Gastar Exploration Inc. (NYSE MKT: GST) (“Gastar”) announced today that it has entered into a purchase and sale agreement to sell certain non-core assets in Oklahoma to an undisclosed private third party for approximately $46.2 million, subject to certain adjustments and customary closing conditions. The transaction is expected to close on or before June 22, 2015, with a property sale effective date of April 1, 2015.
“We are pleased to announce another sale of non-core acreage in Oklahoma at an attractive valuation,” said J. Russell Porter, Gastar’s President and CEO. “The sale of these assets will allow us to continue focusing on our Hunton Limestone exploration and development programs in our core Oklahoma acreage within and around our West Edmond Hunton Lime Unit (“WEHLU”) and AMI joint venture area while retaining a substantial acreage position with Stack Play potential. Following the completion of this transaction, in our Mid-Continent area we will have approximately 103,600 net acres with Hunton Limestone Oil Play reserves or potential, approximately 41,500 net acres with Meramec Shale/Mississippi Lime potential and 44,200 net acres with Woodford Shale potential.”
“We currently believe we will have ample liquidity to support our capital expenditure plans for the remainder of 2015, and the proceeds from this sale will further enhance our liquidity and our financial flexibility regarding future capital activities.”
The assets to be sold include approximately 29,300 gross (19,000 net) acres in Kingfisher County, Oklahoma. For the most recent three months ended March 31, 2015, net production from the associated acreage averaged approximately 170 barrels of oil equivalent (“Boe”) per day from 38 gross (16.7 net) wells, of which 57% was natural gas. At December 31, 2014, proved reserves attributable to the acreage was 379,000 Boe, of which 63% was natural gas.
The closing of the proposed property sale is subject to the satisfaction of customary closing conditions. Proceeds from the transaction will initially be used to reduce Gastar’s outstanding balance under its revolving credit facility and other general corporate purposes including a possible initial operated test of the Meramec Shale potential on a portion of its holdings later in 2015.
About Gastar Exploration
Gastar Exploration Inc. is an independent energy company engaged in the exploration, development and production of oil, condensate, natural gas 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. In Oklahoma, Gastar is developing the primarily oil-bearing reservoirs of the Hunton Limestone horizontal oil play and expects to test other prospective formations on the same acreage, including the Woodford Shale and the Meramec Shale (Mississippi Lime), which Gastar refers to as the Stack Play. In West Virginia, Gastar is developing liquids-rich natural gas in the Marcellus Shale and has drilled and completed its first successful dry gas Utica Shale/Point Pleasant well on its acreage. For more information, visit Gastar’s website at www.gastar.com.