Each one in plain English, with the numbers worked through for a shareholder.
1 Apr 2016bankruptcy or receivership▼ BadMajor
Filed for Chapter 11 in Oklahoma on 1 April 2016, explicitly for an orderly wind-down and sale of everything, with the Constellation holding company put into Chapter 7 liquidation. All five directors resigned on the appointment of a trustee, and the company told shareholders outright that they would lose their entire investment. Unlike the leverage-driven failures of the previous decade, this one the company blamed on the collapse in oil prices and persistently low gas prices, and the record supports it: three borrowing-base cuts in eleven months took the facility from $176 million to $39 million while the debt stayed put. Ends the corporate line that ran from Quest Resource through the 2010 recombination.
Closed the Jericho Buckmanville sale for $12.9 million and paid it to the lenders. The last completed transaction before the company filed for bankruptcy three months later.
Agreed to sell Oklahoma assets to Jericho Buckmanville Oil for $13 million, all of it going to the banks, as the first outcome of the strategic review Evercore had been running since early 2015. Against a $37 million borrowing-base shortfall it was never going to be enough.
The November redetermination halved the borrowing base again, from $76 million to $39 million, against $76.2 million drawn: a $37.2 million shortfall the company had thirty days to explain how it would cover. The lenders named the causes plainly as falling oil and gas prices, expiring hedges and depletion. This is the moment the crash becomes terminal.
Nasdaq confirmed the delisting after the company declined both to file a compliance plan and to withdraw voluntarily, with trading suspended from 9 September 2015. A third deficiency, on free-float market value below $5 million, arrived in the same week. PSTR moved to the pink sheets with no guarantee a market maker would quote it.
Nasdaq said equity had fallen below the $10 million minimum, and the company replied that it would not even file a plan to fix it and expected to be delisted to the over-the-counter market. Giving up the listing without a fight, three months before the final borrowing-base cut.
The May borrowing-base redetermination cut the facility to $76 million and left a $10.38 million shortfall to be cleared by December, with no ability to redraw anything repaid. The first crash-driven cut of the cycle, and the company was now selling assets and hedges simply to stay inside its own credit limit.
Voided five years of accounts, from the September 2010 quarter through September 2014, because White Deer's preferred stock had been shown as temporary equity when it should always have been a liability. The error flowed from the same cashless-exercise feature that let the warrants and preferred interact, and it turns years of reported results more negative, though it does not change equity, per-share figures or cash. A second restatement for a company whose predecessor had already restated 2005 to 2008.
Opened a fresh at-the-market share programme through MLV as oil prices collapsed, at 3% commission. Selling stock into a falling market at around a dollar was the only external funding still open to it.
A second Nasdaq notice within a month: the market value of shares not held by insiders had fallen below $15 million. With White Deer holding most of the stock, the free float was too small to meet the exchange's minimum regardless of what the business did.
Changed auditors for a purely mechanical reason: UHY's Texas practice was bought by BDO USA, so UHY resigned and BDO took over. No disagreements and no qualified opinions. Worth noting only because UHY had been the auditor brought in during the Quest distress of late 2008.
Nasdaq warned that the shares had traded under $1 for thirty straight days, giving until May 2015 to recover. The company had already called a shareholder meeting to approve a ten-for-one reverse split, an admission that the price would not recover on its own.
White Deer Energy L.P, White Deer Energy TE L.P, White Deer Energy FI L.P, Edelman & Guill Energy L.P, Edelman & Guill Energy Ltd, Thomas J. Edelman, Ben A. Guill reported a PostRock Energy Corp shareholding of 70,520,875 shares (77.85% of votes) in a periodic institutional filing.
10 Oct 2014capital raising announcement● NeutralMajor
Swapped $35.0 million of White Deer's redeemable preferred, due for cash redemption in 2018, for 32.1 million new shares at $1.09. It removed a hard cash obligation from a company that could not have met it, at the cost of handing the fund 43.1 million shares outright; $5,075 of preferred still remained.
What it means for a shareholder
32.1m new shares at US$1.09 to raise about US$35.0m. That's 51% dilution: every existing holder's slice gets 51% smaller. If you held US$1,000 of shares (917 at the issue price), your slice goes from 0.00296% to 0.00145% of the company. To keep it you'd need 951 more shares - about US$1,037 at the issue price.
