Exhibit 99.1
Gastar Exploration Provides Update on Australian Activities-Pel 238
Drilling Program
HOUSTON--(BUSINESS WIRE)--March 8, 2006--Gastar Exploration Ltd.
(AMEX:GST)(TSX:YGA) is pleased to provide an operational update on
planned drilling and workover activities on its PEL 238 property
located in New South Wales, Australia. Gastar has a 35% working
interest position in PEL 238.
DRILLING PROGRAM
On March 7, 2006, Eastern Star Gas Limited, the operator of the
PEL 238 Gunnedah Basin Coal Seam Gas Joint Venture, spudded the first
of nine new vertical coal seam gas (CSG) wells to be drilled within
the Bohena Project Area.
The drilling and completion program is expected to continue until
mid-year and consist of:
-- Drilling and fracture stimulation of eight closely spaced new
production wells in proximity to the existing Bibblewindi-1
production well to form a 40-acre spaced "nine-spot"
production pilot; and
-- Drilling of a pressure monitoring well at some distance from
the production pilot to determine the extent of in-seam
permeability communication at approximately 160-acre well
spacing. This larger spacing aims to increase the area over
which reserves can be attributed and provide information that
is expected to allow future development on 160-acre or greater
spacing.
The first well in the drilling program, the Bibblewindi-10, is
located 2.2 kilometers (1.4 miles) north of the previously drilled
Bibblewindi-1, and will be the pressure monitoring well. The
Bibbliwindi-10 well will be drilled to approximately 1,020 meters
(3,350 feet) total depth (TD), completed with 5-1/2 inch production
casing and perforated across the Bohena coal seam. The Bohena coal
seam is expected to be intersected at depth of approximately 910
meters (3,000 feet) and to be more than six (6) meters (approximately
20 feet) thick. This well will be completed so that it can be fracture
stimulated and put on production tests as part of a subsequent
program.
The other eight new production wells will be drilled to a TD of
approximately 1,000 meters (3,300 feet) and completed with 5-1/2 inch
casing. They will be perforated in the Bohena coal seam and then
hydraulically fracture stimulated before being placed into test
production.
The closely spaced "nine-spot" production pilot is designed to
accelerate dewatering of the 6.5 to 15 meter (21 to 49 feet) thick
Bohena coal seam and to achieve commercial gas production rates in a
shorter period than would be possible for an isolated well (as has
been the case for Bibblewindi-1) or for wells drilled on wider
spacing.
The Bibblewindi-1 well was fracture stimulated late in 2004 and
placed on continuous production test shortly thereafter. Initial
results suggest a pressured, highly permeable coal seam characterized
by high water and increasing gas production rates. Bibblewindi-1 is an
unconfined well with the closest production well being the Bohena
South-1, approximately 7 kilometers to the north. Technical studies
indicate that the well is likely to reach commercial gas production
rates, however, because of the thickness of the seam, on an unconfined
(single well) basis de-watering could take several years. In order to
accelerate the de-watering process and commerciality viability
assessment, the Bibblewindi area will be converted to a confined
production pod with the addition of these new wells. The Bibblewindi
pod has been designed based on recommendations from external
independent reservoir engineering firms.
It is anticipated that the new wells will be on production test by
mid-year 2006.
Successful gas reserves certification would enable the CSG Joint
Venture to proceed to development of the coal seam gas field and
commit to gas sales contracts. Gas market opportunities continue to
grow with numerous third parties showing strong interest in gas
purchase, pipeline construction and gas transport from the Narrabri
area to regional and national markets, in addition to use for local
and regional gas fired electricity generation.
WORKOVER PROGRAM
Prior to spudding the Bibblewindi-10 well, the CSG Joint Venture
conducted workovers on three existing CSG production wells as follows:
-- Bibblewindi-1 has been deepened with a 3-3/4 inch hole from
930.5 meters to 1,000 meters GL providing a 98 meter deep sump
below the Bohena coal seam.
-- Bohena-9, ten kilometers north of the Bibblewindi pilot, has
been deepened with a 4-3/4 inch hole from 922 meters to 995
meters, providing a 110 meter deep sump below the Bohena coal
seam.
-- An old pump has been removed from Bohena-7 however a downhole
obstruction has prevented the well from being deepened.
Later this month, Bohena-7, Bohena-9 and Bohena-3 wells will be
returned to production and installation of remotely monitored and
controlled automated pumping systems. Data from this test production
will be monitored and reported over the next few months. Water and gas
production rates achieved to date from the existing Bohena wells,
prior to the workover program appear to support the presence of a
significant commercial accumulation of coal seam methane within the
Bohena Project Area.
On satisfactory completion of the drilling program and production
tests, it is intended, subject to the agreement of all CSG Joint
Venture partners on pricing and gas gathering expenditures, to connect
all production wells within the Bohena Project Area, including the
eight new wells and the existing Bohena wells, to the Wilga Park Power
Station to allow the sale of gas for electricity generation.
About the Gunnedah Basin Gas Project (Coal Seam Gas Joint Venture)
"Delivering Gas Independence to NSW"
The Project is located in Petroleum Exploration License 238
between Narrabri and Gunnedah in New South Wales covering 9,100 square
kilometers (2 million gross acres) of the Gunnedah Basin. The Bohena
Project Area covers 260 square kilometers within PEL 238. The coal
seams within PEL 238 that have CSG potential are the Late Permian
Black Jack Formation and the Early Permian Maules Creek Formation. The
Project is managed by Eastern Star Gas Limited and is owned by the
Gunnedah Basin Gas Project (Coal Seam Gas) Joint Venture comprising:
Eastern Star Gas Limited (ASX:ESG) 32.5%
Hillgrove Resources Limited (ASX:HGO) 32.5%
Gastar Exploration Limited (AMEX:GST; TSX:YGA) 35%
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 balanced strategy combining
low-risk CBM development with select higher risk, deep natural gas
exploration prospects. Gastar's CBM activities are conducted within
the Powder River Basin of Wyoming and upon the approximate 4 million
acres controlled by Gastar and its Joint Development partners in
Australia's Gunnedah Basin, PEL 238 and Gastar's Gippsland Basins
located in New South Wales and Victoria respectively. The Company owns
and controls development acreage in the Deep Bossier Sand gas play of
East Texas and in the deep Trenton-Black River play in the Appalachian
Basin.
Safe Harbor Statement and Disclaimer
This Press 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 oil and
natural gas 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 oil and natural gas 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 oil and gas prices and other risk factors as
described in the Company's Annual Information Form filed as of March
2005, on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com and in the Company's Registration Statement
on Form S-1.
The American Stock Exchange and the Toronto Stock Exchange have
not reviewed and do not accept responsibility for the adequacy or
accuracy of this release.
CONTACT: Gastar Exploration, Ltd., Houston
J. Russell Porter, 713-739-1800
Fax: 713-739-0458
E-mail: rporter@gastar.com
Web site: www.gastar.com