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PostRock Energy acquires Oklahoma properties for $10M

PostRock Energy announced that it was acquiring approximately 22,000 net acres of leasehold in Pottawatomie, Cleveland and McCain Counties in central Oklahoma. The properties are being purchased for $10M, including $3M of cash and $7M of PostRock common stock. Approximately 9,000 of the 22,000 net acres are held by production. Currently, production approximates 50 net barrels of oil equivalent per day from a variety of formations. Producing depths range from 3,000 to 6,000 feet. Closing is expected within 30 days, with an effective date of July 1. PostRock estimates that the net proved reserves being acquired total 574,000 BOE, of which 95% is oil and 60% is classified developed. On that basis, acquisition cost equates to $17 per BOE of proved reserves. The company believes there is significant potential to develop additional reserves in multiple reservoirs. The most significant is the Woodford, a formation which is believed to range from 200 feet to 300 feet in thickness at depths of 4,500 feet to 6,500 feet across the entirety of the acreage.