Saying the financial uncertainty concerning PostRock Energy (Nasdaq:PSTR) has been significantly reduced, KeyBanc is not rating the company as "Hold" from "Not Rated."
A KeyBanc analyst said, "Last week, PostRock Energy announced that White Deer Energy, a recently formed private equity firm, has agreed to invest $60.0 million of equity in the Company. In conjunction with the equity investment, PSTR's credit agreements will be restructured. Moreover, White Deer Energy will provide PSTR with an additional $30 million to invest on mutually acceptable terms to fund growth...With the announced financing, debt restructuring and planned asset sales, we believe the financial uncertainty has been reduced substantially; thus, we are moving our rating from Not Rated to Hold."
PostRock will use the capital to pay down its debt and finance future growth.
Last week, PostRock president and CEO, David C. Lawler, said, "The transaction represents the conclusion of a two-year effort to restructure and recapitalize the company. During this challenging period, we reduced operating costs, kept our capital projects on budget and maintained a strong production base."
PostRock Energy focuses on the exploration, acquisition, development, production and transportation of natural gas and oil mostly in the Cherokee Basin of Kansas and Oklahoma.
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