PostRock Energy Corp. has changed more than just its name since a “debacle” that landed two of its former executives in federal prison.
The Oklahoma City-based energy company has used more than $90 million worth of investments from private equity firm White Deer Energy LP to slash its debt by more than 40 percent, while transforming itself into a pure exploration and production play.
“It's a significantly different company than it was at that time,” CEO Terry W. Carter said.
PostRock was born in 2010 from the ashes of Quest Resources Corp. and its subsidiaries, which had been rocked by allegations of financial improprieties involving former executives Jerry Dale Cash and David Grose. Both men now are in prison after being convicted of misusing company funds.
Carter came on board in the middle of 2011 after David Lawler, who had guided the company through the transition, left for a position at SandRidge Energy Inc.
He said the company has largely moved past its past, which Chief Financial Officer David Klvac described as a “debacle.”
Carter said PostRock's $53.5 million sale of its interstate pipeline system in October has given the company significant liquidity for the first time in a long time.
That is important because PostRock, like many other energy companies, is trying to shift its focus to crude oil development.
“We're no different than 95 percent of the companies out there with that perspective,” Carter said.
PostRock historically has been a natural gas producer working in the Cherokee Basin of southeast Kansas and northeast Oklahoma, but low commodity prices have forced the company to look elsewhere for growth opportunities.
Carter said PostRock is trying to boost its oil production in the Cherokee Basin.