2011-01-14-2010-12-20-2010-12-20

Bought 62,000 net acres in W VA Marcellus play, a gathering system and 7 producing wells, gaining 50,000 Cf/d.

Gastar Exploration Ltd., Houston, (NYSE Amex: GST) has purchased approximately 62,000 net acres of leasehold in the Marcellus shale in West Virginia from undisclosed private sellers for $29.1 million.

The assets comprise 17,000 net acres held by production in Preston, Tucker and Pendleton counties and include a gathering system consisting of 41 miles of pipeline, a salt-water disposal well and seven conventional wells currently producing approximately 500,000 cubic feet of gas per day.

Prior to the agreement, Gastar had obtained an exclusive option on the leasehold with the right to conduct operations to test Marcellus potential on the properties. Gastar deepened an existing well and tested that vertical well at more than over 1.1 million cubic feet per day from the lower Marcellus.

Gastar also re-completed another existing vertical well and tested it at rates as high as 1 million cubic feet of gas per day from the lower Marcellus formation.

Gastar president and chief executive J. Russell Porter says, "With the completion of this acquisition, Gastar now holds approximately 80,000 net acres in the Marcellus shale, making Gastar one of the most highly leveraged companies (in the play) based on net acres related to enterprise value."

The company plans to drill two horizontal wells on the acquired acreage in 2011 near its previous successful vertical well testing, according to Porter. "The proposed drilling activity should further de-risk and demonstrate the long-term growth potential of this acreage," he adds.

Gastar's joint-venture partner in its existing Marcellus shale assets has the right to participate in the newly acquired assets.