© 2013 Gastar Exploration Ltd.
E X P A N D I N G O U R H O R I Z O N S
J. Russell Porter
Chief Executive Officer
September...
© 2013 Gastar Exploration Ltd.
Forward-Looking Statements
2
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION ...
© 2013 Gastar Exploration Ltd.
Gastar Overview
3
 Listed on the NYSE MKT: GST
 $260 million market capitalization(1)
 $...
© 2013 Gastar Exploration Ltd.
East TX
27.4 Bcfe
11%
Appalachia
206.2 Bcfe
83%
Mid-
Continent
15.3 Bcfe
6%
East TX
10.3
MM...
© 2013 Gastar Exploration Ltd.
Historical Reserve Growth
5
Proved Reserves
 2012 proved reserve F&D cost of $1.97 per Mcf...
© 2013 Gastar Exploration Ltd.
Historical Production
6
Total Daily Production
YTD 2013 Marcellus production constrained by...
© 2013 Gastar Exploration Ltd.
278
809
1,680 1,753
2,831
167
1,221
2,295
0.0
500.0
1000.0
1500.0
2000.0
2500.0
3000.0
4Q11...
© 2013 Gastar Exploration Ltd.
 100% of drilling and completion costs
target liquids-rich wells
 74% of 2013 planned cap...
© 2013 Gastar Exploration Ltd.
Field and
Development
Overview
© 2013 Gastar Exploration Ltd.
 Marshall & Wetzel Counties, W. Va.
 JV partner Atinum
 19,400 net JV acres
 Focus area...
© 2013 Gastar Exploration Ltd.
Liquids-Rich Window of
Marshall & Wetzel Counties
11
 High Btu gas and condensate yields
...
© 2013 Gastar Exploration Ltd.
Field and Development Overview –
Marcellus West
12
© 2013 Gastar Exploration Ltd.
Marcellus West Economics
13
 6.7 Bcfe EUR
 Daily Peak Rate
3.5 MMCFD & 175 BCPD
 65% Gas...
© 2013 Gastar Exploration Ltd.
Marcellus West – Operated Drilling Overview
14
 Gastar has completed 57 gross wells as of ...
© 2013 Gastar Exploration Ltd.
Pad Drilling Drives Attractive Economics
15
 Average drilling time reduced to ~ 16 days pe...
© 2013 Gastar Exploration Ltd.
Utica Activity around
Marshall & Wetzel Counties
16
 The Utica/Point Pleasant formation
un...
© 2013 Gastar Exploration Ltd.
New Oklahoma Hunton Limestone Play
17
 Exposure to over 100 MMBOE of net
resource potentia...
© 2013 Gastar Exploration Ltd.
Hunton Acreage
18
 Undeveloped acreage
expands inventory of
prospective low-cost, high-
re...
© 2013 Gastar Exploration Ltd.
Overview of Transactions
19
CHK Acquisition
 Acquired 157,000 net acres and 3.0 MMBOE prov...
© 2013 Gastar Exploration Ltd.
Overview of Transactions (cont’d)
20
WEHLU Acquisition
 Strategic and operational fit with...
© 2013 Gastar Exploration Ltd.
WEHLU Acquisition
21
Encouraging Initial Results
© 2013 Gastar Exploration Ltd.
AMI Horizontal Well Activity
22
Encouraging Initial Results
© 2013 Gastar Exploration Ltd.
County
First
Production
Most Recent
10 Day
Average
(BOE/D)(1)
Mid-Con 1H Kingfisher 10/05/1...
© 2013 Gastar Exploration Ltd.
Hunton Acreage
24
 Initial operated
drilling will test
overall acreage
position for Hunton...
© 2013 Gastar Exploration Ltd.
Lower Hunton Horizontal Oil Play Economics
 436 MBOE EUR
 Peak daily Rate 400 BO &
1,250 ...
© 2013 Gastar Exploration Ltd.
WEHLU Bois d’Arc Horizontal Economics
 123 MBOE EUR
 Peak Daily Rate 165 BO &
231 Mcf
 1...
© 2013 Gastar Exploration Ltd.
