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PostRock Announces $60 Mln Investment By White Deer Energy - Quick Facts

(RTTNews) - Thursday, PostRock Energy Corp. (PSTR) said White Deer Energy L.P. has agreed to invest $60 million of equity in the company. White Deer is a recently formed energy private equity firm. In connection with the investment, PostRock's debt will be reduced and its credit agreements restructured.

White Deer will purchase $60 million of the Company's 12% cumulative redeemable preferred stock. The preferred stock has a 7 1/2 year term and is callable after one year at par plus 10%. The company has the option to pay the preferred dividends in cash or in kind until July 2013. In addition, White Deer will receive 7 1/2 year warrants to purchase $60 million of common stock. The exercise price of the warrants was set at $3.15 per share, which represents an approximate 5% premium to PostRock's closing stock price on September 1, 2010.

The company will use the proceeds to reduce debt and fund future growth. The investment and the debt restructuring are expected to close simultaneously in approximately three weeks, subject to the satisfaction or waiver of various closing conditions. As part of the transaction, White Deer has reserved an additional $30 million to invest in PostRock on mutually acceptable terms to fund future growth.