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. | 65,663,063 | shares of common stock | |
Gastar Exploration USA, Inc. | 750 | shares of common stock |
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Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
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 |
Btu | British thermal unit, typically used in measuring natural gas energy content |
CRP | Central receipt point |
FASB | Financial Accounting Standards Board |
MBbl | One thousand barrels of oil, condensate or NGLs |
MBbl/d | One thousand barrels of oil, condensate or NGLs per day |
Mcf | One thousand cubic feet of natural gas |
Mcf/d | One thousand cubic feet of natural gas per day |
MMBtu/d | One million British thermal units per day |
MMcf | One million cubic feet of natural gas |
MMcf/d | One million cubic feet of natural gas per day |
Mcfe | One thousand cubic feet of natural gas equivalent |
MMcfe | One million cubic feet of natural gas equivalent |
MMcfe/d | One million cubic feet of natural gas equivalent per day |
NGLs | Natural gas liquids |
NYMEX | New York Mercantile Exchange |
psi | Pounds per square inch |
September 30, 2012 | December 31, 2011 | ||||||
(Unaudited) | |||||||
(in thousands, except share data) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 9,103 | $ | 10,647 | |||
Accounts receivable, net of allowance for doubtful accounts of $546 and $551, respectively | 8,277 | 10,706 | |||||
Commodity derivative contracts | 11,446 | 19,385 | |||||
Prepaid expenses | 799 | 1,243 | |||||
Total current assets | 29,625 | 41,981 | |||||
PROPERTY, PLANT AND EQUIPMENT: | |||||||
Natural gas and oil properties, full cost method of accounting: | |||||||
Unproved properties, excluded from amortization | 74,954 | 78,302 | |||||
Proved properties | 623,112 | 514,357 | |||||
Total natural gas and oil properties | 698,066 | 592,659 | |||||
Furniture and equipment | 1,864 | 1,629 | |||||
Total property, plant and equipment | 699,930 | 594,288 | |||||
Accumulated depreciation, depletion and amortization | (479,079 | ) | (308,548 | ) | |||
Total property, plant and equipment, net | 220,851 | 285,740 | |||||
OTHER ASSETS: | |||||||
Restricted cash | — | 50 | |||||
Commodity derivative contracts | 2,685 | 4,130 | |||||
Deferred charges, net | 709 | 535 | |||||
Advances to operators and other assets | 501 | 2,067 | |||||
Total other assets | 3,895 | 6,782 | |||||
TOTAL ASSETS | $ | 254,371 | $ | 334,503 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 11,720 | $ | 17,693 | |||
Revenue payable | 8,811 | 4,137 | |||||
Accrued interest | 136 | 144 | |||||
Accrued drilling and operating costs | 6,923 | 4,647 | |||||
Advances from non-operators | 18,438 | 19,523 | |||||
Commodity derivative contracts | 2,578 | 6,479 | |||||
Commodity derivative premium payable | 1,414 | 4,725 | |||||
Accrued litigation settlement liability | — | 800 | |||||
Other accrued liabilities | 2,407 | 1,723 | |||||
Total current liabilities | 52,427 | 59,871 | |||||
LONG-TERM LIABILITIES: | |||||||
Long-term debt | 70,000 | 30,000 | |||||
Commodity derivative contracts | 2,452 | 1,163 | |||||
Asset retirement obligation | 6,689 | 8,275 | |||||
Total long-term liabilities | 79,141 | 39,438 | |||||
Commitments and contingencies (Note 12) | |||||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock, no par value; unlimited shares authorized; 65,663,063 and 64,706,750 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively | 316,346 | 316,346 | |||||
Additional paid-in capital | 27,618 | 25,376 | |||||
Accumulated deficit | (297,721 | ) | (133,919 | ) | |||
Total shareholders' equity | 46,243 | 207,803 | |||||
Non-controlling interest: | |||||||
Preferred stock of subsidiary, aggregate liquidation preference $98,674 and $34,114 at September 30, 2012 and December 31, 2011, respectively | 76,560 | 27,391 | |||||
Total equity | 122,803 | 235,194 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 254,371 | $ | 334,503 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 8,906 | $ | 8,613 | $ | 22,499 | $ | 25,184 | |||||||
Oil | 3,457 | 736 | 7,748 | 2,707 | |||||||||||
NGLs | 2,483 | 239 | 6,394 | 239 | |||||||||||
Total natural gas, oil and NGLs revenues | 14,846 | 9,588 | 36,641 | 28,130 | |||||||||||
Unrealized hedge gain (loss) | (5,403 | ) | 2,424 | (4,123 | ) | 1,027 | |||||||||
Total revenues | 9,443 | 12,012 | 32,518 | 29,157 | |||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 560 | 157 | 1,494 | 384 | |||||||||||
Lease operating expenses | 780 | 2,363 | 4,754 | 5,945 | |||||||||||
Transportation, treating and gathering | 1,305 | 1,128 | 3,715 | 3,354 | |||||||||||
Depreciation, depletion and amortization | 7,135 | 3,694 | 19,744 | 10,797 | |||||||||||
Impairment of natural gas and oil properties | 78,054 | — | 150,787 | — | |||||||||||
Accretion of asset retirement obligation | 101 | 138 | 284 | 392 | |||||||||||
General and administrative expense | 2,951 | 3,100 | 9,263 | 8,576 | |||||||||||
Litigation settlement expense | — | — | 1,250 | — | |||||||||||
Total expenses | 90,886 | 10,580 | 191,291 | 29,448 | |||||||||||
INCOME (LOSS) FROM OPERATIONS | (81,443 | ) | 1,432 | (158,773 | ) | (291 | ) | ||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (30 | ) | (24 | ) | (86 | ) | (87 | ) | |||||||
Investment income and other | 2 | 2 | 6 | 7 | |||||||||||
Foreign transaction loss | (2 | ) | (8 | ) | (2 | ) | (5 | ) | |||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | (81,473 | ) | 1,402 | (158,855 | ) | (376 | ) | ||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET INCOME (LOSS) | (81,473 | ) | 1,402 | (158,855 | ) | (376 | ) | ||||||||
Dividend on preferred stock attributable to non-controlling interest | 1,984 | 388 | 4,947 | 419 | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO GASTAR EXPLORATION LTD. | $ | (83,457 | ) | $ | 1,014 | $ | (163,802 | ) | $ | (795 | ) | ||||
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO GASTAR EXPLORATION LTD. COMMON SHAREHOLDERS: | |||||||||||||||
Basic | $ | (1.31 | ) | $ | 0.02 | $ | (2.58 | ) | $ | (0.01 | ) | ||||
Diluted | $ | (1.31 | ) | $ | 0.02 | $ | (2.58 | ) | $ | (0.01 | ) | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
Basic | 63,601,645 | 63,238,069 | 63,494,224 | 62,901,860 | |||||||||||
