Gastar Exploration Provides Operations Update

HOUSTON, June 9, 2014 /PRNewswire/ -- Gastar Exploration Inc. ("Gastar") (NYSE MKT: GST) today provided an update on its Hunton Oil Play operations in the Mid-Continent as well as its Marcellus and Utica operations in Appalachia.

Mid-Continent

In our Mid-Continent Hunton Oil Play, we currently have 20 gross (10.1 net) recently drilled wells on production, of which 15 gross (7.2 net) wells are non-operated in our area of mutual interest (AMI), two gross (0.2 net) are non-operated outside our AMI, and three gross (2.7 net) are operated wells.  The table following this news release includes detailed production data for each well.  We intend to post this table on our website and will be updating it from time to time.  Investors interested in receiving an email notice indicating that the table has been updated can register to receive alerts at http://www.gastar.com/alerts.cfm.

Non-Operated Wells

To date in the second quarter of 2014, five gross (1.7 net) non-operated wells have been placed on flowback.  Production rates for these new wells have been generally strong, with one well coming on significantly above our projected type curve.  The Kodiak 1-29H began flowback operations on May 4, 2014 quickly reaching an initial daily production rate of 1,666 barrels of oil equivalent (Boe) (86% crude oil) and achieved a 30-day average production rate of 1,259 Boe (83% crude oil).  

The following table reflects key information on recent non-operated well activity:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Approx.


 

 

 

 

Approx.


 

Initial


 

 

 

 

 

 

 

Gross Costs


 

 

Current


 

Lateral


 

Production


 

30 Day


 

 

 

 

 

to Drill &


 

 

Working


 

Length


 

Rates


 

Average


 

 

 

Flowback Date or


 

Complete

Well Name


 

Interest


 

(in feet)


 

BOE/d


 

% Oil


 

(Boe/d)


 

% Oil


 

Status


 

($ millions)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jet 1-12H


 

47.4%


 

3,900


 

297


 

88%


 

111


 

94%


 

February 1, 2014


 

$6.7

Rosemary 1-3H


 

15.6%


 

3,400


 

476


 

74%


 

325


 

71%


 

February 22, 2014


 

$5.1

Jones 1-21H


 

48.4%


 

4,200


 

449


 

63%


 

250


 

70%


 

March 2, 2014


 

$5.1

Liebhart 1-31H


 

48.8%


 

4,400


 

127


 

81%


 

78


 

78%


 

March 18, 2014


 

$5.7

Coronado 1-3H


 

41.8%


 

4,300


 

224


 

80%


 

105


 

92%


 

March 19, 2014


 

$5.5

Gamebird 1-7H


 

49.3%


 

4,400


 

524


 

86%


 

446


 

87%


 

April 2, 2014


 

$5.3

Sieber 1-31H


 

34.4%


 

4,400


 

842


 

89%


 

649


 

88%


 

April 13, 2014


 

$5.1

Grizzly 1-4H


 

8.8%


 

3,600


 

387


 

65%


 

206


 

66%


 

May 1, 2014


 

$4.7

Kodiak 1-29H


 

45.3%


 

4,300


 

1,666


 

86%


 

1,259


 

83%


 

May 4, 2014


 

$5.1

Anna Lee 1-30H


 

50.0%


 

4,400


 

N/A


 

N/A


 

N/A


 

N/A


 

May 20, 2014


 

$5.2

Hobbs Ranch 1-19H


 

29.5%


 

4,400


 

N/A


 

N/A


 

N/A


 

N/A


 

WOC


 

N/A

Vaverka 1-20H


 

45.8%


 

4,200


 

N/A


 

N/A


 

N/A


 

N/A


 

Drilling


 

N/A

Jam 1-4H


 

25.0%


 

4,200


 

N/A


 

N/A


 

N/A


 

N/A


 

Drilling


 

N/A

Yeti 1-29H


 

32.0%


 

4,200


 

N/A


 

N/A


 

N/A


 

N/A


 

Drilling


 

N/A

Sasquatch 1-23H


 

43.0%


 

4,200


 

N/A


 

N/A


 

N/A


 

N/A


 

Drilling


 

