PostRock Announces $29.7M 2013 Capital Budget
PostRock Energy (NASDAQ: PSTR) today announced a $29.7 million capital budget for 2013. The budget includes $25.6 million for drilling and recompletions, $600,000 for acreage and $3.6 million for maintenance. Given the Company's improved financial position, the budget represents a more than 40% increase over 2012 spending. PostRock expects its 2013 development work to more than double oil production. With minimal capital allocated to gas development, gas production is expected to decline 13%. On a 22:1 price equivalency basis, production is expected to increase approximately 5%. On a traditional 6:1 conversion, production is expected to decline 7%.
At year-end, PostRock held approximately 420,000 net acres in the Cherokee Basin and approximately 1,500 net acres in central Oklahoma, with each providing opportunities for multi-year growth in production and reserves. Approximately 70% of the 2013 budget targets oil projects in the Cherokee while 25% is expected to target oil projects in central Oklahoma. The remaining capital will fund a limited number of oil recompletions in Appalachia as well as maintenance expenditures. Lease operating expenses as well as general and administrative expenses are expected to continue to decrease. The Company expects to fund the 2013 capital budget with internal