Diluted | 63,601,645 | 63,842,098 | 63,494,224 | 62,901,860 |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (158,855 | ) | $ | (376 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 19,744 | 10,797 | |||||
Impairment of natural gas and oil properties | 150,787 | — | |||||
Stock-based compensation | 2,575 | 2,003 | |||||
Unrealized hedge (gain) loss | 4,123 | (1,027 | ) | ||||
Realized gain on derivative contracts | (662 | ) | (1,303 | ) | |||
Amortization of deferred financing costs | 157 | 193 | |||||
Accretion of asset retirement obligation | 284 | 392 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 2,429 | (4,199 | ) | ||||
Commodity derivative contracts | — | (54 | ) | ||||
Prepaid expenses | 345 | 765 | |||||
Accounts payable and accrued liabilities | 129 | 774 | |||||
Net cash provided by operating activities | 21,056 | 7,965 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development and purchase of natural gas and oil properties | (100,606 | ) | (58,672 | ) | |||
Advances to operators | (4,282 | ) | (3,299 | ) | |||
(Use of proceeds) proceeds from non-operators | (1,085 | ) | 27,794 | ||||
Purchase of furniture and equipment | (235 | ) | (346 | ) | |||
Net cash used in investing activities | (106,208 | ) | (34,523 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from revolving credit facility | 70,000 | 41,000 | |||||
Repayment of revolving credit facility | (30,000 | ) | (31,000 | ) | |||
Proceeds from issuance of preferred stock, net of issuance costs | 49,169 | 16,855 | |||||
Dividend on preferred stock attributable to non-controlling interest | (4,947 | ) | (419 | ) | |||
Deferred financing charges | (332 | ) | (13 | ) | |||
Other | (282 | ) | (336 | ) | |||
Net cash provided by financing activities | 83,608 | 26,087 | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,544 | ) | (471 | ) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 10,647 | 7,439 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 9,103 | $ | 6,968 |
September 30, 2012 | December 31, 2011 | ||||||
(Unaudited) | |||||||
(in thousands, except share data) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 9,009 | $ | 10,595 | |||
Accounts receivable, net of allowance for doubtful accounts of $546 and $551, respectively | 8,276 | 10,703 | |||||
Commodity derivative contracts | 11,446 | 19,385 | |||||
Prepaid expenses | 774 | 1,088 | |||||
Total current assets | 29,505 | 41,771 | |||||
PROPERTY, PLANT AND EQUIPMENT: | |||||||
Natural gas and oil properties, full cost method of accounting: | |||||||
Unproved properties, excluded from amortization | 74,954 | 78,302 | |||||
Proved properties | 623,104 | 514,349 | |||||
Total natural gas and oil properties | 698,058 | 592,651 | |||||
Furniture and equipment | 1,864 | 1,629 | |||||
Total property, plant and equipment | 699,922 | 594,280 | |||||
Accumulated depreciation, depletion and amortization | (479,072 | ) | (308,541 | ) | |||
Total property, plant and equipment, net | 220,850 | 285,739 | |||||
OTHER ASSETS: | |||||||
Restricted cash | — | 25 | |||||
Commodity derivative contracts | 2,685 | 4,130 | |||||
Deferred charges, net | 709 | 535 | |||||
Advances to operators and other assets | 501 | 2,067 | |||||
Total other assets | 3,895 | 6,757 | |||||
TOTAL ASSETS | $ | 254,250 | $ | 334,267 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 11,695 | $ | 17,682 | |||
Revenue payable | 8,811 | 4,137 | |||||
Accrued interest | 136 | 144 | |||||
Accrued drilling and operating costs | 6,923 | 4,647 | |||||
Advances from non-operators | 18,438 | 19,523 | |||||
Commodity derivative contracts | 2,578 | 6,479 | |||||
Commodity derivative premium payable | 1,414 | 4,725 | |||||
Accrued litigation settlement liability | — | 800 | |||||
Other accrued liabilities | 2,180 | 1,654 | |||||
Total current liabilities | 52,175 | 59,791 | |||||
LONG-TERM LIABILITIES: | |||||||
Long-term debt | 70,000 | 30,000 | |||||
Commodity derivative contracts | 2,452 | 1,163 | |||||
Asset retirement obligation | 6,682 | 8,268 | |||||
Due to parent | 30,810 | 27,432 | |||||
Total long-term liabilities | 109,944 | 66,863 | |||||
Commitments and contingencies (Note 12) | |||||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 3,946,950 and 1,364,543 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively, with liquidation preference of $25.00 per share | 39 | 14 | |||||
Common stock, no par value; 1,000 shares authorized; 750 shares issued and outstanding | 237,431 | 239,431 | |||||
Additional paid-in capital | 76,521 | 27,377 | |||||
Accumulated deficit | (221,860 | ) | (59,209 | ) | |||
Total stockholders' equity | 92,131 | 207,613 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 254,250 | $ | 334,267 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 8,906 | $ | 8,613 | $ | 22,499 | $ | 25,184 | |||||||
Oil | 3,457 | 736 | 7,748 | 2,707 | |||||||||||
NGLs | 2,483 | 239 | 6,394 | 239 | |||||||||||
Total natural gas, oil and NGLs revenues | 14,846 | 9,588 | 36,641 | 28,130 | |||||||||||
Unrealized hedge gain (loss) | (5,403 | ) | 2,424 | (4,123 | ) | 1,027 | |||||||||
Total revenues | 9,443 | 12,012 | 32,518 | 29,157 | |||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 560 | 157 | 1,494 | 384 | |||||||||||
Lease operating expenses | 780 | 2,363 | 4,754 | 5,944 | |||||||||||
Transportation, treating and gathering | 1,305 | 1,128 | 3,715 | 3,354 | |||||||||||
Depreciation, depletion and amortization | 7,135 | 3,694 | 19,744 | 10,797 | |||||||||||
Impairment of natural gas and oil properties | 78,054 | — | 150,787 | — | |||||||||||
Accretion of asset retirement obligation | 101 | 138 | 284 | 392 | |||||||||||
General and administrative expense | 2,481 | 2,879 | 8,105 | 7,992 | |||||||||||
Litigation settlement expense | — | — | 1,250 | — | |||||||||||
Total expenses | 90,416 | 10,359 | 190,133 | 28,863 | |||||||||||
INOME (LOSS) FROM OPERATIONS | (80,973 | ) | 1,653 | (157,615 | ) | 294 | |||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (30 | ) | (24 | ) | (87 | ) | (86 | ) | |||||||
Investment income and other | (5 | ) | (1 | ) | (4 | ) | 96 | ||||||||
Foreign transaction gain (loss) | 1 | (5 | ) | 2 | (2 | ) | |||||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | (81,007 | ) | 1,623 | (157,704 | ) | 302 | |||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET INCOME (LOSS) | (81,007 | ) | 1,623 | (157,704 | ) | 302 | |||||||||
