NOVEMBER 14, 2006 (HOUSTON, TEXAS) ... Gastar Exploration Ltd. (AMEX: GST; TSX: YGA) reported a net loss for the three months ended September 30, 2006 of $7.7 million, or $0.05 per basic and diluted common share, compared to a net loss of $4.6 million, or $0.03 per basic and diluted common share for the three months ended September 30, 2005. The net loss for 2006 includes a litigation settlement expense of $465,000. Total revenues for the three months ended September 30, 2006 were $6.7 million, a decrease of $1.1 million from revenues of $7.8 million reported for the comparable period in 2005. This decrease in revenues was primarily attributable to a 34% decrease in natural gas prices that was partially offset by an increase in quarterly production. Average daily production for the three months ended September 30, 2006 was 13.7 million cubic feet of natural gas equivalents per day ("MMcfed"), a 4% increase over second quarter 2006 (13.2 MMcfed) production and a 25% increase over third quarter 2005 production (11.0 MMcfd).
Gastar reported a net loss for the nine months ended September 30, 2006 of $57.3 million, or $0.34 per basic and diluted common share, compared to a net loss of $20.9 million, or $0.17 per basic and diluted common share for the nine months ended September 30, 2005. The nine month losses for 2006 and 2005 included a non-cash full cost ceiling impairment of natural gas and oil properties of $37.3 million and $8.7 million, respectively. The net loss for 2006 includes a litigation settlement expense of $1.7 million. Total revenues for the nine months ended September 30, 2006 were $20.0 million, an increase of $2.5 million from revenues of $17.5 million reported for the comparable period in 2005. This increase in revenues was primarily attributable to a 32% increase in production, which was partially offset by a 15% decline in natural gas prices. Average daily production for the nine months ended September 30, 2006 was 12.7 MMcfed, compared to 9.6 MMcfed for the comparable 2005 period. EBITDA for the nine months ended September 30, 2006 was $3.2 million, down from EBITDA of $7.6 million for the nine months ended September 30, 2005.
J. Russell Porter, Gastar's President and Chief Executive Officer, made the following comment, "Our results are greatly influenced by the on-going exploration and evaluation program on our East Texas deep Bossier assets. We continue to focus our drilling efforts on exploratory locations designed to test and prove the presence of multiple Bossier pay sands over a large portion of our acreage. Our production growth in East Texas in the current quarter was not as robust as the previous quarter due to delays in getting the multiple pay zones in the John Parker #1 and Wildman Trust #2 wells fracture stimulated and on production. The John Parker #1 is expected to be returned to production by before the end of November and the Wildman Trust #2 on production by early December. The arrival of a third drilling rig this month and completion of the 3-D seismic survey in early 2007 should allow us to move from strictly exploration activities to a combination of exploration and early development in the deep Bossier play."
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 select higher risk, deep natural gas exploration prospects with lower risk coal bed methane (CBM) development. The Company owns and controls exploration and development acreage in the deep Bossier natural gas play of East Texas and in the deep Trenton-Black River play in the Appalachian Basin. Gastar's CBM activities are conducted within the Powder River Basin of Wyoming and upon the approximate 3.0 million acres controlled by Gastar and its joint development partners in Australia's Gunnedah Basin and Gippsland Basins, located in New South Wales and Victoria, respectively.
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 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 unfavorable 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 31, 2006 with the United States Securities and Exchange Commission at www.sec.gov and on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. The American Stock Exchange and Toronto Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
Gastar Exploration Ltd.
1331 Lamar, Suite 1080
Houston, TX 77010
(713) 739-1800 FAX (713) 739-0458
Attention: J. Russell Porter
Web Site: www.gastar.com