Gastar Exploration Ltd. is acquiring a 35% interest in the Wilga Park Power Station in New South Wales...
Gastar Exploration Ltd. is acquiring a 35% interest in the Wilga Park Power Station in New South Wales, Australia from its joint venture partner, Eastern Star Gas Limited. The acquisition also includes a 35% working interest in Petroleum Production License 3 (PPL3), which contains the Coonarah conventional gas field. Gastar will pay Eastern Star total consideration of US$3.25 million.
J. Russell Porter, Gastar's Chairman, President and CEO stated, "Given our existing 35% working interest in the coal seam gas production from PEL 238, this acquisition more fully aligns our interests with those of our joint venture partner, Eastern Star Gas, as we jointly benefit from the increasing production from the pilot programs. The Wilga Park Power Station will be the primary market for natural gas from PEL 238 until we begin fulfilling our supply arrangements under the two previously announced Memorandums of Understanding."
Gastar will pay $3.0 million upfront with the final $250,000 contingent upon the Power Station being successfully expanded to a capacity of seven megawatts (MW). The facility currently has a capacity of four MW with plans in place to gradually increase capacity up to 40 MW as coal seam gas production from PEL 238 increases. Construction of a flowline to deliver gas from the PEL 238 production pilots to the power station is expected to be completed by the end of 2008. Gastar will fund its share of the construction expenditures of the power station and pipeline, which is expected to total approximately US$3.6 million over the next 12 months.