Dividend on preferred stock | 1,984 | 388 | 4,947 | 419 | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDER | $ | (82,991 | ) | $ | 1,235 | $ | (162,651 | ) | $ | (117 | ) |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | (157,704 | ) | $ | 302 | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 19,744 | 10,797 | |||||
Impairment of natural gas and oil properties | 150,787 | — | |||||
Stock-based compensation | 2,575 | 2,003 | |||||
Unrealized hedge (gain) loss | 4,123 | (1,027 | ) | ||||
Realized gain on derivative contracts | (662 | ) | (1,303 | ) | |||
Amortization of deferred financing costs | 157 | 193 | |||||
Accretion of asset retirement obligation | 284 | 392 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 2,427 | (4,193 | ) | ||||
Commodity derivative contracts | — | (54 | ) | ||||
Prepaid expenses | 215 | 601 | |||||
Accounts payable and accrued liabilities | (43 | ) | 675 | ||||
Net cash provided by operating activities | 21,903 | 8,386 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development and purchase of natural gas and oil properties | (100,606 | ) | (58,672 | ) | |||
Advances to operators | (4,282 | ) | (3,299 | ) | |||
(Use of proceeds) proceeds from non-operators | (1,085 | ) | 27,794 | ||||
Purchase of furniture and equipment | (235 | ) | (346 | ) | |||
Net cash used in investing activities | (106,208 | ) | (34,523 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from revolving credit facility | 70,000 | 41,000 | |||||
Repayment of revolving credit facility | (30,000 | ) | (31,000 | ) | |||
Proceeds from issuance of preferred stock, net of issuance costs | 49,169 | 16,855 | |||||
Dividend on preferred stock | (4,947 | ) | (419 | ) | |||
Deferred financing charges | (332 | ) | (13 | ) | |||
Dividend to parent, net | (1,196 | ) | (836 | ) | |||
Other | 25 | 100 | |||||
Net cash provided by financing activities | 82,719 | 25,687 | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,586 | ) | (450 | ) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 10,595 | 7,401 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 9,009 | $ | 6,951 |
1. | Description of Business |
2. | Summary of Significant Accounting Policies |
3. | Property, Plant and Equipment |
September 30, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Unproved properties, excluded from amortization: | |||||||
Drilling in progress costs | $ | 3,155 | $ | 3,958 | |||
Acreage acquisition costs | 67,590 | 68,217 | |||||
Capitalized interest | 4,209 | 6,127 | |||||
Total unproved properties excluded from amortization | $ | 74,954 | $ | 78,302 |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Average price per Mcfe | $ | 3.69 | $ | 4.59 |
4. | Long-Term Debt |
• | Restrictions on liens, incurrence of other indebtedness without lenders' consent and 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 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 Revolving Credit Facility) of the Parent. |
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 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 September 30, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 9,103 | $ | — | $ | — | $ | 9,103 | |||||||
Commodity derivative contracts | — | — | 14,131 | 14,131 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivative contracts | — | — | (5,030 | ) | (5,030 | ) | |||||||||
Total | $ | 9,103 | $ | — | $ | 9,101 | $ | 18,204 | |||||||
Fair value as of December 31, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 10,647 | $ | — | $ | — | $ | 10,647 | |||||||
Restricted cash | 50 | — | — | 50 | |||||||||||
Commodity derivative contracts | — | — | 23,515 | 23,515 | |||||||||||
Liabilities: | |||||||||||||||
Commodity derivative contracts | — | — | (7,642 | ) | (7,642 | ) | |||||||||
Total | $ | 10,697 | $ | — | $ | 15,873 | $ | 26,570 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Balance at beginning of period | $ | 15,460 | $ | 13,286 | $ | 15,873 | $ | 15,199 | |||||||
Total gains (losses) (realized or unrealized): | |||||||||||||||
included in earnings | (2,045 | ) | 4,813 | 4,594 | 7,596 | ||||||||||
included in other comprehensive income | — | — | — | — | |||||||||||
Purchases | — | — | — | — | |||||||||||
Issuances | — | — | — | — | |||||||||||
Settlements (1) | (4,314 | ) | (2,853 | ) | (11,366 | ) | (7,549 | ) | |||||||
Transfers in and (out) of Level 3 | — | — | — | — | |||||||||||
Balance at end of period | $ | 9,101 | $ | 15,246 | $ | 9,101 | $ | 15,246 | |||||||
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 September 30, 2012 and 2011 | $ | (5,403 | ) | $ | 2,424 | $ | (4,123 | ) | $ | 1,027 |
(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) | ||||||||||||||||||||||||||||
2012 | Put spread | 16,566 | 1,524,040 | $ | — | $ | 6.00 | $ | 4.00 | $ | — | $ | — | |||||||||||||||
2012 | Costless three-way collar | 7,391 | 679,960 | — | 5.73 | 4.00 | — | 6.88 | ||||||||||||||||||||
2012 | Call spread | 2,000 | 184,000 | — | — | — | 4.00 | 4.50 | ||||||||||||||||||||
2012 | Basis - HSC (1) | 5,000 | 460,000 | (0.08 | ) | — | — | — | — | |||||||||||||||||||
2013 | Call spread | 2,500 | 912,500 | — | — | — | 4.75 | 5.25 | ||||||||||||||||||||
2013 | Costless three-way collar | 2,500 | 912,500 | — | 5.00 | 4.00 | — | 6.45 | ||||||||||||||||||||
2013 | Protective spread | 8,000 | 2,920,000 | 4.91 | — | 3.23 | — | — | ||||||||||||||||||||
2013 (2) | Protective spread | 4,025 | 853,200 | 3.70 | — | 3.00 | — | — | ||||||||||||||||||||
2013 | Basis - HSC (1) | 4,000 | 1,460,000 | (0.11 | ) | — | — | — | — | |||||||||||||||||||
2014 | Short calls | 2,500 | 912,500 | — | — | — | — | 6.00 | ||||||||||||||||||||
2014 | Costless three-way collar | 3,000 | 1,095,000 | — | 4.00 | 3.00 | — | 4.36 | ||||||||||||||||||||
2014 | Costless three-way collar | 5,000 | 1,825,000 | — | 3.75 | 3.00 | — | 4.55 |
(1) | East Houston-Katy - Houston Ship Channel |
(2) | For the period January to July 2013 |
Settlement Period | Derivative Instrument | Average Daily Volume (1) | Total of Notional Volume | Base Fixed Price | Floor (Long) | Short Put | Call (Long) | Ceiling (Short) | ||||||||||||||||||||
(in Bbls) | ||||||||||||||||||||||||||||
2012 | Fixed price swap | 600 | 55,200 | $ | 102.01 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
2013 | Put spread | 400 | 146,000 | — | 100.75 | 70.00 | — | — | ||||||||||||||||||||
