Privately held Houston-based Leor Energy has made an undisclosed equity investment in privately owned Texas-based Navasota Resources LP, which recently acquired the rights, title and interest in a portion of the East Texas undeveloped leasehold of Gastar Exploration Ltd., Houston, (Amex: GST; Toronto: YGA) for $92 million.

Navasota Resources has the right to acquire additional undeveloped leasehold interests, covering approximately 544 net acres, for a cash price of $4.1 million, subject to completion of certain curative actions by July 9.

Leor chief executive Guma Aguiar says, "We are pleased to have expanded our acreage position in Robertson County through this strategic investment in Navasota. The acreage acquired by Navasota is adjacent to, and contiguous with, Leor's Amoruso Field, one of the most important onshore discoveries in North America, and is situated only 1.5 miles away from two of our own wells."

Hal Chappelle, president and CEO of Alta Mesa, the general partner of Navasota, says, "We look forward to benefiting from the learning curve, which Leor has climbed over the past few years as they have been able to cut drilling costs and increase productivity through improved completion techniques."

Leor has eight rigs running in the Deep Bossier and a 3-D shoot is currently under way across its Robertson County acreage position.

Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has acquired 1.8 million shares of Gastar for US$2 each in a deal valued at $3.5 million. Chesapeake exercised its preemptive rights to acquire these shares following Gastar's issuance of shares to Navasota.

Chesapeake now owns 16.4% of Gastar's outstanding shares. Gastar president and chief executive J. Russell Porter says, "We are pleased that Chesapeake has elected to maintain their ownership interest in Gastar and we greatly appreciate Chesapeake's continued support of Gastar."

Gastar and Chesapeake are conducting an exploration and development program in the Hilltop area of the Deep Bossier play. The additional funds will support that as well as Gastar's other planned drilling. Chesapeake had planned to acquire the assets for which Navasota exercised its preferential rights.

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