8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                Date of Report (Date of earliest event reported):
                    September 29, 2006 (September 29, 2006)


                             GASTAR EXPLORATION LTD.
             (Exact Name of Registrant as Specified in Its Charter)

      ALBERTA, CANADA                  001-32714                38-3324634
(State or other jurisdiction          (Commission              (IRS Employer
     of incorporation)                File Number)           Identification No.)


                          1331 LAMAR STREET, SUITE 1080
                              HOUSTON, TEXAS 77010
                    (Address of principal executive offices)

                                 (713) 739-1800
              (Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[   ] Written communications pursuant to Rule 425 under the Securities Act
      (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
      (17 CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))




SECTION 7 - REGULATION FD

ITEM 7.01  REGULATION FD DISCLOSURE.

     On September 29, 2006, the Company released updated operational information
on drilling and completion activities on its PEL238 property located in New
South Wales, Australia.

     A press release is attached as Exhibit 99.1 and is being furnished solely
pursuant to Item 7.01 of this report.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(d)      Exhibits

         The following is a list of exhibits furnished as part of this Form 8-K:

Exhibit No.                           Description of Document
- -----------       -------------------------------------------------------------
     99.1         Press release dated September 29, 2006.


                                      -2-


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                           GASTAR EXPLORATION LTD.


Date:  September 29, 2006              By: /s/  J. RUSSELL PORTER
                                           -------------------------------------
                                           J. Russell Porter
                                           President and Chief Executive Officer



                                      -3-


                                  EXHIBIT INDEX

Exhibit No.             Description of Document
- ------------      ---------------------------------------

   99.1           Press release dated September 29, 2006.





                                      -4-

EX-99.1

                                                          Exhibit 99.1

         Gastar Exploration Updates PEL 238 Drilling Program
                      New South Wales, Australia

    HOUSTON--(BUSINESS WIRE)--Sept. 29, 2006--Gastar Exploration Ltd.
(AMEX:GST)(TSX:YGA) is pleased to provide an operational update on
recent drilling and completion activities on its PEL 238 property
located in New South Wales, Australia.

    PEL 238 DRILLING PROGRAM

    Gastar, along with Eastern Star Gas Limited (ASX:ESG), the
operator of the PEL 238 Gunnedah Basin Coal Seam Gas Joint Venture,
has recently completed the drilling and fracture stimulation of a
nine-well program within the Bohena Project Area. The drilling and
completion program was completed as scheduled and within budget.
Gastar owns a 35% working interest in the Coal Seam Gas Joint Venture
with Eastern Star gas owning the remainder of the venture pending
approval of their merger with Hillgrove Resources, Inc.

    The project is located in Petroleum Exploration License 238
between Narrabri and Gunnedah in New South Wales covering 9,100 square
kilometers (2 million gross acres) of the Gunnedah Basin. The Bohena
Project Area covers 265 square kilometers within PEL 238. The coal
seams within PEL 238 that have coal seam gas potential are the Late
Permian Black Jack Formation and the Early Permian Maules Creek
Formation.

    Eight coal seam methane wells were drilled in close proximity to a
previous well, the Bibbliwindi #1 well, to form a 40 acre spaced
"nine-spot" production pilot. The purpose of the drilling program is
to accelerate dewatering of the Bohena coal seam, contained within the
Maules Creek coal measures, and to demonstrate sustainable commercial
gas production rates in a shorter period of time than would be
possible for isolated wells (as has been the case for previous
production tests) or for wells drilled on wider spacing. Each of the
nine wells was fracture stimulated with each of the fracture
stimulations successful in placing either the planned or a greater
than planned volume of sand within the targeted coal seam. As a part
of the fracture stimulation program and subsequent testing, average
permeability in the targeted Bohena seam for the eight new production
wells was measured at 30 millidarcies (md) and ranged as high as 100
md. Previous testing confirmed that the Bohena Seam has high gas
contents averaging greater than 450 Mcf per standard cubic foot.

    A ninth pressure monitoring well was drilled at approximately
160-acre spacing from the production pilot to determine the extent of
in-seam permeability communication. If the pressure monitoring well
demonstrates pressure communication over this larger spacing, it will
increase the area over which reserves can be attributed and provide
information that is expected to allow future development on 160-acre
or greater spacing.

    Once all wells have been cleaned up through flow back they will be
equipped with pumps, and sequentially placed on production test. The
wells will then commence the de-watering process which is expected to
lead to natural gas production resulting in the possible recognition,
during 2007, of proven and probable reserves by an independent third
party reservoir engineering firm.

    Successful gas reserves recognition should enable the CSG Joint
Venture to proceed to development of the coal seam gas field and
commit to gas sales contracts. Gas market opportunities continue to
grow with numerous third parties showing strong interest in gas
purchase, pipeline construction and gas transport from the Narrabri
area to regional and national markets, in addition to use for local
and regional gas fired electricity generation.

    On satisfactory completion of the production tests, and subject to
the agreement of Gastar and Eastern Star Gas on pricing and gas
gathering expenditures, production from the wells within the Bohena
Project Area will be connected to the Wilga Park Power Station to
allow the sale of natural gas for electricity generation.

    Gastar Exploration, Ltd. is an exploration and production company
focused on finding and developing natural gas assets in North America
and Australia. The Company pursues a balanced strategy combining
low-risk CBM development with select higher risk, deep natural gas
exploration prospects. Gastar's CBM activities are conducted within
the Powder River Basin of Wyoming and upon the approximate 4 million
acres controlled by Gastar and its Joint Development partners in
Australia's Gunnedah Basin, PEL 238 and Gastar's Gippsland Basins
located in New South Wales and Victoria respectively. The Company owns
and controls development acreage in the Deep Bossier Sand gas play of
East Texas and in the deep Trenton-Black River play in the Appalachian
Basin.

    Safe Harbor Statement and Disclaimer

    This Press Release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Act of 1934. A statement identified by the words
"expects", "projects", "plans", and certain of the other foregoing
statements may be deemed forward-looking statements. Although Gastar
believes that the expectations reflected in such forward-looking
statements are reasonable, these statements involve risks and
uncertainties that may cause actual future activities and results to
be materially different from those suggested or described in this
press release. These include risks inherent in the drilling of natural
gas and oil wells, including risks of fire, explosion, blowout, pipe
failure, casing collapse, unusual or unexpected formation pressures,
environmental hazards, and other operating and production risks
inherent in natural gas and oil drilling and production activities,
which may temporarily or permanently reduce production or cause
initial production or test results to not be indicative of future well
performance or delay the timing of sales or completion of drilling
operations; risks with respect to oil and natural gas prices, a
material decline in which could cause the Company to delay or suspend
planned drilling operations or reduce production levels; and risks
relating to the availability of capital to fund drilling operations
that can be adversely affected by adverse drilling results, production
declines and declines in natural gas and oil prices and other risk
factors described in the Company's Annual Report on Form 10-K, as
filed on March 31, 2006 with the United States Securities and Exchange
Commission at www.sec.gov and on the System for Electronic Document
Analysis and Retrieval (SEDAR) at www.sedar.com.

    The American Stock Exchange and the Toronto Stock Exchange have
not reviewed and do not accept responsibility for the adequacy or
accuracy of this release.


    CONTACT: Gastar Exploration, Ltd., Houston
             J. Russell Porter, 713-739-1800
             Fax: 713-739-0458
             rporter@gastar.com
             www.gastar.com