2014 | Costless three-way collar | 200 | 73,000 | — | 90.00 | 70.00 | — | 106.20 |
(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 | Floor (Long) | Short Put | Call (Long) | Ceiling (Short) | ||||||||||||||||||||
(in Bbls) | ||||||||||||||||||||||||||||
2012 | Fixed price swap | 250 | 23,000 | $ | 49.59 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
2013 | Fixed price swap | 175 | 63,750 | 42.06 | — | — | — | — |
Fair Values of Derivative Instruments Derivative Assets (Liabilities) | |||||||||
Fair Value | |||||||||
Balance Sheet Location | September 30, 2012 | December 31, 2011 | |||||||
(in thousands) | |||||||||
Derivatives not designated as hedging instruments | |||||||||
Commodity derivative contracts | Current assets | $ | 11,446 | $ | 19,385 | ||||
Commodity derivative contracts | Other assets | 2,685 | 4,130 | ||||||
Commodity derivative contracts | Current liabilities | (2,578 | ) | (6,479 | ) | ||||
Commodity derivative contracts | Long-term liabilities | (2,452 | ) | (1,163 | ) | ||||
Total derivatives not designated as hedging instruments | $ | 9,101 | $ | 15,873 | |||||
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 | September 30, 2012 | September 30, 2011 | |||||||
(in thousands) | |||||||||
Derivatives not designated as hedging instruments | |||||||||
Commodity derivative contracts | Natural gas, oil and NGLs revenues | $ | 3,358 | $ | 2,389 | ||||
Commodity derivative contracts | Unrealized hedge gain (loss) | (5,403 | ) | 2,424 | |||||
Total | $ | (2,045 | ) | $ | 4,813 | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | |||||||||
Amount of Gain (Loss) Recognized in Income on Derivatives For the Nine Months Ended | |||||||||
Location of Gain (Loss) Recognized in Income on Derivatives | September 30, 2012 | September 30, 2011 | |||||||
(in thousands) | |||||||||
Derivatives not designated as hedging instruments | |||||||||
Commodity derivative contracts | Natural gas, oil and NGLs revenues | $ | 8,717 | $ | 6,569 | ||||
Commodity derivative contracts | Unrealized hedge gain (loss) | (4,123 | ) | 1,027 | |||||
Total | $ | 4,594 | $ | 7,596 | |||||
7. | Capital Stock |
For the Three Months Ended September 30, 2012 | For the Nine Months Ended September 30, 2012 | ||||
Other share issuances: | |||||
Restricted common shares granted | — | 1,116,935 | |||
Restricted common shares vested | 127,250 | 496,299 | |||
Stock options exercised | — | 3,000 | |||
Common shares forfeited (1) | 34,111 | 139,101 | |||
Common shares canceled | 26,195 | 26,871 |
(1) | Represents common shares forfeited in connection with the payment of estimated withholding taxes on restricted common shares that vested and with the payment of the exercise price and estimated withholding taxes on option exercises during the period. |
Redemption Date | Redemption Price | ||
On or after June 23, 2012 and prior to June 23, 2013 | $ | 25.50 | |
On or after June 23, 2013 and prior to June 23, 2014 | $ | 25.25 | |
On or after June 23, 2014 | $ | 25.00 |
8. | Interest Expense |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
Interest expense: | |||||||||||||||
Cash and accrued | $ | 549 | $ | 180 | $ | 1,272 | $ | 559 | |||||||
Amortization of deferred financing costs | 60 | 65 | 157 | 193 | |||||||||||
Capitalized interest | (579 | ) | (221 | ) | (1,343 | ) | (665 | ) | |||||||
Total interest expense | $ | 30 | $ | 24 | $ | 86 | $ | 87 |
10. | Income Taxes |
11. | Earnings per Share |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands, except per share and share data) | |||||||||||||||
Net income (loss) attributable to Gastar Exploration Ltd. | $ | (83,457 | ) | $ | 1,014 | $ | (163,802 | ) | $ | (795 | ) | ||||
Weighted average common shares outstanding - basic | 63,601,645 | 63,238,069 | 63,494,224 | 62,901,860 | |||||||||||
Incremental shares from unvested restricted shares | — | 551,687 | — | — | |||||||||||
Incremental shares from outstanding stock options | — | 52,342 | — | — | |||||||||||
Weighted average common shares outstanding - diluted | 63,601,645 | 63,842,098 | 63,494,224 | 62,901,860 | |||||||||||
Net income (loss) per common share attributable to Gastar Exploration Ltd. Common Shareholders: | |||||||||||||||
Basic | $ | (1.31 | ) | $ | 0.02 | $ | (2.58 | ) | $ | (0.01 | ) | ||||
Diluted | $ | (1.31 | ) | $ | 0.02 | $ | (2.58 | ) | $ | (0.01 | ) | ||||
Common shares excluded from denominator as anti-dilutive: | |||||||||||||||
Unvested restricted shares | 1,878,355 | 500 | 1,654,439 | 149,960 | |||||||||||
Stock options | 979,725 | 838,200 | 926,271 | 857,825 | |||||||||||
Warrants | — | 2,000,000 | — | 2,000,000 | |||||||||||
Total | 2,858,080 | 2,838,700 | 2,580,710 | 3,007,785 |
12. | Commitments and Contingencies |
13. | Statement of Cash Flows – Supplemental Information |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
Cash paid for interest | $ | 1,280 | $ | 556 | |||
Non-cash transactions: | |||||||
Capital expenditures excluded from accounts payable and accrued drilling costs | 724 | (99 | ) | ||||
Capital expenditures excluded from prepaid expenses | 99 | — | |||||
Asset retirement obligation included in natural gas and oil properties | 229 | 486 | |||||
Asset retirement obligation assigned to operator | (2,099 | ) | — | ||||
Application of advances to operators | 5,848 | 2,770 |
• | financial position; |
• | business strategy and budgets; |
• | anticipated capital expenditures; |
• | drilling of wells, including the anticipated scheduling and results of such operations; |
• | natural gas and oil reserves; |
• | timing and amount of future production of natural gas, NGLs, oil and condensate; |
• | operating costs and other expenses; |
• | cash flow and anticipated liquidity; |
• | prospect development; and |
• | property acquisitions and sales. |
• | the supply and demand for natural gas, oil and NGLs; |
• | low and/or declining prices for natural gas, oil and NGLs; |
• | price volatility of natural gas, 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) | Status | ||||||
Corley | 4.0 | 1.6 | 40.8% | 35.4% | 4,900 | Producing | ||||||
Simms | 3.0 | 1.5 | 50.0% | 43.2% | 5,000 | Producing | ||||||
Hall | 3.0 | 1.2 | 40.0% | 34.7% | 4,400 | Producing | ||||||
Hendrickson | 5.0 | 2.0 | 40.0% | 34.7% | 4,700 | Producing | ||||||
Accettolo | 3.0 | 1.5 | 50.0% | 40.2% | 4,600 | Producing | ||||||
Burch Ridge | 5.0 | 2.5 | 50.0% | 41.5% | 5,800 | Producing | ||||||
