Gastar Exploration says that the aggregate rate of gas production from the Bibblewindi multi-lateral production pilots in its coal seam gas project in New South Wales, Australia has reached 250,000 standard cubic feet per day. Water production continues at approximately 3,500 to 4,000 barrels per day. Strong water flows, the precursor to strong gas flows, have confirmed the anticipated widespread fracture network and high permeability of the Bohena coal seam. Full scale dewatering from the six production wells commenced in early May 2009. It is expected that gas production rates will continue to climb over coming months as dewatering continues. Gastar holds a 35 percent working interest in the project with the balance held by its joint development operating partner.

J. Russell Porter, Gastar's President and Chief Executive Officer, said, "The excellent early performance of this production pilot is confirming our high expectations for the project. We believe this puts us on track to achieve our reserves upgrade targets as well as move forward to project commercialization and full-scale development.

"In addition, the multi-lateral drilling design is proving to be a success and we are now confident that we can comfortably drill laterals of over 1 km in length. We are also seeing clear pressure communication between the lateral wells, which means the spacing between the laterals can be greatly increased. We anticipate a spacing of up to 1 km will be achievable, increasing the total quantity of gas that will be produced from each well and materially reducing gas production costs.

"We are particularly pleased that gas production was immediate when dewatering of the multi-lateral pilots commenced," added Mr. Porter. "This confirms the Bohena coal seam is fully saturated and based on results we have seen so far, we expect the gas content to be approximately 15 standard cubic metres (530 standard cubic feet) per ton of coal."

Tags: Gastar Exploration Ltd.