Gastar Exploration Receives Demand Under ''Look Back'' Payment Provision



    HOUSTON, November 15 /CNW/ - Gastar Exploration Ltd. (AMEX:  GST) (TSX:YGA)
announced today that it has received a demand letter from GeoStar Corporation
claiming that GeoStar is entitled to be issued approximately 1.69 billion
Gastar common shares under a "Look Back" provision in two Purchase and Sale
Agreements ("PSAs") entered into by GeoStar and Gastar in 2005 conveying
interests in certain Texas properties from GeoStar to Gastar. Under the PSAs,
Gastar paid to GeoStar an agreed $43.5 million in consideration for the
properties (including cash, 8.6 million shares of Gastar stock, and promissory
notes), subject to certain purchase price adjustments relating to the period
prior to closing.

    J. Russell Porter, Gastar's Chairman, President and CEO, stated: "We are
outraged by this claim, which we believe to be made in bad faith and without
merit. We intend to vigorously defend our position, do not believe that
GeoStar has available the remedies that they have threatened, and contend that
GeoStar owes us shares to be returned for cancellation under the Look Back
provision. We intend to continue our business plan without delay focusing on
the continued development of our deep Bossier and Australian coal bed methane
properties."

    The PSAs contain a "Look Back" provision that is the subject of claims in
two previously disclosed lawsuits with GeoStar. Under the "Look Back"
provision, two "Look Back Payments" are to be calculated based in part on
changes in proved and probable reserves attributable to certain of Gastar's
leasehold interests over certain periods of time ending June 30, 2006 and
2007. If a Look Back Payment is due to GeoStar under the PSAs, the PSAs
require the payment to be effected through the issuance of Gastar stock. If a
Look Back Payment is owed by GeoStar under the PSAs, the PSAs require that the
payment be effected through the transfer or cancellation of Gastar stock held
by GeoStar.

    The PSAs provide that the calculation of the Look Back Payment shall be
based upon reserve estimates reported by Netherland Sewell & Associates, Inc.
("NSA"), or in certain circumstances, based upon an average of the NSA
estimates and estimates obtained by GeoStar from an independent,
professionally certified reservoir engineering firm utilizing the same
regulatory requirements and reserve calculation guidelines as those employed
by NSA in its estimates. Based on the NSA reserves estimate and the Look-Back
calculations set forth in the PSAs, Gastar believes that GeoStar owes a
Look-Back Payment to Gastar.

    On November 1, 2007, GeoStar informed the board of directors of Gastar
that it intended to submit a reserve report for purposes of the June 30, 2006
and 2007 Look Back analyses showing that the gross reserves attributable to
Gastar's leasehold interests are substantially greater than those reflected in
the NSA reserve reports on which Gastar's Look Back analyses were based. On
November 7, 2007, GeoStar submitted to Gastar a reserve report from T.J. Smith
& Company, Inc. ("T.J. Smith") that reported a substantially greater reserve
estimate than the estimates in the NSA reserve report.

    On November 14, 2007, Gastar received a revised reserve report of T.J.
Smith as well as a demand letter from GeoStar's counsel ("Demand Letter") in
which GeoStar asserted a purported right under the PSAs to receive additional
shares of Gastar stock as a Look-Back Payment. In the Demand Letter, GeoStar
asserts that T.J. Smith has estimated that the total proved and probable
reserves in Gastar's Texas properties attributable to 100% of the working
interest amount to 2.15 trillion cubic feet of natural gas, a number which is
approximately fourteen times more than the proved and probable reserves
estimated by NSA, the engineering firm selected by the parties in the PSAs. On
the basis of that reserves estimate, GeoStar asserts in the Demand Letter that
it is entitled to a Look-Back Payment of approximately 1.69 billion shares of
Gastar stock, which if issued would constitute approximately 89% of Gastar's
common equity. In the Demand Letter, GeoStar further asserts that if its
demand is not met, it will pursue remedies that may include reclaiming
operatorship over certain of Gastar's Texas properties, rescission of the PSAs
resulting in return of the properties covered by the PSAs and consideration
paid, and unspecified injunctive relief.

