GST

[bellwj]

GST preferred is acting as though the company is about to experience a cash flow issue. Any thoughts or news I may have missed?

[dan_s]

They have several big Marcellus wells coming on-line in Q4. The company is hosting our luncheon at The Hess Club on December 11. I have seen nothing to suggest they cannot pay dividends on their pfd stock.

HOUSTON, Oct. 4, 2012 /PRNewswire/ -- Gastar Exploration Ltd. (NYSE MKT: GST) ("Gastar") announced today that Gastar Exploration USA, Inc., the wholly-owned subsidiary of Gastar, has declared a monthly cash dividend on its 8.625% Series A Preferred Stock ("Series A Preferred Stock") for October 2012.

The dividend on the Series A Preferred Stock is payable on October 31, 2012 to holders of record at the close of business on October 15, 2012. The October 2012 dividend payment will be an annualized 8.625% per share, which is equivalent to $0.179688 per share, based on the $25.00 per share liquidation preference of the Series A Preferred Stock. The Series A Preferred Stock is currently listed on the NYSE MKT and trades under the ticker symbol "GST.PRA."

[letitfly]

Apparently, GST is being sued by Chesapeake over a property dispute. I have not had a chance to review the facts, but curious if this will affect GST's preferred going forward. Any perspective you can provide Dan?

[dan_s]

Shares of Gastar Exploration (AMEX:GST) collapsed after Chesapeake Energy Corporation (NYSE:CHK) brought a lawsuit that seeks rescission of certain transactions in 2005 concerning the former’s Hilltop Prospect in Texas and the latter’s position in Gastar common stock. Chesapeake wants not only its original initial investment of $81.6 million, but also reimbursement of other lease and well costs.

This is all I know, which isn't much.

[letitfly]

While their operations seem to support the payments on the preferred, what is your take on the suit filed by Chesapeake? The market action in the preferred is very volatile right now. How vulnerable is GST due to Chesapeake's claims?

[dan_s]

The company obviously disagrees with the Chesapeake claim. It is up to you as to what you should do. Small caps have more risk. You should sell if this is keeping you up at night.

[dan_s]

GST just sent me some additional info on the chk claim. Send me an email and I can forward it to you.

dmsteffens@comcast.net

I am traveling today so it may be Friday before I can get to it.