Oklahoma City-based exploration and production company PostRock Energy Corp. (NASDAQ: PSTR) is reducing its debt, the company said Oct. 9. This is based on increasing internal cash flow and proceeds from sales of its Constellation units, the company added.
Its bank debt has fallen to $80 million and, throughout the rest of the year, should continue falling, PostRock noted. It might sell its West Virginia properties. Based on the potential sale and the sale of remaining Constellation units, the debt could fall below $65 million, the company added.
Private-equity firm White Deer Energy and PostRock’s board approved an exchange of Series A preferred stock. The common shares, held by White Deer, have a $35 million liquidation value and will be exchanged for PostRock’s common stock, the company added, noting that it represents almost one-third of White Deer’s total preferred position.
The exchange, of about 32.1 million shares, will reduce yearly dividends by about $4.4 million, PostRock said. The outstanding shares will total about 62.9 million, the company added.
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