PostRock Energy Corp. (Nasdaq: PSTR) acquired about 22,000 net acres of leasehold in central Oklahoma for $10 million, the company said Oct. 15.
The assets, located in Pottawatomie, Cleveland and McCain counties, were purchased with $3 million cash and $7 million of PostRock common stock.
About 9,000 of the 22,000 net acres are held by production. Production is about 50 net barrels of oil equivalent per day (BOE/d). Productions depths range from 3,000 to 6,000 feet.
PostRock estimates net proved reserves are 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 said significant potential exists 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- 6,500 feet across the entirety of the acreage.
“This transaction is an important step in our effort to add oil reserves and development opportunities in central Oklahoma,” said Terry W. Carter, president and CEO. “The acquisition brings our leasehold position in this area to more than 34,000 net acres.”
Carter said the purchase adds production, proved reserves and meaningful upside potential from historically productive reservoirs and potentially significant upside from the Woodford.
“We believe we could have as many as 200 potential drilling locations with exposure to more than 10 million BOEs of recoverable reserves,” Carter said.
Closing is expected within 30 days, with an effective date of July 1.
PostRock Energy Corp. is an independent energy company engaged in the acquisition, exploration, development, production, and gathering of crude oil and natural gas. The company is headquartered in Oklahoma City.