PostRock Energy (PSTR) Posts Q1 Loss of $2.46/Share

PostRock Energy (NASDAQ: PSTR) reported Q1 EPS of ($2.46), $1.11 worse than the analyst estimate of ($1.35). Revenue for the quarter came in at $12.5 million versus the consensus estimate of $17.4 million.

Operational Discussion

In response to the recent collapse of oil and gas prices that began in the latter part of 2014, the Company reduced its Oklahoma City staff by nearly 25% and its field staff by nearly 20% in January and February 2015. Excluding one-time costs related to these reductions, operating costs through March 31 are $12.6 million, or 11% lower than the same period last year. Annualized, these and other saving initiatives are expected to result in savings of approximately $4.0 million per year. The 2015 capital budget was set at $5.4 million, an 86% reduction from 2014. The plan includes only maintenance capital and completion of development projects under way at year-end. At current prices, no additional drilling is planned in 2015. Excess cash flow will be used to reduce outstanding debt.

The collapse in prices has also necessitated a full review of strategy going forward. The Company has engaged Evercore Group, L.L.C. to help evaluate strategic alternatives. A special committee of the Board of Directors has been formed to oversee the process.

For earnings history and earnings-related data on PostRock Energy (PSTR) click here.

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