Company Profile: Gastar Exploration Ltd. (TSE: YGA)

Gastar Exploration, Ltd. Is an exploration and production company traded on the Toronto Stock Exchange with a focus on natural gas assets in the United States and Australia. The company pursues a balanced strategy combining low-risk coal-bed methane (CBM) development in Wyoming’s Powder River Basin, the most active CBM play in the U.S. with over 11,000 well drilled to date, and in Australia with positions in three of the most exciting deep natural gas plays in the U.S. The Company intends to begin also trading on a US market in 2003.

Deep Bossier Play, East Texas

Deep Bossier Sands Project area, in which Gastar has increased its working interest in its through the acquisition of an additional 22.5% working interest in a 9,000-acre lease block located in Leon County, Texas. Gastar, as operator, has a 72.5% working interest position in the 9,000-acre block.

Gastar has an 11.82% working interest owner in the Belin Trust A-1 well and in the jointly controlled 4,100 acres surrounding that well. The Belin well, operated by Anadarko Petroleum (NYSE:APC - News) was drilled to a total depth of 20,946 feet and is in the process of being tested.

Ultimately recoverable economic reserves attributable to Gastar's lease hold position, net to Gastar, have been estimated by Netherland Sewell & Associates to be approximately 550 BCF. These reserves are not classified as proven but provide the basis for a low-risk, long-term development program upon Gastar's deep Bossier properties.

Deep Trenton - Black River Play, Appalachia

Gastar has a minimum 7.5% working interest position in the Cross #1 well in the Cottontree Field located in Roane County, WV. The Cross #1 well is the first of two wells to be drilled in the immediate area of several previous successful Trenton - Black River wells drilled by Columbia Natural Resources (CNR, a subsidiary of NISource, NYSE:NI). CNR is participating in the Cross well with a 25% working interest position.

Gastar has assembled an approximate 160,000-acre lease position in north central West Virginia in order to pursue additional Trenton - Black River and deeper prospects. The lease position was assembled based upon Gastar's extensive seismic reconnaissance and proprietary seismic reprocessing of available industry data along with several hundred miles of newly acquired proprietary seismic data. Gastar has identified approximately 100 prospects that are geologically analogous to the successful wells drilled in the Cottontree area.

Powder River Basin CBM Play, Wyoming

Gastar has recently completed a program to drill 12 additional wells and workover and re-enhance 35 of the Company's coalbed methane (CBM) wells drilled in the Squaw Creek project area of the Powder River Basin. Gastar's Squaw Creek property is producing and selling approximately 1.1 MMCFD of natural gas net to Gastar. Gastar expects the Squaw Creek property to ultimately produce approximately 3.0 to 3.6 MMCFD net to Gastar from the existing wells as these wells continue to de-water. Gastar's current lease position would allow the drilling of approximately 1,200 additional wells in the immediate area of the Company's existing production. The Company is planning the drilling of 100 to 150 additional wells in the Squaw Creek area over the next 12 months.

At the Company's Black Panther project area, the 44 wells drilled to-date are currently capable of producing approximately 350 MCFD of natural gas. Gastar believes that with several additional months of de-watering these wells will reach production rates necessary to allow access into the already installed compression and transportation assets. Gastar believes that gross peak rates of approximately 3.0 MMCFD will be ultimately achieved from the Black Panther project.

Gastar continues to hold acreage in the Culp Draw and Table Mountain areas that are within the area being developed for the deeper Big George coal seam. Gastar plans to monitor the development of the Big George coal and potentially participate in future development.

PEL 238 CBM Play, New South Wales, Australia

Gastar is the 100% working interest owner of a 2.2 million acre concession located in New South Wales, Australia approximately 250 miles northwest of the Sydney / New Castle area. Gastar recently re-worked several CBM wells drilled on the property by the previous operator and established short-term production rates that would indicate commercial viability for CBM development. Gastar's independent reservoir engineering firm, Netherland Sewell & Associates, has estimated that 6.6 trillion cubic feet of CBM recoverable reserves are in place on the PEL 238 concession.

Gastar is planning the drilling of three additional wells in the project area encompassing the Bohena #3 well to test the effects of partially de-watering the Maules Creek coal section. Current plans also call for a horizontal test of the Maules Creek coal in the Bohena project area either through re-entering the Bohena #4 or as a part of the completion of one of the new wells scheduled to be drilled. If the results of these wells continue to confirm the positive results seen to date, the Company plans to initiate development of an area sufficient to justify the installation of gathering and transportation assets to serve several local natural gas markets. Additional development of PEL 238 would be planned around the installation of pipeline assets necessary to deliver gas into the systems serving the Sydney / New Castle areas.

