UPDATE: MLV & Co Reiterates On Gastar Exploration As Equity Offering Removes Liquidity Risk

In a report published Monday, MLV & Co analyst Chad Mabry reiterated a Buy rating on

, but lowered the price target from $11.00 to $9.00. In the report, MLV & Co noted, “GST recently closed a common stock offering of 17.0 million shares (19.55 including the shoe). Net proceeds of $101.2 million ($116.4 with the shoe) should ensure that the company has sufficient liquidity to undertake its upcoming capital campaign. "Despite dilution of 28% (32% with the shoe), we see several positives from the offering: (1) removes the near-term liquidity risk, (2) improves balance sheet metrics, and (3) increases institutional interest. We view all of these factors as integral toward GST's march to mid-cap territory. "We're reaffirming our Buy rating but trimming our target to $9 (from $11). Dilution is the culprit, partially offset by better-than-expected 2015 production guidance and slight upward revisions to our valuation of the company's Hunton position. With the liquidity risk removed, we believe GST is positioned to outperform as it continues to delineate its position in the Mid-Continent Hunton and Stack oil plays… both of which offer ample upside from current levels.” Gastar Exploration closed on Friday at $6.16.