Gastar to pay down revolver debt post-asset sale, borrowing base cut

By Wendy Van Sickle

Columbus, Ohio, April 8 – Gastar Exploration Inc. will use proceeds of a newly closed $80 million asset sale to reduce borrowings under its revolving credit facility, which was subject to an automatic reduction of its borrowing base following the sale, according to a press release.

The borrowing base was automatically reduced to $100 million as required by amendment No. 8 to the credit agreement, making the paydown necessary to achieve compliance with the new borrowing base, according to the release.

The company sold substantially all of its producing assets and proved reserves and a significant portion of its undeveloped acreage in the Appalachian Basin for $80 million, subject to certain adjustments, to an affiliate of Tug Hill Inc.

"The closing of this transaction allows us to reduce our debt and exclusively focus our operations on the Mid-Continent Stack Play, one of the most economic plays in the U.S.,” J. Russell Porter, Gastar's president and chief executive officer, said in the release.

The company also paid down $10 million under the revolver in January. On Feb. 22, the company reported it had $90 million drawn under the revolver and cash and cash equivalents of about $35.5 million.

Gastar is a Houston-based oil and gas exploration and production company.

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