PostRock Energy Corp. (PSTR, Financial) filed Quarterly Report for the period ended 2010-09-30.
Postrock Energy Corp. has a market cap of $29.4 million; its shares were traded at around $3.65 with and P/S ratio of 0.3.
Oil and gas production costs, which include lease operating expenses, severance taxes and ad valorem taxes, decreased $3.1 million, or 35.4%, to $5.6 million during the three months ended September 30, 2010, from $8.7 million during the three months ended September 30, 2009. The decrease was primarily due to lower ad valorem taxes of $2.7 million and lower lease operating expenses of $0.6 million partially offset by higher severance taxes of $0.2 million. Ad valorem taxes were lower as we revised our anticipated ad valorem tax to reflect lower reserve values assessed by taxing authorities. Lease operating expenses decreased as a result of lower labor costs. Production costs were $1.14 per Mcfe for the three months ended September 30, 2010, as compared to $1.59 per Mcfe for the three months ended September 30, 2009.
Transportation expense decreased $3.0 million, or 27.4%, to $8.0 million during the three months ended September 30, 2010, from $11.0 million during the three months ended September 30, 2009. The decrease was primarily due to a decrease in the contracted transportation fee as well as lower volumes. Transportation expense was $1.61 per Mcfe for the three months ended September 30, 2010, as compared to $2.00 per Mcfe for the three months ended September 30, 2009.
Depreciation, Depletion and Amortization We are subject to variances in our depletion rates from period to period due to changes in our oil and natural gas reserve quantities, production levels, product prices and changes in the depletable cost basis of our oil and natural gas properties. Our depreciation, depletion and amortization decreased approximately $6.7 million, or 67.6%, during the three months ended September 30, 2010, to $3.2 million from $9.9 million during the three months ended September 30, 2009. On a per unit basis, we had a decrease of $1.15 per Mcfe to $0.65 per Mcfe during the three months ended September 30, 2010, from $1.80 per Mcfe during the three months ended September 30, 2009. This decrease was primarily due to an increase to our reserves as a result of higher prices in 2010 which decreased our rate per unit in the current quarter compared to the prior year quarter.
Depreciation and Amortization Depreciation and amortization expense decreased $2.4 million, or 60.0%, to $1.7 million during the three months ended September 30, 2010, from $4.1 million during the three months ended September 30, 2009. Depreciation and amortization was lower due to an impairment of $165.7 million on our long lived pipeline related assets recorded during the fourth quarter of 2009, which subsequently lowered the depreciable basis of these assets.
ended September 30, 2009. We recorded an $25.5 million unrealized gain and $6.8 million realized gain on our derivative contracts for the three months ended September 30, 2010, compared to a $10.9 million unrealized loss and $19.6 million realized gain for the three months ended September 30, 2009. Unrealized gains and losses are attributable to changes in oil and natural gas prices and volumes hedged from one period end to another.
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Postrock Energy Corp. has a market cap of $29.4 million; its shares were traded at around $3.65 with and P/S ratio of 0.3.
Highlight of Business Operations:
Oil and Gas Sales Oil and gas sales increased $3.2 million, or 17.2%, to $21.5 million during the three months ended September 30, 2010, from $18.3 million during the three months ended September 30, 2009. This increase was primarily due to an increase in average realized natural gas prices which resulted in increased revenues of $5.0 million partially offset by lower production volumes which decreased revenue by $1.8 million. Natural gas equivalent volumes declined to 5.0 Bcfe for the three months ended September 30, 2010, or 10.1%, from 5.5 Bcfe for the three months ended September 30, 2009. Natural gas production decreased primarily due to a lack of development activity beginning in the latter part of 2008 through 2009 as we faced liquidity constraints. Our lack of development activity has resulted in a limited number of new wells coming online, causing us to rely on existing wells to sustain production. These wells have been subject to a natural decline in production. Although we completed and connected 141 wells in the Cherokee Basin during the first nine months of 2010, these wells are still in the early phase of production and did not contribute significant volume to our production in the third quarter of 2010. Our average realized prices on an equivalent basis (Mcfe) increased to $4.33 per Mcfe for the three months ended September 30, 2010, from $3.33 per Mcfe for the three months ended September 30, 2009.Oil and gas production costs, which include lease operating expenses, severance taxes and ad valorem taxes, decreased $3.1 million, or 35.4%, to $5.6 million during the three months ended September 30, 2010, from $8.7 million during the three months ended September 30, 2009. The decrease was primarily due to lower ad valorem taxes of $2.7 million and lower lease operating expenses of $0.6 million partially offset by higher severance taxes of $0.2 million. Ad valorem taxes were lower as we revised our anticipated ad valorem tax to reflect lower reserve values assessed by taxing authorities. Lease operating expenses decreased as a result of lower labor costs. Production costs were $1.14 per Mcfe for the three months ended September 30, 2010, as compared to $1.59 per Mcfe for the three months ended September 30, 2009.
Transportation expense decreased $3.0 million, or 27.4%, to $8.0 million during the three months ended September 30, 2010, from $11.0 million during the three months ended September 30, 2009. The decrease was primarily due to a decrease in the contracted transportation fee as well as lower volumes. Transportation expense was $1.61 per Mcfe for the three months ended September 30, 2010, as compared to $2.00 per Mcfe for the three months ended September 30, 2009.
Depreciation, Depletion and Amortization We are subject to variances in our depletion rates from period to period due to changes in our oil and natural gas reserve quantities, production levels, product prices and changes in the depletable cost basis of our oil and natural gas properties. Our depreciation, depletion and amortization decreased approximately $6.7 million, or 67.6%, during the three months ended September 30, 2010, to $3.2 million from $9.9 million during the three months ended September 30, 2009. On a per unit basis, we had a decrease of $1.15 per Mcfe to $0.65 per Mcfe during the three months ended September 30, 2010, from $1.80 per Mcfe during the three months ended September 30, 2009. This decrease was primarily due to an increase to our reserves as a result of higher prices in 2010 which decreased our rate per unit in the current quarter compared to the prior year quarter.
Depreciation and Amortization Depreciation and amortization expense decreased $2.4 million, or 60.0%, to $1.7 million during the three months ended September 30, 2010, from $4.1 million during the three months ended September 30, 2009. Depreciation and amortization was lower due to an impairment of $165.7 million on our long lived pipeline related assets recorded during the fourth quarter of 2009, which subsequently lowered the depreciable basis of these assets.
ended September 30, 2009. We recorded an $25.5 million unrealized gain and $6.8 million realized gain on our derivative contracts for the three months ended September 30, 2010, compared to a $10.9 million unrealized loss and $19.6 million realized gain for the three months ended September 30, 2009. Unrealized gains and losses are attributable to changes in oil and natural gas prices and volumes hedged from one period end to another.
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