Transaction Provides Additional Capital for STACK Acreage Development
HOUSTON, Jan. 25, 2018 /CNW/ — 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.”
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.