Attached files
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8-K - GASTAR EXPLORATION, INC. | v197389_8k.htm |
EX-2.2 - GASTAR EXPLORATION, INC. | v197389_ex2-2.htm |
EX-2.1 - GASTAR EXPLORATION, INC. | v197389_ex2-1.htm |
NEWS
RELEASE
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Company
Contact:
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Gastar
Exploration Ltd.
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J.
Russell Porter, Chief Executive Officer
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713-739-1800 /
rporter@gastar.com
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Investor
Relations Counsel:
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Lisa
Elliott / Anne Pearson
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DRG&E :
713-529-6600
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lelliott@drg-e.com / apearson@drg-e.com
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For
Immediate Release
Gastar
Exploration Announces Marcellus Shale Joint Venture
HOUSTON,
September 22, 2010 – Gastar Exploration Ltd. (“Gastar”) (NYSE Amex: GST)
announced today that it has entered into a joint venture (“JV”) agreement with
Atinum Marcellus I LLC (“Atinum”), an affiliate of Atinum Partners Co., Ltd.
(“Atinum Partners”), a leading investment firm located in the Republic of
Korea. Pursuant to the agreement, Gastar will assign an initial
21.43% interest to Atinum in all of its existing Marcellus Shale assets in West
Virginia and Pennsylvania, approximately 34,200 net acres, and certain producing
shallow conventional wells in a transaction valued at approximately $70
million.
Under the
terms of the transaction, Atinum will pay Gastar $30 million in cash upon
closing and an additional $40 million in the form of a drilling
carry. Upon the completion of the funding of the drilling carry,
Atinum will own a 50% interest in the 34,200 net acres of Marcellus Shale rights
currently owned by Gastar. Gastar will continue to serve as operator
of all of the Marcellus Shale interests in the JV. The transaction is
expected to close within 30 to 45 days and is contingent upon the receipt of
certain required approvals from government agencies in the Republic of Korea and
other customary closing conditions.
The terms
of the drilling carry call for Atinum to fund its ultimate 50% share of
drilling, completion and infrastructure costs along with 75% of Gastar’s
ultimate 50% share of those same costs until the $40 million carry has been
satisfied. Gastar and Atinum are pursuing an
initial three-year development program that calls for the partners to
drill one horizontal Marcellus Shale well during the remainder of 2010 and a
minimum of 12 horizontal wells in 2011 and 24 horizontal wells in each of 2012
and 2013.
An
initial area of mutual interests (“AMI”) will be established for potential
additional acreage acquisitions in Ohio and New York along with the counties in
West Virginia and Pennsylvania in which the existing interests are
located. Within the initial AMI, Gastar will act as operator and will
offer any future lease acquisitions to Atinum on a 50/50 basis, while Atinum has
agreed to pay Gastar on an annual basis an amount equal to 10% of lease bonuses
and third party leasing costs up to $20 million and 5% of the costs on
activities above $20 million. Until June 30, 2011, Atinum will have
the right to participate in any future leasehold acquisitions made by Gastar,
outside of the initial AMI and within West Virginia or Pennsylvania, on terms
identical to those governing the existing Marcellus JV.
J.
Russell Porter, Gastar’s President and CEO, commented, “We are pleased to
announce this transaction and we look forward to our partnership with Atinum
Partners. This joint venture will allow Gastar to accelerate
development of our Marcellus Shale assets while maintaining a low level of
leverage and a high degree of financial flexibility. This transaction
also realizes a significantly higher valuation for our Marcellus Shale assets
than what has been reflected in our share price and thus made a joint venture
the least dilutive method to finance development. We may utilize the
proceeds from this transaction to help fund our Marcellus Shale development
plans, future drilling and development of our East Texas asset, lease or
property acquisition opportunities and potential debt reduction.”
Kyung Soo
Chung, President and CEO of Atinum Partners, commented, “We are excited about
the opportunity to invest in the Marcellus Shale and to partner with an
experienced operator such as Gastar. This is our third investment in
the U.S. energy sector in the last 12 months, continuing our strategy to
actively invest in significant growth opportunities.”
Vinson
& Elkins LLP acted as legal advisor for Gastar. BMO Capital
Markets acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom
LLP acted as legal advisor for Atinum.
About
Gastar Exploration
Gastar
Exploration Ltd. is an exploration and production company focused on finding and
developing natural gas assets in North America. The Company pursues a
strategy combining deep natural gas exploration and development with lower risk
shale resource and CBM development. The Company owns and operates
exploration and development acreage in the deep Bossier gas play of East Texas
and Marcellus Shale play in West Virginia and Pennsylvania. Gastar’s
CBM activities are conducted within the Powder River Basin of
Wyoming. For more information, visit our web site at www.gastar.com.
About Atinum
Partners Co., Ltd.
Atinum
Partners, headquartered in Seoul, Republic of Korea is a leading private
investment company with assets under management of over US $1.5
billion. Established in 2008, Atinum Partners focuses on domestic and
international investment opportunities in a broad range of industries. In
the United States, the Gastar joint venture marks the third investment in the
oil & gas industry.
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 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 risk
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;
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; risks relating
to the absence or delay in receipt of government approvals or third 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. 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.
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