x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Alberta, Canada
|
98-0570897
|
Delaware
|
38-3531640
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
1331 Lamar Street, Suite 650
|
|
Houston, Texas
|
77010
|
(Address of principal executive offices)
|
(Zip Code)
|
Gastar Exploration Ltd.
|
Yes
|
ý
|
No
|
o
|
Gastar Exploration USA, Inc.
|
Yes
|
ý
|
No
|
o
|
Gastar Exploration Ltd.
|
Yes
|
ý
|
No
|
o
|
Gastar Exploration USA, Inc.
|
Yes
|
ý
|
No
|
o
|
Large accelerated filer
|
o
|
Accelerated filer
|
ý
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
ý
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Gastar Exploration Ltd.
|
Yes
|
o
|
No
|
ý
|
Gastar Exploration USA, Inc.
|
Yes
|
o
|
No
|
ý
|
Gastar Exploration Ltd.
|
61,592,860
|
|
shares of common stock
|
Gastar Exploration USA, Inc.
|
750
|
|
shares of common stock
|
|
|
Page
|
|
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Item 1.
|
||
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Item 2.
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Item 3.
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Item 4.
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Item 1.
|
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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AMI
|
Area of Mutual Interest, an agreed designated geographic area where joint venturers or other industry partners have a right of participation in acquisitions and operations
|
|
|
Bbl
|
Barrel of oil, condensate or NGLs
|
|
|
Bbl/d
|
Barrels of oil, condensate or NGLs per day
|
|
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BOE/d
|
Barrels of oil equivalent per day
|
|
|
Btu
|
British thermal unit, typically used in measuring natural gas energy content
|
|
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CRP
|
Central receipt point
|
|
|
FASB
|
Financial Accounting Standards Board
|
|
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MBbl
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One thousand barrels of oil, condensate or NGLs
|
|
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MBbl/d
|
One thousand barrels of oil, condensate or NGLs per day
|
|
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Mcf
|
One thousand cubic feet of natural gas
|
|
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Mcf/d
|
One thousand cubic feet of natural gas per day
|
|
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Mcfe
|
One thousand cubic feet of natural gas equivalent
|
|
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MMBtu/d
|
One million British thermal units per day
|
|
|
MMcf
|
One million cubic feet of natural gas
|
|
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MMcf/d
|
One million cubic feet of natural gas per day
|
|
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MMcfe
|
One million cubic feet of natural gas equivalent
|
|
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MMcfe/d
|
One million cubic feet of natural gas equivalent per day
|
|
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NGLs
|
Natural gas liquids
|
|
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NYMEX
|
New York Mercantile Exchange
|
|
|
psi
|
Pounds per square inch
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
(Unaudited)
|
|
|
||||
|
(in thousands, except share data)
|
||||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,799
|
|
|
$
|
8,901
|
|
Accounts receivable, net of allowance for doubtful accounts of $540 and $546, respectively
|
10,344
|
|
|
9,540
|
|
||
Commodity derivative contracts
|
2,835
|
|
|
7,799
|
|
||
Prepaid expenses
|
838
|
|
|
1,097
|
|
||
Total current assets
|
24,816
|
|
|
27,337
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
||||
Natural gas and oil properties, full cost method of accounting:
|
|
|
|
||||
Unproved properties, excluded from amortization
|
152,665
|
|
|
67,892
|
|
||
Proved properties
|
762,747
|
|
|
671,193
|
|
||
Total natural gas and oil properties
|
915,412
|
|
|
739,085
|
|
||
Furniture and equipment
|
2,076
|
|
|
1,925
|
|
||
Total property, plant and equipment
|
917,488
|
|
|
741,010
|
|
||
Accumulated depreciation, depletion and amortization
|
(497,720
|
)
|
|
(484,759
|
)
|
||
Total property, plant and equipment, net
|
419,768
|
|
|
256,251
|
|
||
OTHER ASSETS:
|
|
|
|
||||
Commodity derivative contracts
|
1,753
|
|
|
1,369
|
|
||
Deferred charges, net
|
2,170
|
|
|
836
|
|
||
Advances to operators and other assets
|
1,701
|
|
|
4,275
|
|
||
Total other assets
|
5,624
|
|
|
6,480
|
|
||
TOTAL ASSETS
|
$
|
450,208
|
|
|
$
|
290,068
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
25,413
|
|
|
$
|
23,863
|
|
Revenue payable
|
13,742
|
|
|
8,801
|
|
||
Accrued interest
|
2,173
|
|
|
151
|
|
||
Accrued drilling and operating costs
|
3,637
|
|
|
3,907
|
|
||
Advances from non-operators
|
30,414
|
|
|
17,540
|
|
||
Commodity derivative contracts
|
253
|
|
|
1,399
|
|
||
Asset retirement obligation
|
358
|
|
|
358
|
|
||
Other accrued liabilities
|
5,211
|
|
|
1,493
|
|
||
Total current liabilities
|
81,201
|
|
|
57,512
|
|
||
LONG-TERM LIABILITIES:
|
|
|
|
||||
Long-term debt
|
194,609
|
|
|
98,000
|
|
||
Commodity derivative contracts
|
—
|
|
|
1,304
|
|
||
Asset retirement obligation
|
8,235
|
|
|
6,605
|
|
||
Other long-term liabilities
|
274
|
|
|
111
|
|
||
Total long-term liabilities
|
203,118
|
|
|
106,020
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Common stock, no par value; unlimited shares authorized; 61,593,024 and 66,432,609 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively
|
306,593
|
|
|
316,346
|
|
||
Additional paid-in capital
|
30,059
|
|
|
28,336
|
|
||
Accumulated deficit
|
(247,537
|
)
|
|
(294,787
|
)
|
||
Total shareholders' equity
|
89,115
|
|
|
49,895
|
|
||
Non-controlling interest:
|
|
|
|
||||
Preferred stock of subsidiary, aggregate liquidation preference $98,954 and $98,781 at June 30, 2013 and December 31, 2012, respectively
|
76,774
|
|
|
76,641
|
|
||
Total equity
|
165,889
|
|
|
126,536
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
450,208
|
|
|
$
|
290,068
|
|
|
For the Six Months Ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
51,514
|
|
|
$
|
(77,382
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
12,961
|
|
|
12,609
|
|
||
Impairment of natural gas and oil properties
|
—
|
|
|
72,733
|
|
||
Stock-based compensation
|
1,966
|
|
|
1,846
|
|
||
Unrealized hedge (gain) loss
|
2,152
|
|
|
(1,280
|
)
|
||
Realized loss (gain) on derivative contracts
|
7
|
|
|
(440
|
)
|
||
Amortization of deferred financing costs
|
1,450
|
|
|
98
|
|
||
Accretion of asset retirement obligation
|
216
|
|
|
183
|
|
||
Gain on acquisition of assets at fair value
|
(43,712
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
394
|
|
|
(2,996
|
)
|
||
Prepaid expenses
|
259
|
|
|
222
|
|
||
Accounts payable and accrued liabilities
|
9,825
|
|
|
(932
|
)
|
||
Net cash provided by operating activities
|
37,032
|
|
|
4,661
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Development and purchase of natural gas and oil properties
|
(55,955
|
)
|
|
(62,856
|
)
|
||
Acquisition of natural gas and oil properties
|
(69,775
|
)
|
|
—
|
|
||
Advances to operators
|
(5,154
|
)
|
|
(1,911
|
)
|
||
Deposit for sale of natural gas and oil properties
|
2,300
|
|
|
—
|
|
||
Advances from non-operators
|
12,874
|
|
|
5,847
|
|
||
Purchase of furniture and equipment
|
(151
|
)
|
|
(225
|
)
|
||
Net cash used in investing activities
|
(115,861
|
)
|
|
(59,145
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from revolving credit facility
|
19,000
|
|
|
43,000
|
|
||
Repayment of revolving credit facility
|
(117,000
|
)
|
|
(26,000
|
)
|
||
Proceeds from issuance of senior secured notes, net of discount
|
194,500
|
|
|
—
|
|
||
Repurchase of outstanding common shares
|
(9,753
|
)
|
|
—
|
|
||
Proceeds from issuance of preferred stock, net of issuance costs
|
133
|
|
|
38,449