WEHLU Chimney Hill Horizontal Economics
 250 MBOE EUR
 Peak daily rate 340 BO &
1360 MCF
...
© 2013 Gastar Exploration Ltd.
Preliminary Hunton Drilling Plan (Excludes WEHLU activity)
28
2013
 10 total wells
 6 gro...
© 2013 Gastar Exploration Ltd.
Financial Overview
© 2013 Gastar Exploration Ltd.
Assets
Balance Sheet
30
($ in millions)
Liabilities and Shareholders’ Equity
June 30, 2013
...
© 2013 Gastar Exploration Ltd.
Issuer: Gastar Exploration USA, Inc.
Coupon: 8.625%
Maturity: May 15, 2018. Two-year non ca...
© 2013 Gastar Exploration Ltd.
Issuer: Gastar Exploration USA, Inc.
Symbol: NYSE MKT: GST.PRA
Guarantor: Gastar Exploratio...
© 2013 Gastar Exploration Ltd. 33
Strong Collateral Coverage
Collateral Coverage
$431.8
$200.0
$431.8
$109.0
$0
$100
$200
...
© 2013 Gastar Exploration Ltd.
$398.8
$200.0
$398.8
$51.8
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
New Senior S...
© 2013 Gastar Exploration Ltd. 35
(1) SEC and NYMEX reserves and PV-10 figures based on 06/30/13 third-party reserve repor...
© 2013 Gastar Exploration Ltd.
Natural Gas as of September 24, 2013
Hedging Program
36
[VALUE] NYMEX SWAP $3.89
[VALUE] NY...
© 2013 Gastar Exploration Ltd.
Crude Oil and NGLs as of September 24, 2013
Hedging Program (cont’d)
37
[VALUE]/d $97.70 WT...
© 2013 Gastar Exploration Ltd.
Hedge Percentages as of September 24, 2013
Hedging Program (cont’d)
38
© 2013 Gastar Exploration Ltd.
Summary
39
Well positioned for reserve & production growth
with strong economics in 2013 & ...
© 2013 Gastar Exploration Ltd.
Gastar Exploration is an independent energy company engaged in the exploration, development...
© 2013 Gastar Exploration Ltd.
Q&A
© 2013 Gastar Exploration Ltd.
© 2013 Gastar Exploration Ltd.
© 2013 Gastar Exploration Ltd.
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Gastar Exploration Investor Presentation at Johnson Rice Energy Conference - Sept 30, 2013

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PowerPoint presentation used by Gastar Exploration president & CEO J. Russell Porter during a talk he gave at the Johnson Rice & Company Energy Conference held in New Orleans on Sept. 30, 2013. Porter outlines the current assets and operations for Gastar in both the Hunton Limestone Oil play and the Marcellus/Utica Shale play, along with their plans for the future in both plays. Slides #10-#16 will be of particular interest to Marcellus Drilling News readers (Marcellus/Utica details, maps, etc.).

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Gastar Exploration Investor Presentation at Johnson Rice Energy Conference - Sept 30, 2013

  1. 1. © 2013 Gastar Exploration Ltd. E X P A N D I N G O U R H O R I Z O N S J. Russell Porter Chief Executive Officer September 2013
  2. 2. © 2013 Gastar Exploration Ltd. Forward-Looking Statements 2 CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This presentation of Gastar Exploration Ltd. contains forward-looking statements relating to Gastar’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward- looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternative-energy sources or product substitutes; technological developments; the results of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, sever weather or crude oil production quotas that might be imposed; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principals promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 23 through 35 of the company’s 2012 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. Estimates of Hydrocarbons. Certain terms, such as “resources,” “resource potential,” and “EUR,” or “estimated ultimate recovery,” and similar terms, may be used in this presentation to describe certain oil and gas hydrocarbon quantities that are not permitted to be used in filings with the U.S. Securities and Exchange Commission. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company. Estimates of EURs in this presentation were made internally by the company after evaluation of limited production histories of wells drilled recently in the play by other operators. Horizontal drilling in the Hunton formation in this area is a relatively new play with a limited production history and, as a result, such estimates may be subject to more uncertainties than those in more established plays. Individual well reserves will vary and such estimates may prove to be incorrect.
