GST

[wilmawatts]

Should be a good day for GST

Gastar Exploration Inc(GST) :

* Gastar Exploration(GST) announces Oklahoma development agreement in Kingfisher county, non-core Canadian county property sale and revolving credit facility amendment

* Gastar Exploration(GST) - to sell certain non-core leasehold interests primarily in northeast Canadian county for approximately $71.0 million

* Gastar Exploration Inc(GST) - borrowing base reaffirmed at $100.0 million

* Gastar Exploration Inc(GST) - to jointly develop up to 60 Gastar operated wells in stack play in Kingfisher county, Oklahoma Source text for Eikon: Further company coverage

[mkarpoff]

But does it really get them closer to re-starting the div??

[wilmawatts]

They will pay in stock if they cant pay in cash, at least that is what they have said and what the documents require as I understand it

Maybe Dan can clarify when he gets back, he is in Dallas today I was told

[dan_s]

I love the terms of the joint development agreement. Leaves most of the upside with GST and will move lots of reserves to "proven".

Gastar will catch up on pfd dividends by paying them in common stock at one year anniversary. Listen to their Q3 conference call for confirmation, but it is required by terms of the preferred.

If oil moves up over $60, I expect preferred to drift back to par

[Fosterplc]

I've been riding this for a while, nice to see the share price improvement.

[wilmawatts]

Dan is on way back to Houston, I expect he will comment on Friday

Nice day for us GST holders

[bobs]

Does GST still have good acreage that they control that isn't part of the JV agreement for the 60 wells and the non core sold????

[dan_s]

The drilling program ("Drilling Program") will target the Meramec and Osage formations within the Mississippi Lime on a contract area within three townships covering approximately 18,000 undeveloped net mineral acres under leases held by Gastar. Gastar will be the operator of all wells jointly developed under the Development Agreement.

Gastar holds over 100,000 acres with STACK potential.

Key highlights of the Development Agreement are:
Enhances Gastar's ability to hold acreage by production, reducing future lease renewal costs;
Increased drilling activity allows for more rapid delineation of Gastar's STACK acreage;
Investor earns only an interest in the well bores drilled under the Drilling Program, with Gastar retaining all operational control and right to keep offset formation locations at its full original working interest.
Gastar may book offsetting proved undeveloped locations at full original working interest; and
Gastar's 10% carried working interest and projected future reversionary interests will increase production and cash flow while reducing capital requirements.

[wilmawatts]

Gastar Exploration downgraded to market perform from outperform at FBR & Co.
MARKETWATCH 7:53 AM ET 10/21/2016

[wilmawatts]

well this is something you dont see too often, a downgrade and upgrade all rolled into one:

Analyst Actions: FBR & Co Downgrades Gastar Exploration to Mkt Perform vs Outperform, Lifts PT to $1.50 vs $1.25

[grimaldi]

When is that one-year anniversary?

[bearcatbob]

Analysts are if nothing else inconsistent. I long ago realized two people can look at the same set of facts and draw different conclusions - eg politicians.

This mess is simple. Are oil prices going to $40 or $60? How one answers that question should determine their investment decisions.

[dan_s]

Correct. Higher oil & gas prices will float all the boats. What we want to own are the ones that are sure to survive. The survivors, like the Sweet 16, will be much stronger than they were before.

Also, Gastar paid dividends on their preferred stock at the end of Q1 2016. They will catch up at the end of Q1 2017 and probably pay the cumulative dividends by issuing common stock to preferred stockholders. One year's dividends = $14,473,000 (Series A + Series B).

[Wade4213]

Dan/Others -

I own GST/PB purchased for income. We'll all be pleased if the resume distributions. If they distribute in common GST shares (or even more preferreds), I would like to liquidate and convert to cash. But, I assume, the issuance of so many new shares from the GST/PA and GST/PB distribution will certainly dilute GST and decrease its share price as any secondary offering. Many other preferred share holders are probably wanting to sell as well.

Do you agree that the GST price is likely to drop? If so, does anyone have any suggestions regarding how I can liquidate the new GST shares and not take a bath?

Many Thanks for any ideas....

T

[bobs]

I share your concern and believe that at todays common price there would be about a 10% dilution in April when we get the additional shares however I think that is baked into the current pfd prices and by April we will know the results of the new drilling and the market cap will be way up or toast.

[dan_s]

On the last conference call they said that if they pay the preferred dividends "in kind" it will be with common shares. This is one reason that I believe the best way to play GST is the preferred stock.
The news of an asset sale bringing in $71 million and the JV to prove up more leasehold is great news. IMO it means Gastar will survive. If their drilling program is successful and the price of oil increases to $60, Gastar is a screaming takeover target. A takeover by a large-cap means their debt and preferred stock goes quickly to par.
Still a lot of "ifs" on this puppy, but definitely moving in the right direction. Positive well results on the Q3 conference call will be another big step.

Russ Porter is a fighter. He has battled through tough times before.