HOUSTON, July 21, 2014 /PRNewswire/ -- Gastar
Exploration Inc. (NYSE MKT: GST) ("Gastar") today reported that
estimated proved reserves of natural gas, oil and condensate and
natural gas liquids (NGLs) as of June 30,
2014 totaled 78.0 million barrels of oil equivalent (BOE), a
43% increase over December 31, 2013
proved reserves of 54.6 million BOE, as estimated by our
third-party reserve engineers in accordance with SEC
regulations. Of the 78.0 million BOE of mid-year reserves,
54% were natural gas, 26% were oil and condensate and 20% were
NGLs, compared to 55% natural gas, 27% oil and condensate and 18%
NGLs at year-end 2013.
Using SEC pricing, the pre-tax present value discounted at 10%
(PV-10) of proved reserves increased to $826.3 million at June 30,
2014, an increase of 39% versus $592.5 million at year-end 2013. Marcellus
reserves in the Appalachian Basin represented 71% of proved reserve
volumes and 51% of the PV-10 value, while Hunton Limestone reserves
in Oklahoma represented 29% of
proved reserve volumes and 49% of the PV-10 value.
Proved undeveloped (PUD) reserves at mid-year 2014 represented
approximately 62% of total proved reserves compared to
approximately 44% at year-end 2013. The total PUDs had a
PV-10 value of $451.3 million and the
Appalachian Basin represented 74% and Oklahoma represented 26%. At
June 30, 2014 Gastar attributed PUD
reserves to 72 gross (34.6 net) Marcellus PUD locations and 96
gross (73.1 net) Hunton PUD locations, as compared to 40 gross
(18.8 net) and 73 gross (65.4 net), respectively, at December 31, 2013.
In accordance with SEC regulations, estimates of proved reserves
as of June 30, 2014 were calculated
using the 12-month un-weighted arithmetic average of the
first-day-of-the-month price for each month in the period
July 1, 2013 through June 30, 2014. For natural gas volumes, the
average Henry Hub price utilized was $4.10 per million Btu (MMBtu), compared to
$3.67 per MMBtu for the prior period,
and for oil volumes, the average West Texas Intermediate price
utilized was $100.11 per barrel,
compared to $96.78 per barrel for
year-end 2013. These benchmark natural gas and oil prices
were adjusted for energy content or quality, transportation and
regional price differentials by area.
These reserve estimates for both regions were prepared by Wright
& Company, Inc.
J. Russell Porter, Gastar's
President and CEO, stated, "We are very pleased with our progress
in the first half of 2014 in building reserve volumes and
especially pleased with the growth in the value of our
reserves. Our oil-focused assets in the Hunton play in
Oklahoma now represent nearly half
of our total PV 10 reserve value, as we benefit from the continued
strength in crude oil prices.
"Over the last three years, we have grown our reserves more than
nine-fold and transitioned our portfolio from almost exclusively
dry gas to 46 percent higher-value liquids in the form of oil,
condensate and NGLs.
"We are excited about the opportunities for continued increase
in oil production and reserve growth from our extensive
Mid-Continent acreage. We also anticipate strong future
growth in NGLs from our Marcellus operation, and believe we have
strong potential for adding high volume dry gas wells in the
Utica/Point Pleasant formation that underlies the majority of our
Appalachian acreage. We expect to learn the results of our
first Utica test in the third quarter.
"Our extensive inventory of high-return, liquids-focused
drilling opportunities in both regions – along with the strong
prospectivity of the Utica/Point Pleasant gas play -- should allow
us to continue to grow reserves, production and cash flow, and we
believe should continue to drive increased shareholder value," said
Porter.
Hunton Activity Update
Gastar has posted to its Investor Relations website a table
providing a detailed production update on all recently drilled
producing horizontal Hunton wells, which will be periodically
updated. As a reminder, investors interested in receiving an
email notice indicating that the table has been updated can
register to receive automatic alerts at
http://www.gastar.com/alerts.cfm.
About Gastar Exploration
Gastar Exploration Inc. is an independent energy company engaged
in the exploration, development and production of oil, natural gas,
condensate 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
development within the primarily oil-bearing reservoirs of the
Hunton Limestone horizontal oil play in Oklahoma and the development of liquids-rich
natural gas in the Marcellus Shale play and dry gas in the Utica
Shale play in West Virginia. For more information, visit
Gastar's website at www.gastar.com.
Forward Looking Statements
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 are
reasonable, 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 adverse drilling
results, production declines and declines in natural gas and oil
prices; risks relating to unexpected adverse developments in the
status of properties; borrowing base redeterminations by our banks;
risks relating to the absence or delay in receipt of government
approvals or fourth party consents; risks relating to our
ability to integrate acquired assets with ours and to realize the
anticipated benefits from such acquisitions; and other risks
described in Gastar's Annual Report on Form 10-K and other filings
with the U.S. Securities and Exchange Commission ("SEC"), available
at the SEC's website at www.sec.gov. Our actual sales
production rates can vary considerably from tested initial
production rates depending upon completion and production
techniques and our primary areas of operations are subject to
natural steep decline rates. By issuing forward looking statements
based on current expectations, opinions, views or beliefs, Gastar
has no obligation and, except as required by law, is not
undertaking any obligation, to update or revise these statements or
provide any other information relating to such statements.
Contacts:
Gastar Exploration
Inc.
Michael A.
Gerlich, Chief Financial
Officer
713-739-1800 /
mgerlich@gastar.com
Investor Relations Counsel:
Lisa Elliott /
lelliott@DennardLascar.com
Anne Pearson /
apearson@DennardLascar.com
Dennard ▪ Lascar
Associates: 713-529-6600
SOURCE Gastar Exploration Inc.