gst-8k_20190104.htm

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  January 4, 2019

 

GASTAR EXPLORATION INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

 

DELAWARE

001-35211

38-3531640

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

1331 LAMAR STREET, SUITE 650

HOUSTON, TEXAS 77010

 

(Address of principal executive offices)

 

 

 

 

(713) 739-1800

Registrant’s telephone number, including area code

 

 

 

Not Applicable

(Former Name or Former Address, If Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

 

SECTION 7 – REGULATION FD

Item 7.01 Regulation FD Disclosures.

On January 4, 2019, Gastar Exploration Inc. (“Gastar”) and its subsidiary (together with Gastar, the “Company” or the “Debtors”) filed a monthly operating report for the period from November 1, 2018 to November 30, 2018 (the “Monthly Operating Report”) with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Bankruptcy Court has had jurisdiction over the reorganization proceedings under Chapter 11 of the United States Bankruptcy Code for the Debtors since October 31, 2018. A copy of the Monthly Operating Report is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information set forth in this Item 7.01 of this Current Report on Form 8-K and in Exhibit 99.1 is being furnished hereby and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filings. The filing of this Item 7.01 shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.

Cautionary Statement Regarding Financial Operating Data

The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any securities of the Company or any of its subsidiaries. The Debtors prepared the Monthly Operating Report solely for purposes of complying with the monthly operating requirements applicable in the Debtors’ Chapter 11 cases. The financial information contained in the Monthly Operating Report is unaudited, limited in scope, and as such, has not been subject to procedures that would typically be applied to financial statements in accordance with accounting principles generally accepted in the United States of America. The Monthly Operating Report should not be relied upon by any persons for information relating to current or future financial condition, events, or performance of the Company and any of its debtor and non-debtor subsidiaries, as the results of operations contained in the Monthly Operating Report are not necessarily indicative of results which may be expected from any other period or for the full year, and may not necessarily reflect the combined results of operations, financial position, and schedule of receipts and disbursements in the future. There can be no assurance that such information is complete, and the Monthly Operating Report may be subject to revision. Subsequent information or discovery may result in material changes to the Monthly Operating Report and errors or omissions may exist. Notwithstanding any such discovery, new information, or errors or omissions, the Debtors do not undertake any obligation or commitment to update the Monthly Operating Report.


 


 

 

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01  Financial Statements and Exhibits.

 

(d) Exhibits

 

The following is a list of exhibits that are furnished or filed herewith:

 

Exhibit No.

 

Description of Document

 

 

 

99.1

 

Monthly Operating Report of Gastar Exploration Inc. and its debtor subsidiary for the period from November 1, 2018 to November 30, 2018.

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: January 4, 2019

GASTAR EXPLORATION INC.

 

 

 

 

 

By:

/s/  Michael A. Gerlich

 

 

Michael A. Gerlich

 

 

 

Senior Vice President and Chief Financial Officer

 

 

 

 

gst-ex991_9.htm

Exhibit 99.1

 

 

UNITED STATES BANKRUPTCY COURT CASE NAME: Gastar Exploration Inc., et al. PETITION DATE: 10/31/2018 CASE NUMBER: 18-36057 DISTRICT OF TEXAS: Southern District of Texas PROPOSED PLAN DATE: 12/31/2018 DIVISION: Houston MONTHLY OPERATING REPORT SUMMARY FOR NOVEMBER 2018 ($ in thousands) NOVEMBER REVENUES (MOR-6) 7,643 0 0 0 0 INCOME BEFORE INT; DEPREC./TAX (MOR-6) (1,145) 0 0 0 0 NET INCOME (LOSS) (MOR-6) (7,806) 0 0 0 0 PAYMENTS TO INSIDERS (MOR-9) 917 0 0 0 0 PAYMENTS TO PROFESSIONALS (MOR-9) 108 0 0 0 0 TOTAL DISBURSEMENTS (MOR-8) 20,487 0 0 0 0 ***The original of this document must be filed with the United States Bankruptcy Court and a copy must be sent to the United States Trustee*** REQUIRED INSURANCE MAINTAINED AS OF SIGNATURE DATE Mantained EXP. DATE CASUALTY YES 11/1/2019 LIABILITY & AUTO YES 11/1/2019 WELL & POLLUTION YES 11/1/2019 D & O YES 12/1/2019 OTHER YES 12/1/2019 Are all accounts receivable being collected within terms? Yes No Are all post-petition liabilities, including taxes, being paid within terms? Yes No Have any pre-petition liabilities been paid? Yes No If so, describe Amounts paid pursuant to First Day Orders. Are all funds received being deposited into DIP bank accounts? Yes No Were any assets disposed of outside the normal course of business? Yes No If so, describe Are all U.S. Trustee Quarterly Fee Payments current? No What is the status of your Plan of Reorganization? The Plan is confirmed. See docket for confirmation order, DKT #282. ATTORNEY NAME: Ross M. Kwasteniet I certify under penalty of perjury that the following complete Monthly Operating FIRM NAME: Kirkland & Ellis LLP consisting of MOR-1 through MOR-9 plus attachments, is true and correct. ADDRESS: 300 North LaSalle SIGNED: _/s/ Michael Gerlich _ 1/4/2019 CITY, STATE, ZIP: Chicago, Illinois 60654 Michael A. Gerlich (Sr. VP and CFO) DATE TELEPHONE/FAX: (312) 862-2000 MOR-1