  3. 3. © 2013 Gastar Exploration Ltd. Gastar Overview 3  Listed on the NYSE MKT: GST  $260 million market capitalization(1)  $531 million enterprise value(2)  61.6 million shares outstanding(3)  Focus in two areas  Marcellus Shale in liquids-rich window of West Virginia  Emerging Oklahoma Hunton Limestone oil play  Organic growth strategy through the drillbit  74% of 2013 capex (excluding acquisitions) allocated to drilling  Enhanced by recently announced WEHLU acquisition  Track record of adding proved reserves and creating value  248.9 Bcfe with a 14.0 R/P(4)  Reserve growth of 395% over last 3 years  PV-10 value $431.8 million using 6/30/13 NYMEX curve (1) Market capitalization at September 24, 2013 (2) Enterprise value at September 24, 2013; includes preferred shares of $99.0 million face value (3) Reflects 6.8 million shares repurchased as part of CHK transaction (4) Based on June 30, 2013 reserve report
  4. 4. © 2013 Gastar Exploration Ltd. East TX 27.4 Bcfe 11% Appalachia 206.2 Bcfe 83% Mid- Continent 15.3 Bcfe 6% East TX 10.3 MMcfe/d 21% Appalachia 36.4 MMcfe/d 74% Mid- Continent 2.4 MMcfe/d 5% Asset Overview 4 June 30, 2013 Proved Reserves by Region YTD 2013 Net Production by Region Total 176,300 net acres(1)(2) (1) Net acres as of 6/30/2013; excludes 2013 Marcellus West - Pennsylvania expirations and non- core OK sale and JV partner election acreage (2) Net acres as of 6/30/2013 ; includes 16,600 net acres in East Texas Marcellus Shale Rich Gas Play 63,300 net acres(1) Houston HQ 49.1 MMcfe/d 248.9 Bcfe Hunton Limestone Oil Play 96,300 net acres(1)
  5. 5. © 2013 Gastar Exploration Ltd. Historical Reserve Growth 5 Proved Reserves  2012 proved reserve F&D cost of $1.97 per Mcfe  % of high-value liquids expected to increase substantially in 2013-2014 59% 66% 50% 63% 65% 14% 18% 15% 7% 4% 27% 17% 34% 30% 31% 0.0 50.0 100.0 150.0 200.0 250.0 300.0 2009 2010 2011 2012 YTD 2013 Bcfe PDP PDNP PUD 99.2% 99.3% 77% 72% 70% 0.8% 0.7% 23% 28% 30% 0.0 50.0 100.0 150.0 200.0 250.0 300.0 2009 2010 2011 2012 YTD 2013 Bcfe Gas Liquids
  6. 6. © 2013 Gastar Exploration Ltd. Historical Production 6 Total Daily Production YTD 2013 Marcellus production constrained by ~29% due to third-party pipeline & processing issues 99.2% 95% 80% 72% 2% 8% 14% 0.8% 3% 12% 14% 0.0 10.0 20.0 30.0 40.0 50.0 60.0 2010 2011 2012 YTD 2013 MMcfe/d Gas Condensate & Oil NGLs
  7. 7. © 2013 Gastar Exploration Ltd. 278 809 1,680 1,753 2,831 167 1,221 2,295 0.0 500.0 1000.0 1500.0 2000.0 2500.0 3000.0 4Q11 1Q12 4Q12 1Q13 2Q13 2011 2012 YTD 2013 BarrelsofLiquids/day Accelerating Liquids Growth Driving Stronger Economics 7 New Hunton Oil Play Exposes GST to Additional Oil Production & Reserves
  8. 8. © 2013 Gastar Exploration Ltd.  100% of drilling and completion costs target liquids-rich wells  74% of 2013 planned capital dedicated to drilling (excluding acquisition costs)  Excludes $187.5 million WEHLU acq. Aggressively Shifting Capital to Liquids 8 $193 million 2013 Capital Investment (1) Includes capitalized interest and G&A costs. ($ in millions) Area Capital Marcellus $60 Mid-Continent 56 Mid-Continent Acquisition 69 East Texas 2 Capitalized Costs (1) 6 Total $193 Marcellus $60MM 31% East Texas $2MM 1%Mid-Continent $56MM 29% Mid-Continent Acquisition $69MM 36% Capitalized Costs & Other $6MM 3%
  9. 9. © 2013 Gastar Exploration Ltd. Field and Development Overview