    Gastar believes that GeoStar's assertions are without merit. Gastar
believes that the T.J. Smith reserve report was submitted in bad faith and
does not meet the requirements of the PSAs because, among other things, it
does not follow the same regulatory requirements employed by NSA as required
per the terms of the PSAs. In addition, GeoStar has asserted that the Look
Back analysis should be based on changes in reserves attributable to the
entirety, or 8/8ths, of Gastar's leasehold interests with respect to its Texas
properties, rather than on changes in reserves attributable to GeoStar's net
revenue interest in those properties as of the effectiveness of the PSAs, as
Gastar believes. Gastar continues to review the T.J. Smith report and
GeoStar's contentions relating thereto and evaluate Gastar's legal positions
and options.

    Gastar is amending its petition in Gastar Exploration, Ltd., et al v.
GeoStar Corporation, et al., the lawsuit filed August 2007 in Robertson
County, Texas. In the amended petition, Gastar seeks, among other things,
declarations that: Gastar has complied with the Look-Back provision in the
PSAs; Gastar is entitled to receive a Look Back Payment from GeoStar; the NSA
reports and Gastar's Look Back analyses are conclusive as a result of
GeoStar's failure to submit a reserves report that complies with the
provisions of the PSAs; GeoStar is not entitled to rescission or any ownership
interest in the properties covered by the PSAs; and GeoStar is not entitled to
any shares or other relief under the Look Back provision in the PSAs.

    Gastar intends to vigorously defend itself against GeoStar's assertions
and believes that these assertions are without merit. However, an unfavorable
outcome in litigation relating to the Look Back could have a material adverse
effect on Gastar were GeoStar to obtain issuance of the requested shares,
rescission of the PSAs, or other relief it asserts it may request. Although
Gastar does not currently anticipate the need to access the equity capital
markets through 2008 to continue its business plan, until these issues are
resolved in whole or in significant part, it may be difficult for Gastar to
raise capital through the sale of equity.

    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.
Gastar pursues a strategy combining select higher risk, deep natural gas
exploration prospects with lower risk coal bed methane (CBM) development.
Gastar 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 7 million gross acres
controlled by Gastar and its joint development partners in Australia's
Gunnedah Basin (PEL 238, PAL 2, PEL 433 and PEL 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 Reserves 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 news release. These include risks inherent in the drilling
of natural gas and oil wells, including risks of fire, explosion, blowouts,
pipe failure, casing collapse, unusual or unexpected formation pressures,
environmental hazards, and other operating and production risks inherent in
the 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
natural gas and oil prices, a material decline in which could cause Gastar 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
Gastar's Annual Report on Form 10-K, as filed on March 27, 2007 with the SEC
at www.sec.gov and on the System for Electronic Document Analysis and
Retrieval (SEDAR) at www.sedar.com.

    The SEC has generally permitted oil and gas companies, in their filings
with the SEC, to disclose only proved reserves that, under SEC definitions and
guidelines, a company has demonstrated by actual production or conclusive
formation tests to be economically and legally producible under existing
economic and operating conditions. This press release discloses "probable"
reserves that the SEC's guidelines would prohibit us from including in our
filings with the SEC. All of these volumes and estimates are by their nature
more speculative than estimates of proved reserves under SEC definitions and
guidelines and accordingly are subject to substantially greater risk of being
actually realized.

    The American Stock Exchange and the Toronto Stock Exchange have not
reviewed and do not accept responsibility for the adequacy or accuracy of this
news release.




For further information:

For further information: Gastar Exploration Ltd. Company Contact: J.
Russell Porter, President and CEO, 713-739-1800 rporter@gastar.com or DRG&E
Investor Relations Counsel: Lisa Elliott, 713-529-6600 lelliott@drg-e.com Anne
Pearson, 713-529-6600 apearson@drg-e.com

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GASTAR EXPLORATION, LTD.

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