HOUSTON, April 22, 2013 /PRNewswire/ -- Gastar
Exploration Ltd. (NYSE MKT: GST) today announced that it has
entered into a definitive agreement to sell its East Texas assets to Cubic Energy, Inc. (NYSE
MKT: QBC) for $46.0 million, subject
to customary closing adjustments. The transaction is expected
to close on or before June 5 2013,
with a property sale effective date of January 1, 2013.
"This sale allows Gastar to redeploy capital to our higher
return projects in the Marcellus Shale and Hunton Limestone," said
J. Russell Porter, Gastar's
President and CEO. "In conjunction with our previously
announced Hunton Limestone acquisition, this transaction furthers
our planned transition to a liquids rich asset portfolio."
The assets to be sold include approximately 31,800 gross (16,300
net) acres in the Hilltop area of East
Texas in Leon and Robertson
Counties. For the three months ended December 31, 2012, net production from the
Hilltop area averaged approximately 12.4 MMcfe/d. At
December 31, 2012, proved reserves
attributable to the Hilltop area were approximately 27.4 Bcfe, of
which 100% are classified as proved developed and represented
approximately 15% of Gastar's total proved reserves.
The closing of the proposed property sale is subject to
satisfaction of customary closing conditions. Proceeds from
the transaction will initially be used to reduce Gastar's
outstanding balance under its revolving credit facility.
Management anticipates that this transaction will result in a net
increase in the Company's liquidity position of approximately
$25 million.
About Gastar Exploration
Gastar Exploration Ltd. is an independent company engaged in the
exploration, development and production of oil, natural gas and
natural gas liquids in the United States. Gastar's principal
business activities include the identification, acquisition, and
subsequent exploration and development of oil and natural gas
properties with an emphasis on unconventional reserves such as
shale resource plays. Gastar is currently pursuing the development
of liquids-rich natural gas in the Marcellus Shale in West Virginia and is exploring and developing
the Hunton Limestone horizontal oil play in Oklahoma. The
company also holds producing natural gas acreage in the deep
Bossier play in the Hilltop area of East
Texas and prospective Marcellus Shale acreage in
Pennsylvania. For more information, visit Gastar's website at
www.gastar.com.
Safe Harbor Statement and Disclaimer
This news release includes "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward looking statements give our current
expectations, opinion, belief or forecasts of future events and
performance. A statement identified by the use of forward
looking words including "may," "expects," "projects,"
"anticipates," "plans," "believes," "estimate," "will," "should,"
and certain of the other foregoing statements may be deemed
forward-looking statements. Although Gastar believes that the
expectations reflected in such forward-looking statements have a
reasonable basis, these statements involve risks and uncertainties
that may cause actual future activities and results to be
materially different from those suggested or described in this news
release. These include risks inherent in natural gas and oil
drilling and production activities, including risks of fire,
explosion, blowouts, pipe failure, casing collapse, unusual or
unexpected formation pressures, environmental hazards, and other
operating and production risks, which may temporarily or
permanently reduce production or cause initial production or test
results to not be indicative of future well performance or delay
the timing of sales or completion of drilling operations; delays in
receipt of drilling permits; risks with respect to natural gas and
oil prices, a material decline in which could cause Gastar to delay
or suspend planned drilling operations or reduce production levels;
risks relating to the availability of capital to fund drilling
operations that can be adversely affected by borrowing base
redeterminations by our banks, adverse drilling results, production
declines and declines in natural gas and oil prices; risks relating
to unexpected adverse developments in the status of properties;
risks relating to the absence or delay in receipt of government
approvals or fourth party consents; and other risks described in
Gastar's Annual Report on Form 10-K and other filings with the SEC,
available at the SEC's website at www.sec.gov.
Contacts:
Gastar Exploration Ltd.
J. Russell Porter, Chief Executive
Officer
713-739-1800 / rporter@gastar.com
Investor Relations Counsel:
Lisa Elliott / Anne Pearson
Dennard ▪ Lascar Associates: 713-529-6600
lelliott@DennardLascar.com
apearson@DennardLascar.com
SOURCE Gastar Exploration Ltd.