Gastar Exploration Ltd. today reported financial and operating results for the three and nine months ended September 30, 2010.

Operations Review and Update

In East Texas, third quarter net production from the Hilltop area averaged 20.1 MMcfe per day, up from 13.6 MMcfe per day in the second quarter of 2010. The increase in volumes was due to the return of the Belin #1 well to production, following successful operational repairs late in the second quarter, and bringing a new well, the Donelson #4, on production in late June. Additionally, production during the third quarter was slightly higher than expected due to the Streater #1, a middle Bossier well, coming on production on September 20 versus early October as originally expected. The well was completed in one zone and is currently producing approximately 7.6 MMcf per day. Gastar has a 100% before payout working interest (76% before payout net revenue interest) in the Streater #1 well.

Also during the third quarter, we began drilling our first Eagle Ford test well, the Wildman #7H and are currently waiting on service company availability to fracture stimulate the well, which is expected to occur in late December. A rig is currently moving to drill our second well to test the Glen Rose formation, the Wildman #8H, which should spud later this month. In late November, we expect to begin drilling the Belin #2 well, a lower Bossier well located adjacent to the Belin #1 well, which if successful could prove up a new fault block.

Capital expenditures for the third quarter in East Texas were $11.2 million, and we expect to spend approximately $10.4 million in East Texas during the fourth quarter on capital projects.

In Appalachia during the third quarter, we began drilling our first operated horizontal Marcellus Shale test, the Wengerd #1 in Marshall County, West Virginia, which is the initial activity within our new joint venture with an affiliate of Atinum Partners Co., Ltd. Under the terms of the agreement, Atinum will pay 87.5% of the cost of the well for a 50% interest. We expect to have the well fraced by late first quarter 2011, and if successful, it would go on production shortly thereafter.

Atinum and Gastar are also participating in a seven well program to test the Marcellus Shale on acreage pooled with an offset operator in Butler County, Pennsylvania. Atinum and Gastar collectively own 38.4% of the seven wells, and Atinum will pay 87.5% of the combined net cost. The vertical sections of the wells have been drilled from one pad, with a larger rig scheduled to drill horizontal sections in all seven wells early next year. Completion activity is expected to begin in the second quarter of 2011, with the wells scheduled to be fraced and put on production starting mid-year.

Capital expenditures for the third quarter in Appalachia were $6.0 million, and we expect to spend approximately $1.5 million in Appalachia during the fourth quarter on capital projects.

J. Russell Porter, Gastar's President and CEO, stated, "With the closing of our Atinum joint venture, we are dramatically stepping up our development activity in our Appalachia acreage and expect to have an interest in at least eight wells producing from the Marcellus Shale by mid-2011. Additionally, we have an even more active drilling program planned for 2011, with at least another dozen operated horizontal wells planned. Our focus will be to initially target wells near infrastructure and in areas that are expected to have higher liquids content. With over half of our total Marcellus Shale acreage expected to generate production with meaningful liquids content, we believe this strategy will enhance our returns if natural gas prices remain low.

"Likewise in East Texas, we are focusing our capital budget toward testing the potential for oil production from the Glen Rose and Eagle Ford formations. Currently our plan is to determine the most effective method for drilling and completing wells in these target zones. Other than the Belin #2 well, which is being drilled to hold an expiring lease, and the Belin #3 after that, our plans in East Texas are dependent on natural gas prices and results of our Eagle Ford and Glen Rose tests, with the expectation that successful initial tests will create further opportunity."