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OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd.

Gastar Exploration, Ltd. · Oct 10, 2012 · 43 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

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  1. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 1
    J. Russell Porter Chief Executive Officer October 2012 E X P A N D I N G O U R H O R I Z O N S 2012 Gastar Exploration Ltd.
  2. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 2
    Gastar Overview 65.7 million shares outstanding 118.3 million equity market capitalization(1) 254.4 million enterprise value(2) Focused on exploration, development and production of natural gas and oil in the U.S. 167.0 Bcfe of…
  3. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 3
    Asset Overview 2Q 2012 Net Production by Region Marcellus Shale 34.8 MMcfe/d June 30, 2012 Proved Reserves by Region Bossier Play Eaglebine Play 105,900 Net Acres(1) (1) Net acres as of 6/30/2012; includes 9,900 net…
  4. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 4
    Historical Reserve Growth Proved Reserves 180.00 PDP PDNP PUD 160.00 140.00 46% 120.00 100.00 Bcfe 34% 80.00 15% 15% 60.00 37% 38% 17% 40.00 27% 13% 18% 14% 50% 39% 35% 22% 20.00 28% 50% 59% 66% 40%…
  5. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 5
    Historical Reserve Growth Proved Reserves 180.00 160.00 Gas Liquids 27% 140.00 120.00 Bcfe 23% 100.00 80.00 0.1% 60.00 0.1% 0.7% 73% 0.8% 77% 40.00 0.6% 99.9% 99.9% 99.3% 99.2% 20.00 99.4% 0.00 2006…
  6. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 6
    Historical Production Growth Daily Production Gas Oil NGLs 35.0 30.0 11.3% 0.3% 6.6% 25.0 0.3% 0.8% 1.6% MMcfe/d 20.0 3.2% 0.7% 15.0 1.5% 99.7% 82.1% 99.7% 10.0 99.2% 95.2% 99.3% 98.5% 5.0 0.0 2006…
  7. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 7
    Accelerating Liquids Growth 1600.0 1400.0 Barrels of Liquids/day 1200.0 1000.0 800.0 1,420 600.0 1,107 958 400.0 809 200.0 278 152 167 0.0 3Q11 4Q11 1Q12 2Q12 2011 YTD 2012 2012E 2012 Gastar…
  8. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 8
    Major 2011 Accomplishments Gastar utilized the promote from its Marcellus JV to accelerate development: More than doubled proved reserves to 120 Bcfe (1) Increased PV-10 by 223% to 217 million (1) Increased production by 13%…
  9. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 9
    Setting the Stage for 2012 2012 capital budget of 134 million Production projected to grow materially 3Q production guidance of 35-37 MMcfe/d Increase liquids to 20-25% of total production Majority of capex dedicated to…
  10. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 10
    Aggressively Shifting Capital to Liquids ( in millions) Area Capital 2012 Capital Investment Marcellus 107 Mid-Continent 20 East Texas 4 Capitalized Costs (1) 3 Total 134 Capital investment program of 134 million 97% of…
  11. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 11
    Great Assets with Room to Grow 2012 Gastar Exploration Ltd.
