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PostRock Energy aims to continue rebirth with oil focus

PostRock Energy Corp. has cleaned up its balance sheet, so now the company is turning its attention to producing more oil.
BY JAY F. MARKS Published: January 25, 2013
/articleid/3748964/1/pictures/1936180">Photo - Two PostRock Energy Corp. workers perform a well servicing job. <strong> - provided</strong>
Two PostRock Energy Corp. workers perform a well servicing job. - provided

The company derived only 7 percent of its revenues from oil at the beginning of last year, but managed to increase that figure by 50 percent by the end of the year. Officials are aiming to boost that overall revenue figure to 30 percent, while bringing some balance to its asset portfolio.

“It's really setting about remaking the company,” Carter said.

He said PostRock must be smart as it switches its focus to oil because the company, which has about 215 employees, can't afford to compete with larger operators.

Carter said there is room for a company like PostRock to be successful by applying proven techniques to overlooked areas. PostRock is focusing on pure oil plays, where it can drill conventional wells with some unconventional techniques.

Tulsa money manager Jake Dollarhide said it will take some time for PostRock to win back investors' confidence.

“Only the most patient investors are still with them,” said Dollarhide, CEO of Longbow Asset Management Inc.

He noted PostRock's stock traded for $10 a share in 2010, but hasn't been above $5 since late 2011. PostRock closed Thursday at $1.61 a share, up a penny.

Dollarhide said PostRock now is in the crowded position of trying to boost its oil production, which is an expensive proposition.

As a smaller operator without any presence in the nation's largest oil plays, PostRock must build on small successes to lure in investors, he said.


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