Gastar Exploration sells Oklahoma non-core reserves

By Patrick C. Miller | January 30, 2018

Houston-based Gastar Exploration Inc. has entered into a purchase and sale agreement to divest of its interest in the West Edmund Hunton Lime Unit (WEHLU) for $107.5 million.

The unit is primarily located in Oklahoma and Logan counties of Oklahoma. During the third quarter of 2017, Gastar’s daily production was about 2,800 barrels of oil equivalent. It was 52 percent oil, 25 percent natural gas liquids and 23 percent natural gas. This constituted 46 percent of Gastar’s total equivalent production for the quarter.

"This divestiture of our WEHLU assets should provide Gastar with sufficient liquidity to fund our core STACK acreage development plan through 2018,” said Russell Porter, Gastar president and CEO. “Our one-rig drilling program has been restarted and we expect to be able to drill and complete approximately 20 operated wells in 2018 to more fully delineate and develop the Meramec and Osage formations on our 65,200 net surface acres in our core STACK position.”

Porter said that because of Gastar’s contiguous acreage position with up to six potentially productive formations and multiple benches within certain prospective formations, the company has a large inventory of undrilled horizontal locations to exploit.

The transaction is expected to close by Feb. 28, with a property sale effective date of Oct. 1, 2017. Gastar received a deposit of 10 percent of the purchase price on Jan. 25.