  10. 10. © 2013 Gastar Exploration Ltd.  Marshall & Wetzel Counties, W. Va.  JV partner Atinum  19,400 net JV acres  Focus area with ultra liquids-rich gas  Utica potential being tested in the immediate area  Marcellus East, W. Va.  49,000 net acres – dry gas  100% WI, 80% NRI Strong Position in the Marcellus Shale 10 Near-term activity concentrated in highly prospective liquids-rich portion of the play o Marshall & Wetzel Counties o Marcellus East  63,300 net acres with Marcellus exposure(1) (1) As of 6/30/2013; excludes 2013 Marcellus West - Pennsylvania expirations
  11. 11. © 2013 Gastar Exploration Ltd. Liquids-Rich Window of Marshall & Wetzel Counties 11  High Btu gas and condensate yields  30-40 Bbls/MMcf condensate  40-50 Bbls/MMcf NGLs  57 gross horizontal Marshall County wells on production as of August 2013  $60 million capital budget for 2013  57 net (113 gross) additional horizontal wells planned in Marshall and Wetzel Counties on existing acreage for 2014 and beyond with JV partner  Testing tighter spacing and enhanced reservoir evaluation and stimulation to potentially increase IP rates, EURs and number of drilling locations Active development program Williams Pipeline Marshall County Development Area Tax Districts w/Acreage
  12. 12. © 2013 Gastar Exploration Ltd. Field and Development Overview – Marcellus West 12
  13. 13. © 2013 Gastar Exploration Ltd. Marcellus West Economics 13  6.7 Bcfe EUR  Daily Peak Rate 3.5 MMCFD & 175 BCPD  65% Gas (processed)  35% Liquids  39% IRR(1)  Cost $6.7MM (5000’ lateral)  $1.18/MMcfe F&D Costs  PV10 $7.8 million per well (1) Based on Wright & Company, Inc. reserve report and the NYMEX futures curve on August 11, 2013.
  14. 14. © 2013 Gastar Exploration Ltd. Marcellus West – Operated Drilling Overview 14  Gastar has completed 57 gross wells as of today 0.0 10.0 20.0 30.0 40.0 50.0 Marcellus West Historical Daily Production (MMcfe/d) 66% 69% 67% 67% 66% 67% 11% 11% 11% 14% 15% 13% 23% 20% 22% 18% 19% 19% 0% 20% 40% 60% 80% 100% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Gas Condensate and Oil NGLs Marcellus West Production Mix (1) Average well lateral length approximates the actual average well lateral length for the pad wells. (2) Reserves based on 6/30/13 SEC reserve report by Wright. Pad Gross Well Count Working Interest Net Revenue Interest Avg. Lateral Length (ft.) (1) Avg. Well Cost ($ 000's) Date of First Production Avg. EUR/Well (Bcfe) (2) % Liquids Corley 4 40.8% 35.4% 4,700 $7,770 Dec-11 5.3 28.7% Simms 3 50.0% 43.2% 4,900 $8,160 Dec-11 8.0 31.2% Hall 3 40.0% 34.7% 4,300 $6,156 Jan-12 7.2 29.6% Hendrickson 5 40.0% 34.7% 4,600 $6,856 Apr-12 6.6 31.8% Accettolo 3 50.0% 40.2% 4,600 $7,084 Jun-12 5.3 35.3% Burch Ridge 5 50.0% 41.5% 5,500 $7,685 Aug-12 8.0 31.6% Wayne 4 50.0% 40.6% 5,000 $7,321 Sep-12 5.6 34.3% Wengerd 7 44.5% 37.7% 4,900 $8,188 Nov-12 6.0 31.7% Lily 4 50.0% 40.6% 5,300 $6,609 Dec-12 6.6 35.8% Shields (1-5) 5 50.0% 41.5% 3,000 $5,230 Feb-13 6.9 39.5% Addison 5 50.0% 41.7% 5,000 $6,780 Mar-13 5.4 31.3% Shields (6-10) 5 50.0% 41.5% 3,700 $5,440 May-13 5.4 39.5% Goudy 4 50.0% 39.9% 6,000 $7,000 Aug-13 7.5 31.8% Total 57 4,731 $6,945 6.4 33.8% Historical Operated Marcellus West Drilling Results
  15. 15. © 2013 Gastar Exploration Ltd. Pad Drilling Drives Attractive Economics 15  Average drilling time reduced to ~ 16 days per well  Additional savings being realized on completion costs
