PostRock Energy Corp. (PSTR, Financial) filed Annual Report for the period ended 2010-12-31.
Postrock Energy Corp. has a market cap of $48.8 million; its shares were traded at around $5.92 with a P/E ratio of 4 and P/S ratio of 0.5. Hedge Fund Gurus that owns PSTR: Jim Simons of Renaissance Technologies LLC.
The aggregate market value of outstanding common stock, including those held by affiliates of the registrant, at March 1, 2011, was approximately $52 million, based upon the closing price of $6.24 per share. There were 8,290,482 shares of common stock outstanding on that date.
Appalachian Basin Asset Sale On December 24, 2010, we entered into an agreement with Magnum Hunter Resources Corporation (MHR) to sell to MHR certain oil and gas properties and related assets located in Wetzel and Lewis Counties, West Virginia. The sale enabled us to reduce debt and focus on the Cherokee Basin. The sale closed in two phases for $39.7 million. The first phase covered assets located in the Wetzel County which closed on December 30, 2010 for $28 million. The second phase covered assets located in Lewis County which closed on January 14, 2011 for $11.7 million. The amount received at both closings was paid half in cash and half in MHR common stock. The agreement contained provisions for a third closing if certain conditions are met before May 15, 2011. There can be no assurance that the third closing will occur.
For 2011, we have budgeted approximately $43.6 million to drill and complete 290 new wells, complete 8 wells drilled in 2010, and recomplete 40 wells. We estimate that for 2011, our average cost for drilling and completing a well, including the related pipeline infrastructure, will be approximately $140,000. The majority of these new wells will be completed on locations that are classified as containing proved reserves in the December 31, 2010 reserve report. We have budgeted $7.3 million for land and equipment capital expenditures. We intend to fund our 2011 capital expenditures with cash flow from operations. Our ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, regulatory approvals, gas prices, costs and drilling results. See Item 1A. Risk Factors Risks Related to Our Business Our identified drilling location inventories will be developed over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling, resulting in temporarily lower cash from operations, which may impact our results of operations.
The following table presents our estimated net proved reserves at December 31, 2010, based on our reserve report. Proved reserves are those quantities of oil and gas, which, by analysis of geo-scientific and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations and prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The data was prepared by CGA. Reserves at December 31, 2010 were determined using the unweighted arithmetic average of the first day of the month price for each month from January through December 2010. These prices were $79.43 per barrel of oil and $4.37 per Mmbtu of gas.
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Postrock Energy Corp. has a market cap of $48.8 million; its shares were traded at around $5.92 with a P/E ratio of 4 and P/S ratio of 0.5. Hedge Fund Gurus that owns PSTR: Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The aggregate market value of common stock held by non-affiliates of the registrant at June 30, 2010, was approximately $32 million, based upon the closing price of $4.72 per share as reported by the NASDAQ on such date.The aggregate market value of outstanding common stock, including those held by affiliates of the registrant, at March 1, 2011, was approximately $52 million, based upon the closing price of $6.24 per share. There were 8,290,482 shares of common stock outstanding on that date.
Appalachian Basin Asset Sale On December 24, 2010, we entered into an agreement with Magnum Hunter Resources Corporation (MHR) to sell to MHR certain oil and gas properties and related assets located in Wetzel and Lewis Counties, West Virginia. The sale enabled us to reduce debt and focus on the Cherokee Basin. The sale closed in two phases for $39.7 million. The first phase covered assets located in the Wetzel County which closed on December 30, 2010 for $28 million. The second phase covered assets located in Lewis County which closed on January 14, 2011 for $11.7 million. The amount received at both closings was paid half in cash and half in MHR common stock. The agreement contained provisions for a third closing if certain conditions are met before May 15, 2011. There can be no assurance that the third closing will occur.
For 2011, we have budgeted approximately $43.6 million to drill and complete 290 new wells, complete 8 wells drilled in 2010, and recomplete 40 wells. We estimate that for 2011, our average cost for drilling and completing a well, including the related pipeline infrastructure, will be approximately $140,000. The majority of these new wells will be completed on locations that are classified as containing proved reserves in the December 31, 2010 reserve report. We have budgeted $7.3 million for land and equipment capital expenditures. We intend to fund our 2011 capital expenditures with cash flow from operations. Our ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, regulatory approvals, gas prices, costs and drilling results. See Item 1A. Risk Factors Risks Related to Our Business Our identified drilling location inventories will be developed over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling, resulting in temporarily lower cash from operations, which may impact our results of operations.
The following table presents our estimated net proved reserves at December 31, 2010, based on our reserve report. Proved reserves are those quantities of oil and gas, which, by analysis of geo-scientific and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations and prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The data was prepared by CGA. Reserves at December 31, 2010 were determined using the unweighted arithmetic average of the first day of the month price for each month from January through December 2010. These prices were $79.43 per barrel of oil and $4.37 per Mmbtu of gas.
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