8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 27, 2013 (June 7, 2013)

GASTAR EXPLORATION LTD.

GASTAR EXPLORATION USA, INC.

(Exact Name of Registrant as Specified in its Charter)

Alberta, Canada	001-32714	98-0570897
Delaware	001-35211	38-3531640
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
1331 Lamar Street, Suite 650
Houston, Texas		77010
(Address of principal executive offices)		(ZIP Code)

(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))

1-LA/547960.2

Explanatory Note

On April 1, 2013, Gastar Exploration Ltd. (the “Company”) and Gastar Exploration USA, Inc. (“Gastar USA”) filed a current report on Form 8-K announcing that Gastar USA entered into a definitive agreements to (i) acquire proved reserves and undeveloped leasehold interests in Kingfisher and Canadian counties, Oklahoma from Chesapeake Energy Corporation (“Chesapeake”), (ii) repurchase approximately 6.8 million common shares of the Company owned by Chesapeake and (iii) settle all litigation with Chesapeake, for a total of $85.0 million. As reported in a Current Report on Form 8-K filed on June 12, 2013 (the “Original 8-K”), these transactions were consummated on June 7, 2013. This Current Report on Form 8-K/A amends and restates Item 9.01 of the Original 8-K in its entirety to provide the information required by Item 9.01 of Form 8-K.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Item 9.01(a) of the Original 8-K is hereby amended and restated in its entirety as follows:

The audited statement of revenues and direct operating expenses of the assets acquired from Chesapeake Exploration, L.L.C. and Larchmont Resources, L.L.C. for the year ended December 31, 2012, together with the report of BDO USA, LLP with respect thereto, are included as Exhibit 99.1 to this Amendment No. 1 and are incorporated herein by reference.

(d) Exhibits.

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

Exhibit No.    Description of Document    

23.1 Consent of BDO USA, LLP.

99.1 Statement of Revenues and Direct Operating Expenses of the Chesapeake Assets.

99.2 Unaudited Pro Forma Financial Information.

-2-

SIGNATURES

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

Date: June 27, 2013	GASTAR EXPLORATION LTD.
	By:	/s/ J. Russell Porter
		J. Russell Porter
		President and Chief Executive Officer
	GASTAR EXPLORATION USA, INC.
	By:	/s/ J. Russell Porter
		J. Russell Porter
		President

-3-

EXHIBIT LIST

Exhibit No.    Description of Document    

23.1 Consent of BDO USA, LLP.

99.1 Statement of Revenues and Direct Operating Expenses of the Chesapeake Assets.

99.2 Unaudited Pro Forma Financial Information.

-4-

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Gastar Exploration Ltd. and Gastar Exploration USA, Inc.

Houston, Texas

We hereby consent to the incorporation by reference in the registration statement No. 333-174552-01 on Form S-3 of Gastar Exploration Ltd. and Gastar Exploration USA, Inc. and No. 333-182237 on Form S-8 of Gastar Exploration Ltd. of our report dated May 10, 2013, with respect to the audit of the Statement of Revenues and Direct Operating Expenses of the Chesapeake Acquisition Properties for the year ended December 31, 2012, which appears in the Current Report on Form 8-K/A of Gastar Exploration Ltd. and Gastar Exploration USA, Inc.

BDO USA, LLP

Dallas, TX

June 27, 2013

EX-99.1

STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES OF THE

CHESAPEAKE ACQUISTION PROPERTIES

Page

Independent Auditor's Report                                     2

Statement of Revenues and Direct Operating Expenses of the Chesapeake Acquisition Properties         3

Notes to Statement of Revenues and Direct Operating Expenses of the Chesapeake Acquisition Properties     4

Supplementary Oil and Gas Disclosures                                 5

1

Independent Auditor’s Report

To the Board of Directors, Shareholders of Gastar Exploration Ltd. and Stockholders of Gastar Exploration USA, Inc.:

We have audited the accompanying financial statement which comprises the statement of revenues and direct operating expenses of certain oil and gas properties of Chesapeake Energy (the “Chesapeake Acquisition Properties”) for the year ended December 31, 2012.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of the financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and direct operating expenses of the Chesapeake Acquisition Properties for the year ended December 31, 2012 in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in the notes to the financial statement and are not intended to be a complete presentation of the Company’s interests in the Chesapeake Acquisition Properties.