Wayne | 4.0 | 2.0 | 50.0% | 40.6% | 5,700 | Producing | ||||||
Wengerd | 2.0 | 0.9 | 44.5% | 37.7% | 5,200 | Shut-in (2) | ||||||
29.0 | 13.2 |
(1) | Average well lateral length approximates the actual average well lateral length. |
(2) | The Wengerd 1H and 7H wells were shut-in to accommodate the current drilling of five additional Wengerd horizontal wells on the pad, discussed in further detail below. We anticipate that these wells will be returned to production during December 2012 when the five additional Wengerd wells are turned to production. |
Pad | Gross Well Count | Net Well Count | Working Interest | Estimated Net Revenue Interest | Average Lateral Length (in feet) (1) | Status | Estimated Production Date | |||||||
Wengerd | 5.0 | 2.2 | 44.5% | 37.7% | 5,000 | Awaiting fracture stimulation/completion | Early December 2012 | |||||||
Lily | 4.0 | 2.0 | 50.0% | 40.6% | 5,100 | One drilled to total depth; three drilled to kick off point | Late December 2012 | |||||||
Shields | 9.0 | 4.5 | 50.0% | 42.0% | 2,800 | Eight drilled to kick off point; one drilled to intermediate casing point | First and Third Quarters 2013 | |||||||
18.0 | 8.7 |
(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. |
Pad | Gross Well Count | Net Well Count | Working Interest | Estimated Net Revenue Interest | Average Lateral Length (in feet) (1) | Status | Estimated Production Date | |||||||
Wengerd | 5.0 | 2.2 | 44.5% | 37.7% | 5,000 | Fracture stimulation completed; completion operations in progress | Early December 2012 | |||||||
Lily | 4.0 | 2.0 | 50.0% | 40.6% | 5,100 | Fracture stimulation/completion operations to begin mid-November 2012 | Late December 2012 | |||||||
Addison | 5.0 | 2.5 | 50.0% | 41.7% | 5,000 | Currently drilling top-holes | Second Quarter 2013 | |||||||
Shields | 10.0 | 5.0 | 50.0% | 42.0% | 2,800 | Eight drilled to kick off point; one drilled to intermediate casing point | First and Third Quarters 2013 | |||||||
24.0 | 11.7 |
(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. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Production: | |||||||||||||||
Natural gas (MMcf) | 2,783 | 1,837 | 7,584 | 5,437 | |||||||||||
Oil (MBbl) | 42 | 10 | 106 | 31 | |||||||||||
NGLs (MBbl) | 77 | 5 | 186 | 5 | |||||||||||
Total production (MMcfe) | 3,493 | 1,921 | 9,339 | 5,649 | |||||||||||
Total (Mmcfe/d) | 38.0 | 20.9 | 34.1 | 20.7 | |||||||||||
Average sales price per unit: | |||||||||||||||
Natural gas per Mcf, excluding impact of realized hedging activities | $ | 2.27 | $ | 3.37 | $ | 1.99 | $ | 3.41 | |||||||
Natural gas per Mcf, including impact of realized hedging activities | 3.20 | 4.69 | 2.97 | 4.63 | |||||||||||
Oil per Bbl, excluding impact of realized hedging activities | 76.54 | 77.64 | 68.93 | 87.91 | |||||||||||
Oil per Bbl, including impact of realized hedging activities | 83.05 | 77.64 | 72.93 | 87.91 | |||||||||||
NGLs per Bbl, excluding impact of realized hedging activities | 25.26 | 52.93 | 29.02 | 52.93 | |||||||||||
NGLs per Bbl, including impact of realized hedging activities | 32.40 | 52.93 | 34.31 | 52.93 | |||||||||||
Average sales price per Mcfe, excluding impact of realized hedging activities | $ | 3.28 | $ | 3.73 | $ | 2.98 | $ | 3.80 | |||||||
Average sales price per Mcfe, including impact of realized hedging activities | 4.25 | 4.99 | 3.92 | 4.98 | |||||||||||
Selected operating expenses (in thousands): | |||||||||||||||
Production taxes | $ | 560 | $ | 157 | $ | 1,494 | $ | 384 | |||||||
Lease operating expenses | 780 | 2,363 | 4,754 | 5,945 | |||||||||||
Transportation, treating and gathering | 1,305 | 1,128 | 3,715 | 3,354 | |||||||||||
Depreciation, depletion and amortization | 7,135 | 3,694 | 19,744 | 10,797 | |||||||||||
Impairment of natural gas and oil properties | 78,054 | — | 150,787 | — | |||||||||||
General and administrative expense | 2,951 | 3,100 | 9,263 | 8,576 | |||||||||||
Selected operating expenses per Mcfe: | |||||||||||||||
Production taxes | $ | 0.16 | $ | 0.08 | $ | 0.16 | $ | 0.07 | |||||||
Lease operating expenses | 0.22 | 1.23 | 0.51 | 1.05 | |||||||||||
Transportation, treating and gathering | 0.37 | 0.59 | 0.40 | 0.59 | |||||||||||
Depreciation, depletion and amortization | 2.04 | 1.92 | 2.11 | 1.91 | |||||||||||
General and administrative expense | 0.84 | 1.61 | 0.99 | 1.52 |
• | 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. |
Exhibit Number | Description | |
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 refernce 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 refernce 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). | |
10.1† | Amended and Restated Collateral Agency and Intercreditor Agreement dated August 27, 2012, by and among BP Energy Company, Shell Energy North America (US), L.P., Gastar Exploration USA, Inc., Gastar Exploration Ltd., each of the Guarantors party thereto and Amegy Bank National Association. | |
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 | |
101.LAB†† | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE†† | XBRL Taxonomy Extension Presentation Linkbase Document |
GASTAR EXPLORATION LTD. | |||
Date: | November 7, 2012 | By: | /S/ J. RUSSELL PORTER |
J. Russell Porter | |||
President and Chief Executive Officer | |||
(Duly authorized officer and principal executive officer) |
Date: | November 7, 2012 | By: | /S/ MICHAEL A. GERLICH |
Michael A. Gerlich | |||
Vice President and Chief Financial Officer | |||
(Duly authorized officer and principal financial and accounting officer) |
GASTAR EXPLORATION USA, INC. | |||
Date: | November 7, 2012 | By: | /S/ J. RUSSELL PORTER |
J. Russell Porter | |||
President | |||
(Duly authorized officer and principal executive officer) |
Date: | November 7, 2012 | By: | /S/ MICHAEL A. GERLICH |
Michael A. Gerlich | |||
Secretary and Treasurer | |||
(Duly authorized officer and principal financial and accounting officer) |
Exhibit Number | Description | |
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 refernce 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 refernce 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). | |
10.1† | Amended and Restated Collateral Agency and Intercreditor Agreement dated August 27, 2012, by and among BP Energy Company, Shell Energy North America (US), L.P., Gastar Exploration USA, Inc., Gastar Exploration Ltd., each of the Guarantors party thereto and Amegy Bank National Association. | |
