkoma Basin in Oklahoma and the Central Kansas Uplift in Kansas and Nebraska. Production as of Dec. 31 was 41.2 million cubic feet of gas per day. Proved reserves were 169 billion cubic feet equivalent.

Constellation's assets in the Cherokee Basin will complement PostRock's.

PostRock interim president Terry W. Carter says, "With virtually all of the burden of PostRock's history now behind us, we have the ability to focus on the long-term potential of the company and its asset base. As one of our stated objectives is to pursue increased efficiency in our Cherokee Basin assets and to work on consolidating operations in the Basin, we believe this transaction could prove significant. It should help us find ways to work with the second largest producer in the basin."