Gastar Exploration Reports First Quarter 2009 Financial and Operational Results
Production increased 26% to 30 MMcfe per day from fourth quarter 2008
Excluding impairment charges and unrealized hedging losses, the Company reported a net loss of
Net cash flows provided by operating activities for the three months ended
Excluding the unrealized gas hedging loss, natural gas and oil revenues in the first quarter of 2009 decreased 20% to
Lease operating expense (LOE) was
Operations Review and Update
In
As a result of our activity in
In Appalachia, we have assembled more than 41,000 net acres in the Marcellus Shale play and have drilled 10 shallow wells, including three during the first quarter. Seven of these wells are on production, and the remaining wells are scheduled to be on production during 2009. These wells will allow us to hold the leases with production, while we finalize a plan for exploration and development of the deeper Marcellus objective. We do not expect to drill additional shallow wells until we secure a joint venture partner or until natural gas prices improve. We will continue to maintain our leases through renewals, extensions and renegotiations of the few drilling commitments related to our interests. Net production from our Appalachia properties averaged 500 Mcfe per day in the first quarter.
In
“We are exploring all avenues to bolster liquidity. We currently are involved in numerous conversations at various stages of development with potential partners and asset purchasers in each of our three primary asset areas. In the Marcellus Shale, we have identified a potential joint venture partner, who is working through due diligence on our assets in the play. In
Liquidity and Capital Budget
At
Based on our current capital plan, our current cash on hand and projected internally generated cash flow, we project that we will need to raise an additional
Gastar Exploration Conference Call
Gastar Exploration’s management team will hold a conference call on
The call will also be webcast live over the Internet at . To listen to the live call on the Web, please visit Gastar’s Web site at least 10 minutes early to register and download any necessary audio software. An archive will be available shortly after the call. For more information, please contact
About Gastar Exploration
Gastar Exploration Ltd. is an exploration and production company focused on finding and developing natural gas assets in
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. A statement identified by the words “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 risks inherent in the drilling of natural gas and oil wells, including risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in the natural gas and oil drilling and production activities, 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 receipt of a “going concern” statement in our auditor’s report on our 2008 consolidated financial statements, and 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 and other risk factors described in Gastar’s Annual Report on Form 10-K and other filings with the SEC at www.sec.gov and on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Contact:
Gastar Exploration Ltd.
J. Russell Porter, Chief Executive Officer
713-739-1800 / rporter@gastar.com
Investor Relations Counsel:
Lisa Elliott / Anne Pearson
DRG&E: 713-529-6600
lelliott@drg-e.com / apearson@drg-e.com
The NYSE Amex and Toronto Stock Exchange have not reviewed and do not
accept responsibility for the adequacy or accuracy of this release.