/s/BDO USA, LLP

Dallas, Texas

May 10, 2013

2

STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES

CHESAPEAKE ACQUISITION PROPERTIES

	(Unaudited) For the Three Months Ended March 31, 2013		For the Year Ended December 31, 2012
	(In thousands)
REVENUES:
Natural gas	$	1,190	$	4,857
Condensate and oil	1,371		7,725
NGLs	158		701
Total revenues	$	2,719	$	13,283
DIRECT OPERATING EXPENSES:
Production taxes	$	151	$	651
Lease operating expenses	885		3,594
Transportation, treating and gathering	38		136
Total direct operating expenses	1,074		4,381
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES	$	1,645	$	8,902

See accompanying notes to statement of revenues and direct operating expenses.

3

CHESAPEAKE ACQUISTION PROPERTIES

NOTES TO STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES

(1) Basis of Presentation

The accompanying financial statement present the revenues and direct operating expenses of the oil and natural gas properties to be acquired pursuant to a Purchase and Sale Agreement dated March 28, 2013 among Chesapeake Exploration, L.L.C. (“Chesapeake”) and Larchmont Resources, L.L.C. and Gastar Exploration, USA, Inc. (“Gastar USA”), a wholly-owned subsidiary of Gastar Exploration Ltd., for the year ended December 31, 2012 (the “Chesapeake Acquisition Properties”). The acquisition of the Chesapeake Acquisition Properties closed on June 7, 2013 for a net cash purchase price of $74.2 million.

The accompanying statement of revenues and direct operating expenses of the Chesapeake Acquisition Properties do not include indirect general and administrative expenses, interest expense, depreciation, depletion and amortization, or any provision for income taxes. Gastar USA's management believes historical expenses of this nature incurred by Chesapeake associated with the properties are not indicative of the costs to be incurred by Gastar USA.

Revenues in the accompanying statement of revenues and direct operating expenses are recognized based on the Chesapeake Acquisition Properties' share of any given period's production volumes and revenues received for the period. The direct operating expenses are recognized based on the Chesapeake Acquisition Properties' share of direct costs including production taxes, lifting costs, gathering, well repair and well workover costs. Direct costs do not include general corporate overhead. The historical financial statement of revenues and direct operating expenses for the Chesapeake Acquisition Properties do not include revenues and direct operating expenses attributable to certain small interests related to the Other Entities controlled by the former chief executive officer of Chesapeake as such were deemed immaterial.

Historical financial information reflecting financial position, results of operations, and cash flows of the Chesapeake Acquisition Properties is not presented because it would be impractical and costly to obtain since such financial information was not historically prepared by Chesapeake. Other assets acquired and liabilities assumed were not material. In addition, the Chesapeake Acquisition Properties were a part of a larger enterprise prior to the acquisition by Gastar USA, and representative amounts of indirect general and administrative expenses, depreciation, depletion and amortization, interest and other indirect costs were not necessarily allocated to the Chesapeake Acquisition Properties acquired, nor would such allocated historical costs be relevant to future operations of the Chesapeake Acquisition Properties. Accordingly, the historical statement of revenues and direct operating expenses of the Chesapeake Acquisition Properties are not indicative of the financial conditions or results of operations going forward. The historical statement of revenues and direct operating expenses of Chesapeake's interest in the Chesapeake Acquisition Properties are presented in order to substantially comply with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for businesses acquired.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(2) Business Combination

Pursuant to the Purchase Agreement, Gastar USA will acquire approximately 157,000 net acres of Oklahoma oil and gas leasehold interests from Chesapeake, including production from interests in 176 producing wells located in Oklahoma, for a cash purchase price of approximately $74.2 million, subject to customary adjustments.

(3) Subsequent Events

In accordance with Accounting Standards Codification 865, Gastar USA has evaluated subsequent events through May 10, 2013, the date of the accompanying statement of revenue and direct operating expenses were available to be

4

issued. There were no material subsequent events that required recognition or additional disclosure in the accompanying statement of revenue and direct operating expenses.

