Constellation Energy Partners Announces Settlement of the PostRock
HOUSTON -- March 31, 2014
Constellation Energy Partners LLC (NYSE MKT: CEP) today announced that the
PostRock Litigation has been settled. The PostRock Litigation was between CEP,
certain of its current and former managers and executive officers,
Constellation Energy Partners Management, LLC (“CEPM”), a wholly owned
subsidiary of PostRock Energy Corporation (NASDAQ: PSTR), Sanchez Energy
Partners I, L.P. (“SEPI”) and Sanchez Oil & Gas Corporation (“SOG”). Following
the consummation of the settlement, SEPI will be the sole holder of CEP’s
Class A units and it is expected that by the end of 2014 CEPM will have little
or no continuing ownership interest in CEP.
“With the settlement of the PostRock Litigation, CEP can resume developing
what we believe will be a transformative relationship with Sanchez Oil & Gas,”
commented Stephen R. Brunner, President and Chief Executive Officer of CEP.
“We expect that the relationship will provide CEP with additional asset
acquisition opportunities, a means to achieving enhanced deal flow, and an
opportunity to leverage the skills and personnel of Sanchez Oil & Gas, a
proven operator with an outstanding technical team and experience that spans
across multiple basins in the U.S.”
As a result of the settlement, the Class A units acquired by SEPI in the
August 2013 transaction have been returned to CEP and cancelled; CEPM
transferred 100% of its CEP Class A units to SEPI and also transferred 414,938
of CEP’s Class B units to SEPI in exchange for an aggregate payment of $1.0
million; and CEP paid $6.5 million to CEPM. In addition, pursuant to the terms
of the settlement, CEPM agrees to sellits remaining Class B units over the
next nine months, with SEPI providing up to a $5.0 million backstop payment to
CEPM to the extent the proceeds received by CEPM from such sale do not meet or
exceed a specified amount.
As a result of the settlement, the settling parties agree to file a
stipulation in the Court of Chancery of the State of Delaware seeking to lift
the preliminary injunction issued on December 3, 2013 and dismiss the PostRock
Litigation with prejudice. The settlement agreement includes mutual releases
between the plaintiffs and defendants.
Additional information about the PostRock Litigation and settlement can be
found in the company’s filings with the Securities and Exchange Commission and
on the company’s Web site (http://www.constellationenergypartners.com).
About the Company
Constellation Energy Partners LLC is a limited liability company focused on
the acquisition, development and production of oil and natural gas properties,
as well as related midstream assets.
We make statements in this news release that are considered forward-looking
statements within the meaning of the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended. These forward-looking
statements are largely based on our expectations, which reflect estimates and
assumptions made by our management. These estimates and assumptions reflect
our best judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to be reasonable,
they are inherently uncertain and involve a number of risks and uncertainties
that are beyond our control, including, without limitation, whether the court
will approve the settlement discussed in this news release. In addition,
management's assumptions about future events may prove to be inaccurate.
Management cautions all readers that the forward-looking statements contained
in this news release are not guarantees of future performance, and we cannot
assure you that such statements will be realized or the forward-looking events
and circumstances will occur. Actual results may differ materially from those
anticipated or implied in the forward-looking statements due to factors listed
in the "Risk Factors" section in our SEC filings and elsewhere in those
filings. All forward-looking statements speak only as of the date of this news
release. We do not intend to publicly update or revise any forward-looking
statements as a result of new information, future events or otherwise. These
cautionary statements qualify all forward-looking statements attributable to
us or persons acting on our behalf.
Constellation Energy Partners LLC
Charles C. Ward, 877.847.0009
General Inquiries: 877.847.0008
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