 

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION CASE NAME: Gastar Exploration Inc., et al. PETITION DATE: 10/31/2018 CASE NUMBER: 18-36057 MONTHLY OPERATING REPORT NOTES FOR NOVEMBER 2018 Note 1 Note 2 Note 3 Note 4 Debtor-in-Possession Financial Statements - The accompanying schedules MOR-1 through MOR-9 and the supplemental exhibits contained herein are unaudited, preliminary, and may not comply with generally accepted accounting principles in the United States of America ("U.S. GAAP") in all material respects. In addition, the financial statements and the supplemental information contained herein represent the financial information for the Debtors only. The Company's non-Debtor entities are not included in the financial statements and supplemental information contained herein. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court and the United States Trustee. The unaudited financial statements have been derived from the books and records of the Debtor. The information presented herein has not been subject to all procedures that would typically be applied to financial information presented in accordance with GAAP. Upon the application of such procedures, the Debtors believe that the financial information could be subject to changes, and these changes could be material. The information furnished in this Monthly Operating Report includes normal recurring adjustments, but does not include all of the adjustments that would typically be made for interim financial statements in accordance with GAAP. The results of operations contained herein are not necessarily indicative of results that are expected from any other period or for the full year and may not necessarily reflect the combined results of operations, financial position or cash flows of the Debtors in the future. The November financial statements are preliminary and subject to quarter-end adjustments and true-ups made during the quarter close process.


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 COMPARATIVE BALANCE SHEETS ASSETS ($ in thousands) FILING DATE 10/31/2018 MONTH 11/30/2018 MONTH MONTH MONTH CURRENT ASSETS Cash 6,331 15,523 Revenue Receivable 13,559 10,351 Accounts Receivable, Net 7,880 5,257 Prepaid Expenses 3,928 4,211 Commodity derivative contracts 0 0 TOTAL CURRENT ASSETS 31,698 35,342 0 0 0 PROPERTY, PLANT & EQUIP. @ COST 1,490,979 1,490,842 Less: Accumulated Depreciation 1,200,064 1,203,148 NET BOOK VALUE OF PP & E 290,915 287,694 0 0 0 OTHER ASSETS 1. Restricted Cash 25 25 2. Advances to Operators 78 79 TOTAL ASSETS $322,716 $323,140 $0 $0 $0 MOR-2


 

CASE NAME: Gastar Exploration Inc., et al. -------------------- CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 COMPARATIVE BALANCE SHEETS LIABILITIES & OWNER'S EQUITY ($ in thousands) FILING DATE 10/31/2018 MONTH 11/30/2018 MONTH MONTH MONTH LIABILITIES POST-PETITION LIABILITIES(MOR-4) 0 20,613 PRE-PETITION LIABILITIES Accounts Payable 29,870 0 Revenues Payable 13,443 13,170 Accrued Interest 4,016 0 Accrued Drilling and Operating Cost 3,885 0 Other Accrued Liabilities 4,468 0 Liabilities Subject to Compromise 0 413,808 Term Loan 260,349 0 Convertible Notes 121,052 0 Asset Retirement Obligations 2,591 0 TOTAL PRE-PETITION LIABILITIES 439,674 426,978 0 0 0 TOTAL LIABILITIES 439,674 447,591 0 0 0 OWNER'S EQUITY (DEFICIT) Preferred Stock, par value (Series A) 41 41 Preferred Stock, par value (Series B) 21 21 Common Stock, par value 219 219 Additional paid-in capital (commons stock & stock comp) 692,726 693,039 Additional paid-in capital (preferred shares - Series A) 78,799 78,799 Additional paid-in capital (preferred shares - Series B) 50,027 50,027 Deficits (938,791) (946,597) TOTAL OWNER'S EQUITY (NET WORTH) (116,958) (124,451) 0 0 0 TOTAL LIABILITIES & OWNER'S EQUITY $322,716 $323,140 $0 $0 $0 MOR-3


