Gastar Exploration Inc. reported that estimated proved reserves of natural gas, oil and condensate and natural gas liquids (NGLs) as of June 30, 2014 totaled 78.0 million barrels of oil equivalent (BOE), a 43% increase over December 31, 2013 proved reserves of 54.6 million BOE, as estimated by our third-party reserve engineers in accordance with SEC regulations. Of the 78.0 million BOE of mid-year reserves, 54% were natural gas, 26% were oil and condensate and 20% were NGLs, compared to 55% natural gas, 27% oil and condensate and 18% NGLs at year-end 2013.
Using SEC pricing, the pre-tax present value discounted at 10% (PV-10) of proved reserves increased to $826.3 million at June 30, 2014, an increase of 39% versus $592.5 million at year-end 2013. Marcellus reserves in the Appalachian Basin represented 71% of proved reserve volumes and 51% of the PV-10 value, while Hunton Limestone reserves in Oklahoma represented 29% of proved reserve volumes and 49% of the PV-10 value.
Proved undeveloped (PUD) reserves at mid-year 2014 represented approximately 62% of total proved reserves compared to approximately 44% at year-end 2013. The total PUDs had a PV-10 value of $451.3 million and the Appalachian Basin represented 74% and Oklahoma represented 26%. At June 30, 2014 Gastar attributed PUD reserves to 72 gross (34.6 net) Marcellus PUD locations and 96 gross (73.1 net) Hunton PUD locations, as compared to 40 gross (18.8 net) and 73 gross (65.4 net), respectively, at December 31, 2013.
In accordance with SEC regulations, estimates of proved reserves as of June 30, 2014 were calculated using the 12-month un-weighted arithmetic average of the first-day-of-the-month price for each month in the period July 1, 2013 through June 30, 2014. For natural gas volumes, the average Henry Hub price utilized was $4.10 per million Btu (MMBtu), compared to $3.67 per MMBtu for the prior period, and for oil volumes, the average West Texas Intermediate price utilized was $100.11 per barrel, compared to $96.78 per barrel for year-end 2013. These benchmark natural gas and oil prices were adjusted for energy content or quality, transportation and regional price differentials by area.
These reserve estimates for both regions were prepared by Wright & Company, Inc.
J. Russell Porter, Gastar's President and CEO, stated, "We are very pleased with our progress in the first half of 2014 in building reserve volumes and especially pleased with the growth in the value of our reserves. Our oil-focused assets in the Hunton play in Oklahoma now represent nearly half of our total PV 10 reserve value, as we benefit from the continued strength in crude oil prices.
"Over the last three years, we have grown our reserves more than nine-fold and transitioned our portfolio from almost exclusively dry gas to 46 percent higher-value liquids in the form of oil, condensate and NGLs.
"We are excited about the opportunities for continued increase in oil production and reserve growth from our extensive Mid-Continent acreage. We also anticipate strong future growth in NGLs from our Marcellus operation, and believe we have strong potential for adding high volume dry gas wells in the Utica/Point Pleasant formation that underlies the majority of our Appalachian acreage. We expect to learn the results of our first Utica test in the third quarter.
"Our extensive inventory of high-return, liquids-focused drilling opportunities in both regions - along with the strong prospectivity of the Utica/Point Pleasant gas play -- should allow us to continue to grow reserves, production and cash flow, and we believe should continue to drive increased shareholder value," said Porter.
For more information about related Opportunities and Key Players visit Shale Gas Projects