N/A


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WOC – waiting on completion


Operated Wells

During the second quarter of 2014, we completed the drilling of the Easton 22-1H well, which is our first Lower Hunton (Chimney Hill) well on our recently acquired WEHLU acreage.  The well was drilled to a total measured depth of 12,455 feet, including a 5,000-foot lateral. The Chimney Hill formation logs were encouraging as they showed porosity up to 10% as well as significant secondary vugular and fracture porosity.  We are currently drilling the Easton 22-2H, an Upper Hunton (Bois d' Arc) well.  We have completed setting the intermediate casing in the Easton 22-2H and are commencing drilling of the approximately 4,200-foot lateral section.  Once drilling of the Easton 22-2H has been completed, we plan on completing the well with an open hole acid stimulation and briefly flow testing the Easton 22-2H before shutting the well in to commence completion operations on the Easton 22-1H.  Completion operations on the Easton 22-1H are planned to consist of approximately 23 hydraulic fracturing stages.  Both wells are scheduled to begin full flow back operations in late July 2014.  We have a 98.3% working interest (80.5% net revenue interest (NRI)) in both of these wells. 

J. Russell Porter, Gastar's President and CEO, commented, "As shown in the information provided herein, in the areas where we have drilled a sufficient number of Lower Hunton wells, those wells are averaging production rates, on a Boe basis, that are on par with our published Lower Hunton type curve.  In addition, the percentage of oil on average is higher than our type curve.  As we continue to ramp up our operated activities in the play, we expect to achieve similar results that on average will demonstrate the attractive returns that can be generated over our very large acreage position.  We are also planning our initial tests later this year of the Woodford and Meramec shale formations on this same acreage position."

Appalachia

Utica

As previously reported, we commenced drilling our first Utica Shale/Point Pleasant well, the Simms U-5H, on April 3, 2014 in Marshall County, West Virginia.  We are approaching total depth of 11,300 feet on the vertical pilot hole and expect to have the horizontal well completed and on production in the third quarter of 2014. Our working interest in the Simms U-5H is 50.0% (43.2% NRI).  Drilling of our second Utica/Point Pleasant well is scheduled to commence late third quarter 2014 in Wetzel County, West Virginia.  Our operating working interest in the first Wetzel County well will be 50.0% (41.0% NRI). 

Marcellus

In Marshall County on the Armstrong and Hansen pads, we currently have 14 gross (7.0 net) Marcellus wells in various stages of drilling.  We plan to complete five gross (2.5 net) wells from the Armstrong pad in the third quarter of 2014 and five gross (2.5 net) wells from the Hansen pad in the fourth quarter of 2014.   We continue to delay completion of three gross (1.5 net) wells previously drilled on the Goudy pad pending resolution of the previously disclosed non-lessor surface owner dispute.  In the third quarter of 2014, the rig in Marshall County will be moved south to Wetzel County to drill two Marcellus wells and a Utica/ Point Pleasant well.  By year-end 2014, we expect to have 67 total gross (32.0 net) operated Marcellus wells and two gross (1.0 net) Utica/Point Pleasant wells capable of production in West Virginia.

The third-party midstream operator servicing our Appalachia production experienced another pipeline rupture in May, which has resulted in the curtailment of our gross Marcellus production by an estimated 16% over the past three weeks.  As of June 5, 2014, we resumed transporting full, unrestricted production through the midstream facilities.

Second Quarter Production Guidance

The decrease in production resulting from the most recent Appalachia pipeline rupture during this quarter has been offset by higher than expected production from recently completed Hunton wells.  Therefore, we are reaffirming our second quarter production guidance range of 8.4 – 8.8 thousand barrels of oil equivalent per day (MBoe/d) and we currently anticipate that actual production will be in the upper end of that range.  In addition, we expect the percentage of our second quarter production attributable to liquids to be on the upper end of previous guidance range of 42 – 44% due to higher crude oil and natural gas liquids (NGLs) content in our recent Hunton completions. 