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 SCHEDULE OF POST-PETITION LIABILITIES ($ in thousands) MONTH 11/30/2018 MONTH MONTH MONTH MONTH TRADE ACCOUNTS PAYABLE 1,135 TAX PAYABLE Federal Payroll Taxes State Payroll Taxes Ad Valorem Taxes Other Taxes TOTAL TAXES PAYABLE 0 0 0 0 0 OTHER PAYABLES Revenues Payable TOTAL OTHER PAYABLES 0 0 0 0 0 SECURED DEBT POST-PETITION 12,667 ACCRUED INTEREST PAYABLE 1,047 ACCRUED PROFESSIONAL FEES* 4,694 OTHER ACCRUED LIABILITIES 1. Accrued Drilling and Operating Costs 1,070 TOTAL POST-PETITION LIABILITIES (MOR-3) $20,613 $0 $0 $0 $0 *Payment requires Court Approval MOR-4


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 AGING OF POST-PETITION LIABILITIES NOVEMBER 2018 ($ in thousands) TOTAL TRADE ACCOUNTS FEDERAL TAXES STATE TAXES AD VALOREM, OTHER TAXES REVENUES PAYABLE ACCRUED PROFESSIONAL FEES OTHER PAYABLES Current 20,612 1,134 0 0 0 0 4,694 14,784 1-30 DAYS 1 1 31-60 DAYS 0 0 61-90 DAYS 0 0 91+ DAYS 0 0 TOTAL $20,613 $1,135 $0 $0 $0 $0 $4,694 $14,784 AGING OF ACCOUNTS RECEIVABLE ($ in thousands) MONTH 11/30/2018 Current 12,049 1-30 DAYS 811 31-60 DAYS (2,816) 61-90 DAYS (336) 91+ DAYS 5,900 TOTAL $15,608 $0 $0 $0 $0 $0 $0 $0 MOR-5


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 STATEMENT OF INCOME (LOSS) ($ in thousands) MONTH 11/30/2018 MONTH MONTH MONTH MONTH FILING TO DATE: REVENUES (MOR-1) 7,643 7,643 TOTAL COST OF REVENUES 0 0 GROSS PROFIT 7,643 0 0 0 0 7,643 OPERATING EXPENSES: Selling & Marketing 380 380 General & Administrative 1,028 1,028 Lease Operating Expense 1,868 1,868 Insiders Compensation 917 917 Professional Fees 4,580 4,580 Other 15 15 TOTAL OPERATING EXPENSES 8,788 0 0 0 0 8,788 INCOME BEFORE INT, DEPR/TAX (MOR-1) (1,145) 0 0 0 0 (1,145) INTEREST EXPENSE (3,581) (3,581) DEPRECIATION (3,084) (3,084) OTHER (INCOME) EXPENSE1 4 4 OTHER ITEMS 0 0 TOTAL INT, DEPR & OTHER ITEMS (6,661) 0 0 0 0 (6,661) NET INCOME BEFORE TAXES (7,806) 0 0 0 0 (7,806) FEDERAL INCOME TAXES 0 0 NET INCOME (LOSS) (MOR-1) ($7,806) $0 $0 $0 $0 ($7,806) Footnotes 1 Investment income MOR-6


