Gastar Exploration Inc. (ticker: GST) will divest its interest in the West Edmund Hunton Lime Unit (WEHLU) for $107.5 million. The transaction 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, the 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 the quarter.
Gastar Overview, Nov. 2017
Gastar President and CEO J. Russell Porter 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.”
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.