  16. 16. © 2013 Gastar Exploration Ltd. Utica Activity around Marshall & Wetzel Counties 16  The Utica/Point Pleasant formation underlies GST’s Marcellus West position  Five operators currently drilling Utica wells that matter to GST  Dry gas  Approximately 100 gross GST Utica locations at 8 to 10 BCF recoverable per location  Estimated $10 million per well D&C  800 Bcf to 1 TCF of gross Utica resource underlying a successful and highly profitable Marcellus Shale development  Planning initial test in 2014 drilling program Offset Utica Activity Williams Pipeline Marshall County Development Area Tax Districts w/Acreage XTO Chevron Gulfport Eclipse Triad Hunter Permitted Commenced Drilling XTO
  17. 17. © 2013 Gastar Exploration Ltd. New Oklahoma Hunton Limestone Play 17  Exposure to over 100 MMBOE of net resource potential, primarily oil  Very encouraging early drilling results  Play further de-risked by partner’s recent activity and historic vertical production in the area  CHK acquisition and subsequent non-core lease sale significantly lower GST financial risk  Current lease position – approximately 96,300 net acres  WEHLU acquisition will add 2,000 BOE/D plus numerous low-risk development drilling locations
  18. 18. © 2013 Gastar Exploration Ltd. Hunton Acreage 18  Undeveloped acreage expands inventory of prospective low-cost, high- return drilling locations
  19. 19. © 2013 Gastar Exploration Ltd. Overview of Transactions 19 CHK Acquisition  Acquired 157,000 net acres and 3.0 MMBOE proved reserves for $69 million  Acquired 6.8 million GST common shares at $1.44 per share ($9.8 million)  $1 million allocated to litigation resolution  Closed June 7, 2013 Partner AMI Election  Sold 12,800 net undeveloped acres and 0.4 MMBOE proved reserves for $12.1 million  Closed July 1st, 2013 Non-Core Sale  Sold 76,000 net undeveloped acres for $62 million  To close August 6th, 2013 Summary  GST acquired 68,200 additional undeveloped acres and 2.6 MMBOE proved reserves for no outlay of cash; and  GST executed a 10% stock buy back at a 42% discount to market
  20. 20. © 2013 Gastar Exploration Ltd. Overview of Transactions (cont’d) 20 WEHLU Acquisition  Strategic and operational fit with considerable upside  Acquiring 11.1 million proven BOE producing 2,078 BOE/D for $187.5 million  24,000 HBP acres with 62 identified upper Hunton PUD’s limited to only 7,000 acres  Over 100 additional drilling locations for the upper and lower Hunton  Scheduled to close late November 2013
  21. 21. © 2013 Gastar Exploration Ltd. WEHLU Acquisition 21 Encouraging Initial Results
  22. 22. © 2013 Gastar Exploration Ltd. AMI Horizontal Well Activity 22 Encouraging Initial Results
  23. 23. © 2013 Gastar Exploration Ltd. County First Production Most Recent 10 Day Average (BOE/D)(1) Mid-Con 1H Kingfisher 10/05/12 32 Mid-Con 2H Kingfisher 02/15/13 671 Mid-Con 3H Garfield 04/04/13 81 Mid-Con 4H Kingfisher 06/01/13 121 Mid-Con 5H Kingfisher 08/28/13 310(2) Hunton Oil Play Well Data 23 Gastar’s Wells in Existing AMI: County First Production IP or Peak Rate (BOE/D) EUR (MBOE) First 6 wells avg. Logan 2010 342 226 Last 7 wells avg. Logan / Kingfisher 2011-2013 645 436 Recent JV Partner Hunton Wells Outside of AMI: (1) As of September 4, 2013 (2) September 12th rate. Well flowing from 8 of 20 stages with mechanical restrictions due to stuck coil tubing
