Explosions & Fires Occur in Marcellus Operations
Gastar to Sell Leases & Wells in Wetzel & Marshall Counties to Concentrate on Oklahoma
From an Article in the Marcellus Drilling News, October 15, 2015
What a difference a few months, or even a week, can make. In August, Gastar Exploration, which owns roughly 60,000 acres of leases in the Marcellus/Utica mostly in Marshall and Wetzel counties in West Virginia, was talking up their drilling program in the northeast.
Just last week we reported on Gastar CEO Russ Porter’s talk at OGIS in San Francisco about the Marcellus/Utica and what’s ahead for his company. Lately it seems like Gastar, which also drills in the Mid-Continent region of the country, has been giving a little more love to Mid-Continent area because gas prices in the northeast remain stubbornly low. Looks like the Mid-Continent is about to get all of Gastar’s love.
The company announced yesterday they’ve put all of their Marcellus/Utica assets up for sale, including leases and drilled/producing wells …
The press release is mostly about Gastar’s Mid-Continent operations, with just a small mention at the end about the Marcellus/Utica – but wow, what a mention! More like a bombshell:
Gastar Exploration Inc today announced that it has entered into a definitive purchase and sale agreement to acquire additional working and net revenue interests in 103 gross (10.2 net) producing wells and certain undeveloped acreage in the STACK and Hunton Limestone formations in its Area of Mutual Interest (“AMI”) from its AMI partner, Husky Ventures, Inc. (“Husky”), and certain other parties (collectively “Sellers”). The purchase price is approximately $43.3 million, subject to certain adjustments and customary closing conditions, and the conveyance of approximately 11,000 net non-core, non-producing acres in Blaine and Major Counties, Oklahoma to the Sellers. The transaction is expected to close on or about November 30, 2015, with an effective date of July 1, 2015. After closing, the AMI joint venture with Husky will be dissolved. The acquisition will be funded with borrowings under Gastar’s revolving credit facility.
In order to allow the Company to concentrate on the significant opportunities identified in its existing Oklahoma assets and to improve the strength of its balance sheet, the Company has engaged Tudor, Pickering, Holt & Co. to market its Marcellus Shale and Utica/Point Pleasant acreage, which are primarily focused in Marshall and Wetzel Counties, West Virginia. These assets include producing wells and acreage located in the liquids-rich Marcellus Shale and high-deliverability, dry-gas Utica Shale/Point Pleasant plays.
“With this strategic Mid-Continent transaction, we are consolidating our working interest in our core Mid-Continent acreage and will be able to operationally control development decisions going forward,” said J. Russell Porter, Gastar’s President and CEO. “We believe this acreage is not only productive for the Hunton Limestone formation but also very prospective for the Meramec Shale and Woodford Shale STACK play, with additional upside from the Oswego and Osage formations. In addition, the contemplated sale of certain of our Marcellus and Utica assets should allow us to further reduce leverage while enhancing our liquidity position to allow for the future development of our extensive Mid-Continent position.”
Gastar Exploration Inc. is an independent energy company engaged in the exploration, development and production of oil, condensate, natural gas and natural gas liquids in the United States. In West Virginia, Gastar has developed liquids-rich natural gas in the Marcellus Shale and has drilled and completed its first two successful dry gas Utica Shale/Point Pleasant wells on its acreage. Gastar has engaged Tudor, Pickering, Holt & Co. to market its Marcellus Shale and Utica Shale/Point Pleasant assets in West Virginia.*
*Gastar Exploration Inc. (Oct 14, 2015) – Gastar Exploration Announces Acquisition of Mid-Continent Interests and Marketing of Appalachian Basin Assets
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See additional information about Explosions & Fires in Wetzel and Marshall Counties, etc.
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