|
|
||
Dividend on preferred stock attributable to non-controlling interest
|
(3,554
|
)
|
|
(2,963
|
)
|
||
Deferred financing charges
|
(2,355
|
)
|
|
(332
|
)
|
||
Other
|
(244
|
)
|
|
(278
|
)
|
||
Net cash provided by financing activities
|
80,727
|
|
|
51,876
|
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,898
|
|
|
(2,608
|
)
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
8,901
|
|
|
10,647
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
10,799
|
|
|
$
|
8,039
|
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
(Unaudited)
|
|
|
||||
|
(in thousands, except share data)
|
||||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,760
|
|
|
$
|
8,892
|
|
Accounts receivable, net of allowance for doubtful accounts of $540 and $546, respectively
|
10,344
|
|
|
9,539
|
|
||
Commodity derivative contracts
|
2,835
|
|
|
7,799
|
|
||
Prepaid expenses
|
746
|
|
|
919
|
|
||
Total current assets
|
24,685
|
|
|
27,149
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
||||
Natural gas and oil properties, full cost method of accounting:
|
|
|
|
||||
Unproved properties, excluded from amortization
|
152,665
|
|
|
67,892
|
|
||
Proved properties
|
762,739
|
|
|
671,185
|
|
||
Total natural gas and oil properties
|
915,404
|
|
|
739,077
|
|
||
Furniture and equipment
|
2,076
|
|
|
1,925
|
|
||
Total property, plant and equipment
|
917,480
|
|
|
741,002
|
|
||
Accumulated depreciation, depletion and amortization
|
(497,713
|
)
|
|
(484,752
|
)
|
||
Total property, plant and equipment, net
|
419,767
|
|
|
256,250
|
|
||
OTHER ASSETS:
|
|
|
|
||||
Commodity derivative contracts
|
1,753
|
|
|
1,369
|
|
||
Deferred charges, net
|
2,170
|
|
|
836
|
|
||
Advances to operators and other assets
|
1,701
|
|
|
4,275
|
|
||
Total other assets
|
5,624
|
|
|
6,480
|
|
||
TOTAL ASSETS
|
$
|
450,076
|
|
|
$
|
289,879
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
25,413
|
|
|
$
|
23,863
|
|
Revenue payable
|
13,742
|
|
|
8,801
|
|
||
Accrued interest
|
2,173
|
|
|
151
|
|
||
Accrued drilling and operating costs
|
3,637
|
|
|
3,907
|
|
||
Advances from non-operators
|
30,414
|
|
|
17,540
|
|
||
Commodity derivative contracts
|
253
|
|
|
1,399
|
|
||
Asset retirement obligation
|
358
|
|
|
358
|
|
||
Other accrued liabilities
|
5,088
|
|
|
1,480
|
|
||
Total current liabilities
|
81,078
|
|
|
57,499
|
|
||
LONG-TERM LIABILITIES:
|
|
|
|
||||
Long-term debt
|
194,609
|
|
|
98,000
|
|
||
Commodity derivative contracts
|
—
|
|
|
1,304
|
|
||
Asset retirement obligation
|
8,228
|
|
|
6,598
|
|
||
Due to parent
|
34,473
|
|
|
30,903
|
|
||
Other long-term liabilities
|
274
|
|
|
111
|
|
||
Total long-term liabilities
|
237,584
|
|
|
136,916
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
STOCKHOLDERS' EQUITY:
|
|
|
|
||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 3,958,160 and 3,951,254 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively, with liquidation preference of $25.00 per share
|
40
|
|
|
40
|
|
||
Common stock, no par value; 1,000 shares authorized; 750 shares issued and outstanding
|
225,431
|
|
|
237,431
|
|
||
Additional paid-in capital
|
76,734
|
|
|
76,601
|
|
||
Accumulated deficit
|
(170,791
|
)
|
|
(218,608
|
)
|
||
Total stockholders' equity
|
131,414
|
|
|
95,464
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
450,076
|
|
|
$
|
289,879
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
||||||||
Natural gas
|
$
|
12,044
|
|
|
$
|
6,682
|
|
|
$
|
23,277
|
|
|
$
|
13,593
|
|
Condensate and oil
|
8,017
|
|
|
2,408
|
|
|
14,143
|
|
|
4,291
|
|
||||
NGLs
|
3,380
|
|
|
2,027
|
|
|
6,922
|
|
|
3,911
|
|
||||
Total natural gas, condensate, oil and NGLs revenues
|
23,441
|
|
|
11,117
|
|
|
44,342
|
|
|
21,795
|
|
||||
Unrealized hedge gain (loss)
|
7,485
|
|
|
2,804
|
|
|
(2,152
|
)
|
|
1,280
|
|
||||
Total revenues
|
30,926
|
|
|
13,921
|
|
|
42,190
|
|
|
23,075
|
|
||||
EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Production taxes
|
1,150
|
|
|
481
|
|
|
1,793
|
|
|
934
|
|
||||
Lease operating expenses
|
2,169
|
|
|
1,558
|
|
|
4,006
|
|
|
3,974
|
|
||||
Transportation, treating and gathering
|
1,124
|
|
|
1,231
|
|
|
2,288
|
|
|
2,410
|
|
||||
Depreciation, depletion and amortization
|
7,596
|
|
|
6,956
|
|
|
12,961
|
|
|
12,609
|
|
||||
Impairment of natural gas and oil properties
|
—
|
|
|
72,733
|
|
|
—
|
|
|
72,733
|
|
||||
Accretion of asset retirement obligation
|
114
|
|
|
89
|
|
|
216
|
|
|
183
|
|
||||
General and administrative expense
|
4,616
|
|
|
2,853
|
|
|
7,397
|
|
|
5,624
|
|
||||
Litigation settlement expense
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,250
|
|
||||
Total expenses
|
16,769
|
|
|
85,901
|
|
|
29,661
|
|
|
99,717
|
|
||||
INCOME (LOSS) FROM OPERATIONS
|
14,157
|
|
|
(71,980
|
)
|
|
12,529
|
|
|
(76,642
|
)
|
||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
||||||||
Gain on acquisition of assets at fair value
|
43,712
|
|
|
—
|
|
|
43,712
|
|
|
—
|
|
||||
Interest expense
|
(3,545
|
)
|
|
(29
|
)
|
|
(4,154
|
)
|
|
(57
|
)
|
||||
Investment income and other
|
(3
|
)
|
|
(1
|
)
|
|
2
|
|
|
1
|
|
||||
Foreign transaction (loss) gain
|
(9
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|
1
|
|
||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
54,312
|
|
|
(72,011
|
)
|
|
52,081
|
|
|
(76,697
|
)
|
||||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
NET INCOME (LOSS)
|
54,312
|
|
|
(72,011
|
)
|
|
52,081
|
|
|
(76,697
|
)
|
||||
Dividend on preferred stock
|
(2,134
|
)
|
|
(1,727
|
)
|
|
(4,264
|
)
|
|
(2,963
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDER
|
$
|
52,178
|
|
|
$
|
(73,738
|
)
|
|
$
|
47,817
|
|
|
$
|
(79,660
|
)
|
|
For the Six Months Ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
52,081
|
|
|
$
|
(76,697
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
12,961
|
|
|
12,609
|
|
||
Impairment of natural gas and oil properties
|
—
|
|
|
72,733
|
|
||
Stock-based compensation
|
1,966
|
|
|
1,846
|
|
||
Unrealized hedge loss (gain)
|
2,152
|
|
|
(1,280
|
)
|
||
Realized loss (gain) on derivative contracts
|
7
|
|
|
(440
|
)
|
||
Amortization of deferred financing costs
|
1,450
|
|
|
98
|
|
||
Accretion of asset retirement obligation
|
216
|
|
|
183
|
|
||
Gain on acquisition of assets at fair value
|
(43,712
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
393
|
|
|
(2,998
|
)
|
||
Prepaid expenses
|
173
|
|
|
147
|
|
||
Accounts payable and accrued liabilities
|
9,721
|
|
|
(1,078
|
)
|
||
Net cash provided by operating activities
|
37,408
|
|
|
5,123
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Development and purchase of natural gas and oil properties
|
(55,955
|
)
|
|
(62,856
|
)
|
||
Acquisition of natural gas and oil properties
|
(69,775
|
)
|
|
—
|
|
||
Advances to operators
|
(5,154
|
)
|
|
(1,911
|
)
|
||
Deposit for sale of natural gas and oil properties
|
2,300
|
|
|
—
|
|
||
Advances from non-operators
|
12,874
|
|
|
5,847
|
|
||
Purchase of furniture and equipment
|
(151
|
)
|
|
(225
|
)
|
||
Net cash used in investing activities
|
(115,861
|
)
|
|
(59,145
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from revolving credit facility
|
19,000
|
|
|
43,000
|
|
||
Repayment of revolving credit facility
|
(117,000
|
)
|
|
(26,000
|
)
|
||
Proceeds from issuance of senior secured notes, net of discounts
|
194,500
|
|
|
—
|
|
||
Proceeds from issuance of preferred stock, net of issuance costs
|
133
|
|
|
38,449
|
|
||
Dividend on preferred stock
|
(3,554
|
)
|
|
(2,963
|
)
|
||
Deferred financing charges
|
(2,355
|
)
|
|
(332
|
)
|
||
Distribution to Parent, net
|
(10,401
|
)
|
|
(766
|
)
|
||
Other
|
(2
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
80,321
|
|
|
51,388
|
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,868
|
|
|
(2,634
|
)
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
8,892
|
|
|
10,595
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
10,760
|
|
|
$
|
7,961
|
|
1.
