MARCH 31, 2006 - HOUSTON, TEXAS - Gastar Exploration Ltd. (AMEX: GST; TSX: YGA) reported a net loss attributable to common shares for the three months ended December 31, 2005 of $4.8 million, or $0.03 per basic and diluted common share, compared to a net loss of $9.4 million, or $0.08 per basic and diluted common share, for the three months ended December 31, 2004. The 2004 quarterly loss included an impairment of natural gas and oil properties of $6.3 million. Total revenues for the three months ended December 31, 2005 were $9.9 million, an increase of $5.5 million, as compared to revenues of $4.4 million for the 2004 comparable period. Of the 2005 quarterly increase in revenues, 45% was the result of increases in the quarterly production, and 55% was attributable to higher prices. Average daily production for the three months ended December 31, 2005 was 13.0 million cubic feet of natural gas equivalents per day ("MMcfed"), compared to 8.2 MMcfed for the three months ended December 31, 2004. EBITDA, as defined below, for the three months ended December 31, 2005 was $4.7 million, up from EBITDA of $1.1 million for the three months ended December 31, 2004.
Gastar reported a net loss attributable to common shares for the year ended December 31, 2005 of $25.7 million, or $0.20 per basic and diluted common share, compared to a net loss of $12.8 million, or $0.12 per basic and diluted common share, for the year ended December 31, 2004. The net loss for 2005 and 2004 includes impairment of natural gas and oil properties of $8.7 million and $6.3 million, respectively. Total revenues for the year ended December 31, 2005 were $27.4 million, an increase of $21.3 million, as compared to revenues of $6.1 million for the 2004 comparable period. Of the 2005 annual increase in revenues, 68% was the result of increases in the production, and 32% was attributable to higher prices. Average daily production for the year ended December 31, 2005 was 10.5 MMcfe, compared to 3.1 MMcfed for the year ended December 31, 2004. EBITDA for the year ended December 31, 2005 was $12.3 million, up from EBITDA of $63,000 for the year ended December 31, 2004.
Total proved reserves as of December 31, 2005 were 33.0 Bcf of natural gas and 1,000 barrels of oil. The present value of estimated future cash flows before income taxes as of December 31, 2005, based on the weighted average natural gas and oil prices after basis adjustments of $56.00 per barrel and $7.39 per Mcf and discounted at 10% per annum, was $91.3 million.
J. Russell Porter, Gastar's President and Chief Executive Officer, made the following comment, "We are pleased with our reported increases in production, revenue and EBITDA. We anticipate continued improvement in operating results during 2006 as we implement a more active drilling program in the deep Bossier play and on our Australian coal bed methane properties. Our 2006 Donelson #1 discovery is currently producing at an approximate gross rate of 7.5 MMcfd (net 5.6 MMcfd) and appears to be stabilizing from the initial gross production rate of 11 MMcfd. The Donelson #1 is our first commercial production in the lower Bossier sands and appears to support Gastar's overall geologic and geophysical model in these formations."
Gastar Exploration Ltd. is an independent 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 CBM development projects. Gastar owns and operates 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 3.4 million acres controlled by Gastar and its joint development partners in PEL 238, located in the Gunnedah Basin of New South Wales, and in EL 4416, located in the Gippsland Basin of Victoria, Australia.
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 to 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 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 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 as described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission at www.sec.gov and on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
In connection with the filing of Gastar's Annual Report on Form 10-K with the Securities and Exchange Commission, the Company is also filing on SEDAR at www.sedar.com its annual certifications of the Chief Executive Officer and the Chief Financial Officer as to the effectiveness of the Company's controls over financial reporting and the fair presentation of the Company's financial statements; the report of the independent qualified reserves evaluator; the report of Gastar's directors and management on reserve data; and the Company's Annual Report on Form 10-K; with specific sections of the Form 10-K regarding Managements Discussion and Analysis of Financial Condition and Results of Operations and a reconciliation of accounting principles generally accepted in the United States to accounting principles generally accepted in Canada being set out separately.
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.
1331 Lamar Street, Suite 1080
Houston, Texas 77010
(713) 739-1800 FAX (713) 739-0458
Attention: J. Russell Porter
Web Site: www.gastar.com