Gastar Exploration announces 51% increase in proved reserves
Friday, Feb 22, 2013

Gastar Exploration Ltd. (NYSE MKT: GST) (Gastar) today reported year-end 2012 proved natural gas, oil and condensate and natural gas liquids (NGLs) reserves of 180.9 billion cubic feet equivalent (Bcfe) as estimated in accordance with Securities Exchange Commission (SEC) regulations. This represents an increase of 51% over year-end 2011 proved reserves of 119.7 Bcfe.

Of the total 2012 year-end proved reserves, 72% were natural gas, 11% were condensate and oil and 17% were NGLs, as compared to 77%, 9% and 14%, respectively, for year-end 2011.  The pre-tax present value of these reserves, discounted at 10% (PV-10), was $206.8 million, versus $217.1 million at year-end 2011, which reflects a year-over-year decline in natural gas, oil, condensate and NGLs prices.

Marcellus Shale assets represented 85% of proved reserves volumes and 93% of the PV-10 value, with East Texas comprising the majority of the remainder of proved reserves and PV-10 value.

Proved undeveloped (PUD) reserves at December 31, 2012 accounted for approximately 30% of total proved reserves, compared to approximately 34% at year-end 2011.  Proved undeveloped reserves at year-end 2012 were comprised of 54.3 Bcfe of Appalachian Basin reserves with a PV-10 value of $39.1 million.  At year-end 2012, Gastar recorded only 1.0 gross Marcellus PUD location adjacent to each gross producing location drilled (down from gross 1.3 PUD locations for each gross producing location at year-end 2011). Gastar believes all of its Marcellus acreage in Marshall and Wetzel Counties, West Virginia is prospective in the Marcellus and that the development of the acreage will result in natural gas production with high NGLs and condensate yields.

In accordance with SEC regulations, estimates of proved reserves as of December 31, 2012 were calculated using the 12-month un-weighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2012.  For natural gas volumes, the average Henry Hub price utilized was $2.76 per MMbtu.  For oil volumes, the average West Texas Intermediate (WTI) posted price and the WTI spot price utilized was $91.21 and $94.71 per barrel, respectively.  For NGLs volumes, the price per barrel used was $31.73.

The natural gas, oil, condensate and NGLs prices are adjusted for energy content or quality, transportation and regional price differentials by area.

For comparative purposes, utilizing the significantly higher forward closing prices on the New York Mercantile Exchange (NYMEX) for natural gas and oil as of December 31, 2012, total proved reserves were 190.4 Bcfe, with a PV-10 value of $333.2 million using un-weighted average prices of $5.28 per MMBtu of natural gas, $87.28 per barrel of oil and $29.24 per barrel of NGLs, assuming a historical spread to oil prices.

The natural gas, oil, condensate and NGLs prices are adjusted for energy content or quality, transportation and regional price differentials by area.

The Appalachian Basin and Mid-Continent proved reserves estimates were prepared by Wright & Company, Inc.  Netherland Sewell & Associates, Inc. prepared East Texas and other areas reserves.

Source: Gastar Exploration

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