Gastar Exploration Ltd
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| * J. Russell Porter is Gastar's President and CEO. | * J. Russell Porter is Gastar's President and CEO. | ||
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| + | [[Category:E&P Companies]] | ||
| + | [[Category:Active]] [[Category:Public]] [[Category:Listed-AMEX]] [[Category: Domestic]] [[Category:Pennsylvania]] [[Category:West Virginia]] [[Category:Marcellus shale]][[Category:25,000 to 50,000 acres acres]] [[Category:Wetzel County]] | ||
Revision as of 01:03, 28 September 2010
Houston, Texas-based Gastar Exploration Ltd. (AMEX: GST) is an oil and gas exploration company focused on North America. It was reported leasing land both for Marcellus shale and Trenton-Black River development.
Gastar owns drilling rights to roughly 36,000 net acres of land prospective for Marcellus shale in southwestern Pennsylvania and northern West Virginia. Most of its acreage is centered in the key over-pressured area of the Marcellus fairway. It owns an average working interest of 81.5%.
A March, 2009 report indicated the company had drilled ten shallow wells on their acreage to get some production going in order to hold the company's leases. Seven wells were in production and the remaining three were to be online by year-end 2009. Gastar had been looking for a joint development partner to help explore the deeper Marcellus shale formation on its acreage. According to a May, 2009 company update no further drilling was to be undertaken so long as natural gas prices remained depressed or unless and until a joint venture partner emerges.
By January, 2010 the company was reporting the success of its first vertical Marcellus shale well, the James Yoho #1, located in the Green District of Wetzel County, West Virginia. Tests on this well yielded the following initial results:
- 1.5 Mmcf/d of natural gas
- 120 BBL/d of condensate
- zero water production
- 1,000 psi of flowing tubing pressure
The well was to be shut-in pending set up of gas gathering and processing arrangements. Gastar owned 100% woring interest in the well or an 81.5% net revenue interest. The Marcellus shale is approximately 46 feet thick in this area, so the Yoho #1 well confirmed excellent results even in thinner portions of the formation using only vertical drilling. Gastar planed to use horizontal drilling in the future for even greater well productivity.
In September, 2010 news of a Korean joint venture partner, Atinum Partners Co., Ltd. was announced. Atinum acquired a 21.43% interest in 34,200 net acres of Gastar's Marcellus shale leasehold. This included producing shallow conventional wells located on the acreage. The interest assigned to Atinum was valued at $70 million. $30 million cash was to be paid up front with the balance of $40 million to be in the form of drilling carry. Once the terms of the carry had been fulfilled, Atinum was to end up as a 50% owner of the acreage. Gastar was to be operator. The deal was expected to close in October or November, 2010.
The joint venture planned a three year program of development that included drilling one horizontal Marcellus shale well during 2010, a dozen such wells in 2011, and two dozen in each of 2012 and 2013. Atinum was to fund its ultimate 50% share of the development expense and bear 75% of Gastar's share until the $40 million carry was satisfied. Atinum was also to participate in any future leasing activity by Gastar on the same 50-50 basis within an area of mutual interest (AMI) through 2011.
- J. Russell Porter is Gastar's President and CEO.