(4) Supplemental Financial Information for Natural Gas and Oil Producing Activities (Unaudited)

The following reserve estimates have been prepared by Gastar USA's independent reservoir engineering firm, Wright & Company, Inc. (“Wright”), as of December 31, 2012. The reserve estimates have been prepared in compliance with the SEC rules and accounting standards based on the 12-month unweighted arithmetic average of the first-day-of-the-month prices as of December 31, 2012 with appropriate adjustments by property for location, quality, gathering and marketing adjustments.

(a) Reserve Quantity Information

Proved reserves are estimated quantities of natural gas, crude oil and NGLs which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those which are expected to be recovered through existing wells with existing equipment and operating methods. Below are the net quantities of total proved reserves and proved developed reserves of the Chesapeake Acquisition Properties. An analysis of the change in estimated quantities of reserves, all of which are located within the United States, is presented below.

	Natural Gas (MMcf) (1)		NGLs (MBbl) (2)		Condensate and Oil (MBbl) (2)		MMcfe (1) Equivalents
Change in Proved Reserves
Proved reserves as of December 31, 2011 (3)	12,836		288		453		17,282
Extensions and discoveries	598		41		114		1,528
Revisions of previous estimates	(986	)	(3	)	(25	)	(1,156	)
Production	(1,474	)	(22	)	(85	)	(2,120	)
Proved reserves as of December 31, 2012	10,974		304		457		15,534

	Natural Gas (MMcf) (1)	NGLs (MBbl) (2)	Condensate and Oil (MBbl) (2)	MMcfe (1) Equivalents
Proved Developed and Undeveloped Reserves
December 31, 2012
Proved developed reserves	10,974	304	457	15,534
Proved undeveloped reserves	—	—	—	—
Total	10,974	304	457	15,534

_________________________

(1) Million cubic feet or million cubic feet equivalent, as applicable

(2) Thousand barrels

(3) Reserve studies were not prepared for the Chesapeake Acquisition properties as of December 31, 2011. The reserve estimates for December 31, 2011 were derived based on the reserve estimates prepared by Wright as of December 31, 2012 and computing such December 31, 2012 estimates backwards to account for production, extensions and discoveries and revisions of previous estimates to estimate reserve quantities as of December 31, 2011.

5

(b) Standardized Measure of Discounted Future Net Cash Flows Relating to Oil and Natural Gas Reserves

The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves (“Standardized Measure”) is a disclosure requirement under Accounting Standards Codification 932-235. The Standardized Measure does not purport to be, nor should it be interpreted to present, the fair value of the proved oil and natural gas reserves of the Chesapeake Acquisition Properties. An estimate of fair value would also take into account, among other things, the recovery of reserves not presently classified as proved, the value of unproved properties and consideration of expected future economic and operating conditions. The estimates of future cash flows and future production and development costs are based on the 12-month unweighted first-day-of-the-month average prices as of December 31, 2012 for natural gas, NGLs and condensate and oil, estimated future production of proved reserves and estimated future production and development costs of proved reserves, based on current costs and economic conditions. The estimated future net cash flows are then discounted at a rate of 10%. No deduction has been made for general and administrative expenses, interest expense, depreciation, depletion and amortization or federal or state income taxes.

The Standardized Measure relating to proved natural gas, NGLs and condensate and oil reserves are presented below:

	December 31, 2012
	(In thousands)
Future cash inflows	$	83,600
Future production costs	(39,123		)
Future development costs	(3,397		)
Future net cash flows	41,080
10% annual discount for estimated timing of cash flows	(17,507		)
Standardized measure of discounted future cash flows	$	23,573

For the year ended December 31, 2012 future cash inflows were computed using the 12-month unweighted arithmetic average of the first-day-of-the-month prices for natural gas, NGLs and condensate and oil, adjusted by lease in accordance with sales contracts and for energy content, quality, transportation, compression and gathering fees and regional price differentials. For the period indicated, the following natural gas, NGLs and condensate and oil prices were used in the calculations:

	For the Year Ended December 31, 2012
Natural gas, per MMBtu
Henry Hub	$	2.76
Oil, per barrel
WTI spot	$	94.71
NGLs, per barrel	$	31.06

These prices are held constant in accordance with SEC guidelines for the life of the wells included in the reserve report but are adjusted by lease in accordance with sales contracts and for energy content, quality, transportation, compression and gathering fees and regional price differentials.

