PostRock Energy Corporation Announces Unaudited Consolidated Earnings and Operating Results for the Second Quarter Ended June 30, 2014 and Cash Flow Results for the Six Months Ended June 30, 2014; Provides Capital Expenditure and Production Guidance for the Year 2014
For the six months, net cash flows from operating activities were $8.451 million against $1.249 million a year ago. Expenditures for equipment, development and leasehold were $14.737 million against $26.821 million a year ago.
For the quarter, the company's oil production averaged 682 barrels per day, up 25% from the prior-year period. Total natural gas production was 3,337 MMcf against 3,635 MMcf a year ago. Total crude oil production was 62,050 Bbls against 49,481 Bbls a year ago. Total natural gas 23:1 oil-to-gas economic equivalency was 4,764 MMcfe against 4,773 MMcfe a year ago. Total natural gas 6:1 oil-to-gas economic equivalency was 3,709 MMcfe against 3,931 MMcfe a year ago. The increase in oil production in the first quarter was driven predominantly by a very successful workover program that was initiated in March and continued on through May 2014. Gas production averaged 36.7 MMcf a day, down 8.2% from the prior year period. This is an improvement from traditional 11% to 13% decline on the quarter. The primary driver of the reduction is attributable to the fuel savings from the compressor optimization project that wrapped up in late May of this year coupled with a slight improvement in the overall decline curve for the period.
The company expects to invest an additional $14 million to $15 million throughout the balance of the year on capital development, almost completely funded by cash flow from operations.
The company expects to drill at least 1 may be 2 additional Hunton wells, just rig availability and preparation to drill and watching the performance of the first 2 wells for a little while it would not expect to spud the next Hunton well until late third quarter, early fourth quarter. The company also expect to participate in either as a non-operator or possible as an operator in 1 to 2 other Woodford wells in the balance of the year, probably at less than 50% operating ownership and 1 of them probably less than 10%.