Exhibit 99.1
Gastar Exploration Announces Results of Operations for the Quarter Ended
March 31, 2007
HOUSTON--(BUSINESS WIRE)--May 15, 2007--Gastar Exploration Ltd.
(AMEX:GST) (TSX:YGA) reported a net loss attributable to common shares
for the three months ended March 31, 2007 of $11.0 million, or $0.06
per basic and diluted common share, compared to a net loss of $42.9
million, or $0.26 per basic and diluted common share, for the three
months ended March 31, 2006. The first quarter 2007 loss included a
litigation settlement expense accrual of $5.0 million. There was no
litigation settlement expense for the three months ended March 31,
2006. The first quarter 2006 loss included an impairment of natural
gas and oil properties of $37.3 million. There was no impairment of
natural gas and oil properties for the three months ended March 31,
2007. Total revenues for the three months ended March 31, 2007 were
$7.5 million, a 13% increase over revenues of $6.6 million for the
2006 comparable period. The increase in revenues was primarily
attributable to a 28% increase in production resulting from the
commencement of production of natural gas from new wells in East Texas
in 2007. The increase in production was partially offset by a 12%
decrease in natural gas prices. Average daily production for the three
months ended March 31, 2007 was 14.1 million cubic feet of natural gas
equivalents per day ("MMcfed"), an increase of 27% compared to 11.1
MMcfed for the three months ended March 31, 2006 and a 3% increase
over production for the fourth quarter of 2006 of 13.7 MMcfed. Net
cash flow provided by operating activities for the three months ended
March 31, 2007 was $281,000, compared to a deficit of $2.7 million for
the comparable period in 2006.
J. Russell Porter, Gastar's President and Chief Executive Officer,
made the following comment, "Gastar continues to grow production
volumes as we bring on new wells in the deep Bossier play. Revenues
increased despite lower average natural gas and oil prices, compared
to the first quarter of 2006. We currently are nearing total depth of
two additional wells that are expected, along with the Wagner #1 well,
to impact third quarter production volumes. Following the closing of
the sale of a portion of our undeveloped leasehold interests in East
Texas, we are positioned to increase our deep Bossier drilling program
following the interpretation of new 3-D seismic data. We also
anticipate an increase in activities on our PEL 238 coal bed methane
property during the second half of 2007."
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 coal bed
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 3.0 million gross acres controlled by
Gastar and its joint development partners in Australia's Gunnedah
Basin, PEL 238, located in New South Wales and the Gippsland Basin, EL
4416, located in Victoria.
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, 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 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, 2006 with the SEC at www.sec.gov and on
the System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com.
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.
GASTAR EXPLORATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months
Ended March 31,
-----------------------------
2007 2006
-------------- --------------
(in thousands, except share
and per share data)
REVENUES $7,515 $6,623
EXPENSES:
Production taxes 294 400
Lease operating expenses 1,695 1,256
Transportation and treating 323 304
Depreciation, depletion and
amortization 4,341 4,309
Impairment of natural gas and oil
properties - 37,301
Accretion of asset retirement
obligation 66 57
Mineral resource properties 13 157
General and administrative expenses 3,185 2,519
Litigation settlement expense 4,972 -
-------------- --------------
Total expenses 14,889 46,303
-------------- --------------
LOSS FROM OPERATIONS (7,374) (39,680)
OTHER (EXPENSES) INCOME:
Interest expense (3,943) (3,758)
Investment income and other 363 527
Foreign exchange gain (loss) (1) 1
-------------- --------------
LOSS BEFORE INCOME TAXES (10,955) (42,910)
Provision for income taxes - -
-------------- --------------
NET LOSS $(10,955) $(42,910)
============== ==============
NET LOSS PER SHARE:
Basic and diluted $(0.06) $(0.26)
============== ==============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic and diluted 195,015,561 164,796,868
============== ==============
PRODUCTION AND PRICES
For the Three Months
Ended March 31,
-----------------------------
2007 2006
-------------- --------------
Production:
Natural gas (MMcf) 1,253.1 993.3
Oil (MBbls) 3.2 0.3
Total (MMcfe) 1,272.1 994.9
MMcfe per day 14.1 11.1
Average sales prices:
Natural gas (per Mcf) $5.86 $6.65
Oil (per Bbl) $55.05 $62.49
CONTACT: Gastar Exploration Ltd., Houston
J. Russell Porter, 713-739-1800
Fax: 713-739-0458
rporter@gastar.com
www.gastar.com