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 | |
101.LAB†† | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE†† | XBRL Taxonomy Extension Presentation Linkbase Document |
1. | First Lien Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated November 29, 2007 from Gastar Exploration Texas, LP to W. Bryan Chapman, Trustee for the benefit of Amegy Bank National Association filed and recorded as follows: | |
JURISDICTION | FILING DATA | |
TEXAS | ||
Leon County | Filed December 10, 2007 under Document No. 00351068, Volume 1343, Page 1, Official Records | |
Robertson County | Filed December 6, 2007 under Document No. 20077286, Volume 1014, Page 1, Official Records | |
as amended and ratified by that certain Ratification of and Amendment to First Lien Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective March 31, 2008, by and between Gastar Exploration Texas, LP and Amegy Bank National Association, as Agent, filed and recorded as follows: | ||
JURISDICTION | FILING DATA | |
TEXAS | ||
Leon County | Filed May 16, 2008 under Document No. 00355160, Volume 1361, Pages 748-755, Official Records Book |
Robertson County | Filed May 15, 2008 under Document No. 20083555, Volume 1035, Pages 499-506, Official Records Book | ||
as amended and restated by the document listed as 2 below, | |||
and as amended and ratified by that certain Amendment to and Ratification of Amended and Restated First Lien Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 by and between Gastar Exploration Texas, LP and Amegy Bank National Association, as Collateral Agent. | |||
2. | Amended and Restated First Lien Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated February 16, 2009 from Gastar Exploration Texas, LP to W. Bryan Chapman, Trustee for the benefit of Amegy Bank National Association, as Collateral Agent; filed and recorded as follows: | ||
as amended and ratified by that certain Amendment to and Ratification of Amended and Restated First Lien Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 by and between Gastar Exploration Texas, LP and Amegy Bank National Association, as Collateral Agent. | |||
JURISDICTION | FILING DATA | ||
TEXAS | |||
Leon County | Filed February 18, 2009 under Document No. 00361105, Volume 1388, Page 562, Official Records | ||
Robertson County | Filed February 18, 2009 under Document No. 20090791, Volume 1066, Page 84 | ||
3. | First Lien Credit Line Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated February 16, 2009 from Gastar Exploration USA, Inc. to William M. Herlihy, Trustee for the benefit of Amegy Bank National Association, as Collateral Agent; filed and recorded as follows: | ||
JURISDICTION | FILING DATA | ||
WEST VIRGINIA | |||
Doddridge County | Recorded February 20, 2009 as Instrument No. 94514, in Trust Deed Book 177, Page 387 | ||
Gilmer County | Recorded February 20, 2009 as Instrument No. 2601, in Trust Deed Book 163, Page 87 | ||
Harrison County | Recorded February 20, 2009 as Instrument No. 200900005682, in Trust Deed Book 1166, Page 100 | ||
Lewis County | Recorded February 20, 2009 in Trust Deed Book No. 366, Page 1 | ||
Marion County | Recorded February 24, 2009 as Instrument No. 200900002210, in Trust Deed Book 947, Page 112 | ||
Marshall County | Recorded February 20, 2009 as Instrument No. 1264326, in Trust Deed Book 840, Page 215 | ||
Monongalia County | Recorded February 20, 2009 as Instrument No. 312456, in Trust Deed Book 1677, Page 85 | ||
Pleasants County | Recorded February 20, 2009 as Instrument No. 584091, in Trust Deed Book 137, Page 309 | ||
Wetzel County | Recorded February 20, 2009 as Instrument No. 88365, in Trust Deed Book 342, Page 37 | ||
as amended and ratified by that certain First Amendment to and Ratification of First Lien Credit Line Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 by and between Gastar Exploration USA, Inc. and Amegy Bank National Association, as Collateral Agent. | |||
4. | First Lien Credit Line Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 from Gastar Exploration USA, Inc. in favor of William M. Herlihy, Trustee for the benefit of Amegy Bank National Association, as Collateral Agent. | ||
5. | First Lien Open-End Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated February 16, 2009 from Gastar Exploration USA, Inc. to Amegy Bank National Association, as Collateral Agent; filed and recorded as follows: | ||
JURISDICTION | FILING DATA | ||
PENNSYLVANIA | |||
Fayette County | Filed February 20, 2009 under Instrument No. 200900001771, Book 3086, Page 1057, Official Records | ||
Greene County | Filed February 20, 2009 under Document No. 200900000748, Book 405, Page 115 | ||
Somerset County | Filed February 20, 2009 under Instrument No. 2009001443, Book 2097, Page 1 | ||
as amended and ratified by that certain First Amendment to and Ratification of First Lien Open-End Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 by and between Gastar Exploration USA, Inc. and Amegy Bank National Association, as Collateral Agent. | |||
6. | First Lien Open-End Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated effective August 27, 2012 from Gastar Exploration USA, Inc. to Amegy Bank National Association, as Collateral Agent. | ||
7. | Amended and Restated First Lien Security Agreement dated February 16, 2009 from Gastar Exploration USA, Inc., Gastar Exploration New South Wales, Inc., Gastar Exploration Victoria, Inc., Gastar Exploration Texas, Inc., Gastar Exploration Texas LLC and Gastar Exploration Texas, LP in favor of Amegy Bank National Association, as Collateral Agent, as amended and ratified by that certain First Amendment to Amended and Restated First Lien Security Agreement dated effective August 27, 2012 by and among Gastar Exploration USA, Inc., Gastar Exploration New South Wales, Inc., Gastar Exploration Victoria, Inc., Gastar Exploration Texas, Inc., Gastar Exploration Texas LLC, Gastar Exploration Texas, LP and Amegy Bank National Association, as Collateral Agent. | ||
8. | Amended and Restated First Lien Security Agreement (Pledge) dated February 16, 2009 from Gastar Exploration Ltd. in favor of Amegy Bank National Association, as Collateral Agent, as amended and ratified by that certain First Amendment to Amended and Restated First Lien Security Agreement (Pledge) dated effective August 27, 2012 by and between Gastar Exploration Ltd. and Amegy Bank National Association, as Collateral Agent. |
