Gastar Exploration USA Inc., the wholly-owned subsidiary of Gastar Exploration Ltd. (NYSE Amex: GST), is commencing an underwritten public offering of 600,000 shares of perpetual and non-convertible 8.625% Series A Cumulative Preferred Stock (liquidation preference of $25.00 per share).
The company will guarantee the payment of dividends that have been declared by the board of directors of Gastar USA, amounts payable upon redemption or liquidation, dissolution or winding up, and any other amounts due with respect to the Series A Cumulative Preferred Stock, to the extent described in the prospectus supplement. Upon issuance, the company anticipates that Gastar USA's 8.625% Series A Cumulative Preferred Stock will be listed for trading on the NYSE Amex under the ticker symbol "GST.PR.A."
Proceeds from the raise will be used to pay down the balance on the revolving credit facility which currently stands at approximately $21 million.
The company is active in the capital markets, as it has an aggressive drilling CAPEX budget of more than $80 million and bolt-on acquisitions in the Marcellus Shale, noted Global Hunter Securities in a research note June 15. In December, Gastar issued 13.8 million common shares for net proceeds of $52.5 million.
McNicoll, Lewis & Vlak LLC is acting as book-running manager for the offering.
