PostRock Energy Corporation announced Friday that it filed for Chapter 11 bankruptcy reorganization to facilitate an orderly sale of substantially all of their assets.
In its bankruptcy filing, Oklahoma City-based PostRock said it had assets ranging between $10 million and $50 million, with debts from $50 million and $100 million. The oil and natural gas company does not expect any recovery for its stockholders and indicates they will lose their entire investment.
“Following a comprehensive review of our alternatives and in consultation with our secured lenders, the Board of Directors and management team determined that this process would produce the best outcome for PostRock and its creditors,” said Interim President and Chief Executive Officer Clark W. Edwards.
In March, PostRock said its lenders called the company’s debts and shareholders would lose their investment after the company defaulted on its loans. That came after its credit line was cut in half last year, leaving the company overdrawn by more than $37 million.
PostRock also announced the resignation of its current directors, Duke R. Ligon, Alexander P. Lynch, William H. Damon III, J. Philip McCormick and Clark W. Edwards, effective upon the appointment of a trustee in bankruptcy.
PostRock said it had 129 employees at its Oklahoma City headquarters and at operations in southeastern Kansas and northeastern Oklahoma.
“Like many other exploration and production companies, PostRock’s operations have been significantly impacted by the dramatic decline in oil prices, continued low prices of natural gas and general uncertainty in the energy market,” the company said in a press release.
PostRock was engaged in the acquisition, exploration, development, production and gathering of crude oil and natural gas. Its production activity was focused in the Cherokee Basin, a 15-county region in Kansas and Oklahoma. The company owns and operates over 2,500 wells and nearly 2,200 miles of gas gathering lines in the Basin. It also owns and operates minor oil and gas producing properties in the Appalachian Basin.