9. | Amended and Restated First Lien Security Agreement (Pledge) dated February 16, 2009 from Gastar Exploration USA, Inc. in favor of Amegy Bank National Association, as Collateral Agent, as amended and ratified by that certain First Amendment to First Lien Security Agreement (Pledge) dated effective August 27, 2012 by and between Gastar Exploration USA, Inc. and Amegy Bank National Association, as Collateral Agent. | ||
10. | Amended and Restated First Lien Collateral Assignment of Membership Interest and Partnership Interest (Security Agreement) dated February 16, 2009 from Gastar Exploration Texas, Inc. in favor of Amegy Bank National Association, as Collateral Agent, as amended and ratified by that certain First Amendment to First Lien Collateral Assignment of Membership Interest and Partnership Interest (Security Agreement) dated effective August 27, 2012 by and between Gastar Exploration Texas, Inc. and Amegy Bank National Association, as Collateral Agent. | ||
11. | Amended and Restated First Lien Collateral Assignment of Partnership Interest (Security Agreement) dated February 16, 2009 from Gastar Exploration Texas LLC in favor of Amegy Bank National Association, as Collateral Agent, as amended and ratified by that certain First Amendment to First Lien Collateral Assignment of Partnership Interest (Security Agreement) dated effective August 27, 2012 by and between Gastar Exploration Texas LLC and Amegy Bank National Association, as Collateral Agent. | ||
12. | Amended and Restated First Lien Guaranty dated effective August 27, 2012 by Gastar Exploration, Ltd., Gastar Exploration New South Wales, Inc., Gastar Exploration Victoria, Inc., Gastar Exploration Texas, Inc., Gastar Exploration Texas LLC and Gastar Exploration Texas, LP in favor of Amegy Bank National Association, as Collateral Agent. |
NEW APPROVED HEDGE COUNTERPARTY: | [ ] By: Name: Title: |
BORROWER: GUARANTORS: | GASTAR EXPLORATION USA, INC. By: Name: Title: GASTAR EXPLORATION LTD. By: Name: Title: GASTAR EXPLORATION NEW SOUTH WALES, INC. By: Name: Title: GASTAR EXPLORATION VICTORIA, INC. By: Name: Title: GASTAR EXPLORATION TEXAS, INC. By: Name: Title: |
GASTAR EXPLORATION TEXAS, LP By: Name: Title: GASTAR EXPLORATION TEXAS LLC By: Name: Title: |
AGENT: | AMEGY BANK NATIONAL ASSOCIATION, as Agent By: Name: Title: |
COLLATERAL AGENT: | AMEGY BANK NATIONAL ASSOCIATION, as Collateral Agent By: Name: Title: |
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; |
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 |
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 and Chief Executive Officer |
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; |
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 |
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 |
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 |
(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 |
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 |
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 |
Vice President and Chief Financial Officer |
/S/ J. RUSSELL PORTER |
J. Russell Porter |
President |
/S/ MICHAEL A. GERLICH |
Michael A. Gerlich |
Secretary and Treasurer |
Capital Stock (Schedule of Preferred Stock Redemption Dates) (Details) (USD $)
|
Sep. 30, 2012
|
---|---|
On or after June 23, 2012 and prior to June 23, 2013
|
|
Redemption Price | $ 25.50 |
On or after June 23, 2013 and prior to June 23, 2014
|
|
Redemption Price | $ 25.25 |
On or after June 23, 2014
|
|
Redemption Price | $ 25 |
Fair Value Measurements (Net Change in the Assets and Liabilities Measured at Fair Value on a Recurring Basis and Included in the Level 3 Fair Value Category) (Details) (Fair Value, Inputs, Level 3, Commodity, Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Mar. 31, 2012
|
Mar. 31, 2011
|
|||||||
Fair Value, Inputs, Level 3 | Commodity | Fair Value, Measurements, Recurring
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||||||
Balance at beginning of period | $ 15,873 | $ 15,199 | $ 15,460 | $ 13,286 | ||||||||
Total Gains Losses Realized Or Unrealized [Abstract] | ||||||||||||
included in earnings | (2,045) | 4,813 | 4,594 | 7,596 | ||||||||
included in other comprehensive income | 0 | 0 | 0 | 0 | ||||||||
Purchases | 0 | 0 | 0 | 0 | ||||||||
Issuances | 0 | 0 | 0 | 0 | ||||||||
Settlements | (4,314) | [1] | (2,853) | [1] | (11,366) | [1] | (7,549) | [1] | ||||
Transfers in and (out) of Level 3 | 0 | 0 | 0 | 0 | ||||||||
Balance at end of period | 9,101 | 15,246 | 9,101 | 15,246 | 15,460 | 13,286 | ||||||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets | $ (5,403) | $ 2,424 | $ (4,123) | $ 1,027 | ||||||||
|
Earnings Per Share (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
|
Earnings Per Share (Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Net Income (loss) attributable to Gastar Exploration Ltd | $ (83,457) | $ 1,014 | $ (163,802) | $ (795) |
Weighted average common shares outstanding basic (shares) | 63,601,645 | 63,238,069 | 63,494,224 | 62,901,860 |
Weighted average common shares outstanding diluted (shares) | 63,601,645 | 63,842,098 | 63,494,224 | 62,901,860 |
Basic (dollars per share) | $ (1.31) | $ 0.02 | $ (2.58) | $ (0.01) |
Diluted (dollars per share) | $ (1.31) | $ 0.02 | $ (2.58) | $ (0.01) |
Common shares excluded from denominator as anti-dilutive (shares) | 2,858,080 | 2,838,700 | 2,580,710 | 3,007,785 |
Restricted Stock
|
||||
Common shares excluded from denominator as anti-dilutive (shares) | 1,878,355 | 500 | 1,654,439 | 149,960 |
Stock Options
|
||||
Common shares excluded from denominator as anti-dilutive (shares) | 979,725 | 838,200 | 926,271 | 857,825 |
Warrants
|
||||
Common shares excluded from denominator as anti-dilutive (shares) | 0 | 2,000,000 | 0 | 2,000,000 |
Restricted Stock
|
||||
Incremental shares from outstanding stock options (shares) | 0 | 551,687 | 0 | 0 |
Stock Options
|
||||
Incremental shares from outstanding stock options (shares) | 0 | 52,342 | 0 | 0 |
Capital Stock (Narrative) (Details) (USD $)
|
9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Jun. 03, 2012
|
Jun. 02, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
Gastar Exploration USA Inc.
|
Sep. 30, 2011
Gastar Exploration USA Inc.
