Gastar Exploration to repay bank debt, notes with asset sale proceeds

By Sara Rosenberg

New York, July 2 - Gastar Exploration Ltd. plans to repay outstanding debt under its revolving credit facility, retire its $25 million term loan and pay in full its $30 million of convertible subordinated notes due in November using proceeds from an asset sale, according to a news release.

Remaining proceeds are expected to be used to finance an offer to repurchase any and all of the company's $100 million of 12¾% senior secured notes.

The company is selling its interest in Petroleum Exploration Licenses 238, 433 and 434 in New South Wales, Australia, along with shares of Gastar Power Pty Ltd, the entity holding it 35% interest in the Wilga Park Power Station.

Santos Ltd. is purchasing the assets for about $240 million, and upon closing, net proceeds to Gastar are expected to be about $175 million.

The transaction is expected to close on July 10.

Gastar is a Houston-based exploration and production company focused on finding and developing natural gas assets.

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