UPDATE: Imperial Capital Re-Initiates Coverage on Gastar Exploration Limited on Positive Outlook

In a report published Monday, Imperial Capital analyst Kim Pacanovsky re-initiated coverage on

with an Outperform rating and $6.00 price target. In the report, Imperial Capital noted, “We are re-initiating coverage of GST shares with an Outperform rating and one-year price target of $6, about 34% above the recently quotes share price. Gastar is about a third of the way through a successful development of its liquids-rich Marshall/Wetzel Counties leasehold, and will soon commence full-scale development on its oily Hunton Limestone play in Oklahoma, where it holds 96,400 net acres. After raising about $178mn in senior notes and preferred stock, the company funded the acquisition of an additional 24,00 acres and 2,00 boe/d in the Hunton (the WEHLU acquisition), and believes it now had sufficient data from both its own drilling and offset operators to begin an aggressive development program. We believe the Hunton offers GST a right-size project, i.e., the wells are low cost with high oil cuts and 62-94% IRRs (depending on target), and the large acreage position acquired at an attractive price means GST is significantly leveraged to its success. We like GST's straightforward management and the clarity provided on development of its assets going forward. Our Risked Net Asset Value (RNAV) of $12.40/share highlights the undervaluation of GST shares.” Gastar Exploration LImited closed on Friday at $4.47.