6

Changes in Standardized Measure of Discounted Future Net Cash Flows

The principal sources of changes in the standardized measure of future net cash flows are as follows:

	United States
	(In thousands)
December 31, 2011	$	31,899
Extensions and discoveries, less related costs	8,611
Sale of natural gas and oil, net of production costs	(8,902		)
Revisions of previous quantity estimates	(8,035		)
December 31, 2012	$	23,573

Estimates of economically recoverable oil and natural gas reserves and of future net revenues are based upon a number of variable factors and assumptions, all of which are to some degree speculative and may vary considerably from actual results. Therefore, actual production, revenues, development and operating expenditures may not occur as estimated. The reserve data are estimates only, are subject to many uncertainties and are based on data gained from production histories and on assumptions as to geologic formations, reservoir behavior, equipment condition and other matters. Actual quantities of oil and natural gas produced in the future may differ materially from the amounts estimated.

7

EX-99.2

UNAUDITED PRO FORMA FINANCIAL INFORMATION

On March 28, 2013, Gastar Exploration USA, Inc. (“Gastar USA”), a subsidiary of Gastar Exploration Ltd. (the “Company”), entered into a Purchase and Sale Agreement, by and among Chesapeake Exploration, L.L.C. and Larchmont Resources, L.L.C. and Gastar USA, to acquire approximately 157,000 net acres of Mid-Continent oil and gas leasehold interests, including production from interests in 176 net producing locations in Oklahoma (the “Chesapeake Assets”), for approximately $74.2 million, subject to customary adjustments. We refer to this acquisition as the “Chesapeake Acquisition”. The Chesapeake acquisition had an effective date of October 1, 2012. The Chesapeake Acquisition was completed on June 7, 2013.

Also on March 28, 2013, the Company, Gastar Exploration Texas, L.P. and Gastar Exploration Texas, LLC entered into a Settlement Agreement with Chesapeake Exploration, L.L.C. and Chesapeake Energy Corporation (together, “Chesapeake”). In order to effect a mutual full and unconditional release and settlement of all claims made in a lawsuit filed by Chesapeake, Gastar USA agreed to pay Chesapeake approximately $10.8 million in cash, approximately $9.8 of which through the repurchase of 6,781,768 outstanding common shares of the Company's common stock currently held by Chesapeake. The litigation settlement and share repurchase were completed on June 7, 2013.

On May 15, 2013, Gastar USA issued and sold $200.0 million aggregate principal amount of its 8.625% Senior Secured Notes due 2018 to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to persons outside the United States under Regulation S of the Securities Act. The net proceeds of the offering were approximately $192.0 million and were placed into escrow pending use of such proceeds in the closing of the Chesapeake Acquisition on June 7, 2013. The balance of the net proceeds were used to fund the litigation settlement and share repurchase on June 7, 2013, to repay in full approximately $115.0 million of existing indebtedness under Gastar USA's revolving credit facility in connection with the amendment and restatement of such facility and approximately $3.2 million were used for general corporate purposes.

On June 7, 2013, Gastar USA entered into the Second Amended and Restated Credit Agreement among Gastar USA, Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuing Lender and the lenders named therein. The initial borrowing base under the new revolving credit facility is $50.0 million. The new revolving credit facility is currently undrawn.

The unaudited pro forma combined financial statements give effect to the:

• issuance and sale of the Notes and the application of the net proceeds therefrom;

• Chesapeake Acquisition;

• repurchase of shares of the Company's common stock held by Chesapeake;

• litigation settlement with Chesapeake; and new revolving credit facility (collectively, the “Transactions”).

The following unaudited pro forma financial information is derived from the historical financial statements of the Company and Gastar USA and reflect the impact of the Transactions. The Unaudited Pro Forma Combined Balance Sheet of the Company as of March 31, 2013 and the Unaudited Pro Forma Combined Balance Sheet of Gastar USA as of March 31, 2013 have been prepared assuming the Transactions were consummated on March 31, 2013. The Unaudited Pro Forma Combined Statements of Operations of the Company and Gastar USA for the year ended December 31, 2012 and for the three month period ended March 31, 2013 have been prepared assuming the Transactions were consummated on January 1, 2012. These unaudited pro forma combined financial statements should be read in conjunction with the notes hereto and the consolidated financial statements and notes thereto of the Company and Gastar USA filed on Form 10-K for the year ended December 31, 2012 and on Form 10-Q for the three months ended March 31, 2013.

