Gastar Exploration, Ltd.
TSX : YGA
OTC Bulletin Board : GSREF
PINK SHEETS : GSREF

Gastar Exploration, Ltd.

August 15, 2005 20:30 ET

Gastar Exploration Ltd. Reports Second Quarter Results

HOUSTON, TEXAS--(CCNMatthews - Aug. 15, 2005) - Gastar Exploration Ltd. (TSX:YGA) filed Consolidated Financial Statements (Unaudited) and Management Discussion and Analysis for the 3-month and 6-month periods ended June 30, 2005 under Canadian GAAP and securities reporting requirements. The Company's full Canadian filings are available at www.sedar.com. All amounts are reported in United States dollars.

Gastar reported a net loss attributable to common shares for the three months ended June 30, 2005 of $4.9 million, or $0.04 per basic and diluted share, compared to a net loss attributable to common shares for the three months ended June 30, 2004 of $804,000, or $0.1 per basic and diluted share. Natural gas and oil sales for the three months ended June 30, 2005 were $4.9 million, compared to natural gas and oil sales for the comparable 2004 period of $517,000. Average daily production of natural gas and oil sales for the three months ended June 30, 2005 totaled 8.4 million cubic feet of natural gas equivalents per day (MMcfed), compared to 1.1 MMcfed for the comparable 2004 period. EBITDA (as defined below) for the three months ended June 30, 2005 was $2.9 million, up from a negative EBITDA of $331,000 for the three months ended June 30, 2004.

Net loss attributable to common shares for the six months ended June 30, 2005 was $8.5 million, or $0.7 per basic and diluted share, compared to a net loss attributable to common shares for the six months ended June 30, 2004 of $1.4 million, or $0.01 per basic and diluted share. Natural gas and oil sales for the six months ended June 30, 2005 were $9.7 million, compared to natural gas and oil sales for the comparable 2004 period of $873,000. Average daily production of natural gas and oil sales for the six months ended June 30, 2005 totaled 8.9 MMcfed, compared to 1.0 MMcfed for the comparable 2004 period. EBITDA for the six months ended June 30, 2005 was $4.5 million, up from a negative EBITDA of $362,000 for the six months ended June 30, 2004.

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 gross 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.

This press release contains forward-looking statements that involve risks and uncertainties, and actual events or results may differ materially from Gastar's expectations. The statements reflect Gastar's current views with respect to future events that involve risks and uncertainties, including those related to successful negotiations with other parties, oil and gas exploration risks, price volatility, production levels, closing of transactions, capital availability, operational and other risks, uncertainties and factors described from time to time in Gastar's publicly available reports.



GASTAR EXPLORATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(U.S. $ in thousands, except per share
amounts)

Revenues $ 4,942 $ 517 $ 9,674 $ 873

Expenses:
Depletion, depreciation and
amortization (2,805) (243) (5,905) (448)
Interest and debt related items (4,969) (219) (7,136) (586)
Accretion on asset retirement
obligations (24) (11) (43) (25)
Lease operating,
transportation and selling (478) (227) (1,792) (438)
General and administrative (1,771) (680) (3,537) (847)
--------- --------- --------- ---------
Net loss before other items (5,105) (863) (8,739) (1,471)
--------- --------- --------- ---------


Other items:
Investment income and other 23 4 62 8
Foreign exchange gain 167 55 142 42
--------- --------- --------- ---------
190 59 204 50
--------- --------- --------- ---------
Net loss before income taxes (4,915) (804) (8,535) (1,421)
Provision for income taxes - - - -
--------- --------- --------- ---------
Net loss for the period $ (4,915) $ (804) $ (8,535) $(1,421)
--------- --------- --------- ---------
--------- --------- --------- ---------

Loss per share:
Net loss per share
(basic and diluted) $ (0.042) $(0.007) $(0.074) $(0.013)
--------- --------- --------- ---------
--------- --------- --------- ---------
Average number of
shares outstanding:
Basic and diluted 117,287 112,201 115,547 109,733
--------- --------- --------- ---------
--------- --------- --------- ---------



PRODUCTION, PRICES, OPERATING EXPENSES AND EBITDA

Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Production:
Natural gas
(millions of cubic feet) 757.2 99.0 1,606.4 185.3
Oil and condensate
(thousands of barrel) 0.5 0.3 0.4 0.4
Total (millions of cubic feet
equivalent) 760.1 101.1 1,613.7 187.5

Natural gas
(millions of cubic feet per day) 8.3 1.1 8.9 1.0
Oil and condensate
(thousands of barrels per day) 0.0 0.0 0.0 0.0
Total (millions of cubic feet
equivalent per day) 8.4 1.1 8.9 1.0

Average sales price:
Natural gas
(per thousand cubic feet) $ 6.50 $ 5.10 $ 5.99 $ 4.65
Oil and condensate (per barrel) $ 49.03 $ 32.92 $ 47.09 $ 32.84

EBITDA (U.S. $ in thousands) (1) $ 2,883 $ (331) $ 4,549 $ (362)


(1) EBITDA represents earnings before interest and debt related items, accretion on asset retirement obligations, depletion, depreciation and amortization and provision for income taxes. We have reported EBITDA because we believe EBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt. We believe EBITDA assists investors in comparing a company's performance on a consistent basis without regard to before interest and debt related items, accretion on asset retirement obligations and depreciation, depletion and amortization, which can vary significantly depending upon accounting methods. EBITDA is not a calculation based on Canadian generally accepted accounting principles and should not be considered an alternative to net income (loss) in measuring our performance or used as an exclusive measure of cash flow because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in our statements of cash flows. Investors should carefully consider the specific items included in our computation of EBITDA. While we have disclosed our EBITDA to permit a more complete comparative analysis of our operating performance and debt servicing ability relative to other companies, investors should be cautioned that EBITDA as reported by us may not be comparable in all instances to EBITDA as reported by other companies. EBITDA amounts may not be fully available for management's discretionary use, due to requirements to conserve funds for capital expenditures, debt service, preferred stock dividends and other commitments.

A reconciliation of EBITDA to income (loss) from operations for the periods indicated is presented below.



Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(U.S. $ in thousands)
Loss for the period $ (4,915) $ (804) $ (8,535) $ (1,421)
Interest and debt related items 4,969 219 7,136 586
Accretion on asset retirement
obligations 24 11 43 25
Depletion, depreciation and
amortization 2,805 243 5,905 448
Provision for income taxes - - - -
--------- --------- --------- ---------
EBITDA $ 2,883 $ (331) $ 4,549 $ (362)
--------- --------- --------- ---------
--------- --------- --------- ---------


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
    President and Chief Executive Officer
    (713) 739-1800
    Email: rporter@gastar.com
    Website: www.gastar.com
    or
    Gastar Exploration Ltd.
    1331 Lamar Street, Suite 1080
    Houston, Texas 77010
    (713) 739-1800