|
Description of Business
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Property, Plant and Equipment
|
|
June 30, 2013
|
|
December 31, 2012
|
||||
|
(in thousands)
|
||||||
Unproved properties, excluded from amortization:
|
|
|
|
||||
Drilling in progress costs
|
$
|
2,311
|
|
|
$
|
1,902
|
|
Acreage acquisition costs (1)
|
146,141
|
|
|
62,395
|
|
||
Capitalized interest
|
4,213
|
|
|
3,595
|
|
||
Total unproved properties excluded from amortization
|
$
|
152,665
|
|
|
$
|
67,892
|
|
(1)
|
Includes gain on acquisition of assets at fair value.
|
|
2013
|
||||||||||
|
Total Impairment
|
|
June 30
|
|
March 31
|
||||||
Henry Hub natural gas price (per MMBtu)
|
|
|
$
|
3.44
|
|
|
$
|
2.95
|
|
||
West Texas Intermediate oil price (per Bbl)
|
|
|
$
|
88.13
|
|
|
$
|
89.17
|
|
||
Impairment recorded (pre-tax) (in thousands)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2012
|
||||||||||
|
Total Impairment
|
|
June 30
|
|
March 31
|
||||||
Henry Hub natural gas price (per MMBtu)
|
|
|
$
|
3.15
|
|
|
$
|
3.73
|
|
||
West Texas Intermediate oil price (per Bbl)
|
|
|
$
|
92.17
|
|
|
$
|
94.65
|
|
||
Impairment recorded (pre-tax) (in thousands)
|
$
|
72,733
|
|
|
$
|
72,733
|
|
|
$
|
—
|
|
|
|
|
||
Consideration:
|
|
|
||
Cash consideration
|
|
$
|
69,775
|
|
|
|
|
||
Estimated Fair Value of Assets Acquired:
|
|
|
||
Unproved properties
|
|
$
|
86,172
|
|
Proved properties
|
|
27,315
|
|
|
Total assets acquired
|
|
$
|
113,487
|
|
|
|
|
||
Bargain purchase gain
|
|
$
|
43,712
|
|
4.
|
Long-Term Debt
|
•
|
Restrictions on liens, incurrence of other indebtedness without lenders' consent and common stock dividends and other restricted payments;
|
•
|
Maintenance of a minimum consolidated current ratio as of the end of each quarter of not less than
1.0
to
1.0
, as adjusted;
|
•
|
Maintenance of a maximum ratio of indebtedness to EBITDA, as of the fiscal quarter ending
June 30, 2013
, of not greater than
4.5
to
1.0
, as of the fiscal quarter ending
September 30, 2013
, of not greater than
4.25
to
1.0
, and for each quarter thereafter, of not greater than
4.0
to
1.0
; and
|
•
|
Maintenance of an interest coverage ratio on a rolling four quarters basis, as adjusted, of EBITDA to interest expense, as of the end of each quarter, to be less than
2.5
to
1.0
.
|
•
|
Failure to make payments;
|
•
|
Non-performance of covenants and obligations continuing beyond any applicable grace period; and
|
•
|
The occurrence of a change in control of Gastar USA, as defined in the New Revolving Credit Facility.
|
•
|
Restrictions on liens, incurrence of other indebtedness without lenders' consent and other restricted payments including a restriction on the amount of cash dividends to be paid in aggregate on the Gastar USA Series A Preferred Stock each calendar year, subject to certain available commitment thresholds;
|
•
|
Limitation of hedging volumes with a final limitation of
100%
of the proved developed reserves as reflected in Gastar USA's reserve report using hedging other than floors and protective spreads;
|
•
|
Maintenance of a minimum consolidated current ratio as of the end of each quarter of not less than
1.0
to
1.0
, as adjusted, except for quarters ending on
March 31, 2013
through
December 31, 2013
whereby the ratio was reduced to
0.6
to
1.0
and making certain changes in the calculation of current liabilities for such periods to exclude advances from non-operators;
|
•
|
Maintenance of a maximum ratio of indebtedness to EBITDA on a rolling four quarter basis, as adjusted, of not greater than
4.0
to
1.0
; and
|
•
|
Maintenance of an interest coverage ratio on a rolling four quarters basis, as adjusted, of EBITDA to interest expense, as of the end of each quarter, to be less than
2.5
to
1.0
.
|
•
|
Failure to make payments;
|
•
|
Non-performance of covenants and obligations continuing beyond any applicable grace period; and
|
•
|
The occurrence of a “Change in Control” (as defined in the Old Amended Revolving Credit Facility) of the Parent.
|
•
|
Transfer or sell assets or use asset sale proceeds;
|
•
|
Pay dividends or make distributions, redeem subordinated debt or make other restricted payments;
|
•
|
Make certain investments; incur or guarantee additional debt or issue preferred equity securities;
|
•
|
Create or incur certain liens on Gastar USA's assets;
|
•
|
Incur dividend or other payment restrictions affecting future restricted subsidiaries;
|
•
|
Merge, consolidated or transfer all or substantially all of Gastar USA's assets;
|
•
|
Enter into certain transactions with affiliates; and
|
•
|
Enter into certain sale and leaseback transactions.
|
5.
|
Fair Value Measurements
|
•
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company’s cash equivalents consist of short-term, highly liquid investments, which have maturities of 90 days or less, including sweep investments and money market funds.
|
•
|
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs are measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources. These inputs may be used with internally developed methodologies or third party broker quotes that result in management’s best estimate of fair value. The Company’s valuation models consider various inputs including (a) quoted forward prices for commodities, (b) time value, (c) volatility factors and (d) current market and contractual prices for the underlying instruments. Significant increases or decreases in any of these inputs in isolation would result in a significantly higher or lower fair value measurement. Level 3 instruments are commodity costless collars, index swaps, basis and fixed price swaps and put and call options to hedge natural gas, oil and NGLs price risk. At each balance sheet date, the Company performs an analysis of all applicable instruments and includes in Level 3 all of those whose fair value is based on significant unobservable inputs. The fair values derived from counterparties and third-party brokers are verified by the Company using publicly available values for relevant NYMEX futures contracts and exchange traded contracts for each derivative settlement location. Although such counterparty and third-party broker quotes are used to assess the fair value of its commodity derivative instruments, the Company does not have access to the specific assumptions used in its counterparties valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided and the Company does not currently have sufficient corroborating market evidence to support classifying these contracts as Level 2 instruments.
|
|
Fair value as of June 30, 2013
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
10,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,799
|
|
Commodity derivative contracts
|
—
|
|
|
—
|
|
|
4,588
|
|
|
4,588
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative contracts
|
—
|
|
|
—
|
|
|
(253
|
)
|
|
(253
|
)
|
||||
Total
|
$
|
10,799
|
|
|
$
|
—
|
|
|
$
|
4,335
|
|
|
$
|
15,134
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Fair value as of December 31, 2012
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
8,901
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,901
|
|
Commodity derivative contracts
|
—
|
|
|
—
|
|
|
9,168
|
|
|
9,168
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative contracts
|
—
|
|
|
—
|
|
|
(2,703
|
)
|
|
(2,703
|
)
|
||||
Total
|
$
|
8,901
|
|
|
$
|
—
|
|
|
$
|
6,465
|
|
|
$
|
15,366
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at beginning of period
|
$
|
(3,145
|
)
|
|
$
|
13,456
|
|
|
$
|
6,465
|
|
|
$
|
15,873
|
|
Total gains (realized or unrealized):
|
|
|
|
|
|
|
|
||||||||
included in earnings
|
7,036
|
|
|
5,768
|
|
|
3,034
|
|
|
6,641
|
|
||||
included in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements (1)
|
444
|
|
|
(3,764
|
)
|
|
(5,164
|
)
|
|
(7,054
|
)
|
||||
Transfers in and (out) of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
$
|
4,335
|
|
|
$
|
15,460
|
|
|
$
|
4,335
|
|
|
$
|
15,460
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at June 30, 2013 and 2012
|
$
|
7,485
|
|
|
$
|
2,804
|
|
|
$
|
(2,152
|
)
|
|
$
|
1,280
|
|
(1)
|
Included in total revenues on the statement of operations.
