HOUSTON, September 27 /CNW/ - Gastar Exploration Ltd. (AMEX: GST)
(TSX:YGA) announced today that Proved and Probable (2P) gas reserves in the
Bohena Project Area of PEL 238, located in New South Wales, Australia, have
been independently estimated by Netherland Sewell & Associates, Inc. Initial
gross 2P gas reserves total 59 Bcf, including 21 Bcf of gross Proved (1P)
"This is a major milestone for the PEL 238 coalbed methane project and
the first step in an ongoing process to prove up the existence of significant
gas reserves to underwrite gas supply commitments for local markets," said J.
Russell Porter, Gastar's President and CEO.
"Demand for natural gas as a clean-burning alternative to coal for power
generation in Australia is very strong, and the recognition of Proved and
Probable gas reserves is a positive development for the project and for the
asset value that Gastar believes will be created through future activities.
"The Proved and Probable reserves recognized covers less than 1 percent
of the acreage known to be underlain by coals within PEL 238, and we believe
that reserve certification on the remaining project acreage involves low
geologic risk, based on results of previous drilling and core work on our
acreage," he said.
Gastar and its operating joint venture partner, Eastern Star Gas,
executed a memorandum of understanding in March 2007 to potentially supply up
to 500 Bcf of gas to the New South Wales government-owned electricity
generator Macquarie Generation.
Mr. Porter added, "The joint venture's goal is to increase the
independently estimated gross gas reserves within PEL 238 to 600 Bcf by 2010
in order to be in a position to deliver initial gas volumes into the Macquarie
contract or to one of several other gas contracts currently under
consideration. Plans for additional production pilots and core hole drilling
programs are being finalized as a part of the process to obtain future
independent gas reserves certifications on PEL 238."
Gastar owns a 35% working interest (31% net revenue interest) in the
project, and Eastern Star Gas, the operator, holds a 65% working interest (57%
net revenue interest).
The United States Securities and Exchange Commission (the "SEC") has
generally permitted natural gas and oil companies, in their filings with the
SEC, to disclose only proved reserves that a company has demonstrated by
actual production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We use the terms
"Probable (2P) gas reserves", "gross 2P gas reserves", or other descriptions
of volumes of hydrocarbons that the SEC guidelines may prohibit us from
including in filings with the SEC. Estimates of probable gas reserves do not
reflect volumes that are demonstrated as being commercially or technically
recoverable. Even if commercially or technically recoverable, a significant
recovery factor would be applied to these volumes to determine estimates of
volumes of proved reserves. Accordingly, these estimates are by their nature
more speculative than estimates of proved reserves and accordingly are subject
to substantially greater risk of being actually realized by the Company.
About Gastar Exploration
Gastar Exploration Ltd. is an exploration and production company focused
on finding and developing natural gas assets in North America and Australia.
The Company pursues a strategy combining select higher risk, deep natural gas
exploration prospects with lower risk coalbed methane (CBM) development. The
Company owns and operates exploration and development acreage in the deep
Bossier gas play of East Texas. Gastar's CBM activities are conducted within
the Powder River Basin of Wyoming and on approximately 5 million gross acres
controlled by Gastar and its joint development partners in Australia's
Gunnedah Basin, PEL 238, 433 and 434, located in New South Wales, and the
Gippsland Basin, EL 4416, located in Victoria. For more information, visit our
web site at www.gastar.com.
Safe Harbor Statement and Disclaimer:
This news release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934. A statement identified by the words "expects",
"projects", "plans", and certain of the other foregoing statements may be
deemed forward-looking statements. Although Gastar believes that the
expectations reflected in such forward-looking statements are reasonable,
these statements involve risks and uncertainties that may cause actual future
activities and results to be materially different from those suggested or
described in this press release. These include risks inherent in the drilling
of natural gas and oil wells, including risks of fire, explosion, blowout,
pipe failure, casing collapse, unusual or unexpected formation pressures,
environmental hazards, and other operating and production risks inherent in
natural gas and oil drilling and production activities, which may temporarily
or permanently reduce production or cause initial production or test results
to not be indicative of future well performance or delay the timing of sales
or completion of drilling operations; risks with respect to oil and natural
gas prices, a material decline in which could cause the Company to delay or
suspend planned drilling operations or reduce production levels; and risks
relating to the availability of capital to fund drilling operations that can
be adversely affected by adverse drilling results, production declines and
declines in natural gas and oil prices and other risk factors described in the
Company's Annual Report on Form 10-K, as filed on March 27, 2007 with the
United States Securities and Exchange Commission at www.sec.gov and on the
System for Electronic Document Analysis and Retrieval (SEDAR) at
The American Stock Exchange and Toronto Stock Exchange have not reviewed
and do not accept responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Gastar Exploration Ltd. J. Russell Porter,
Chief Executive Officer, 713-739-1800 email@example.com or Investor Relations
Counsel: DRG&E Lisa Elliott, 713-529-6600 firstname.lastname@example.org Anne Pearson,