Gastar Exploration, Ltd.
TSX : YGA
PINK SHEETS : GSREF

Gastar Exploration, Ltd.

September 20, 2005 08:45 ET

Gastar Announces Completion of the Sale of Additional $10 Million in Senior Secured Notes

HOUSTON, TEXAS--(CCNMatthews - Sept. 20, 2005) - Gastar Exploration, Ltd. (TSX:YGA)(PINK SHEETS:GSREF) announced that it has completed the issuance to the holders of its Senior Secured Notes of US $10 million of additional Senior Secured Notes on substantially the same terms as the original June 2005 placement, which also included the issuance of 206,354 common shares to the note holders (refer to prior press release dated September 9, 2005). The common shares issued in the transaction represented an aggregate value of CDN $714,286 based upon the five day weighted average trading price of CDN$3.4615 per share for the five trading days prior to closing. In connection with the sale of the notes, Gastar has also agreed to issue to the purchasers of the notes, for no additional consideration, common chares in CDN $714,286 increments on each of the six, twelve and eighteen month anniversaries of the closing date valued on a five day weighted average trading price at the date of issuance.

Gastar has the right on a quarterly basis to require the investors to purchase up to an aggregate additional US $10 million principal amount of additional Senior Secured Notes from November 2005 to June 17, 2007.

On June 20 and 21, 2005, the Company made copies of the material agreements related to the Senior Secured Notes and the related common share issuance and the Geostar acquisition available on the System for Electronic Document Analysis and Retrieval under the Canadian Securities Laws ("SEDAR"), which filings can be reviewed under the Company's profile at www.sedar.com.

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 low-risk CBM development with select higher risk, deep natural gas exploration prospects. Gastar's CBM activities are conducted within the Powder River Basin of Wyoming and upon the approximate 4 million acres controlled by Gastar and its Joint Development partners in Australia's Gunnedah Basin, PEL 238 and Gastar's Gippsland Basins located in New South Wales and Victoria respectively. The Company owns and controls development acreage in the Deep Bossier Sand gas play of East Texas and in the deep Trenton-Black River play in the Appalachian Basin.

THIS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE, NOR THERE ANY SALE OF THE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL. THE SENIOR SECURED NOTES AND COMMON SHARES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS.

Safe Harbor Statement and Disclaimer

This Press Release includes forward-looking statements 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 oil and natural gas 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 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 adverse drilling results, production declines and declines in oil and gas prices and other risk factors as described in the Company's Annual Information Form filed as of March 30, 2005, on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Gastar Exploration, Ltd.
    J. Russell Porter
    (713) 739-1800
    (713) 739-0458 (FAX)
    Web Site: www.gastar.com
    or
    Gastar Exploration, Ltd.
    1331 Lamar, Suite 1080
    Houston, TX 77010
    (713) 739-1800