PostRock Energy Corporation announced that to date PostRock has been unable to reduce the amount outstanding under its credit facility to the $39 million borrowing base. PostRock also announces that it did not make the quarterly interest payment due February 11, 2016. As previously announced on November 17, 2015, PostRock's banking syndicate reduced the credit facility's borrowing base from $76 million to $39 million.

The reduction in the borrowing base was due to the decline in oil and natural gas prices, the roll-off of hedges, and the production of reserves since May 1, 2015. PostRock has been unable to comply with any of the various alternatives for compliance under the credit facility. The failure of PostRock to comply with one of the alternatives set in the credit facility resulted in an event of default under the facility, as did the failure to make the quarterly interest payment.

The lenders at this time have not moved to accelerate the repayment of PostRock's indebtedness and are not exercising rights and remedies under the credit facility. Additionally, to date, PostRock and its lenders have not entered into a forbearance agreement pursuant to which the lenders would agree not to exercise their rights under the credit facility. PostRock continues to work with its banking syndicate to explore various strategic alternatives.