  24. 24. © 2013 Gastar Exploration Ltd. Hunton Acreage 24  Initial operated drilling will test overall acreage position for Hunton prospectivity
  25. 25. © 2013 Gastar Exploration Ltd. Lower Hunton Horizontal Oil Play Economics  436 MBOE EUR  Peak daily Rate 400 BO & 1,250 MCF  35% Gas (processed; 57% unprocessed)  65% Liquids  73% IRR(1)  Cost $5.2MM (4,200’ lateral)  $15.36/BOE F&D Cost  PV10 $5.5 million per well(1) Based on results of last 7 wells of JV partner and the NYMEX futures curve on August 11, 2013. 25
  26. 26. © 2013 Gastar Exploration Ltd. WEHLU Bois d’Arc Horizontal Economics  123 MBOE EUR  Peak Daily Rate 165 BO & 231 Mcf  12% Gas (processed; 19% unprocessed)  88% Liquids  61% IRR(1)  Cost $2.3MM (3500’ lateral)  $22.79/BOE F&D Cost  PV10 $1.9 million per well (1) Based on Wright & Company, Inc. reserve report and NYMEX futures curve on August 11, 2013. 26
  27. 27. © 2013 Gastar Exploration Ltd. WEHLU Chimney Hill Horizontal Economics  250 MBOE EUR  Peak daily rate 340 BO & 1360 MCF  25% Gas (processed; 40% unprocessed)  75% Liquids  53% IRR(1)  Cost $4.5MM (4,200’ lateral)  $21.98/BOE F&D Cost  PV10 $3.2 million per well(1) Based on Wright & Company, Inc. reserve report and NYMEX futures curve on August 11, 2013. 27
  28. 28. © 2013 Gastar Exploration Ltd. Preliminary Hunton Drilling Plan (Excludes WEHLU activity) 28 2013  10 total wells  6 gross (3 net) within existing AMI (non-operated)  3 gross (3 net) on new acreage (operated)  1 gross (0.8 net) on new acreage (non-operated) 2014  19 total wells  8 gross (4 net) within existing AMI (non-operated)  11 gross (11 net) on new acreage (operated) Net Drilling Locations  ~210 net locations in retained acreage  65 net locations on existing AMI  Exposure to over 100 MMBOE net resource potential
  29. 29. © 2013 Gastar Exploration Ltd. Financial Overview
  30. 30. © 2013 Gastar Exploration Ltd. Assets Balance Sheet 30 ($ in millions) Liabilities and Shareholders’ Equity June 30, 2013 Cash and cash equivalents 10.8 Other current assets 14.0 Total current assets 24.8 Total property, plant and equipment, net 419.8 Other assets 5.6 Total assets 450.2 Current portion of debt - Other current liabilities(1) 81.2 Total current liabilities 81.2 Long-term debt 194.6 Other long-term liabilities 8.5 Preferred stock of subsidiary 76.8 Common shareholders' equity 89.1 Total liabilities and shareholders' equity 450.2 $ $ $ $ (1) Includes $30.4 million of advances from non-operators
  31. 31. © 2013 Gastar Exploration Ltd. Issuer: Gastar Exploration USA, Inc. Coupon: 8.625% Maturity: May 15, 2018. Two-year non call provision. Guarantees: Fully and unconditionally guaranteed by the Company and certain existing and future wholly-owned domestic restricted subsidiaries R/C Facility: $50 million undrawn revolving credit facility that expands as a percentage of ACNTA Ranking: The Notes and the guarantees will rank senior in right of payment to all of the Company’s and the guarantors’ future subordinated indebtedness and equal in right of payment with all of the Company’s and the guarantors’ existing and future senior indebtedness, and effectively junior to the Company’s and the guarantors’ obligations under the Company’s new revolving credit facility. Security: The Notes and the guarantees will be secured by a lien on substantially all of the Company’s and the guarantors’ proved and probable reserves and certain other assets, subject to certain exceptions; provided, however, that pursuant to the terms of an intercreditor agreement, the security interest in those assets that secure the Notes and the guarantees will be contractually subordinated to liens thereon that secure the new $50 million revolving credit facility and certain other permitted indebtedness. 31 Issued on May 15, 2013 at par $200 million Senior Secured Notes
