Gastar Exploration, Ltd.
OTC Bulletin Board : GSREF

Gastar Exploration, Ltd.

October 20, 2005 08:30 ET

Gastar Announces Latest Successful Drilling Results in East Texas

HOUSTON, TEXAS--(CCNMatthews - Oct. 20, 2005) - Gastar Exploration Ltd. (TSX:YGA) (OTCBB:GSREF) is pleased to announce that it has encountered multiple shallow and deep pay zones in its Donelson #1 well.

Gastar drilled the Donelson #1 well, its sixth Deep Bossier well in the Hilltop area of East Texas, to a total depth of 19,200 feet. As previously announced, the Donelson #1 well has encountered an apparent commercial gas discovery in the Pettet formation at approximately 10,000 feet. In addition, the Donelson #1 well has encountered a productive interval within the Knowles limestone. The Knowles has been tested productive even after being damaged by heavy drilling fluids required to control the well during drilling. A dedicated Knowles well will be drilled on the Donelson #1 location in order to accelerate the development and production of the Knowles formation and to take advantage of current high natural gas prices.

The Donelson #1 well also encountered apparently productive sands in the upper and middle Bossier formations along with a series of apparently productive pay zones in the lower or deep Bossier formation from approximately 17,000 feet to 19,000 feet. Gastar estimates that, utilizing conservative porosity cut-off parameters, over 90 feet of net pay is present in the lower Bossier sands and an additional 53 feet of net pay was encountered in the upper and middle Bossier formations. The lower Bossier sands appear to correlate to a similar series of sands discovered by Gastar in the earlier Belin Trust A-1 well. Based on these latest results, Gastar believes that it has confirmed the presence of a series of gas bearing lower or deep Bossier formation sands that are productive due to their uplifted structural position in the Hilltop area and thus unique to Gastar's acreage position. Gastar will undertake a completion in the lower Bossier pays immediately after the dedicated Knowles well is drilled and completed on the Donelson #1 location. The Donelson Knowles well is expected to take approximately 45 days to drill and complete.

J. Russell Porter, Gastar's President & CEO, made the following comments on the announcement," The discovery of a productive interval in the Knowles formation should allow Gastar to potentially ramp up production and cash flow through the drilling of two, and possibly three, offsets to this discovery. The cost of these wells is significantly less than the cost to drill and complete our Bossier wells and this additional cash flow will be available for our on-going Bossier drilling program. The confirmation of the presence of the lower Bossier sands in the Donelson #1 fault block supports our geologic model for the lower Bossier and sets up numerous additional drilling locations for these lower Bossier sands. We will also continue with exploration and development of the middle Bossier sands that have been discovered and produced in Gastar's previous F-K #1, Cheney #1, LOR #1 and Greer #1 wells and that are being successfully drilled by Burlington Resources (NYSE: BR) and EnCana (TSX: ECA; NYSE: ECA) in our immediate area."

"We continue to identify additional opportunities on our lease position and are currently testing the Travis Peak formation, after experiencing gas shows while drilling, to determine if commercial gas rates can be sustained from that formation. Gastar has executed a coring program within the Travis Peak formation that provided confirmation of a significant thickness of potential reservoir. If the Travis Peak tests are successful, Gastar believes that a large area could be developed for Travis Peak production. This would add a new dimension to our existing plans and enable Gastar to move forward with a multiple horizon drilling program."

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 low-risk coal bed methane (CBM) development. The Company owns and controls exploration and development acreage in the Deep Bossier 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 3.5 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.

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 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 2005, on the System for Electronic Document Analysis and Retrieval (SEDAR) at and has disclosed in the Company's registration statement on Form S-1 filed with United States Securities and Exchange Commission.

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
    Gastar Exploration, Ltd.
    1331 Lamar, Suite 1080
    Houston, TX 77010
    (713) 739-1800
    (713) 739-0458 (FAX)