  12. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 12
    Strong Position in the Marcellus Shale Near-term activity concentrated in highly prospective liquids-rich portion of the play 75,700 net acres with Marcellus exposure Two rigs currently operating Marshall & Wetzel Counties JV…
  13. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 13
    Liquids-Rich Window of Marshall & Wetzel Counties High Btu gas and condensate yields 30-50 bbls/MMcf condensate 40-50 bbls/MMcf NGLs Active development program 31 horizontal wells drilled to date in Marshall County 23 completed…
  14. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 14
    Integrated Reservoir Solutions Burch Ridge 1H Gastar Exploration Marshall County, West Virginia Marcellus Formation Appalachian Basin
  15. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 15
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Method) 3.0 Scatter Due to: 2.9 Core Heterogeneity & Sampling Coring Conditions (filtrate invasion) 2.8 Fluid Loss (core recovery & handling) Log Averaging Log RHOB, g/cc…
  16. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 16
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Method) 1E-01 1E-02 1307 Samples 1E-03 Matrix Permeability, md 1E-04 1E-05 y = 1E-11x6.2544 1E-06 y = 4E-12x7.4875 1E-07 R = 0.8629 1E-08 y = 3E-14x8.4354 1E-09…
  17. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 17
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Saturation) 1E-01 1307 Samples 1E-02 1E-03 Matrix Permeability, md 1E-04 1E-05 1E-06 1E-07 y = 8E-13x4.5445 1E-08 R = 0.8982 1E-09 y = 2E-16x6.447 1E-10 y =…
  18. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 18
    Summary of Rock Properties BASIC ROCK PROPERTIES (Data Comparison) 1E-01 1307 Samples 1E-02 1E-03 Matrix Permeability, md 1E-04 1E-05 1E-06 y = 5E-12x7.1912 R = 0.9174 1E-07 1E-08 y = 6E-10x5.8615 R = 0.8918 1E-09 y =…
  19. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 19
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Saturation) 1E-01 All JIP Wells 1E-02 Burch Ridge 1H (Upper Marcellus) 1E-03 Burch Ridge 1H (Lower Marcellus) Matrix Permeability, md 1E-04 Burch Ridge 1H (Onondaga)…
  20. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 20
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Saturation) 1E-01 All JIP Wells 1E-02 Burch Ridge 1H (Upper Marcellus) 1E-03 Burch Ridge 1H (Lower Marcellus) Burch Ridge 1H (Onondaga) Matrix Permeability, md 1E-04 1307…
  21. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 21
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Method) 20 Total (Interconnected) Porosity, percent 1307 Samples 18 16 14 Bulk Volume Water 12 2.1 percent 10 8 y = 0.9481x + 2.084 6 R = 0.9871 4 All JIP Wells…
  22. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 22
    Summary of Rock Properties Bulk Volume Water BASIC ROCK PROPERTIES 2.1 percent (GRI Method) 1E-01 y = 1E-11x6.2544 1E-02 1E-03 Matrix Permeability, md 1E-04 1E-05 1E-06 1E-07 1E-08 1307 Samples 1E-09 Crushed Sample…
  23. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 23
    Summary of Rock Properties BASIC ROCK PROPERTIES (GRI Method) 3.0 1318 Samples 2.8 Bulk Density (GRI), g/cc 2.6 2.4 2.2 2.0 All JIP Wells 1.8 Burch Ridge 1H (Upper Marcellus) Burch Ridge 1H (Lower Marcellus) y =…
  24. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 24
    Marcellus West Economics 6.4 Bcfe EUR 63% Gas 37% Liquids 38% IRR(1) Cost 7.3MM (5000 lateral) 1.52/MMcfe F&D Costs (1) Based on third party reservoir engineering curve and the NYMEX futures curve on August 20, 2012.…
  25. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 25
    Operational Excellence with Pad Drilling 2012 Gastar Exploration Ltd. 26
  26. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 26
    Production Mix of Marcellus West Wells Gas Oil NGLs 80% 74% 71% 69% 70% 66% 66% 60% 50% 40% 30% 22% 23% 20% 21% 20% 14% 12% 13% 11% 11% 10% 6% 0% 3Q11 4Q11 1Q12 2Q12 3Q/4Q12E 2012 Gastar…
  27. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 27
    Pennsylvania Consolidating in two core areas. Butler County 2,400 net acres 4,800 JV net acres 3 wells completed in 2011 4 wells completed in 2012 Btu-rich wet gas Fayette & Somerset Counties 3,500 net acres 7,000 JV net…
