Attached files
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| 8-K - GASTAR EXPLORATION, INC. | v200860_8k.htm |
| EX-99.2 - GASTAR EXPLORATION, INC. | v200860_ex99-2.htm |
Exhibit
99.1
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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&L :
713-529-6600
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For
Immediate Release
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lelliott@drg-l.com/
apearson@drg-l.com
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Gastar
Exploration Closes Marcellus Shale Joint Venture
HOUSTON,
November 2, 2010 – Gastar Exploration Ltd. (NYSE Amex: GST) announced today that
Gastar Exploration USA, Inc., a wholly owned subsidiary of Gastar Exploration
Ltd., has closed its joint venture agreement funding with Atinum Marcellus I LLC
(“Atinum”), an affiliate of Atinum Partners Co., Ltd., a leading investment firm
located in the Republic of Korea. Pursuant to the agreement, Gastar
has assigned to Atinum an initial 21.43% interest in all of its existing
Marcellus Shale undeveloped lease acreage in West Virginia and Pennsylvania,
along with certain producing shallow conventional wells.
With
the closing of the transaction, Atinum has paid Gastar $30 million in cash and
now owns a 21.43% interest in the 34,200 net acres of Marcellus Shale rights
previously owned by Gastar. Also under the terms of the agreement,
Atinum has committed to an additional $40 million in the form of a drilling
carry to Gastar by funding 75% of Gastar’s 50% share of drilling completion and
infrastructure costs in addition to its own 50% share of these same
costs. Upon the completion of the funding of the $40 million drilling
carry, Atinum will own a 50% interest in the acreage, making the transaction
valued at approximately $70 million. A post-closing title review
period could result in certain purchase price adjustments.
Gastar and Atinum have an initial
three-year development program that calls for them to drill one horizontal
Marcellus Shale well during the remainder of 2010 and a minimum of 12 horizontal
wells in 2011 and 24 in each of 2012 and 2013. Gastar will continue
to serve as operator of all of the Marcellus Shale interests in the joint
venture.
J.
Russell Porter, Gastar’s President and CEO, commented, “We are excited to be
moving forward with our partnership with Atinum, which will allow us to
accelerate development of our Marcellus Shale assets. We have already
spudded our first operated horizontal Marcellus Shale well in Marshall County,
West Virginia — the Wengerd #1. Under the terms of the partnership,
Atinum will pay 87.5% of the cost of the well for a 50% interest. We
expect to have the well completed by late first quarter 2011, and due to the
close proximity of this well to existing pipelines, if successful, we should be
able to place it on production quickly.”
“Atinum is also participating with us
in an agreement with an operator of adjacent acreage, to pool acreage in Butler
County, Pennsylvania, and participate in the drilling of seven horizontal wells
targeting the Marcellus Shale. Under terms of that agreement,
collectively Atinum and GST own 38.4% of seven horizontal wells to be
drilled. Atinum will pay 87.5% of our net cost (or 33.6% for a 19.2%
working interest). Currently the other operator is completing the
drilling of the vertical section of the seven wells from one pad and will return
later this year with a larger rig to drill horizontal sections in all seven
wells. Completion activity is expected to begin in the first quarter
of 2011 with the wells scheduled to be fracture stimulated and put on production
starting early in the second quarter,” added Porter.
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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