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 CASH RECEIPTS AND DISBURSEMENTS ($ in thousands) MONTH 11/30/2018 MONTH MONTH MONTH MONTH FILING TO DATE 1. CASH-BEGINNING OF MONTH $6,357 $6,357 RECEIPTS: 2. CASH SALES 15,332 15,332 3. COLLECTION OF ACCOUNTS RECEIVABLE 2,931 2,931 4. LOANS & ADVANCES1 11,415 11,415 5. SALE OF ASSETS 0 0 6. OTHER 0 0 TOTAL RECEIPTS** 29,678 0 0 0 0 29,678 (Withdrawal) Contribution by Individual Debtor MFR-2* 0 DISBURSEMENTS: 7. NET PAYROLL 1,489 1,489 8. PAYROLL TAXES PAID 0 0 9. SALES, USE & OTHER TAXES PAID 0 0 10. SECURED/RENTAL/LEASES 167 167 11. UTILITIES & TELEPHONE 4 4 12. INSURANCE 850 850 13. INVENTORY PURCHASES 0 0 14. VEHICLE EXPENSES 1 1 15. TRAVEL & ENTERTAINMENT 1 1 16. ADMINISTRATIVE & SELLING 233 233 17. ROYALTIES 4,833 4,833 18. LEASE OPPERATING EXPENSE 5,022 5,022 19. CAPITAL EXPENDITURE 6,424 6,424 20. NON-OPERATED DRILLING & COMPLETETION 977 977 21. OTHER 0 0 TOTAL DISBURSEMENTS FROM OPERATIONS 20,002 0 0 0 0 20,002 22. PROFESSIONAL FEES 485 485 23. U.S. TRUSTEE FEES 0 0 24. OTHER REORGANIZATION EXPENSES 0 0 TOTAL DISBURSEMENTS** 20,487 0 0 0 0 20,487 25. NET CASH FLOW 9,191 0 0 0 0 9,191 26. CASH - END OF MONTH (MOR-2) $15,548 $0 $0 $0 $0 $15,548 Footnotes 1 Proceeds received under DIP Facility * Applies to Individual debtors only MOR-7 **Numbers for the current month should balance (match) RECEIPTS and CHECKS/OTHER DISBURSEMENTS lines on MOR-8


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 CASH ACCOUNT RECONCILIATION MONTH OF NOVEMBER 2018 BANK NAME Wells Fargo Wells Fargo Wells Fargo Wells Fargo Texas Capital ACCOUNT NUMBER (LAST 4) 6232 8071 1937 7838 2715 ACCOUNT TYPE OPERATING/SWEEP ZBA ROW MONEY MARKET RESTRICTED CASH TOTAL BANK BALANCE ($ in thousands) 23,086 0 30 0 25 $23,141 DEPOSITS IN TRANSIT 0 0 0 0 0 $0 OUTSTANDING CHECKS 0 7,593 0 0 0 $7,593 ADJUSTED BANK BALANCE $23,086 ($7,593) $30 $0 $25 $15,548 BEGINNING CASH - PER BOOKS 13,055 (6,754) 30 0 25 $6,357 RECEIPTS* 29,678 0 0 0 0 $29,678 TRANSFERS BETWEEN ACCOUNTS (15,551) 15,551 0 0 0 $0 (WITHDRAWAL) OR CONTRIBUTION BY INDIVIDUAL DEBTOR MFR-2 0 0 0 0 0 $0 CHECKS/OTHER DISBURSEMENTS* 4,096 16,391 0 0 0 $20,487 ENDING CASH - PER BOOKS $23,086 ($7,593) $30 $0 $25 $15,548 MOR-8 *Numbers should balance (match) TOTAL RECEIPTS and TOTAL DISBURSEMENTS lines on MOR-7


 

CASE NAME: Gastar Exploration Inc., et al. CASE NUMBER: 18-36057 PAYMENTS TO INSIDERS AND PROFESSIONALS Of the total disbursements shown for the month, list the amount paid to insiders (as defined in Section 101(31)(A)-(F) of the U.S. Bankruptcy Code) and the professionals. Also, for insiders, identify the type of compensation paid (e.g., salary, commission, bonus, etc.) (Attach additional pages as necessary). INSIDERS: NAME/COMP TYPE MONTH 11/30/2018 MONTH MONTH MONTH MONTH 1 Jerry R. Schuyler (salary, bonus, and expense reimbursement) 500,535 2 Michael A. Gerlich (salary, bonus, and expense reimbursement) 183,192 3 Stephen P. Roberts (salary, bonus, and expense reimbursement) 197,005 4 Harry Quarls (Director Fees and expense reimbursement) 17,647 5 Randolph C. Coley (Director Fees and expense reimbursement) 14,586 6 Marc Bellinson (expense reimbursement) 1,836 7 William L. Transier 0 8 Robert D. Penner (expense reimbursement) 1,604 9 Stephen A. Holditch (expense reimbursement) 376 TOTAL INSIDERS (MOR-1) $916,782 $0 $0 $0 $0 PROFESSIONALS MONTH 11/30/2018 MONTH MONTH MONTH MONTH 1 BMC Group, Inc. (DKT #72) 108,088 2 Jackson Walker LLP (DKT #274) 0 3 Kirkland & Ellis LLP (DKT #273) 0 4 Opportune LLP (DKT #279) 0 5 Perella Weinberg Partners LP (DKT #278) 0 TOTAL PROFESSIONALS (MOR-1) $108,088 $0 $0 $0 $0 MOR-9