|
6.
|
Derivative Instruments and Hedging Activity
|
Settlement Period
|
|
Derivative Instrument
|
|
Average
Daily
Volume
|
|
Total of
Notional
Volume
|
|
Base
Fixed
Price
|
|
Floor
(Long)
|
|
Short
Put
|
|
Call
(Long)
|
|
Ceiling
(Short)
|
||||||||||||
|
|
|
|
(in MMBtu's)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2013
|
|
Fixed price swap
|
|
2,000
|
|
|
368,000
|
|
|
$
|
3.85
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2013
|
|
Fixed price swap
|
|
2,000
|
|
|
368,000
|
|
|
4.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2013
|
|
Fixed price swap
|
|
3,000
|
|
|
552,000
|
|
|
4.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2013
|
|
Fixed price swap
|
|
2,500
|
|
|
460,000
|
|
|
4.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2013
|
|
Fixed price swap
|
|
13,082
|
|
|
2,407,000
|
|
|
3.87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2013 (1)
|
|
Fixed price swap
|
|
2,500
|
|
|
307,500
|
|
|
4.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2013 (2)
|
|
Protective spread
|
|
2,500
|
|
|
152,500
|
|
|
4.05
|
|
|
—
|
|
|
3.79
|
|
|
—
|
|
|
—
|
|
|||||
2013 (3)
|
|
Protective spread
|
|
4,025
|
|
|
124,760
|
|
|
3.70
|
|
|
—
|
|
|
3.00
|
|
|
—
|
|
|
—
|
|
|||||
2013 (1)
|
|
Costless collar
|
|
2,500
|
|
|
307,500
|
|
|
—
|
|
|
5.00
|
|
|
—
|
|
|
—
|
|
|
6.45
|
|
|||||
2013 (2)
|
|
Costless three-way collar
|
|
2,500
|
|
|
152,500
|
|
|
—
|
|
|
5.00
|
|
|
4.00
|
|
|
—
|
|
|
6.45
|
|
|||||
2013
|
|
Call spread
|
|
2,500
|
|
|
460,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.75
|
|
|
5.25
|
|
|||||
2013
|
|
Basis - HSC (4)
|
|
4,000
|
|
|
736,000
|
|
|
(0.11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2014
|
|
Short calls
|
|
2,500
|
|
|
912,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.59
|
|
|||||
2014
|
|
Costless three-way collar
|
|
10,500
|
|
|
3,832,500
|
|
|
—
|
|
|
3.88
|
|
|
3.00
|
|
|
—
|
|
|
4.53
|
|
|||||
2014
|
|
Fixed price swap
|
|
11,136
|
|
|
4,064,500
|
|
|
4.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
For the period July to October 2013
|
(2)
|
For the period November to December 2013
|
(3)
|
For the month of July 2013
|
(4)
|
East Houston-Katy - Houston Ship Channel
|
Settlement Period
|
|
Derivative Instrument
|
|
Average
Daily
Volume (1)
|
|
Total of
Notional
Volume
|
|
Base
Fixed
Price
|
|
Floor
(Long)
|
|
Short
Put
|
|
Ceiling
(Short)
|
||||||||||
|
|
|
|
(in Bbls)
|
|
|
|
|
|
|
|
|
||||||||||||
2013
|
|
Fixed price swap
|
|
92
|
|
|
16,900
|
|
|
$
|
92.80
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2013
|
|
Fixed price swap
|
|
150
|
|
|
27,600
|
|
|
92.80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2013
|
|
Fixed price swap
|
|
400
|
|
|
73,600
|
|
|
94.86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2013
|
|
Protective spread
|
|
400
|
|
|
73,600
|
|
|
92.80
|
|
|
—
|
|
|
70.00
|
|
|
—
|
|
||||
2014
|
|
Producer three-way collar
|
|
200
|
|
|
73,000
|
|
|
—
|
|
|
90.00
|
|
|
70.00
|
|
|
106.20
|
|
||||
2014
|
|
Fixed price swap
|
|
270
|
|
|
98,500
|
|
|
90.77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2014
|
|
Fixed price swap
|
|
500
|
|
|
182,500
|
|
|
91.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2015
|
|
Producer three-way collar
|
|
345
|
|
|
126,100
|
|
|
—
|
|
|
85.00
|
|
|
65.00
|
|
|
97.80
|
|
||||
2015
|
|
Producer three-way collar
|
|
400
|
|
|
146,000
|
|
|
—
|
|
|
85.00
|
|
|
70.00
|
|
|
96.50
|
|
||||
2016
|
|
Producer three-way collar
|
|
275
|
|
|
100,600
|
|
|
—
|
|
|
85.00
|
|
|
65.00
|
|
|
95.10
|
|
||||
2016
|
|
Producer three-way collar
|
|
330
|
|
|
120,780
|
|
|
—
|
|
|
80.00
|
|
|
65.00
|
|
|
97.35
|
|
||||
2017
|
|
Producer three-way collar
|
|
242
|
|
|
88,150
|
|
|
—
|
|
|
80.00
|
|
|
60.00
|
|
|
98.70
|
|
||||
2017
|
|
Producer three-way collar
|
|
280
|
|
|
102,200
|
|
|
—
|
|
|
80.00
|
|
|
65.00
|
|
|
97.25
|
|
(1)
|
Crude volumes hedged include oil, condensate and certain components of our NGLs production.
|
Settlement Period
|
|
Derivative Instrument
|
|
Average
Daily
Volume
|
|
Total of
Notional
Volume
|
|
Base
Fixed
Price
|
||||
|
|
|
|
(in Bbls)
|
|
|
||||||
2013
|
|
Fixed price swap
|
|
150
|
|
|
27,600
|
|
|
$
|
41.06
|
|
2013
|
|
Fixed price swap
|
|
350
|
|
|
64,400
|
|
|
41.32
|
|
|
Fair Values of Derivative Instruments
Derivative Assets (Liabilities)
|
||||||||
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
June 30, 2013
|
|
December 31, 2012
|
||||
|
|
|
(in thousands)
|
||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Current assets
|
|
$
|
2,835
|
|
|
$
|
7,799
|
|
Commodity derivative contracts
|
Other assets
|
|
1,753
|
|
|
1,369
|
|
||
Commodity derivative contracts
|
Current liabilities
|
|
(253
|
)
|
|
(1,399
|
)
|
||
Commodity derivative contracts
|
Long-term liabilities
|
|
—
|
|
|
(1,304
|
)
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
4,335
|
|
|
$
|
6,465
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
||||||||
|
|
|
Amount of Gain (Loss)
Recognized in Income on
Derivatives For the Three
Months Ended
|
||||||
|
Location of Gain (Loss) Recognized in Income on Derivatives
|
|
June 30, 2013
|
|
June 30, 2012
|
||||
|
|
|
(in thousands)
|
||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Natural gas, condensate, oil and NGLs revenues
|
|
$
|
(449
|
)
|
|
$
|
3,003
|
|
Commodity derivative contracts
|
Unrealized hedge gain
|
|
7,485
|
|
|
2,804
|
|
||
Commodity derivative contracts
|
Interest expense
|
|
—
|
|
|
(39
|
)
|
||
Total
|
|
|
$
|
7,036
|
|
|
$
|
5,768
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
||||||||
|
|
|
Amount of Gain (Loss)
Recognized in Income on
Derivatives For the Six
Months Ended
|
||||||
|
Location of Gain (Loss) Recognized in Income on Derivatives
|
|
June 30, 2013
|
|
June 30, 2012
|
||||
|
|
|
(in thousands)
|
||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Natural gas, condensate, oil and NGLs revenues
|
|
$
|
5,186
|
|
|
$
|
5,443
|
|
Commodity derivative contracts
|
Unrealized hedge (loss) gain
|
|
(2,152
|
)
|
|
1,280
|
|
||
Commodity derivative contracts
|
Interest expense
|
|
—
|
|
|
(82
|
)
|
||
Total
|
|
|
$
|
3,034
|
|
|
$
|
6,641
|
|
|
|
|
|
|
|
7.