- Financial Tables Follow -
GASTAR EXPLORATION LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended March 31,
---------------
2009 2008
---- ----
(in thousands, except share
and per share data)
REVENUES:
Natural gas and oil revenues $ 13,461 $ 16,846
Unrealized natural gas hedge loss (196) (1,413)
------ -------
Total revenues 13,265 15,433
EXPENSES:
Production taxes 157 269
Lease operating expenses 1,877 1,542
Transportation and treating 493 459
Depreciation, depletion and amortization 7,999 6,409
Impairment of natural gas and oil properties 68,729 -
Accretion of asset retirement obligation 87 82
General and administrative expense 2,958 4,275
----- -----
Total expenses 82,300 13,036
------ ------
INCOME (LOSS) FROM OPERATIONS (69,035) 2,397
OTHER (EXPENSES) INCOME:
Interest expense (1,162) (2,096)
Investment income and other 13 823
Foreign transaction loss (3) (37)
--- ----
INCOME (LOSS) BEFORE INCOME TAXES (70,187) 1,087
Provision for income taxes - -
-------- -----
NET INCOME (LOSS) $ (70,187) $ 1,087
========= =========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.34) $ 0.01
========== ========
Diluted $ (0.34) $ 0.01
========== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 207,262,117 207,098,570
=========== ===========
GASTAR EXPLORATION LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2009 2008
---- ----
(Unaudited)
(in thousands)
Current Assets:
Cash and cash equivalents $ 18,863 $ 6,153
Other 13,031 18,386
------ ------
Total current assets 31,894 24,539
Property, plant and equipment, net 196,036 252,527
Total other assets 10,197 11,371
------ ------
Total assets $238,127 $288,437
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Other $ 26,353 $ 30,076
Current portion of long-term debt 174,717 151,684
------- -------
Total current liabilities 201,070 181,760
Other long-term liabilities 5,307 5,095
Total shareholders' equity 31,750 101,582
------ -------
Total liabilities and shareholders' equity $238,127 $288,437
======== ========
PRODUCTION AND PRICES
For the Three Months
Ended March 31,
---------------
2009 2008
---- ----
Production:
Natural gas (MMcf) 2,693 2,406
Oil (MBbl) 1 1
Total (MMcfe) 2,698 2,413
Total (MMcfed) 30.0 26.5
Average sales prices:
Natural gas (per Mcf), including
impact of realized hedging activities $ 4.99 $ 6.96
Oil (per Bbl) $39.47 $96.84
CURRENT HEDGE POSITION
The following derivative transactions were outstanding with associated
notional volumes and hedge prices for the index specified as of April 11,
2009:
Notional
Daily Total Base
Derivative Volume Volume Fixed
Date Period Instrument(1) Average Remaining Price
(MMBtu) (MMBtu)
10/15/08 Cal 09 CC 5,000 1,375,000
10/15/08 Cal 09 (P) 5,000 1,375,000
01/29/09 Apr-Dec 09 P 14,994 4,123,453
05/05/09 Jan-Mar 10 CC 10,000 900,000
05/05/09 Jan-Mar 10 (P) 10,000 900,000
10/15/08 Cal 09 B 5,000 1,375,000 -$0.3825
10/15/08 Cal 09 I 5,000 1,375,000
02/12/09 Apr-Dec 09 B 2,000 550,000 -$0.3750
03/16/09 Apr-Oct 09 B 2,000 428,000 -$0.2800
03/25/09 Apr-Oct 09 B 2,000 428,000 -$0.2850
11/14/08 Cal 09 B 1,500 412,500 -$2.2200
11/21/08 Cal 09 B 1,000 275,000 -$2.0200
02/12/09 Apr-Dec 09 B 850 233,750 -$1.7500
04/07/09 Cal 10 B 1,000 365,000 -$1.3100
04/07/09 Cal 11 B 1,000 365,000 -$1.2100
Production
Area
Date Puts Call Index Hedged
(MMBtu) (MMBtu)
10/15/08 $8.00 $12.05 Nymex-HH TX
10/15/08 $5.75 Nymex-HH TX
01/29/09 $5.00 Nymex-HH TX/WY
05/05/09 $5.00 $7.00 Nymex-HH TX
05/05/09 $3.50 Nymex-HH TX
10/15/08 HSC (2) TX
10/15/08 HSC (2) TX
02/12/09 HSC (2) TX
03/16/09 HSC (2) TX
03/25/09 HSC (2) TX
11/14/08 CIG (3) WY
11/21/08 CIG (3) WY
02/12/09 CIG (3) WY
04/07/09 CIG (3) WY
04/07/09 CIG (3) WY
(1) CC = Costless collars.
(1) B = Basis Swaps.
(1) I = Index swaps; Gas Daily to IFERC Monthly Index.
(1) P = Put purchased.
(1) (P) = Put sold.
(2) East-Houston-Katy -- Houston Ship Channel.
(3) Inside FERC Colorado Interstate Gas, Rocky Mountains.
SOURCE Gastar Exploration Ltd.