SOURCE: Gastar Exploration, Ltd.

November 14, 2005 19:38 ET

Gastar Reports Third Quarter Earnings and Production

HOUSTON, TX -- (MARKET WIRE) -- November 14, 2005 -- Gastar Exploration Ltd. (TSX: YGA) (OTC: GSREF) reported a net loss attributable to common shares for the three months ended September 30, 2005 of $6.1 million, or $0.05 per basic and diluted share, compared to a net loss attributable to common shares for the three months ended September 30, 2004 of $2.0 million, or $0.02 per basic and diluted share. Natural gas and oil sales for the three months ended September 30, 2005 were $7.8 million, compared to natural gas and oil sales for the comparable 2004 period of $814,000. Average daily production of natural gas and oil sales for the three months ended September 30, 2005 totaled 11.0 million cubic feet of natural gas equivalents per day (MMcfed), compared to 1.9 MMcfed for the comparable 2004 period. EBITDA (as defined below) for the three months ended September 30, 2005 was $3.1 million, up from negative EBITDA of $682,000 for the three months ended September 30, 2004.

Net loss attributable to common shares for the nine months ended September 30, 2005 was $14.6 million, or $0.12 per basic and diluted share, compared to a net loss attributable to common shares for the nine months ended September 30, 2004 of $3.5 million, or $0.03 per basic and diluted share. Natural gas and oil sales for the nine months ended September 30, 2005 were $17.5 million, compared to natural gas and oil sales for the comparable 2004 period of $1.7 million. Average daily production of natural gas and oil sales for the nine months ended September 30, 2005 totaled 9.6 MMcfed, compared to 1.3 MMcfed for the comparable 2004 period. EBITDA for the nine months ended September 30, 2005 was $7.7 million, up from negative EBITDA of $1.0 million for the nine months ended September 30, 2004.

The full set of financial statements may be found on 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 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 www.sedar.com 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.


                               GASTAR EXPLORATION LTD.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (Unaudited)

                                Three Months Ended       Nine Months Ended
                                   September 30,            September 30,
                               -------------------    --------------------
                               2005           2004      2005        2004
                               ----           ----      ----        ----
                                 (in thousands, except per share amounts)

Revenues.....................  $7,822        $814    $17,496       $1,688
Expenses:
  Depletion, depreciation
  and amortization  .......... (5,595)       (428)   (11,501)        (877)
  Interest and debt
  related items .........      (3,614)       (911)   (10,750)      (1,497)
  Accretion on asset
  retirement obligations......... (35)        (13)       (78)         (37)
  Lease operating, transportation
  and selling..................(2,232)       (499)    (4,024)        (937)
  General and
  Administrative...............(2,461)     (1,069)    (5,997)      (1,916)
                               -------     -------     ------       ------
 Net loss before other items...(6,115)     (2,106)   (14,854)      (3,576)
                               -------     -------     ------       ------

Other items:
  Investment income and
  other........................... 25           7         87           15
  Foreign exchange
  gain............................(17)         65        125          107
                               -------     -------     ------       ------
                                    8          72        212          122
                               -------     -------     ------       ------
Net loss before income taxes...(6,107)     (2,034)   (14,642)      (3,454)
  Provision for income taxes...... -           -           -            -
                               -------     -------     ------       ------
 Net loss for the period......$(6,107)    $(2,034)  $(14,642)     $(3,454)
                               ========   ========  =========     ========

Loss per share:
  Net loss per share
  (basic and diluted)..........$(0.046)  $ (0.018)   $(0.121)    $ (0.031)
                               ========  =========   ========    =========

Average number of shares outstanding:
  Basic and diluted............132,410    112,756    121,205      110,709
                               ========  =========   ========    =========






PRODUCTION, PRICES, OPERATING EXPENSES AND EBITDA

                                   September 30,            September 30,
                               -------------------    --------------------
                               2005           2004      2005         2004
                               ----           ----      ----         ----
Production:
  Natural gas
  (millions of cubic feet)...1,008.3        167.6    2,614.8        353.0
  Oil and condensate
  (thousands of barrel)..........0.4          0.7        1.6          1.1
  Total (millions of
  cubic feet equivalent).....1,010.6        172.0    2,624.3        359.4
Natural gas
(millions of cubic feet
 per day).......................11.0          1.8        9.6          1.3
 Oil and condensate (thousands
 of barrels per  day)........... 0.0          0.0        0.0          0.0
 Total (millions of cubic feet
 equivalent per day)........... 11.0          1.9        9.6          1.3

Average sales price:
  Natural gas (per thousand
  cubic feet)..............  $  7.74      $  4.69    $  6.67     $   4.67

Oil and condensate
(per barrel)................ $ 60.31      $ 40.30    $ 50.19     $  37.75

 EBITDA(000).............    $ 3,137      $  (682)   $ 7,687     $ (1,043)

(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 depreciation, depletion and amortization, impairment of natural gas
and oil properties and exploration expenses, which can vary significantly
depending upon accounting methods.  EBITDA is not a calculation based on
U.S. 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.

                                   September 30,            September 30,
                               -------------------    --------------------
                               2005        2004      2005           2004
                               ----        ----      ----           ----
                                            (in thousands)
Loss for the period.........$(6,107)     $(2,034)     $(14,642)   $(3,454)
Interest and debt
related items.................3,614          911        10,750      1,497
Accretion on asset
retirement obligations...........35           13            78         37
Depletion, depreciation
and amortization..............5,595          428        11,501        877
Provision for income taxes......-             -             -          -
                             -------       ------       ------     -------
  EBITDA.....................$3,137        $(682)       $7,687    $(1,043)
                             =======       ======       ======    ========

Contact Information

  • Contact Information:

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

    Attention J. Russell Porter

    E-Mail: Email Contact
    Website: www.gastar.com