|
Capital Stock
|
|
For the Three Months Ended June 30, 2013
|
|
For the Six Months Ended June 30, 2013
|
||
Other share issuances:
|
|
|
|
||
Restricted common shares granted
|
—
|
|
|
2,177,903
|
|
Restricted common shares vested
|
1,500
|
|
|
630,529
|
|
Common shares surrendered upon vesting (1)
|
490
|
|
|
189,393
|
|
Common shares forfeited
|
20,000
|
|
|
86,327
|
|
(1)
|
Represents common shares forfeited in connection with the payment of estimated withholding taxes on restricted common shares that vested during the period.
|
Redemption Date
|
Redemption
Price
|
||
On or after June 23, 2013 and prior to June 23, 2014
|
$
|
25.25
|
|
On or after June 23, 2014
|
$
|
25.00
|
|
8.
|
Equity Compensation Plans
|
|
|
|
|
|
|||
|
|
PBUs
|
|
Fair Value per Unit
|
|||
Unvested PBUs at December 31, 2012
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
1,192,889
|
|
|
1.56
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Unvested PBUs at June 30, 2013
|
|
1,192,889
|
|
|
$
|
1.56
|
|
9.
|
Interest Expense
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(in thousands)
|
||||||||||||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Cash and accrued
|
$
|
2,962
|
|
|
$
|
434
|
|
|
$
|
3,862
|
|
|
$
|
723
|
|
Amortization of deferred financing costs (1)
|
1,372
|
|
|
56
|
|
|
1,450
|
|
|
98
|
|
||||
Capitalized interest
|
(789
|
)
|
|
(461
|
)
|
|
(1,158
|
)
|
|
(765
|
)
|
||||
Total interest expense
|
$
|
3,545
|
|
|
$
|
29
|
|
|
$
|
4,154
|
|
|
$
|
56
|
|
(1)
|
The three and six months ended June 30, 2013 include
$1.2 million
of deferred financing costs written off as a result of the new Revolving Credit Facility.
|
10.
|
Related Party Transactions
|
11.
|
Income Taxes
|
12.
|
Earnings per Share
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(in thousands, except per share and share data)
|
||||||||||||||
Net income (loss) attributable to Gastar Exploration Ltd.
|
$
|
51,836
|
|
|
$
|
(74,035
|
)
|
|
$
|
47,250
|
|
|
$
|
(80,345
|
)
|
Weighted average common shares outstanding - basic
|
62,398,472
|
|
|
63,541,739
|
|
|
63,089,987
|
|
|
63,439,412
|
|
||||
Incremental shares from unvested restricted shares
|
1,151,451
|
|
|
—
|
|
|
607,974
|
|
|
—
|
|
||||
Incremental shares from outstanding stock options
|
1,564
|
|
|
—
|
|
|
1,564
|
|
|
—
|
|
||||
Incremental shares from outstanding PBUs
|
261,936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding - diluted
|
63,813,423
|
|
|
63,541,739
|
|
|
63,699,525
|
|
|
63,439,412
|
|
||||
Net income (loss) per common share attributable to Gastar Exploration Ltd. Common Shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.83
|
|
|
$
|
(1.17
|
)
|
|
$
|
0.75
|
|
|
$
|
(1.27
|
)
|
Diluted
|
$
|
0.81
|
|
|
$
|
(1.17
|
)
|
|
$
|
0.74
|
|
|
$
|
(1.27
|
)
|
Common shares excluded from denominator as anti-dilutive:
|
|
|
|
|
|
|
|
||||||||
Unvested restricted shares
|
—
|
|
|
1,865,967
|
|
|
1,308,507
|
|
|
1,541,251
|
|
||||
Stock options
|
770,200
|
|
|
980,900
|
|
|
859,156
|
|
|
899,250
|
|
||||
PBUs
|
—
|
|
|
—
|
|
|
48,382
|
|
|
—
|
|
||||
Total
|
770,200
|
|
|
2,846,867
|
|
|
2,216,045
|
|
|
2,440,501
|
|
13.
|
Commitments and Contingencies
|
14.
|
Statement of Cash Flows – Supplemental Information
|
|
For the Six Months Ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Cash paid for interest
|
$
|
1,840
|
|
|
$
|
725
|
|
Non-cash transactions:
|
|
|
|
||||
Capital expenditures excluded from accounts payable and accrued drilling costs
|
(1,031
|
)
|
|
3,843
|
|
||
Capital expenditures excluded from prepaid expenses
|
—
|
|
|
70
|
|
||
Asset retirement obligation included in natural gas and oil properties
|
1,775
|
|
|
95
|
|
||
Asset retirement obligation assigned to operator
|
(362
|
)
|
|
(2,099
|
)
|
||
Application of advances to operators
|
7,728
|
|
|
3,153
|
|
||
Other
|
157
|
|
|
—
|
|
•
|
financial position;
|
•
|
business strategy and budgets;
|
•
|
anticipated capital expenditures;
|
•
|
drilling of wells, including the anticipated scheduling and results of such operations;
|
•
|
natural gas, oil and NGLs reserves;
|
•
|
timing and amount of future production of natural gas, condensate, oil and NGLs;
|
•
|
operating costs and other expenses;
|
•
|
cash flow and anticipated liquidity;
|
•
|
prospect development; and
|
•
|
property acquisitions and sales.
|
•
|
our ability to successfully integrate the Mid-Continent assets we acquired from Chesapeake with ours and realize the anticipated benefits from the transaction;
|
•
|
our ability to successfully complete the divestiture of our East Texas assets and realize anticipated uses of proceeds and improved liquidity position from that transaction;
|
•
|
any unexpected costs or delays in connection with the East Texas divestiture;
|
•
|
the supply and demand for natural gas, condensate, oil and NGLs;
|
•
|
low and/or declining prices for natural gas, condensate, oil and NGLs;
|
•
|
price volatility of natural gas, condensate, oil and NGLs;
|
•
|
worldwide political and economic conditions and conditions in the energy market;
|
•
|
our ability to raise capital to fund capital expenditures or repay or refinance debt upon maturity;
|
•
|
the ability and willingness of our current or potential counterparties, third-party operators or vendors to enter into transactions with us and/or fulfill their obligation to us;
|
•
|
failure of our joint interest partners to fund any or all of their portion of any capital program;
|
•
|
the ability to find, acquire, market, develop and produce new natural gas and oil properties;
|
•
|
uncertainties about the estimated quantities of natural gas and oil reserves and in the projection of future rates of production and timing of development expenditures of proved reserves;
|
•
|
strength and financial resources of competitors;
|
•
|
availability and cost of material and equipment, such as drilling rigs and transportation pipelines;
|
•
|
availability and cost of processing and transportation;
|
•
|
changes or advances in technology;
|
•
|
the risks associated with exploration, including cost overruns and the drilling of non-economic wells or dry wells, operating hazards inherent to the natural gas and oil business and down hole drilling and completion risks that are generally not recoverable from third parties or insurance;
|
•
|
potential mechanical failure or under-performance of significant wells or pipeline mishaps;
|
•
|
environmental risks;
|
•
|
possible new legislative initiatives and regulatory changes potentially adversely impacting our business and industry, including, but not limited to, national healthcare, hydraulic fracturing, state and federal corporate income taxes, retroactive royalty or production tax regimes, changes in environmental regulations, environmental risks and liability under federal, state and local environmental laws and regulations;
|
•
|
effects of the application of applicable laws and regulations, including changes in such regulations or the interpretation thereof;
|
•
|
potential losses from pending or possible future claims, litigation or enforcement actions;
|
•
|
potential defects in title to our properties or lease termination due to lack of activity or other disputes with mineral lease and royalty owners, whether regarding calculation and payment of royalties or otherwise;
|
•
|
the weather, including the occurrence of any adverse weather conditions and/or natural disasters affecting our business;
|
•
|
ability to find and retain skilled personnel; and
|
•
|
any other factors that impact or could impact the exploration of natural gas or oil resources, including, but not limited to, the geology of a resource, the total amount and costs to develop recoverable reserves, legal title, regulatory, natural gas administration, marketing and operational factors relating to the extraction of natural gas and oil.
