April 1, 2016 - 10:30 AM EDT
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OKC's PostRock Energy files for bankruptcy

April 01--PostRock Energy Corp. filed for bankruptcy reorganization on Friday, just days after warning investors the company's viability was in doubt.

The

Oklahoma City
-based oil and natural gas company, whose primary operations are in southeastern
Kansas
and northeastern
Oklahoma
, also said its entire board of directors will resign after the appointment of a bankruptcy trustee.

PostRock said it had 129 employees at its

Oklahoma City
headquarters and at operations in
Kansas, Oklahoma
and
West Virginia
.

PostRock said selling its assets through the Chapter 11 bankruptcy process would be the best way to maximize value for its creditors. It said shareholders would lose their entire investment.

In its bankruptcy filing, PostRock said it had assets ranging from $10 million and $50 million, with debts between $50 million and $100 million.

"Following a comprehensive review of our alternatives and in consultation with our secured lenders, the board of directors and management team determined that this process would produce the best outcome for PostRock and its creditors," Clark Edwards, interim president and CEO, said in a news release. "We want to thank our employees, as well as our suppliers and service providers, for their continued support."

PostRock said its operations have been affected by the decline in oil prices, continued low natural gas prices and what it called "general uncertainty in the energy market."

Along with Edwards, the directors who will resign are Duke R. Ligon; Alexander P. Lynch; William H. Damon III; and J. Philip McCormick.

In March, PostRock said its lenders called the company's debts, and that shareholders would lose their investment after the company defaulted on its loans. That came after its credit line was cut in half last year, leaving the company overdrawn by more than $37 million.

PostRock's production activity was focused in the Cherokee Basin, a 15-county region in southeastern

Kansas
and northeastern
Oklahoma
. The company owns and operates more than 2,500 wells and nearly 2,200 miles of gas gathering lines in that basin. It also owns and operates minor oil and gas producing properties in the Appalachian Basin.

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Source: Equities.com News (April 1, 2016 - 10:30 AM EDT)

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