HOUSTON, Jan. 10, 2017 /PRNewswire/ -- Gastar
Exploration Inc. (NYSE MKT: GST) ("Gastar") announced today that it
has declared special cash dividends on its 8.625% Series A
Preferred Stock ("Series A Preferred Stock") and its 10.75% Series
B Preferred Stock ("Series B Preferred Stock") to pay in full all
accumulated and unpaid cash dividends on both of its outstanding
series of preferred stock. Due to covenant restrictions under its
credit agreement, Gastar had previously suspended the payment of
monthly cash dividends on both outstanding series of its preferred
stock as of April 1, 2016. The total
amount of the declared dividend payments is approximately
$12.1 million.
The dividend on the Series A Preferred Stock and Series B
Preferred Stock is payable on January 31,
2017 to holders of record at the close of business on
January 20, 2017.
The Series A Preferred Stock January
2017 dividend payment will include all accumulated and
unpaid dividends accrued since April 1,
2016 at an annualized 8.625% through the payment date, which
is equivalent to $1.796875 per share,
based on the $25.00 per share
liquidation preference. The Series A Preferred Stock is
currently listed on the NYSE MKT and trades under the ticker symbol
"GST.PRA."
The Series B Preferred Stock January
2017 dividend payment will include all accumulated and
unpaid dividends accrued since April 1,
2016 at an annualized 10.75% through the payment date, which
is equivalent to $2.239584 per share,
based on the $25.00 per share
liquidation preference. The Series B Preferred Stock is
currently listed on the NYSE MKT and trades under the ticker symbol
"GST.PRB."
In connection with the dividend declaration, Gastar also
announced that it has entered into an amendment of its credit
agreement governing its revolving credit facility to, among other
items, permit the limited payment of certain cash dividends on its
preferred stock, including the dividends declared payable on
January 31, 2017, provided that
Gastar's borrowing base will be correspondingly reduced in the
amount of any such dividend payment and Gastar pays down its
outstanding indebtedness in the amount of dividends paid. Gastar's
credit agreement had previously prohibited payment of cash
dividends on preferred stock after March 31,
2016.
Under the amendment, payment of the declared January 2017 dividend and monthly preferred stock
cash dividends through May 2017 is
permitted contingent upon the satisfaction of certain conditions,
including but not limited to (1) the absence of any defaults
or borrowing base deficiency, (2) having cash liquidity (including
any available revolver borrowings) of more than $30 million, and (3) paying permitted dividends
solely from proceeds received by Gastar from sales of equity since
November 30, 2016 (including through
the Company's at-the-market sales program). There is no assurance,
however, when or if Gastar will declare and pay further preferred
stock dividends after January 31,
2017.
Under the credit agreement amendment, Gastar also agreed to pay
down indebtedness under its revolving credit facility by at least
an additional $8.1 million by
April 30, 2017, which is anticipated
to be paid out of proceeds received by such date from its
previously announced sale of non-core Canadian County, Oklahoma oil and gas
properties.
About Gastar Exploration
Gastar Exploration Inc. is a pure play Mid-Continent independent
energy company engaged in the exploration, development and
production of oil, condensate, natural gas and natural gas liquids.
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 holds a concentrated acreage
position in what is believed to be the core of the STACK Play, an
area of central Oklahoma which is
home to multiple oil and natural gas-rich reservoirs including the
Meramec, Oswego, Osage,
Woodford and Hunton formations.
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 with respect to
continued low or further declining prices for natural gas and
oil that could result in further downward revisions to the
value of proved reserves or otherwise cause Gastar to
further delay or suspend planned drilling and completion operations
or reduce production levels which would adversely impact cash flow;
risks relating to the availability of capital to fund drilling
operations that can be adversely affected by adverse drilling
results, production declines and continued low or further declining
prices for natural gas and oil; risks
regarding Gastar's ability to meet financial covenants
under its indenture or credit agreements or the ability to obtain
amendments or waivers to effect such compliance; 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 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 third-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, Quarterly Reports
on Form 10-Q and other filings with the 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, Dennardâ–ªLascar
Associates:
713-529-6600 / lelliott@DennardLascar.com
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SOURCE Gastar Exploration Inc.