Oil and gas firm PostRock Energy has signed a definitive agreement with Magnum Hunter Resources to sell certain assets in Wetzel and Lewis Counties in West Virginia for $39.75m.
The consideration for the sale will consist of 50% cash and 50% MHR common stock.
The sale proceeds will be used by the company for repaying debt secured by the subject assets.
The sale is subject to certain conditions and slated to be completed in two phases, each of which is expected to be closed by mid-January 2011.
The first closing contemplates the sale of the Wetzel County assets for $28m and the second closing contemplates the sale of the Lewis County assets for $11.75m.
PostRock Energy president and CEO David Lawler said that this sale represents another critical step in the company’s strategy to improve its balance sheet through the reduction of debt and to sharpen its focus on its core area of operations in the Cherokee Basin.