PostRock Buys 4,300 Net Acres In OK

Purchased acreage in northern Lincoln and southern Payne counties.

PostRock Energy Corp. (Nasdaq: PSTR) has purchased 4,300 net acres of leasehold in northern Lincoln and southern Payne counties, Oklahoma for $1.7 million in cash and shares from an unidentified seller.

The acreage is prospective for oil from the Mississippian and Woodford formations. PostRock issued 126,602 shares of its common stock to the seller. The cash was funded with borrowings under the company's bank revolver.

Terry W. Carter, PostRock's president and chief executive, said the acquisition nearly doubles the company’s footprint in the midcontinent and is an important step in the expansion of the company’s operations.

“Our leasehold in Central Oklahoma now approximates 8,100 acres. Though our position in the area remains modest, we have increased it five-fold since year-end. Our first horizontal well in Central Oklahoma should spud within 45 days and our first horizontal well on the acquired land should spud within six months,” he said.

“In addition, we expect to participate as a small working interest owner in 3 to 5 other wells beginning as soon as this summer under Oklahoma's normal pooling process. If initial drilling proves successful, we would expect to continue expanding our acreage holdings in Central Oklahoma," he said.

PostRock Energy is an independent oil and gas company based in Oklahoma City. The company owns and operates over 3,000 wells and nearly 2,200 miles of gas gathering lines in the Cherokee Basin. It also owns and operates oil-producing properties in Central Oklahoma and minor oil and gas producing properties in the Appalachian Basin.