Attached files
file | filename |
---|---|
8-K - FORM 8-K - PostRock Energy Corp | h75878e8vk.htm |
EX-4.2 - EX-4.2 - PostRock Energy Corp | h75878exv4w2.htm |
EX-4.3 - EX-4.3 - PostRock Energy Corp | h75878exv4w3.htm |
EX-4.1 - EX-4.1 - PostRock Energy Corp | h75878exv4w1.htm |
EX-10.3 - EX-10.3 - PostRock Energy Corp | h75878exv10w3.htm |
EX-10.2 - EX-10.2 - PostRock Energy Corp | h75878exv10w2.htm |
EX-10.1 - EX-10.1 - PostRock Energy Corp | h75878exv10w1.htm |
EX-99.1 - EX-99.1 - PostRock Energy Corp | h75878exv99w1.htm |
Exhibit 99.2
September 2, 2010
Dear Fellow Shareholder:
We are pleased to announce that White Deer Energy L.P. and its affiliates have agreed to
invest $60 million of equity in the Company. In the transaction, the Company will issue White Deer
12% redeemable preferred stock and warrants with a per share exercise price of $3.15, which
represents an approximate 5% premium to the Companys closing stock price on September 1, 2010.
Because of the size of the investment relative to PostRocks equity market value, White Deer will
have the right under the warrants to acquire approximately 70% of the Companys common stock, but
its voting rights will initially be limited to 45%. Nevertheless, the investment will result in a
change of control under Nasdaq regulations. Due to imminent debt maturities which the Company could
not meet without an immediate equity infusion, the time necessary to seek and obtain shareholder
approval of the transaction rendered such course impracticable. Therefore, the Company requested
and received a financial viability exception from Nasdaq waiving the requirement for shareholder
approval. The Companys Audit Committee expressly approved the Companys reliance upon the
financial viability exception. The transaction does not require shareholder approval under
Delaware law or the Companys certificate of incorporation. The transaction is expected to close
on September 24, 2010. As a result of the investment, our debt will be materially reduced and our
banks have unanimously agreed to sharply reduce the cost of our remaining indebtedness. A fairness
opinion on the transaction has been obtained from Stephens Inc.
White Deer is a recently formed $800+ million energy private equity fund led by Thomas J.
Edelman and Ben A. Guill. Each has a 30-plus year record of success in the energy business. Mr.
Edelman founded or co-founded Snyder Oil Corporation, Range Resources Corporation and Patina Oil &
Gas Corporation and served as President and/or Chief Executive of each. Mr. Guill was Co-Head of
Investment Banking at Simmons & Company International and, more recently, President of First
Reserve Corporation. As a result, White Deer has a high degree of visibility in the investment
community and extensive relationships throughout the oil and gas industry. Their investment and
significant ongoing involvement should greatly enhance the Companys visibility and its access to
potential transactions and required capital. As part of the transaction, White Deer has reserved
an additional $30 million to invest in PostRock on mutually acceptable terms as required to fund
future growth.
As a condition to reliance on the Nasdaq exception, the Company is mailing this letter to all
shareholders not later than ten days before the anticipated closing date to alert you that the
Company will not seek, and will not be required to seek, the shareholder approval that would
otherwise be required. In addition to this notification, the Company is also contemporaneously
issuing a press release publicly announcing the proposed transaction and filing a Current Report on
Form 8-K with the Securities and Exchange Commission. A copy of the Securities Purchase Agreement
with White Deer and related documents will be filed with the Form 8-K.
210 PARK AVENUE, SUITE 2750
OKLAHOMA CITY, OK 73102
MAIN: (405) 600-7704
FAX: (405) 600-7756
WEB: www.pstr.com
NASDAQ:PSTR
OKLAHOMA CITY, OK 73102
MAIN: (405) 600-7704
FAX: (405) 600-7756
WEB: www.pstr.com
NASDAQ:PSTR
September 2, 2010
Page 2
Page 2
The past two years have obviously been an extraordinarily difficult period for the Company.
During this period we have worked with the utmost dedication to shareholder interests, and it is
our hope and expectation that White Deers investment will mark the end of PostRocks
reconstruction and prove to be a key turning point in our history. With White Deers support and
assistance, we plan to focus on being the low cost producer in the Cherokee Basin and an acquirer
of additional properties there and in analogous basins.
You have our warmest possible thanks for your patience and confidence over the course of the
past two years and our sincere appreciation for your current support. We plan to build PostRock
into a company about which all of us can be proud. We look forward to keeping you abreast of our
progress in the year ahead.
With all best wishes, |
||||
David C. Lawler | ||||
President and Chief Executive Officer | ||||