  32. 32. © 2013 Gastar Exploration Ltd. Issuer: Gastar Exploration USA, Inc. Symbol: NYSE MKT: GST.PRA Guarantor: Gastar Exploration Ltd. Annual Rate: 8.625% Face Value: up to $100,000,000 (4,000,000 shares) Guarantee: Gastar Exploration Ltd. will fully and unconditionally guarantee the payment of dividends that have been declared by the board of directors of Gastar Exploration USA, Inc., amounts payable upon redemption or liquidation, dissolution or winding up, or any other amount due. Dividends: Holders are entitled to receive cumulative cash dividends of 8.625% per annum of the $25.00 liquidation preference per share ($2.16 per annum per share). Dividends will be payable monthly in arrears on the last day of each calendar month. Tax Treatment: Distributions will be treated as dividends to the extent of Gastar’s current and accumulated earnings and profits as determined under the U.S. Tax Code. Any portion of the distributions that exceeds Gastar’s current and accumulated earnings and profits (currently anticipated to be 100% of future distributions) will first be applied to reduce a U.S. holder’s tax basis in the Series A Preferred Securities. 32 $99.0 million issued to date(1) (1) Face value composed of 3,958,160 shares sold as of June 30, 2013 at $25 face value. 8.625% Cumulative Preferred Stock
  33. 33. © 2013 Gastar Exploration Ltd. 33 Strong Collateral Coverage Collateral Coverage $431.8 $200.0 $431.8 $109.0 $0 $100 $200 $300 $400 $500 $600 New Senior Secured Notes Proved PV-10(1) Proved PV-10(1) + Undeveloped Acreage(2) $189.2 million Net Debt(3) $540.8 PV-10 / Total Debt: 2.2x 2.7x PV-10 / Net Debt: 2.3x 2.9x (1) Based on 6/30/13 NYMEX reserve report (2) Excludes $43.7 million gain on acquisition of assets at fair value (3) Before sales proceeds from East Texas and Hunton non-core divestitures
  34. 34. © 2013 Gastar Exploration Ltd. $398.8 $200.0 $398.8 $51.8 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 New Senior Secured Notes Proved PV-10(1) Proved PV-10(1) + Undeveloped Acreage(2) 34 Strong Collateral Coverage – Pro Forma Collateral Coverage $91.6 million Net Debt(3) $450.6 PV-10 / Total Debt: 2.0x 2.2x (1) Based on 6/30/13 NYMEX reserve report; excludes East Texas (2) Excludes $43.7 million gain on acquisition of assets at fair value; includes impact of Hunton non-core divestiture (3) After sales proceeds from East Texas and Hunton non-core divestitures, net PV-10 / Net Debt: 4.4x 4.9x
  35. 35. © 2013 Gastar Exploration Ltd. 35 (1) SEC and NYMEX reserves and PV-10 figures based on 06/30/13 third-party reserve report. (2) Excludes $43.7 million gain on acquisition of assets at fair value. (3) Includes adjustment for Williams downtime. Financial Overview Credit Statistics Credit Statistics ($ in millions) June 30, 2013 (1) Total Debt 200.0$ Net Debt 189.2 LTM Adjusted EBITDA (2) 53.0 LTM Normalized Adjusted EBITDA (2) (3) 66.2 Total Proved Reserves - NYMEX (Bcfe) 257.7 Total Proved PV-10 - NYMEX 431.8$ Total Proved Reserves - SEC (Bcfe) 248.9 