The unaudited pro forma financial information is not indicative of the financial position or results of operations of the Company or Gastar USA which would have actually occurred if the transaction had occurred at the dates presented or which may be obtained in the future. In addition, future results may vary significantly from the results reflected in such statements due to normal oil and natural gas production declines, reductions in prices paid for oil or natural gas, future acquisitions or dispositions and other factors.

1

GASTAR EXPLORATION LTD.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2013

				Pro Forma Adjustments
	Gastar LTD
	Historical			The Transactions				Pro Forma
	(in thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,135		$	3,209		(a)	$	10,344
Accounts receivable, net of allowance for doubtful accounts of $542	8,289			—				8,289
Commodity derivative contracts	1,217			—				1,217
Prepaid expenses	991			—				991
Total current assets	17,632			3,209				20,841
PROPERTY, PLANT AND EQUIPMENT:
Natural gas and oil properties, full cost method of accounting:
Unproved properties, excluded from amortization	74,865			40,307			(b)	115,172
Proved properties	699,408			32,248			(b)	731,656
Total natural gas and oil properties	774,273			72,555				846,828
Furniture and equipment	1,944			—				1,944
Total property, plant and equipment	776,217			72,555				848,772
Accumulated depreciation, depletion and amortization	(490,124		)	—				(490,124		)
Total property, plant and equipment, net	286,093			72,555				358,648
OTHER ASSETS:
Commodity derivative contracts	854			—				854
Deferred charges, net	825			2,500			(c)	3,325
Advances to operators and other assets	2,153			—				2,153
Deposit for purchase of natural gas and oil properties	7,425			(7,425		)	(d)	—
Total other assets	11,257			(4,925		)		6,332
TOTAL ASSETS	$	314,982		$	70,839			$	385,821
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	18,239		$	—			$	18,239
Revenue payable	7,563			—				7,563
Accrued interest	172			—				172
Accrued drilling and operating costs	2,888			—				2,888
Advances from non-operators	33,630			—				33,630
Commodity derivative contracts	3,491			—				3,491
Accrued litigation settlement liability	1,000			(1,000		)	(e)	—
Asset retirement obligation	358			—				358
Other accrued liabilities	1,707			—				1,707
Total current liabilities	69,048			(1,000		)		68,048
LONG-TERM LIABILITIES:
Long-term debt	115,000			79,500			(f)	194,500
Commodity derivative contracts	1,725			—				1,725
Asset retirement obligation	6,445			2,092			(g)	8,537
Other accrued liabilities	228			—				228
Total long-term liabilities	123,398			81,592				204,990
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Common stock, no par value; unlimited shares authorized; 68,375,282 shares issued and outstanding at March 31, 2013	316,346			(9,753		)	(h)	306,593
Additional paid-in capital	28,925			—				28,925
Accumulated deficit	(299,373		)	—				(299,373		)
Total shareholders' equity	45,898			(9,753		)		36,145
Non-controlling interest:
Preferred stock of subsidiary, aggregate liquidation preference $98,781 at March 31, 2013	76,638			—				76,638
Total equity	122,536			(9,753		)		112,783
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	314,982		$	70,839			$	385,821

See accompanying notes to unaudited pro forma combined financial statements.

