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Gastar Provides Operations Update for Utica And Mid-Continent

Source: 9/8/2014, Location: North America

Gastar Exploration Inc. provides an operational update on recent well results and activity in the Utica/Point Pleasant play in West Virginia and in the Hunton Limestone play in north-central Oklahoma.

Well Results
The Simms U-5H well in Marshall County, West Virginia, Gastar's first Utica/Point Pleasant well, produced at an initial 48-hour gross sales rate of 29.4 MMcf/d of natural gas on a 30/64ths choke with approximately 6,700 psi of flowing casing pressure. The well lateral length is 4,447 feet and was completed with 25 hydraulic fracturing stages that used approximately 10.6 million pounds of sand proppant. Gastar has a 50% working interest ("WI") in the Simms U-5H well (43.2% net revenue interest ("NRI").

The Easton 22-1H and 22-2H wells in Kingfisher County, Oklahoma have reached a combined gross peak production rate of 1,528 BOE per day (92% crude oil). The Easton 22-1H well drilled in the Lower Hunton formation, had a peak production rate of 673 BOE per day (89% crude oil) and has a most recent 5-day average of 602 BOE per day (87% crude oil). The Easton 22-2H well drilled in the Upper Hunton formation, had a peak production rate of 855 BOE per day (94% crude oil) and has a most recent 5-day average of 628 BOE per day (93% crude oil). Gastar has a 98.3% WI (80.5% NRI) in both wells.

J. Russell Porter, Gastar's President and Chief Executive Officer, commented, "We believe the Simms U-5H is one of the most productive wells to date in the dry gas Utica play, particularly when considering the relatively short lateral length. The well has exceeded our pre-drill expectations with excellent porosity, pressures and flow rates. Along with successful Utica activity from other nearby operators, this well significantly de-risks Gastar's Utica/Point Pleasant assets."

"Our current plans are to drill one or two additional Utica/Point Pleasant wells later this year and early 2015 to demonstrate its consistency across our leasehold. At that time, we will carefully evaluate further drilling plans in light of regional natural gas prices and returns on investment relative to our internal investment opportunities."

Mr. Porter continued, "The two Easton wells represent a tremendous result from our initial drilling activity on the West Edmond Hunton Lime Unit ("WEHLU") property. These two wells have doubled production from our WEHLU property at a combined cost of approximately $12.0 million. The 22-1H well confirmed the Lower Hunton probable reserves upside that we initially recognized when we acquired the asset in November 2013. The 22-2H well has significantly outperformed our PUD type curve for Upper Hunton wells in the northern portion of the WEHLU property." "Overall, the Utica and Hunton results demonstrate that we can generate significant incremental value from the exploitation of our existing asset base."

Operations Update
In our area of mutual interest ("AMI") during the third quarter of 2014, five gross (1.9 net) non-operated horizontal wells have been placed on flow back, five gross wells are awaiting completion and four gross wells are being drilled. Early average production rates for these non-operated wells appear to be on trend with our projected AMI average type curve. We anticipate an additional three gross wells will be placed on flow back before the end of the third quarter of 2014 and an additional seven to nine gross wells will be placed on production in the fourth quarter of 2014.

During the third quarter of 2014, two gross (2.0 net) operated lower Hunton horizontal wells have been drilled and are awaiting completion. The Horseshoe 3-1H well, located in Canadian County, Oklahoma is scheduled to commence completion operations this week. Completion operations on the well are planned to consist of approximately 19 hydraulic fracturing stages within the 4,166-foot lateral section. If successful, flow back operations are anticipated by late September 2014. Our WI in the Horseshoe 3-1H well is 99.3% (76.7% NRI). The Deer Draw 21-4CH well, located in Oklahoma County, Oklahoma within our WEHLU property, just completed drilling and has encouraging log indications. Completion operations are estimated to commence late-September with flow back operations scheduled for mid-October 2014. Our WI in the Deer Draw 21-4CH well is 98.3% (80.5% NRI).

Marcellus and Utica Shales
In Marshall County, West Virginia, we currently have ten gross (5.0 net) Marcellus wells in various stages of drilling on the Armstrong and Hansen pads. We plan on completing all ten wells late in the fourth quarter of 2014. Drilling of the next dry gas Utica Shale well on the Blake pad is scheduled to commence by mid-October 2014. This Blake well is projected to have a 6,600-foot lateral and we will have a 50% WI (41.5% NRI).

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