Another potential market for CBM from the PEL 238 property is the generation of electricity on-site. Eastern Star Gas Limited, the owner of the conventional oil and gas rights covering PEL 238, has announced a joint venture with Country Energy, the 3rd largest natural gas marketer in Australia, to study and develop cogeneration utilizing natural gas from PEL 238. Gastar is also pursuing strategies to expand potential CBM gas sales from PEL 238 including power generation business opportunities.

Gippsland Basin CBM Play, Victoria, Australia

Gastar applied for permits to begin drilling the first of several three to five well pilot programs to evaluate the CBM potential of the brown coals located within its licenses. Gastar has a 75% working interest position in approximately 2,000,000 acres comprising essentially the entire onshore portion of the Gippsland Basin. The Gippsland Basin is known to contain one of the world's largest accumulations of low rank brown coals and is the site of several very large surface coalmines. The project is expected to receive appropriate permits shortly and was originally scheduled to commence drilling in April. The start-up of the first pilot project has been delayed to the fourth quarter of 2002 due to several permitting delays. Well drilling is expected to be completed in the fourth quarter of 2002 with additional testing ongoing throughout the first half of 2003.

Prior to the decision to evaluate the CBM potential through drilling activities, Gastar commissioned Dr. Guy Holdgate, an outside consultant and the leading authority on the coals within the Gippsland Basin, to conduct an independent study of the potential for commercial CBM reserves on Gastar's licenses. Dr. Holdgate's study estimated that between 37 and 57 trillion cubic feet (TCF) of CBM gas is in place on Gastar's licenses. Using a 50% recovery factor results in potential CBM reserves net to Gastar's interest of over 16 TCF. Dr. Holdgate's study confirmed that the coals located in the Gippsland Basin are nearly identical in age and characteristics to the coals that are exploited for CBM in the Powder River Basin of Wyoming and Montana. Subsequent testing supported the Holdgate report.

Gastar has gathered definitive information on the prospective coals through observing the shallow portion of other operators' wells that have been drilled through the coals and through the commissioning of an independent resource evaluation. Specifically, Gastar has observed the drilling of two conventional wells that penetrated the coal sections. In both cases, as these wells penetrated the shallow coal formations, various tests were conducted that resulted in immediate indications of methane gas within the coals and permeability within the coal which is necessary to allow the coal to produce the methane. On March 8, 2002, a third party operator, Lakes Oil (ASX: LKO), announced the York #1, a shallow conventional well cored the coal sections and reported that ``between 567 and 640 meters drilled a massive coal section'' with minor gas shows encountered throughout the coal section. The York #1 encountered a total of 380 feet of coals. This is a strong indication of the presence of methane within coals that are permeable enough to allow the production of the methane against the well's fluid system. This well is located approximately 80 kilometers from the prior wells that tested positive for CBM indicating the potential for a large productive area. All of the wells discussed herein are with Gastar's license area for CBM development. Gastar's pilot projects will be focused near the prior test wells that encountered the massive coal sections and within 5 kilometers of a natural gas transmission pipeline that has the capacity to transport gas from this project.

Deep Temblor Play, San Joaquin Basin, California

Gastar owns approximately 4,000 acres of leases in the East Lost Hills area of the San Joaquin Basin. This area has been an active drilling province for the deep Temblor formation since an exploration well was drilled into the Temblor formation in November 1998 and experienced a high rate gas and condensate flow during a blow out and subsequent fire.

At the present time, two deep Temblor wells are being drilled on acreage immediately adjacent to Gastar's holdings. The NWLH 1-22 well, operated by Aera Energy, LLC along with its partners Ivanhoe Energy (NasdaqNM:IVAN) (Toronto:IE.TO), PYR Energy Corporation, and Ceniarth, Inc., was drilled to the Temblor formation and was subsequently sidetracked in the direction of Gastar's lease holdings and encountered the Temblor formation an estimated 800 feet higher than the original wellbore and more than 650 feet higher on structure than the nearest producing well. Gastar believes that if the NWLH 1-22 well is completed in the Temblor formation as a producing well, that Gastar's leasehold will become a significant opportunity for development by Gastar and/or industry partners. Gastar also believes that, based on seismic data, the Temblor formation will be encountered even higher on structure if a well were to be drilled on its acreage. Reserve estimates for the deep Temblor formation are 250 BCF of natural gas per square mile. Gastar's acreage directly offsetting the NWLH 1-22 is 320 acres or 1/2 square mile. Gastar has applied for two drilling locations on its leasehold.

Anadarko Petroleum Company (NYSE:APC) has drilled, set production casing and is awaiting completion efforts on the ELH #9 well in the southern portion of the East Lost Hills Temblor play on acreage that is immediately adjacent to another lease tract that is 100% owned by Gastar. While results of the APC well have not been released, Gastar believes that the Temblor formation has been encountered in the well and that natural gas shows were recorded during the drilling of the Temblor formation. If the Aera/Ivanhoe and Anadarko wells are successfully completed, Gastar will pursue the strategy of bringing in industry partners to drill Temblor wells at no cost to Gastar.