Gastar Exploration Completes Sale of Australian Assets
14 July 2009 - 12:28AM
PR Newswire (US)
HOUSTON, July 13 /PRNewswire-FirstCall/ -- Gastar Exploration Ltd.
(NYSE Amex: GST) has completed the previously announced sale of all
of its interest in Petroleum Exploration Licenses 238, 433 and 434
in New South Wales, Australia, and the sale of its shares of Gastar
Power Pty Ltd, to affiliates of Santos Ltd. (ASX:STO). Gastar
received approximately US $217 (AU $280) million of the aggregate
US $233 (AU $300) million purchase price at closing and is
scheduled to receive the balance upon receipt of certain government
approvals. Total net proceeds after payment of Australian income
taxes are expected to be approximately US $170.5 (AU $219) million
prior to transaction costs. The Company may be paid an additional
US $16 (AU $20) million in early 2010 if the independently
certified gross 2P reserves (SPE proved plus probable) for the PEL
238 coalbed methane project are at least 1.3 Tcf at year-end 2009.
Using a portion of the proceeds, Gastar will retire its $25 million
secured term note and pay down the current outstanding balance of
$13 million under its secured revolving credit facility. The
Company intends to immediately offer to repurchase all of its
outstanding $100 million of 12-3/4% senior notes with remaining
proceeds in accordance with the governing indenture and expects to
retire its $30 million convertible subordinated debentures upon
their maturity in November 2009. Successful redemption of the
12-3/4% senior notes and repayment of the convertible subordinated
debentures at maturity would result in the elimination of
substantially all of Gastar's currently outstanding debt. In
addition, the Company completed the previously announced voluntary
de-listing of its common shares from the Toronto Stock Exchange
(TSX) effective July 6. Gastar also previously announced that it
intends to implement a 1-for-5 reverse share consolidation, leaving
approximately 49.6 million basic common shares outstanding. The
share consolidation is expected on or about July 31, 2009. J.
Russell Porter, Gastar's President and Chief Executive Officer,
said, "This transaction transforms Gastar's balance sheet and puts
the Company in a strong position going forward, concentrating our
development and growth efforts in the United States. I want to
express my sincere thanks to our partners at Eastern Star Gas.
David Casey and his talented team have shown commitment and
expertise that have been instrumental in demonstrating the
world-class potential of PEL 238, and we wish them and Santos
continued success as they develop a unique and uniquely positioned
asset." 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 CBM and shale resource 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 http://www.gastar.com/. Safe Harbor Statement
and Disclaimer This news release includes "forward looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Act of 1934. A statement
identified by the words "expects", "projects", "plans", 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 risks
related to unexpected adverse developments in the status of the
properties, the absence or delay in receipt of government approvals
or third party consents, or an unanticipated need for using a
portion of net cash proceeds from the announced transaction. The
NYSE Amex has not reviewed and does not accept responsibility for
the adequacy of this release. Company Contact: Gastar Exploration
Ltd. J. Russell Porter, Chief Executive Officer 713-739-1800 /
Investor Relations Counsel: Lisa Elliott / Anne Pearson DRG&E :
713-529-6600 / DATASOURCE: Gastar Exploration Ltd. CONTACT: J.
Russell Porter, Chief Executive Officer of Gastar Exploration Ltd.,
+1-713-739-1800, ; or Investor Relations Counsel, Lisa Elliott, or
Anne Pearson, , both of DRG&E, +1-713-529-6600, for Gastar
Exploration Ltd. Web Site: http://www.gastar.com/
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