Gastar Exploration Ltd
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| The December release also mentioned that Gastar planned to drill two [[horizontal drilling|horizontal wells]] close to the aforementioned James Yoho #1 well in Wetzel County's Green District during 2011. | The December release also mentioned that Gastar planned to drill two [[horizontal drilling|horizontal wells]] close to the aforementioned James Yoho #1 well in Wetzel County's Green District during 2011. | ||
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| + | In March, 2011 ''PPG Industries'' announced that it had leased a tract in Marshall County near New Martinsville about 20 miles south of Wheeling, WV at Natrium along the Ohio River, site of a chemical plant that it operates, to Gastar Exploration for Marcellus shale development. More than 30 wells were planned with drilling to begin in the third quarter of 2011. The project was to be managed out of Gastar’s northeast regional office in Clarksburg, WV. Gastar paid PPG an up-front signing bonus for the lease amounting to $10 million. This new acreage was said to form a contiguous block with Gastar's existing leasehold in Marshall and Wetzel counties. PPG's Natrium tract is also site of a newly announced [[Dominion Gas|Dominion Resources]] natural gas processing and fractionation plant. | ||
| * J. Russell Porter is Gastar's President and CEO. | * J. Russell Porter is Gastar's President and CEO. | ||
Revision as of 21:42, 3 March 2011
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 80,000 net acres 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. An affiliate, Atinum Marcellus I 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 closed in 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.
As of November, 2010, the first well in the program had been spud, named the Wengerd #1 in Marshall Co., WV. It was expected to be completed and in production by the first quarter of 2010.
Gastar also announced in November that it was participating in a 7-horizontal-well program with another operator in Butler Co., PA along with Atinum. Together with the latter, both partners owned 38.4% of the seven wells to be drilled. Atinum was to pay 87.5% of the net cost, that is 33.6% of the cost in exchange for a 19.2% working interest. The other operator (Rex Energy?) was in the process of drilling the vertical portion of the 7 wells from a single well pad, and completion activity was scheduled for 1Q11 production online to sales by 2Q11.
Gastar issued a press release in December, 2010 stating that it had acquired 62,000 acres of leased Marcellus shale in West Virginia for $29.1 million. This acreage was located in northern West Virginia's Pendleton, Preston and Tucker counties. 17,000 net acres of the total were held by production. The acquisition also included a 41 mile long, 6-inch pipeline gathering system, a salt water disposal well, and 5 conventional wells producing 500 Mcf/d. This acquisition increased the size of Gastar's Marcellus leasehold from 36,000 net acres to 80,000.
The December release also mentioned that Gastar planned to drill two horizontal wells close to the aforementioned James Yoho #1 well in Wetzel County's Green District during 2011.
In March, 2011 PPG Industries announced that it had leased a tract in Marshall County near New Martinsville about 20 miles south of Wheeling, WV at Natrium along the Ohio River, site of a chemical plant that it operates, to Gastar Exploration for Marcellus shale development. More than 30 wells were planned with drilling to begin in the third quarter of 2011. The project was to be managed out of Gastar’s northeast regional office in Clarksburg, WV. Gastar paid PPG an up-front signing bonus for the lease amounting to $10 million. This new acreage was said to form a contiguous block with Gastar's existing leasehold in Marshall and Wetzel counties. PPG's Natrium tract is also site of a newly announced Dominion Resources natural gas processing and fractionation plant.
- J. Russell Porter is Gastar's President and CEO.
