Each one in plain English, with the numbers worked through for a shareholder.
20 Oct 2016material agreement● NeutralMajor
Gastar signed three deals: a credit facility amendment that keeps the borrowing base at $100 million (next review November 2016) and loosens the interest coverage test; a deal with an investor (STACK Exploration LLC) to fund and jointly drill up to 60 wells on about 18,000 net acres in Kingfisher County, with the investor paying 90% of Gastar's share of well costs to earn 80% of its working interest, reverting toward Gastar at 15% and 20% investor returns; and a ~$71 million sale of non-core Canadian/Kingfisher County leases to Red Bluff Resources (up to $10 million contingent), expected to close by Nov 18, 2016. This follows the earlier $100M borrowing base cut and the Kingfisher sale thread; the sale also requires at least 20% of net proceeds to repay the credit facility.
/ Global Undervalued Securities Master, / Kleinheinz Capital Partners, Inc, / . John B. Kleinheinz reported a Gastar Exploration Inc. shareholding of 6,565,000 shares (4.98% of votes) in a periodic institutional filing.
Dan H. Wilks, Staci Wilks, Wilks Brothers, LLC reported a Gastar Exploration Inc. shareholding of 6,454,011 shares (4.90% of votes) in a periodic institutional filing.
/ Global Undervalued Securities Master, / Kleinheinz Capital Partners, Inc, / . John B. Kleinheinz reported a Gastar Exploration Inc. shareholding of 8,125,000 shares (6.20% of votes) in a periodic institutional filing.
/ Global Undervalued Securities Master, / Kleinheinz Capital Partners, Inc, / . John B. Kleinheinz, / Fred N. Reynolds reported a Gastar Exploration Inc. shareholding of 9,500,000 shares (7.20% of votes) in a periodic institutional filing.
16 May 2016security holder rights change▼ BadMajor
Gastar launched an underwritten public offering of up to 57.5 million new common shares (including a 7.5 million-share over-allotment option) through Seaport Global Securities and Johnson Rice, closing scheduled May 17, 2016; this is dilutive to existing shareholders, and proceeds are for general corporate purposes and may be used to repay credit facility amounts. The board amended the January 2016 Rights Agreement so board-approved buyers in the offering are not treated as an 'Acquiring Person'. Lenders also permanently waived an unintended credit agreement default caused by the timing of March 2016 preferred dividend payments (paid March 31, 2016). Offering price and proceeds are not stated in this filing.
Gastar closed the Appalachian Basin sale on April 8, 2016 to TH Exploration II, LLC, an affiliate of Tug Hill, for $80.0 million before adjustments; cash proceeds were about $76.6 million after adjustments (including the buyer assuming about $2.8 million of revenue suspense liabilities). Gastar cut its revolver borrowings by $80.0 million, and the borrowing base was automatically reduced to $100.0 million under Amendment No. 8. This completes the West Virginia exit and leaves Oklahoma as its only operating area described in the release.
Gastar and the Tug Hill affiliate amended the Appalachian sale agreement to push the closing date to April 8, 2016; the press release says this was due to a delay in obtaining one required lessor consent. The price ($80.0 million) is unchanged. The release also says the first Meramec well (Deep River 30-1H) averaged 713 Boe/d (61% oil) over its first 90 post-peak days and that the second Meramec well (Holiday Road 2-1H) has been completed with 34 frack stages.
Gastar agreed on Feb 19, 2016 to sell substantially all of its producing assets and proved reserves and a significant portion of its undeveloped acreage in the Appalachian Basin (the West Virginia Marcellus and Utica/Point Pleasant assets that had been marketed since Oct 2015) to an affiliate of Tug Hill Inc. for $80.0 million, expected to close on or before March 31, 2016. This resolves the open question of a buyer and price; proceeds are to reduce revolving credit borrowings. The filing also reports year-end 2015 proved reserves of 55.9 MMBoe (down 45%, which Gastar attributes to lower commodity prices), a preliminary 2016 capital budget of about $37.0 million, and the second Meramec well started drilling Feb 10, 2016.
