PostRock Sells KPC Pipeline for $53.5M

PostRock Energy PSTR today announced that on Friday, September 28, 2012, it sold PostRock KPC Pipeline, LLC ("KPC") to MV Pipelines, LLC ("MV Pipelines") for $53.5 million in cash. Of this amount, $500,000 will be placed in escrow pending cleanup of a former KPC site. PostRock may receive additional payments of $1 million a year in each of the next four years if KPC's EBITDA (as defined in the agreement) exceeds a target amount. The sale is subject to a working capital adjustment. After approximately $2 million in estimated transaction costs, the Company will record a loss on the sale of approximately $6 million. Net proceeds from the sale will be used to repay borrowings under the Company's credit facility. The Company's borrowing base has been reduced to $120 million. PostRock's next borrowing base redetermination will be based on its reserves at June 30, 2012 and become effective October 31st.  After applying the sales proceeds, PostRock's debt totaled $104.3 million. See full press release