2

GASTAR EXPLORATION LTD.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2013

				Pro Forma Adjustments
	Gastar LTD
	Historical			The Transactions				Pro Forma
REVENUES:
Natural gas	$	11,233		$	1,190		(j)	$	12,423
Condensate and oil	6,126			1,371			(j)	7,497
NGLs	3,542			158			(j)	3,700
Total natural gas, oil and NGLs revenues	20,901			2,719				23,620
Unrealized hedge loss	(9,637		)	—				(9,637		)
Total revenues	11,264			2,719				13,983
EXPENSES:
Production taxes	643			151			(k)	794
Lease operating expenses	1,837			885			(k)	2,722
Transportation, treating and gathering	1,164			38			(k)	1,202
Depreciation, depletion and amortization	5,365			797			(l)	6,162
Accretion of asset retirement obligation	102			52			(m)	154
General and administrative expense	3,002			—				3,002
Litigation settlement expense	1,000			—				1,000
Total expenses	13,113			1,923				15,036
(LOSS) INCOME FROM OPERATIONS	(1,849		)	796				(1,053		)
OTHER INCOME (EXPENSE):
Interest expense	(609		)	(2,537		)	(n)	(3,146		)
Investment income and other	3			—				3
Foreign transaction loss	(1		)	—				(1		)
LOSS BEFORE PROVISION FOR INCOME TAXES	(2,456		)	(1,741		)		(4,197		)
Provision for income taxes	—			—				—
NET LOSS	(2,456		)	(1,741		)		(4,197		)
Dividend on preferred stock attributable to non-controlling interest	(2,130		)	—				(2,130		)
NET LOSS ATTRIBUTABLE TO GASTAR EXPLORATION LTD.	$	(4,586	)	$	(1,741	)		$	(6,327	)
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO GASTAR EXPLORATION LTD. COMMON SHAREHOLDERS:
Basic	$	(0.07	)					$	(0.11	)
Diluted	$	(0.07	)					$	(0.11	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	63,864,527			(6,781,768		)		57,082,759
Diluted	63,864,527			(6,781,768		)		57,082,759

See accompanying notes to unaudited pro forma combined financial statements.

3

GASTAR EXPLORATION LTD.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012

				Pro Forma Adjustments
	Gastar LTD
	Historical			The Transactions				Pro Forma
REVENUES:
Natural gas	$	33,829		$	4,857		(j)	$	38,686
Condensate and oil	12,377			7,725			(j)	20,102
NGLs	9,300			701			(j)	10,001
Total natural gas, oil and NGLs revenues	55,506			13,283				68,789
Unrealized hedge loss	(5,566		)	—				(5,566		)
Total revenues	49,940			13,283				63,223
EXPENSES:
Production taxes	2,269			651			(k)	2,920
Lease operating expenses	6,174			3,594			(k)	9,768
Transportation, treating and gathering	4,965			136			(k)	5,101
Depreciation, depletion and amortization	25,424			4,321			(l)	29,745
Impairment of natural gas and oil properties	150,787			—
Accretion of asset retirement obligation	388			196			(m)	584
General and administrative expense	12,211			—				12,211
Litigation settlement expense	1,250			—				1,250
Total expenses	203,468			8,898				212,366
(LOSS) INCOME FROM OPERATIONS	(153,528		)	4,385				(149,143		)
OTHER INCOME (EXPENSE):
Interest expense	(270		)	(9,158		)	(n)	(9,428		)
Investment income and other	9			—				9
Foreign transaction loss	(2		)	—				(2		)
LOSS BEFORE PROVISION FOR INCOME TAXES	(153,791		)	(4,773		)		(158,564		)
Provision for income taxes	—			—				—
NET LOSS	(153,791		)	(4,773		)		(158,564		)
Dividend on preferred stock attributable to non-controlling interest	(7,077		)	—				(7,077		)
NET LOSS ATTRIBUTABLE TO GASTAR EXPLORATION LTD.	$	(160,868	)	$	(4,773	)		$	(165,641	)
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO GASTAR EXPLORATION LTD. COMMON SHAREHOLDERS:
Basic	$	(2.53	)					$	(2.92	)
Diluted	$	(2.53	)					$	(2.92	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	63,538,362			(6,781,768		)		56,756,594
Diluted	63,538,362			(6,781,768		)		56,756,594

See accompanying notes to unaudited pro forma combined financial statements.

