PostRock Energy Corp., Oklahoma City, has sold PostRock KPC Pipeline LLC, a 1,120-mile interstate pipeline that carries natural gas from northern Oklahoma and western Kansas to Wichita and Kansas City, to MV Pipelines LLC, a private logistics company based in Wichita.
The transaction price was $53.5 million. PostRock can receive additional payments of $1 million/year for 4 years if the pipeline’s financial performance achieves specified targets.
PostRock Energy, which produces oil and gas primarily in the Cherokee basin of Oklahoma and Kansas, will use proceeds of the transaction, on which it expects to record a $6 million loss, to pay debt.
Terry W. Carter, president and chief executive officer, said PostRock seeks to become a “pure-play oil and gas production and development company.”
The company owns and operates more than 3,000 wells in the Cherokee basin and nearly 2,200 miles of gas gathering lines. It also has oil producing interests in central Oklahoma and oil and gas producing interests in the Appalachian basin.