|
Sep. 30, 2012
Gastar Exploration USA
|
Sep. 30, 2012
Gastar Exploration USA
|
Dec. 31, 2011
Gastar Exploration USA
|
Jun. 23, 2011
Gastar Exploration USA
|
May 24, 2011
Gastar Exploration USA
|
May 23, 2011
Gastar Exploration USA
|
Sep. 30, 2012
Gastar Exploration USA
At The Market Sales Agreement
|
Jun. 29, 2011
Gastar Exploration USA
At The Market Sales Agreement
|
Sep. 30, 2012
Gastar Exploration USA
Subsequent Event
At The Market Sales Agreement
|
Sep. 30, 2012
Parent's 2006 Long-Term Stock Incentive Plan
|
|
Common shares reserved for the exercise of stock options (shares) | 978,550 | 11,000,000 | 6,000,000 | 5,192,527 | |||||||||||||
Common shares authorized for issuance (shares) | 1,000 | 1,000 | 1,000 | 1,000 | |||||||||||||
Common shares issued (shares) | 65,663,063 | 64,706,750 | 750 | 750 | 750 | 750 | 750 | 750 | |||||||||
Preferred shares authorized for issuance (shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Preferred stock par value per share | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||
Preferred stock, shares sold (shares) | 3,946,950 | 1,364,543 | 646,295 | 3,946,950 | 4,304 | ||||||||||||
Preferred stock, dividend rate, percentage (percentage) | 8.625% | ||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | $ 25 | ||||||||||||||
Proceeds from issuance of preferred stock and preference stock | $ 49,169,000 | $ 16,855,000 | $ 49,169,000 | $ 16,855,000 | $ 13,600,000 | $ 49,200,000 | $ 84,000 | ||||||||||
Preferred stock shares authorized to be sold in at the market sales agreement | 3,400,000 | ||||||||||||||||
Preferred stock shares issued during current period | 2,582,407 | ||||||||||||||||
Cumulative net proceeds from issuance of preferred stock | 76,600,000 | ||||||||||||||||
Period after change in control to redeem preferred stock (days) | 90 days | ||||||||||||||||
Payments of dividends | $ (2,000,000) | $ (4,900,000) |
Long-Term Debt
|
9 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Amended and Restated Revolving Credit Facility On October 28, 2009, Gastar USA, together with the other parties thereto, entered into an amended and restated credit facility (as amended and restated, the “Revolving Credit Facility”). The Revolving Credit Facility provided an initial borrowing base of $47.5 million, with borrowings bearing interest, at Gastar USA’s election, at the prime rate or LIBO rate plus an applicable margin. The applicable interest rate margin varies from 1.0% to 2.0% in the case of borrowings based on the prime rate and from 2.5% to 3.5% in the case of borrowings based on LIBO rate, depending on the utilization percentage in relation to the borrowing base. An annual commitment fee of 0.5% is payable quarterly based on the unutilized balance of the borrowing base. The Revolving Credit Facility had a scheduled maturity date of January 2, 2013. The Revolving Credit Facility is guaranteed by Parent (as defined in the Revolving Credit Facility) and all of Gastar USA’s current domestic subsidiaries and all future domestic subsidiaries formed during the term of the Revolving Credit Facility. Borrowings and related guarantees are secured by a first priority lien on all domestic natural gas and oil properties currently owned by or later acquired by Gastar USA and its subsidiaries, excluding de minimus value properties as determined by the lender. The facility is secured by a first priority pledge of the stock of each domestic subsidiary, a first priority interest on all accounts receivable, notes receivable, inventory, contract rights, general intangibles and material property of the issuer and 65% of the stock of each foreign subsidiary of Gastar USA. The Revolving Credit Facility contains various covenants, including among others:
All outstanding amounts owed become due and payable upon the occurrence of certain usual and customary events of default, including among others:
Should there occur a Change in Control of Parent, then, five days after such occurrence, immediately and without notice, (i) all amounts outstanding under the Revolving Credit Facility shall automatically become immediately due and payable and (ii) the commitments shall immediately cease and terminate unless and until reinstated by the lender in writing. If amounts outstanding become immediately due and payable, the obligation of Gastar USA with respect to any commodity hedge exposure shall be to provide cash as collateral to be held and administered by the lender as collateral agent. On June 24, 2010, Gastar USA, together with the other parties thereto, entered into the Second Amendment to the Amended and Restated Credit Agreement (the “Second Amendment”) amending that certain Amended and Restated Credit Agreement dated October 28, 2009 (as amended by that certain Consent and First Amendment to Amended and Restated Credit Agreement dated November 20, 2009, the Second Amendment, the Third Amendment (as defined below) and the Fourth Amendment (as defined below), the “Credit Agreement”) . The Second Amendment amended the Revolving Credit Facility, by, among other things, (i) allowing Gastar USA to hedge up to 80% of the proved developed producing (“PDP”) reserves reflected in its reserve report using hedging other than floors and protective spreads, (ii) allowing Gastar USA to present to the administrative agent a report showing any PDP additions resulting from new wells or the conversion of proved developed non-producing reserves to PDP reserves since the last reserve report in order to hedge the revised PDP reserves, and (iii) removing the limitations on hedging using floors and protective spreads. On June 14, 2011, Gastar USA, together with the parties thereto, entered into the Third Amendment to the Credit Agreement (the “Third Amendment”). The Third Amendment amended the Revolving Credit Facility by, among other things, allowing Gastar USA to issue Series A Preferred Stock (as defined below) described in Part I, Item 1. “Financial Statements, Note 7 – Capital Stock” of this report and pay cash dividends on the Series A Preferred Stock of no more than $10.0 million in the aggregate in each calendar year and as long as payment of such dividends does not exceed 10% of the current availability under the then existing borrowing base. On December 2, 2011, Gastar USA, together with the parties thereto, entered into the Fourth Amendment to the Credit Agreement, effective as of November 10, 2011 (the “Fourth Amendment”). The Fourth Amendment amended the Revolving Credit Facility, by, among other things, (i) extending the maturity date on borrowings under the Revolving Credit Facility to September 30, 2015; (ii) allowing Gastar USA to hedge up to 100% of the PDP reserves reflected in its reserve report using hedging other than floors and protective spreads; and (iii) allowing no more than ten separate LIBO Rate Loans to be outstanding at one time. Borrowing base redeterminations are scheduled semi-annually in May and November of each calendar year. Gastar USA and its lenders may request one additional unscheduled redetermination annually. As of December 31, 2011, the Revolving Credit Facility had a borrowing base of $50.0 million, with $30.0 million of borrowings outstanding and availability of $20.0 million. Gastar USA requested that the May 2012 redetermination be accelerated to March 2012. On March 5, 2012, Gastar USA was notified by its lenders that, effective immediately, the borrowing base was increased from $50.0 million to $100.0 million. Gastar USA requested that the November 2012 redetermination be accelerated to September 2012. On October 19, 2012, Gastar USA was notified by its lenders that, effective September 30, 2012, the borrowing base was increased from $100.0 million to $110.0 million. At September 30, 2012, the Revolving Credit Facility had a borrowing base of $110.0 million, with $70.0 million of borrowings outstanding and availability of $40.0 million. The next regularly scheduled redetermination is set for May 2013. At September 30, 2012, Gastar USA was in compliance with all financial covenants under the Revolving Credit Facility. Other Debt Credit support for the Company’s open derivatives at September 30, 2012 is provided under the Revolving Credit Facility through inter-creditor agreements or open accounts of up to $5.0 million. |