Gastar Exploration Ltd. (GST) announced Monday that it agreed to sell its East Texas assets to Cubic Energy Inc. (QBC) for $46.0 million, subject to customary closing adjustments. The transaction is expected to close on or before June 5 2013, with a property sale effective date of January 1, 2013.
The assets to be sold include about 31,800 gross acres in the Hilltop area of East Texas in Leon and Robertson Counties. For the three months ended December 31, 2012, net production from the Hilltop area averaged approximately 12.4 MMcfe/d. At December 31, 2012, proved reserves attributable to the Hilltop area were approximately 27.4 Bcfe, of which 100% are classified as proved developed and represented approximately 15% of Gastar's total proved reserves.
Gastar stated that it will use proceed from the transaction to reduce its outstanding balance under its revolving credit facility. The company anticipates that this transaction will result in a net increase in the Company's liquidity position of about $25 million.
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