Gastar Exploration begins consent solicitation for 12¾% notes

By Angela McDaniels

Tacoma, Wash., Feb. 11 - Gastar Exploration Ltd. said Gastar Exploration USA, Inc. is soliciting consents from holders of its $100 million 12¾% senior secured notes due 2012 to eliminate or modify some covenants in the notes indenture.

The company needs consents from holders of a majority of the notes in order to make the changes, which would allow Gastar USA to borrow $25 million under a proposed first-lien term loan facility.

Holders of a majority of the notes have indicated that they plan to consent to the proposed amendments, according to a company news release.

Immediately following the receipt of the consents, Gastar and Gastar USA expect to receive the net proceeds from the $25 million term loan. These proceeds will primarily be used to fund current and future capital commitments and well operating costs.

The company said it believes the consents will be obtained and the term loan transaction will close within two weeks.

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

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