UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 14, 2011
POSTROCK ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware
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001-34635
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27-0981065 |
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(Commission file number)
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(I.R.S. employer identification number) |
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210 Park Avenue, Suite 2750
Oklahoma City, Oklahoma
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73102 |
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(Zip code) |
Registrant’s telephone number, including area code: (405) 600-7704
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 2.01
Completion of Acquisition or Disposition of Assets.
On January 14, 2011, Quest Eastern Resource LLC (“QER”) and PostRock MidContinent Production,
LLC (“PMP” and, together with QER, the “Sellers”), wholly owned subsidiaries of PostRock Energy
Corporation (“PostRock”), closed the second phase of the sale of certain oil and gas properties and
leasehold mineral interests and related assets primarily located in Wetzel and Lewis Counties, West
Virginia (the “Assets”) to Triad Hunter, LLC (“Triad”), a wholly owned subsidiary of Magnum Hunter
Resources Corporation (“MHR”), pursuant to a Purchase and Sale Agreement, dated as of December 24,
2010 (the “Purchase Agreement”), by and among the Sellers, Triad and MHR. The closing of the first
phase occurred on December 30, 2010. The Purchase Agreement also provides for Triad to acquire a
third, smaller package of assets upon satisfaction of certain events and conditions. There can be
no assurance that the sale of this third package will occur. The Purchase Agreement and the terms
and conditions of the sale of the Assets by the Sellers are described in more detail in the Current
Report on Form 8-K filed by PostRock with the Securities and Exchange Commission on December 30,
2010, which description is incorporated by reference herein.
The aggregate consideration received by the Sellers for the Assets purchased at the two
closings, after preliminary closing adjustments, was $39.6 million, which consisted of (a) $19.7
million in cash, of which $5.9 million was placed in escrow pursuant to the terms of the Purchase
Agreement, and (b) 3.2 million newly issued shares of MHR common stock.
The assets sold by QER were pledged as collateral under the Third Amended and Restated Credit
Agreement between QER, as borrower, and Royal Bank of Canada (“RBC”), as administrative and
collateral agent and lender. Approximately $12.1 million of the net cash consideration and the
share consideration received by QER pursuant to the Purchase Agreement (totaling 3.0 million
shares) were paid to RBC in repayment of a portion of the term loan under that credit agreement and
as consideration for the release of RBC’s liens encumbering the assets sold. After giving effect
to such repayment, the principal balance of the term loan was $13.3 million.
The assets sold by PMP were pledged as collateral under the Second Amended and Restated Credit
Agreement among PostRock Energy Services Corporation and PMP, as borrowers, RBC, as administrative
and collateral agent, and the lenders party thereto relating to a secured borrowing base facility.
Approximately $0.9 million of the net cash consideration received by PMP pursuant to the Purchase
Agreement was used to repay outstanding borrowings under that credit agreement, with the remainder
for capital expenditures, transaction expenses and other working capital purposes.
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