|
Pad
|
|
Gross Well Count
|
|
Net Well Count
|
|
Working Interest
|
|
Net Revenue Interest
|
|
Average Lateral Length (in feet)
(1)
|
|
Date on Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corley
|
|
4.0
|
|
1.6
|
|
40.8%
|
|
35.4%
|
|
4,700
|
|
December 2011
|
Simms
|
|
3.0
|
|
1.5
|
|
50.0%
|
|
43.2%
|
|
4,900
|
|
December 2011
|
Hall
|
|
3.0
|
|
1.2
|
|
40.0%
|
|
34.7%
|
|
4,300
|
|
January 2012
|
Hendrickson
|
|
5.0
|
|
2.0
|
|
40.0%
|
|
34.7%
|
|
4,600
|
|
April 2012
|
Accettolo
|
|
3.0
|
|
1.5
|
|
50.0%
|
|
40.2%
|
|
4,600
|
|
June 2012
|
Burch Ridge
|
|
5.0
|
|
2.5
|
|
50.0%
|
|
41.5%
|
|
5,500
|
|
August 2012
|
Wayne
|
|
4.0
|
|
2.0
|
|
50.0%
|
|
40.6%
|
|
5,000
|
|
September 2012
|
Wengerd
|
|
7.0
|
|
3.1
|
|
44.5%
|
|
37.7%
|
|
4,900
|
|
November 2012
|
Lily
|
|
4.0
|
|
2.0
|
|
50.0%
|
|
40.6%
|
|
5,300
|
|
December 2012
|
Shields
|
|
10.0
|
|
5.0
|
|
50.0%
|
|
41.5%
|
|
3,400
|
|
February and May 2013
|
Addison
|
|
5.0
|
|
2.5
|
|
50.0%
|
|
41.7%
|
|
5,000
|
|
March 2013
|
|
|
53.0
|
|
24.9
|
|
|
|
|
|
|
|
|
(1)
|
Average well lateral length approximates the actual average well lateral length for the pad wells.
|
Pad
|
|
Gross Well Count
|
|
Net Well Count
|
|
Working Interest
|
|
Estimated Net Revenue Interest
|
|
Average Lateral Length (in feet)
(1)
|
|
Status
|
|
Estimated Production Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goudy
(2)
|
|
7.0
|
|
3.5
|
|
50.0%
|
|
40.5%
|
|
6,100
|
|
Completion operations in progress
|
|
Early Third Quarter 2013 and early 2014
|
|
|
7.0
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Average well lateral length approximates the actual average well lateral length for wells that have been completed and the estimated average well lateral length for wells that have not been completed on a pad.
|
(2)
|
Goudy pad to ultimately have nine wells - four of which are to be placed on production in early third quarter 2013.
|
|
|
|
|
|
|
|
|
Average Production Rates
(1)
|
|
|
|
|
||||
Well Name
|
|
Current Working Interest
|
|
Current Approximate Net Revenue Interest
|
|
Approximate Lateral Length (in feet)
|
|
Oil (Bbl/d)
|
|
Natural Gas (Mcf/d)
|
|
BOE/d
|
|
Status
|
|
Approximate Gross Costs to Drill & Complete ($ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-Con 1H
|
|
50.0%
|
|
39.0%
|
|
4,200
|
|
26
|
|
81
|
|
39
|
|
Producing - October 2012
(2)
|
|
$5.0
|
Mid-Con 2H
|
|
50.0%
|
|
39.0%
|
|
4,100
|
|
489
|
|
1,691
|
|
771
|
|
Producing - April 2013
(3)
|
|
$5.3
|
Mid-Con 3H
(4)
|
|
70.9%
|
|
55.3%
|
|
4,300
|
|
70
|
|
47
|
|
78
|
|
Producing - May 2013
(5)
|
|
$5.1
|
Mid-Con 4H
(6)
|
|
62.5%
|
|
48.8%
|
|
4,200
|
|
—
|
|
—
|
|
—
|
|
Initial flow back - May 2013
|
|
$4.5
|
Mid-Con 5H
(7)
|
|
56.3%
|
|
43.9%
|
|
4,600
|
|
—
|
|
—
|
|
—
|
|
Awaiting completion operations - initial flowback late August 2013
|
|
$6.0
|
(1)
|
Current production rates are based on the 30 days ended July 31, 2013.
|
(2)
|
Well has recovered approximately 42% of completion fluids as of July 31, 2013 and is currently averaging 77 barrels of completion fluids per day.
|
(3)
|
Well has recovered approximately 20% of completion fluids as of July 31, 2013 and is currently averaging 212 barrels of completion fluids per day.
|
(4)
|
As a result of inclusion of non-consent interests, we are paying 70.9% of the drilling and completions costs to earn an approximate before payout 56.7% working interest and 44.2% net revenue interest. Upon payout of 500% of all drilling and completions costs and 300% of all operating costs, our working interest will be reduced to 50% with an approximate net revenue interest of 39%.
|
(5)
|
Well has recovered approximately 35% of completion fluids as of July 31, 2013 and is currently averaging 541 barrels of completion fluids per day.
|
(6)
|
We will ultimately own a 50% working interest and an approximate 39% net revenue interest in the well. Well has been flowing back completion water at rates in excess of 1,000 barrels per day. The horizontal lateral is currently being cleaned out due to the flow back of frac sand into the wellbore.
|
(7)
|
We will ultimately own a 50% working interest and an approximate 39% net revenue interest in the well. Increase in well costs is due to the cost of side-tracking the well during the initial drilling operations.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Production:
|
|
|
|
|
|
|
|
||||||||
Natural gas (MMcf)
|
3,692
|
|
|
2,564
|
|
|
6,391
|
|
|
4,801
|
|
||||
Condensate and oil (MBbl)
|
127
|
|
|
38
|
|
|
205
|
|
|
65
|
|
||||
NGLs (MBbl)
|
130
|
|
|
62
|
|
|
210
|
|
|
110
|
|
||||
Total production (MMcfe)
|
5,238
|
|
|
3,169
|
|
|
8,884
|
|
|
5,847
|
|
||||
Daily Production:
|
|
|
|
|
|
|
|
||||||||
Natural gas (MMcf/d)
|
40.6
|
|
|
28.2
|
|
|
35.3
|
|
|
26.4
|
|
||||
Condensate and oil (MBbl/d)
|
1.4
|
|
|
0.4
|
|
|
1.1
|
|
|
0.4
|
|
||||
NGLs (MBbl/d)
|
1.4
|
|
|
0.7
|
|
|
1.2
|
|
|
0.6
|
|
||||
Total daily production (MMcfe/d)
|
57.6
|
|
|
34.8
|
|
|
49.1
|
|
|
32.1
|
|
||||
Average sales price per unit:
|
|
|
|
|
|
|
|
||||||||
Natural gas per Mcf, excluding impact of realized hedging activities
|
$
|
3.36
|
|
|
$
|
1.70
|
|
|
$
|
3.13
|
|
|
$
|
1.82
|
|
Natural gas per Mcf, including impact of realized hedging activities
|
3.26
|
|
|
2.61
|
|
|
3.64
|
|
|
2.83
|
|
||||
Condensate and oil per Bbl, excluding impact of realized hedging activities
|
63.36
|
|
|
56.72
|
|
|
65.07
|
|
|
64.03
|
|
||||
Condensate and oil per Bbl, including impact of realized hedging activities
|
62.97
|
|
|
62.76
|
|
|
68.93
|
|
|
66.42
|
|
||||
NGLs per Bbl, excluding impact of realized hedging activities
|
26.17
|
|
|
25.44
|
|
|
27.54
|
|
|
31.64
|
|
||||
NGLs per Bbl, including impact of realized hedging activities
|
25.93
|
|
|
32.53
|
|
|
32.92
|
|
|
35.66
|
|
||||
Average sales price per Mcfe, excluding impact of realized hedging activities
|
$
|
4.56
|
|
|
$
|
2.56
|
|
|
$
|
4.41
|
|
|
$
|
2.80
|
|
Average sales price per Mcfe, including impact of realized hedging activities
|
4.48
|
|
|
3.51
|
|
|
4.99
|
|
|
3.73
|
|
||||
Selected operating expenses (in thousands):
|
|
|
|
|
|
|
|
||||||||
Production taxes
|
$
|
1,150
|
|
|
$
|
481
|
|
|
$
|
1,793
|
|
|
$
|
934
|
|
Lease operating expenses
|
2,169
|
|
|
1,558
|
|
|
4,006
|
|
|
3,974
|
|
||||
Transportation, treating and gathering
|
1,124
|
|
|
1,231
|
|
|
2,288
|
|
|
2,410
|
|
||||
Depreciation, depletion and amortization
|
7,596
|
|
|
6,956
|
|
|
12,961
|
|
|
12,609
|
|
||||
Impairment of natural gas and oil properties
|
—
|
|
|
72,733
|
|
|
—
|
|
|
72,733
|
|
||||
General and administrative expense (1)
|
4,964
|
|
|
3,151
|
|
|
7,966
|
|
|
6,312
|
|
||||
Selected operating expenses per Mcfe:
|
|
|
|
|
|
|
|
||||||||
Production taxes
|
$
|
0.22
|
|
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
$
|
0.16
|
|
Lease operating expenses
|
0.41
|
|
|
0.49
|
|
|
0.45
|
|
|
0.68
|
|
||||
Transportation, treating and gathering
|
0.21
|
|
|
0.39
|
|
|
0.26
|
|
|
0.41
|
|
||||
Depreciation, depletion and amortization
|
1.45
|
|
|
2.20
|
|
|
1.46
|
|
|
2.16
|
|
||||
General and administrative expense (1)
|
0.95
|
|
|
0.99
|
|
|
0.90
|
|
|
1.08
|
|
||||
Production costs (2)
|
0.59
|
|
|
0.79
|
|
|
0.66
|
|
|
1.02
|
|
(1)
|
The three and six months ended June 30, 2013 include approximately $1.4 million of general and administrative costs related to the acquisition of the Chesapeake Assets. Excluding these costs, general and administrative expense per Mcfe would have been $0.67 and $0.74 for the three and six months ended June 30, 2013, respectively.