About Gastar Exploration

Gastar Exploration Inc. is an independent energy company engaged in the exploration, development and production of oil, condensate, natural gas and NGLs 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. Gastar is currently pursuing development within the primarily oil-bearing reservoirs of the Hunton Limestone horizontal oil play in Oklahoma and the development of liquids-rich natural gas in the Marcellus Shale play and dry gas in the Utica Shale play in West Virginia.  For more information, visit Gastar's website at 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward looking statements give our current expectations, opinion, belief or forecasts of future events and performance.  A statement identified by the use of forward looking words including "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 natural gas and oil drilling and production activities, including risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, 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; delays in receipt of drilling permits; 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 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; risks relating to unexpected adverse developments in the status of properties; borrowing base redeterminations by our banks; risks relating to the absence or delay in receipt of government approvals or fourth party consents; risks relating to our ability to integrate acquired assets with ours and to realize the anticipated benefits from such acquisitions; and other risks described in Gastar's Annual Report on Form 10-K and other filings with the U.S. Securities and Exchange Commission ("SEC"), available at the SEC's website at www.sec.gov.  Our actual sales production rates can vary considerably from tested initial production rates depending upon completion and production techniques and our primary areas of operations are subject to natural steep decline rates. Initial and 30 day average production rates are measured after flowback and dewatering. By issuing forward looking statements based on current expectations, opinions, views or beliefs, Gastar has no obligation and, except as required by law, is not undertaking any obligation, to update or revise these statements or provide any other information relating to such statements.

~Production Information Follows~

Hunton Production Information
As of June 4, 2014

Well Results


 

 

 

 

Cumulative Production Averages(2)


 

 

 

Approx.

Date Flowback


 

 

 

 

 

Current 5 Day


 

 

NRI %

Commenced

IP Rate(1)

30 Day

60 Day

90 Day

180 Day

Average(3)

% Oil(4)


 

 

 

(Boe/d)


 

 

 

 

 

 

 

 

 

 

 

Upper Hunton AMI


 

 

 

 

 

 

 

 

 

Huntsberger 1-3H

39.0%

10/05/12

140

89

92

96

80

24

71%

Lower Hunton AMI


 

 

 

 

 

 

 

 

 

Thrasher 1-1H

39.0%

02/15/13

1,383

631

882

1,013

918

383

67%

Bledsoe 1-28H

44.2%

04/03/13

280

44

62

67

70

171

89%

Gritz 1-7H

39.0%

04/30/13

179

102

107

104

89

58

62%

Henley 1-11H

42.6%

08/23/13

397

250

287

276

226

98

71%

State School Land 1-36H

39.0%

10/04/13

1,477

467

870

1,011

947

593

55%

Stevens 1-36H

36.6%

11/15/13

906

749

599

487

N/A

104

57%

Jet 1-12H

36.8%

02/01/14

297

111

117

147

N/A

244

90%

Jones 1-21H

37.7%

03/02/14

449

250

293

N/A

N/A

224

60%

Liebhart 1-31H

37.4%

03/18/14

127

78

88

N/A

N/A

98

77%

Coronado 1-3H

32.6%

03/19/14

224

105

146

N/A

N/A

173

83%

Gamebird 1-7H

37.0%

04/02/14

524

446

436

N/A

N/A

433

87%

Sieber 1-31H

25.0%

04/13/14

842

649

N/A

N/A

N/A

583

88%

Kodiak 1-29H

35.0%

05/04/14

1,666

1,259

N/A

N/A

N/A

1,022

83%

Anna Lee 1-30H

39.0%

05/20/14

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Average


 

 

673

395

354

444

450

322

75%

Non-AMI


 

 

 

 

 

 

 

 

 

Rosemary 1-3H

12.7%

02/22/14

476

325

335

297

N/A

194

63%

Grizzly 1-4H

7.0%

05/01/14

387

206

N/A

N/A

N/A

272

66%

Average


 

 

432

265

335

297

N/A

233

64%

Lower Hunton Operated


 

 

 

 

 

 

 

 

 

Burton 16-1H

65.8%

12/07/13

121

30

44

52

N/A

57

68%

Townsend 6-1H

80.0%

01/10/14

303

170

180

182

N/A

140

57%

Taborek 22-1H

67.0%

03/06/14

256

132

151

N/A

N/A

167

38%

Average


 

 

227

111

125

117

N/A

121

55%


 

 

 

 

 

 

 

 

 

 

Type Curve Well


 

 

608

536

481

440

360


 

65%


 

 

 

 

 

(1)  

Represents highest daily gross Boe rate.

(2)  

Represents the actual on production cumulative average daily Boe production.

(3)  

Reflects most recent five-day production average.

(4)  

Inception to date percentage oil production.

Company Contact:
Gastar Exploration Inc.
J. Russell Porter, President and CEO
713-739-1800 / rporter@gastar.com

Investor Relations Counsel:
Lisa Elliott / lelliott@DennardLascar.com
Anne Pearson / apearson@DennardLascar.com
Dennard-Lascar Associates: 713-529-6600

 

SOURCE Gastar Exploration Inc.



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