Total Proved PV-10 - SEC 324.1$ Undeveloped Acreage Value (2) 109.0$ Total Asset Value - NYMEX 540.8$ Total Asset Value - SEC 433.1 Total Debt / Normalized Adjusted EBITDA 3.0x Net Debt / Normalized Adjusted EBITDA 2.9x Normalized Adjusted EBITDA / Total Interest Expense 3.8x Normalized Adjusted EBITDA / (Total Interest Expense + Preferred Equity Dividends) 2.6x Total Net Debt / Total Proved Reserves ($ / Bcfe) 0.73$ Total Asset Value - NYMEX / Net Debt 2.9x Total Asset Value - SEC / Net Debt 2.3x Year to Date as of
  36. 36. © 2013 Gastar Exploration Ltd. Natural Gas as of September 24, 2013 Hedging Program 36 [VALUE] NYMEX SWAP $3.89 [VALUE] NYMEX SWAP $4.06 [VALUE] NYMEX SWAP 4.03 [VALUE] NYMEX SWAP $4.11 [VALUE] $5.00/$6.45 Collar [VALUE] $4.05/$3.79 Prot. Spread [VALUE] $3.88/$3.00/$4.53 3way - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2013 2014 2015 2016 Gas Hedging Strategy MMbtu per day Swap Collar Protective Spread 3-Way 29,381 MMbtu/d 21,636 MMbtu/d 5,500 MMbtu/d 2000 MMbtu/d
  37. 37. © 2013 Gastar Exploration Ltd. Crude Oil and NGLs as of September 24, 2013 Hedging Program (cont’d) 37 [VALUE]/d $97.70 WTI Swap [VALUE]/d $92.68 WTI Swap [VALUE] /d $39.88 Propane Swap [VALUE]/d $98 collar [VALUE]/d $85/$67.37/$97.00 3way [VALUE]/d $82.27/$65/$96.33 3way[VALUE]/d $80/$62.68/$97.92 3way - 500 1,000 1,500 2,000 2,500 3,000 2013 2014 2015 2016 2017 Liquids Hedging Stategy Barrels per day WTI Swap Propane Swap Collar 3-Way 2,635 Bpd 1,668 Bpd 845 Bpd 605 Bpd 522 Bpd
  38. 38. © 2013 Gastar Exploration Ltd. Hedge Percentages as of September 24, 2013 Hedging Program (cont’d) 38
  39. 39. © 2013 Gastar Exploration Ltd. Summary 39 Well positioned for reserve & production growth with strong economics in 2013 & beyond  2013 production projected to grow materially over 2012  High-value liquids production expected to increase vs last year  Hunton oil play further enhances overall drilling economics  74% of planned capex allocated to drilling in 2013  Early mover with sizeable acreage positions in two oil / NGL plays  2013 capex focused primarily on liquids-rich Marcellus acreage  New Mid-Continent Hunton oil play focus expanding in 2014  Strong inventory of repeatable, low-cost, high-return drilling locations in both core areas  Estimated 113 undrilled locations in Marcellus West  Total of 380 locations in Mid-Continent post-WEHLU acquisition  Strong track record of adding reserves and creating value  248.9 Bcfe of proved reserves with a 14.0 R/P  Reserves growth of 395% over last 3 years
  40. 40. © 2013 Gastar Exploration Ltd. 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 identification, acquisition, and subsequent exploration and development of natural gas and oil properties with an emphasis on unconventional reserves, such as shale resource plays. Publicly Traded Securities CUSIP Ticker Common Stock 367299203 GST 8.625% Cumulative Preferred Stock (Series A) 36729P207 GST.PRA Investor Contacts J. Russell Porter President and Chief Executive Officer (713) 739-0456 rporter@gastar.com Michael A. Gerlich Vice President and Chief Financial Officer (713) 739-0455 mgerlich@gastar.com Gastar Exploration Ltd. 40
  41. 41. © 2013 Gastar Exploration Ltd. Q&A
  42. 42. © 2013 Gastar Exploration Ltd.
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  44. 44. © 2013 Gastar Exploration Ltd.

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