|
(2)
|
Production costs include lease operating expenses, insurance, gathering and workover expense and excludes ad valorem and severance taxes.
|
•
|
It requires assumptions to be made that were uncertain at the time the estimate was made; and
|
•
|
Changes in the estimate or different estimates that could have been selected could have a material impact on our consolidated results of operations or financial condition.
|
Votes For
|
|
Votes Against
|
|
Votes Abstain
|
|
Broker Non-Vote
|
51,021,049
|
|
572,895
|
|
301,774
|
|
230,656
|
Nominee
|
|
Votes For
|
|
Withheld (1)
|
John H. Cassels
|
|
27,011,946
|
|
25,114,428
|
Randolph C. Coley
|
|
26,960,983
|
|
25,165,391
|
Robert D. Penner
|
|
24,722,200
|
|
27,404,174
|
J. Russell Porter
|
|
24,744,789
|
|
27,381,588
|
John M. Selser Sr.
|
|
24,449,421
|
|
27,676,953
|
(1)
|
“Withheld” votes represent the number of absenteeism and broker non-votes.
|
Votes For
|
|
Votes Against
|
|
Votes Abstain
|
|
Broker Non-Vote
|
51,741,386
|
|
300,094
|
|
84,893
|
|
—
|
Votes For
|
|
Votes Against
|
|
Votes Abstain
|
|
Broker Non-Vote
|
25,102,706
|
|
2,212,586
|
|
305,590
|
|
24,505,492
|
Votes For
|
|
Votes Against
|
|
Votes Abstain
|
|
Broker Non-Vote
|
27,292,560
|
|
207,319
|
|
121,003
|
|
24,505,492
|
Exhibit Number
|
|
Description
|
2.1*
|
|
Purchase and Sale Agreement, dated March 28, 2013, by and among Chesapeake Exploration, L.L.C., Arcadia Resources, L.P., Jamestown Resources, L.L.C., Larchmont Resources, L.L.C and Gastar Exploration USA, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
|
|
|
|
2.2*
|
|
Amendment to Purchase and Sale Agreement, dated as of June 7, 2013, by and among Chesapeake Exploration, L.L.C., Arcadia Resources, L.P., Jamestown Resources, L.L.C., Larchmont Resources, L.L.C. and Gastar Exploration USA, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
|
|
|
|
2.3*
|
|
Purchase and Sale Agreement, dated April 19, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
|
|
|
|
2.4
|
|
First Amendment of Purchase and Sale Agreement, dated as of June 11, 2013, but effective as of June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
|
|
|
|
2.5
|
|
Second Amendment of Purchase and Sale Agreement, dated as of June 27, 2013, but effective as June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 3, 2013. File No. 001-32714).
|
|
|
|
2.6
|
|
Third Amendment of Purchase and Sale Agreement, dated as of July 11, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 17, 2013. File No. 001-32714).
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation of Gastar Exploration Ltd. (incorporated herein by reference to Exhibit 3.1 the Company’s Amendment No. 1 to Registration Statement on Form S-1/A filed October 13, 2005. Registration No. 333-127498).
|
|
|
|
3.2
|
|
Amended Bylaws of Gastar Exploration Ltd. dated as of June 3, 2010 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated June 4, 2010. File No. 001-32714).
|
|
|
|
3.3
|
|
Articles of Amendment and Share Structure attached to and forming part of the Amended and Restated Articles of Incorporation of Gastar Exploration Ltd, dated as of June 30, 2009. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 1, 2009. File No. 001-32714).
|
|
|
|
3.4
|
|
Articles of Amendment attached to and forming part of the Amended and Restated Articles of Incorporation of Gastar Exploration Ltd, dated as of July 23, 2009 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 24, 2009. File No. 001-32714).
|
|
|
|
3.5
|
|
Certificate of Incorporation of Gastar Exploration USA, Inc. (incorporated by reference to Exhibit 3.3 to Gastar Exploration USA, Inc.'s Registration Statement on Form S-3, dated May 27, 2011. Registration No. 333-174552).
|
|
|
|
3.6
|
|
Amended and Restated Bylaws of Gastar Exploration USA, Inc. (incorporated by reference to Exhibit 3.3 to Gastar Exploration USA, Inc.'s Registration Statement on Form S-3, dated May 27, 2011. Registration No. 333-174552).
|
|
|
|
3.7
|
|
Certificate of Designation of Rights and Preferences of 8.625% Series A Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 of Gastar Exploration USA, Inc.'s Form 8A filed on June 20, 2011).
|
|
|
|
4.1
|
|
Form of 8 5/8% Senior Secured Notes due 2018 (incorporated herein by reference to Exhibit A to Exhibit 4.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
|
|
|
|
Exhibit Number
|
|
Description
|
4.2
|
|
Indenture dated May 15, 2013 among Gastar Exploration USA, Inc., as issuer, the Subsidiary Guarantors (as defined therein) as guarantors and Wells Fargo Bank, National Association as trustee (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
|
|
|
|
4.3
|
|
Registration Rights Agreement dated May 15, 2013 by and among Gastar Exploration USA, Inc., the Guarantors (as defined therein) and the Initial Purchasers (as defined therein) (incorporated by reference to Exhibit 4.3 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
|
|
|
|
10.1
|
|
Form of the Final Settlement Agreement between Chesapeake Exploration, L.L.C., Chesapeake Energy Corporation, Gastar Exploration Ltd., Gastar Exploration Texas, LP and Gastar Exploration Texas, LLC Effective March 28, 2013 (incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
|
|
|
|
10.2
|
|
Second Amended and Restated Credit Agreement, dated as of June 7, 2013, among Gastar Exploration USA, Inc., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuing Lender, and the Lenders named therein (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
|
|
|
|
10.3†
|
|
Waiver, Agreement and Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of July 31, 2013, among Gastar Exploration USA, Inc., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuing Lender, and the Lenders named therein
|
|
|
|
10.4
|
|
Intercreditor Agreement, dated as of June 7, 2013, among Gastar Exploration USA, Inc., certain subsidiaries party thereto, Wells Fargo Bank, National Association, as First Priority Agent and Wells Fargo Bank, National Association, as Second Priority Agent (incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
|
|
|
|
10.5
|
|
Second Amendment to Gastar Exploration Ltd. Employee Change of Control Severance Plan, dated June 7, 2013 (incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
|
|
|
|
10.6
|
|
Resignation, Consent and Appointment Agreement and Amendment Agreement, dated as of May 13, 2013, by and among Gastar Exploration USA, Inc., Gastar Exploration Ltd., Gastar Exploration New South Wales, Gastar Exploration Texas, Inc., Gastar Exploration Texas, LP, Gastar Exploration Texas LLC, Amegy Bank National Association and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
|
|
|
|
31.1†
|
|
Certification of Periodic Financial Reports by Chief Executive Officer of Gastar Exploration Ltd. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2†
|
|
Certification of Periodic Financial Reports by Chief Financial Officer of Gastar Exploration Ltd. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.3†
|
|
Certification of Periodic Financial Reports by President of Gastar Exploration USA, Inc. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.4†
|
|
Certification of Periodic Financial Reports by Treasurer of Gastar Exploration USA, Inc. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1††
|
|
Certification of Periodic Financial Reports by Chief Executive Officer of Gastar Exploration Ltd. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2††
|
|
Certification of Periodic Financial Reports by Chief Financial Officer of Gastar Exploration Ltd. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.3††
|
|
Certification of Periodic Financial Reports by President of Gastar Exploration USA, Inc. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.4††
|
|
Certification of Periodic Financial Reports by Treasurer of Gastar Exploration USA, Inc. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS††
|
|
XBRL Instance Document
|
|
|
|
101.SCH††
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL††
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF††
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Exhibit Number
|
|
Description
|
|
|
|
101.LAB††
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE††
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
Filed herewith.
|
††
|
Furnished herewith.
|
*
|
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and similar attachments to Exhibits 2.1, 2.2 and 2.3 have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
|
|
|
GASTAR EXPLORATION LTD.
|
|
|
|
|
|
Date:
|
August 5, 2013
|
By:
|
/
S
/ J. RUSSELL PORTER
|
|
|
|
J. Russell Porter
|
|
|
|
President and Chief Executive Officer
|
|
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(Duly authorized officer and principal executive
officer)
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Date:
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August 5, 2013
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By:
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/
S
/ MICHAEL A. GERLICH
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Michael A. Gerlich
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Vice President and Chief Financial Officer
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(Duly authorized officer and principal financial and
accounting officer)
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GASTAR EXPLORATION USA, INC.
