Transaction Provides Additional Capital for STACK Acreage
Development
HOUSTON, Jan. 25, 2018 /PRNewswire/ -- Gastar Exploration
Inc. (NYSE MKT: GST) ("Gastar" or the "Company") today announced
that it has entered into a definitive purchase and sale agreement
to divest its interest in the West Edmund Hunton Lime Unit
("WEHLU") for $107.5 million.
The transaction, subject to customary closing conditions and
adjustments, is expected to close on or before February 28, 2018, with a property sale effective
date of October 1, 2017. Gastar
received a deposit of 10% of the purchase price on January 25, 2018.
WEHLU is primarily located in Oklahoma and Logan counties, Oklahoma. During the
third quarter of 2017, our WEHLU assets' daily production net to
the Company was approximately 2,836 barrels of oil equivalent
("BOE") comprised of 52% oil, 25% natural gas liquids and 23%
natural gas, which constituted 46% of the Company's total
equivalent production for such quarter.
J. Russell Porter, Gastar's
President and CEO, commented, "This divestiture of our WEHLU assets
should provide Gastar with sufficient liquidity to fund our core
STACK acreage development plan through 2018. Our one rig
drilling program has been re-started and we expect to be able to
drill and complete approximately 20 operated wells in 2018 to more
fully delineate and develop the Meramec and Osage formations on our 65,200 net surface
acres in our core STACK position. Due to our large,
contiguous acreage position with as many as six potentially
productive formations and multiple benches within certain
prospective formations, we have a large inventory of undrilled
horizontal locations to exploit to create value going forward."
Advisors
Tudor, Pickering, Holt & Co. advised Gastar on the sale of
its WEHLU assets. Vinson & Elkins L.L.P. served as legal
counsel to Gastar for the transaction.
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 closing the sale of
Gastar's WEHLU assets; 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; 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 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.
Targeted expectations and guidance for the full-year of 2018 are
based upon the current 2018 planned capital expenditures budget,
which may be subject to revision and reevaluation dependent upon
future developments, including changes in commodity prices,
drilling results, our liquidity position, availability of crews,
supplies and production capacity, weather delays and significant
changes in drilling costs.
Unless otherwise stated herein, equivalent volumes of production
are based upon an energy equivalent ratio of six Mcf of natural gas
to each barrel of liquids (oil, condensate and NGLs), which ratio
is not reflective of relative value. Our NGLs are sold as
part of our wet gas subject to an incremental NGLs pricing formula
based upon a percentage of NGLs extracted from our wet gas
production. Our reported production volumes reflect
incremental post-processing NGLs volumes and residual gas volumes
with which we are credited under our sales contracts.
Contacts:
Gastar Exploration Inc.
J. Russell Porter, President &
Chief Executive Officer
713-739-1800 / rporter@gastar.com
Investor Relations Counsel:
Lisa Elliott, Dennard Lascar Investor Relations:
713-529-6600 / lelliott@DennardLascar.com
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SOURCE Gastar Exploration Inc.