4

GASTAR EXPLORATION USA, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2013

				Pro Forma Adjustments
	Gastar USA
	Historical			The Transactions				Pro Forma
	(in thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,089		$	3,209		(a)	$	10,298
Accounts receivable, net of allowance for doubtful accounts of $542	8,288			—				8,288
Commodity derivative contracts	1,217			—				1,217
Prepaid expenses	837			—				837
Total current assets	17,431			3,209				20,640
PROPERTY, PLANT AND EQUIPMENT:
Natural gas and oil properties, full cost method of accounting:
Unproved properties, excluded from amortization	74,865			40,307			(b)	115,172
Proved properties	699,400			32,248			(b)	731,648
Total natural gas and oil properties	774,265			72,555				846,820
Furniture and equipment	1,944			—				1,944
Total property, plant and equipment	776,209			72,555				848,764
Accumulated depreciation, depletion and amortization	(490,117		)	—				(490,117		)
Total property, plant and equipment, net	286,092			72,555				358,647
OTHER ASSETS:
Commodity derivative contracts	854			—				854
Deferred charges, net	825			2,500			(c)	3,325
Advances to operators and other assets	2,153			—				2,153
Deposit for purchase of natural gas and oil properties	7,425			(7,425		)	(d)	—
Total other assets	11,257			(4,925		)		6,332
TOTAL ASSETS	$	314,780		$	70,839			$	385,619
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	18,214		$	—			$	18,214
Revenue payable	7,563			—				7,563
Accrued interest	172			—				172
Accrued drilling and operating costs	2,888			—				2,888
Advances from non-operators	33,630			—				33,630
Commodity derivative contracts	3,491			—				3,491
Accrued litigation settlement liability	1,000			(1,000		)	(e)	—
Asset retirement obligation	358			—				358
Other accrued liabilities	1,611			—				1,611
Total current liabilities	68,927			(1,000		)		67,927
LONG-TERM LIABILITIES:
Long-term debt	115,000			79,500			(f)	194,500
Commodity derivative contracts	1,725			—				1,725
Asset retirement obligation	6,438			2,092			(g)	8,530
Due to Parent	31,362			(9,753		)	(i)	21,609
Other accrued liabilities	228			—				228
Total long-term liabilities	154,753			71,839				226,592
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 3,951,254 shares issued and outstanding at March 31, 2013 with liquidation preference of $25.00 per share	40			—				40
Common stock, no par value; 1,000 shares authorized; 750 shares issued and outstanding	237,431			—				237,431
Additional paid-in capital	76,598			—				76,598
Accumulated deficit	(222,969		)	—				(222,969		)
Total stockholders' equity	91,100			—				91,100
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	314,780		$	70,839			$	385,619

See accompanying notes to unaudited pro forma combined financial statements.

5

GASTAR EXPLORATION USA, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2013

				Pro Forma Adjustments
	Gastar USA
	Historical			The Transactions				Pro Forma
REVENUES:
Natural gas	$	11,233		$	1,190		(j)	$	12,423
Condensate and oil	6,126			1,371			(j)	7,497
NGLs	3,542			158			(j)	3,700
Total natural gas, oil and NGLs revenues	20,901			2,719				23,620
Unrealized hedge loss	(9,637		)	—				(9,637		)
Total revenues	11,264			2,719				13,983
EXPENSES:
Production taxes	643			151			(k)	794
Lease operating expenses	1,837			885			(k)	2,722
Transportation, treating and gathering	1,164			38			(k)	1,202
Depreciation, depletion and amortization	5,365			797			(l)	6,162
Accretion of asset retirement obligation	102			52			(m)	154
General and administrative expense	2,781			—				2,781
Litigation settlement expense	1,000			—				1,000
Total expenses	12,892			1,923				14,815
(LOSS) INCOME FROM OPERATIONS	(1,628		)	796				(832		)
OTHER INCOME (EXPENSE):
Interest expense	(609		)	(2,537		)	(n)	(3,146		)
Investment income and other	5			—				5
Foreign transaction gain	1			—				1
LOSS BEFORE PROVISION FOR INCOME TAXES	(2,231		)	(1,741		)		(3,972		)
Provision for income taxes	—			—				—
NET LOSS	(2,231		)	(1,741		)		(3,972		)
Dividend on preferred stock	(2,130		)	—				(2,130		)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDER	$	(4,361	)	$	(1,741	)		$	(6,102	)

See accompanying notes to unaudited pro forma combined financial statements.