  28. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 28
    Marcellus East Large position Low entry price Acquired assets in November 2010 100% WI, 80% NRI Tested Marcellus potential in 2 wells Preston/Tucker tested 1.1 MMcf/d Pendleton tested 0.8-1.0 MMcf/d First horizontal has been…
  29. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 29
    Mid-Continent Horizontal Oil Play Play de-risked by partner activity and historic vertical production Current lease position approximately 22,500 gross (11,300 net) acres Goal - 25,000 gross acres in initial AMI Operations…
  30. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 30
    Mid-Continent Horizontal Oil Play Economics Risked 236 MBOE EUR 43% Gas 57% Liquids 25% IRR Cost 4.3MM (4500 lateral) Un-risked 321 MBOE EUR 43% Gas 57% Liquids 63% IRR Cost 4.3MM (4500 lateral) 2012 Gastar…
  31. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 31
    Shallow Potential Combined With Proven Success in East Texas Combination of Eagle Ford/Woodbine liquids and Bossier gas. Leon Substantial Shallow Potential Identified Eagle Ford/Woodbine (Eaglebine) becoming more active Encana and…
  32. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 32
    Solid Acreage Position in the Emerging Eagle Ford Trend Actively monitoring and evaluating as our peers de-risk the play. 20,300 Net Acres 2012 Gastar Exploration Ltd. 33
  33. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 33
    Abundant Supply of Eagle Ford/Woodbine Opportunities Potential for 100+ horizontal drilling locations. First Class Neighbors 2012 Gastar Exploration Ltd. 34
  34. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 34
    Financial Strength 2012 Gastar Exploration Ltd.
  35. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 35
    Liquidity to Execute Our Plan Sources for our 134 million capital budget have been secured. Base capital program funded from internally-generated cash flow supplemented by borrowings under current credit facility and remaining…
  36. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 36
    Balance Sheet Assets ( in millions) June 30, 2012 Cash and cash equivalents 8.0 Other current assets 31.9 Total current assets 39.9 Total property, plant and equipment, net 269.9 Other assets 7.2 Total assets 317.0…
  37. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 37
    Strong Balance Sheet and Liquidity Borrowing Base Bank Debt 120 100 100 80 MM 60 48 50 47 40 31 30 20 - - - 2009 2010 2011 6/30/2012 June 30, 2012 Bank Debt Outstanding 47.0 MM Total Liquidity(1) 61.0 MM Net…
  38. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 38
    8.625% Cumulative Preferred Stock is Being Well Received By The Market 98.4 million issued to date(1). Issuer: Gastar Exploration USA, Inc. Symbol: NYSE Amex: GST.PRA Guarantor: Gastar Exploration Ltd. Annual Rate: 8.625% Face…
  39. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 39
    Responsible Hedging Program Natural Gas as of August 31, 2012 Gas Hedging Strategy Daily Volumes Hedged, MMBtu/day 30,000 25,957 MMBtu/d 25,000 2,000 MMBtu/d 4.00 / 4.50 Call Spread 16,566 MMBtu/d 20,000 6.00 / 4.00 15,338…
  40. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 40
    Responsible Hedging Program Crude Oil and NGL as of August 31, 2012 Liquids Hedging Strategy Daily Volumes Hedged, Bbls/day 900 800 Bbls/d 800 200 Bbls/d 700 52.50 Fixed Price Swap 600 600 Bbls/d 500 449.3 Bbls/d 49.3…
  41. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 41
    Summary 2012 is an active, pivotal year for Gastar. Aggressively shifting to liquids Focusing on liquids-rich Marcellus acreage New Mid-Continent oil play Capital investment program fully funded Realized a 100% increase in our…
  42. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 42
    Gastar Exploration Ltd. General Information Gastar Exploration is an independent energy company engaged in the exploration, development and production of natural gas and oil in the U.S. Our principal business activities include the…
  43. OCTOBER 2012 INVESTOR PRESENTATION – Gastar Exploration, Ltd. – slide 43
    Q&A 2012 Gastar Exploration Ltd.

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