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Date:
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August 5, 2013
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By:
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/
S
/ J. RUSSELL PORTER
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J. Russell Porter
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President
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(Duly authorized officer and principal executive
officer)
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Date:
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August 5, 2013
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By:
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/
S
/ MICHAEL A. GERLICH
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Michael A. Gerlich
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Secretary and Treasurer
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(Duly authorized officer and principal financial and
accounting officer)
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Exhibit Number
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Description
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2.1*
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Purchase and Sale Agreement, dated March 28, 2013, by and among Chesapeake Exploration, L.L.C., Arcadia Resources, L.P., Jamestown Resources, L.L.C., Larchmont Resources, L.L.C and Gastar Exploration USA, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
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2.2*
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Amendment to Purchase and Sale Agreement, dated as of June 7, 2013, by and among Chesapeake Exploration, L.L.C., Arcadia Resources, L.P., Jamestown Resources, L.L.C., Larchmont Resources, L.L.C. and Gastar Exploration USA, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
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2.3*
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Purchase and Sale Agreement, dated April 19, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
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2.4
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First Amendment of Purchase and Sale Agreement, dated as of June 11, 2013, but effective as of June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
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2.5
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Second Amendment of Purchase and Sale Agreement, dated as of June 27, 2013, but effective as June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 3, 2013. File No. 001-32714).
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2.6
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Third Amendment of Purchase and Sale Agreement, dated as of July 11, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 17, 2013. File No. 001-32714).
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3.1
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Amended and Restated Articles of Incorporation of Gastar Exploration Ltd. (incorporated herein by reference to Exhibit 3.1 the Company’s Amendment No. 1 to Registration Statement on Form S-1/A filed October 13, 2005. Registration No. 333-127498).
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3.2
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Amended Bylaws of Gastar Exploration Ltd. dated as of June 3, 2010 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated June 4, 2010. File No. 001-32714).
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3.3
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Articles of Amendment and Share Structure attached to and forming part of the Amended and Restated Articles of Incorporation of Gastar Exploration Ltd, dated as of June 30, 2009. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 1, 2009. File No. 001-32714).
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3.4
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Articles of Amendment attached to and forming part of the Amended and Restated Articles of Incorporation of Gastar Exploration Ltd, dated as of July 23, 2009 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated July 24, 2009. File No. 001-32714).
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3.5
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Certificate of Incorporation of Gastar Exploration USA, Inc. (incorporated by reference to Exhibit 3.3 to Gastar Exploration USA, Inc.'s Registration Statement on Form S-3, dated May 27, 2011. Registration No. 333-174552).
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3.6
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Amended and Restated Bylaws of Gastar Exploration USA, Inc. (incorporated by reference to Exhibit 3.3 to Gastar Exploration USA, Inc.'s Registration Statement on Form S-3, dated May 27, 2011. Registration No. 333-174552).
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3.7
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Certificate of Designation of Rights and Preferences of 8.625% Series A Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 of Gastar Exploration USA, Inc.'s Form 8A filed on June 20, 2011).
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4.1
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Form of 8 5/8% Senior Secured Notes due 2018 (incorporated herein by reference to Exhibit A to Exhibit 4.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
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4.2
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Indenture dated May 15, 2013 among Gastar Exploration USA, Inc., as issuer, the Subsidiary Guarantors (as defined therein) as guarantors and Wells Fargo Bank, National Association as trustee (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
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4.3
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Registration Rights Agreement dated May 15, 2013 by and among Gastar Exploration USA, Inc., the Guarantors (as defined therein) and the Initial Purchasers (as defined therein) (incorporated by reference to Exhibit 4.3 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
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Exhibit Number
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|
Description
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10.1
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Form of the Final Settlement Agreement between Chesapeake Exploration, L.L.C., Chesapeake Energy Corporation, Gastar Exploration Ltd., Gastar Exploration Texas, LP and Gastar Exploration Texas, LLC Effective March 28, 2013 (incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714).
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10.2
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Second Amended and Restated Credit Agreement, dated as of June 7, 2013, among Gastar Exploration USA, Inc., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuing Lender, and the Lenders named therein (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
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10.3†
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Waiver, Agreement and Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of July 31, 2013, among Gastar Exploration USA, Inc., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuing Lender, and the Lenders named therein
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10.4
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Intercreditor Agreement, dated as of June 7, 2013, among Gastar Exploration USA, Inc., certain subsidiaries party thereto, Wells Fargo Bank, National Association, as First Priority Agent and Wells Fargo Bank, National Association, as Second Priority Agent (incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
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10.5
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Second Amendment to Gastar Exploration Ltd. Employee Change of Control Severance Plan, dated June 7, 2013 (incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714).
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10.6
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Resignation, Consent and Appointment Agreement and Amendment Agreement, dated as of May 13, 2013, by and among Gastar Exploration USA, Inc., Gastar Exploration Ltd., Gastar Exploration New South Wales, Gastar Exploration Texas, Inc., Gastar Exploration Texas, LP, Gastar Exploration Texas LLC, Amegy Bank National Association and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated May 15, 2013. File No. 001-32714).
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31.1†
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Certification of Periodic Financial Reports by Chief Executive Officer of Gastar Exploration Ltd. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2†
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Certification of Periodic Financial Reports by Chief Financial Officer of Gastar Exploration Ltd. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
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31.3†
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Certification of Periodic Financial Reports by President of Gastar Exploration USA, Inc. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
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31.4†
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Certification of Periodic Financial Reports by Treasurer of Gastar Exploration USA, Inc. in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1††
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Certification of Periodic Financial Reports by Chief Executive Officer of Gastar Exploration Ltd. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2††
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Certification of Periodic Financial Reports by Chief Financial Officer of Gastar Exploration Ltd. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
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32.3††
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Certification of Periodic Financial Reports by President of Gastar Exploration USA, Inc. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
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32.4††
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Certification of Periodic Financial Reports by Treasurer of Gastar Exploration USA, Inc. in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS††
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|
XBRL Instance Document
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101.SCH††
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XBRL Taxonomy Extension Schema Document
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101.CAL††
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
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|
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101.DEF††
|
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB††
|
|
XBRL Taxonomy Extension Label Linkbase Document
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101.PRE††
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|
XBRL Taxonomy Extension Presentation Linkbase Document
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†
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Filed herewith.
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††
|
Furnished herewith.
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*
|
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and similar attachments to Exhibits 2.1, 2.2 and 2.3 have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of Gastar Exploration Ltd. (the “Registrant”);
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designated under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
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/
S
/ J. RUSSELL PORTER
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J. Russell Porter
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President and Chief Executive Officer
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of Gastar Exploration Ltd. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designated under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
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/
S
/ MICHAEL A. GERLICH
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Michael A. Gerlich
|
Senior Vice President and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Gastar Exploration USA, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designated under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
/
S
/ J. RUSSELL PORTER
|
J. Russell Porter
|
President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Gastar Exploration USA, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designated under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
/
S
/ MICHAEL A. GERLICH
|
Michael A. Gerlich
|
Secretary and Treasurer
|
/S/ J. RUSSELL PORTER
|
J. Russell Porter
|
President and Chief Executive Officer
|
/S/ MICHAEL A. GERLICH
|
Michael A. Gerlich
|
Senior Vice President and Chief Financial Officer
|
/S/ J. RUSSELL PORTER
|
J. Russell Porter
|
President
|
/S/ MICHAEL A. GERLICH
|
Michael A. Gerlich
|
Secretary and Treasurer
|