6

GASTAR EXPLORATION USA, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012

				Pro Forma Adjustments
	Gastar USA
	Historical			The Transactions				Pro Forma
REVENUES:
Natural gas	$	33,829		$	4,857		(j)	$	38,686
Condensate and oil	12,377			7,725			(j)	20,102
NGLs	9,300			701			(j)	10,001
Total natural gas, oil and NGLs revenues	55,506			13,283				68,789
Unrealized hedge loss	(5,566		)	—				(5,566		)
Total revenues	49,940			13,283				63,223
EXPENSES:
Production taxes	2,269			651			(k)	2,920
Lease operating expenses	6,174			3,594			(k)	9,768
Transportation, treating and gathering	4,965			136			(k)	5,101
Depreciation, depletion and amortization	25,424			4,321			(l)	29,745
Impairment of natural gas and oil properties	150,787			—				150,787
Accretion of asset retirement obligation	388			196			(m)	584
General and administrative expense	10,732			—				10,732
Litigation settlement expense	1,250			—				1,250
Total expenses	201,989			8,898				210,887
(LOSS) INCOME FROM OPERATIONS	(152,049		)	4,385				(147,664		)
OTHER INCOME (EXPENSE):
Interest expense	(271		)	(9,158		)	(n)	(9,429		)
Investment income and other	(4		)	—				(4		)
Foreign transaction gain	2			—				2
LOSS BEFORE PROVISION FOR INCOME TAXES	(152,322		)	(4,773		)		(157,095		)
Provision for income taxes	—			—				—
NET LOSS	(152,322		)	(4,773		)		(157,095		)
Dividend on preferred stock	(7,077		)	—				(7,077		)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDER	$	(159,399	)	$	(4,773	)		$	(164,172	)

See accompanying notes to unaudited pro forma combined financial statements.

7

1. Pro Forma Adjustments

(a) To record the net cash proceeds received from the sale of Gastar USA's 8.625% senior secured notes, net of initial purchasers' discount and expenses less net Chesapeake Acquisition costs.

(b) To record additional property, plant and equipment acquired and additional asset retirement obligation (full cost method) as of March 31, 2013 for the Chesapeake Assets, net of purchase price adjustments of $3.8 million to reflect the effective date of October 31, 2012.

(c) To record the additional deferred financing costs of $2.5 million for the senior secured notes at March 31, 2013.

(d) To record the application of the $7.4 million deposit previously paid for the Chesapeake Acquisition at March 31, 2013.

(e) To record the payment of the litigation liability at March 31, 2013 as a result of the settlement agreement with Chesapeake.

(f) To record the issuance of $200.0 million of Gastar USA's 8.625% senior secured notes, net of $5.5 million of initial purchasers' discount, and the retirement of the existing revolving credit facility outstanding balance at March 31, 2013.

(g) To record additional asset retirement obligation liability for the properties acquired at March 31, 2013 for the Chesapeake Assets.

(h) To record the repurchase of 6,781,678 common shares of GastarExploration Ltd. held by Chesapeake completed on June 7, 2013.

(i) To record the reduction in the amount due to Gastar Exploration Ltd. for the repurchase of 6,781,678 shares of Gastar Exploration Ltd.'s common stock on June 7, 2013.

(j) To record natural gas, condensate and oil and NGLs sales revenues for the Chesapeake Assets for the three months ended March 31, 2013 and for the year ended December 31, 2012.

(k) To record direct operating expenses for the Chesapeake Assets for the three months ended March 31, 2013 and for the year ended December 31, 2012.

(l) To record additional depreciation, depletion and amortization (“DD&A”) expense for the Transactions for the three months ended March 31, 2013 and for the year ended December 31, 2012 under the full cost method of accounting.

(m) To record additional accretion expense on the asset retirement obligation for the Transactions for the three months ended March 31, 2013 and for the year ended December 31, 2012.

(n) To record interest expense based on borrowings to fund the Transactions and related existing revolving credit facility retirement resulting in a net increase in interest expense for the three months ended March 31, 2013 and for the year ended December 31, 2012. The increase in interest expense assumes the issuance of $200.0 million of Gastar USA's 8.625% senior secured notes and the retirement, net of additional capitalized interest, of the existing revolving credit facility with an outstanding balance of $30.0 million occurred on January 1, 2012.

8