Gastar Exploration Ltd. GST today announced that it has entered into a definitive agreement to sell
its East Texas assets to Cubic Energy, Inc. QBC for $46.0 million,
subject to customary closing adjustments. The transaction is expected to
close on or before June 5 2013, with a property sale effective date of January
1, 2013.
"This sale allows Gastar to redeploy capital to our higher return projects in
the Marcellus Shale and Hunton Limestone," said J. Russell Porter, Gastar's
President and CEO. "In conjunction with our previously announced Hunton
Limestone acquisition, this transaction furthers our planned transition to a
liquids rich asset portfolio."
The assets to be sold include approximately 31,800 gross (16,300 net) acres in
the Hilltop area of East Texas in Leon and Robertson Counties. For the three
months ended December 31, 2012, net production from the Hilltop area averaged
approximately 12.4 MMcfe/d. At December 31, 2012, proved reserves
attributable to the Hilltop area were approximately 27.4 Bcfe, of which 100%
are classified as proved developed and represented approximately 15% of
Gastar's total proved reserves.
The closing of the proposed property sale is subject to satisfaction of
customary closing conditions. Proceeds from the transaction will initially be
used to reduce Gastar's outstanding balance under its revolving credit
facility. Management anticipates that this transaction will result in a net
increase in the Company's liquidity position of approximately $25 million.
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