HOUSTON — Gastar Exploration Inc. reported Feb. 2 its proved reserves increased 87 percent in 2014 to 102.1 million barrels of oil equivalent (MMBoe), of which 53 percent is liquids (oil, condensate, and natural gas liquids, or NGLs) and 47 percent is natural gas.

The pre-tax present value of future cash flows of these reserves grew 67 percent to $988.7 million.

Making the announcement, however, J. Russell Porter, Gastar’s president and CEO, said the company’s 2015 capital budget has been reduced to approximately $103 million from the previously announced 2015 budget of $173 million.

Porter said the company has confirmed the “productivity of the Utica/Point Pleasant formation on our assets in West Virginia.”

“In West Virginia, our Utica/Point Pleasant test on the Simms pad in the Appalachian Basin continues to produce at high rates,” he added.

A recent five-day average was 8.5 MMcf/d of natural gas and cumulative production of 1.8 Bcf of natural gas since initial production as of Aug. 30, 2014.

Drilling shelved

Despite these results, Porter said, “we do not believe that it is prudent to drill or complete additional Utica/Point Pleasant wells until natural gas prices in the region improve.”

Legal challenge

Late last year, a West Virginia state judge rejected the second of a pair of lawsuits launched by a unit of Axiall Corp. aimed at stopping Gastar Exploration hydraulic fracturing operations in the Marcellus Shale.

In a Dec. 24, 2014 order, Circuit Judge David W. Hummel dismissed Gastar from a lawsuit filed by Eagle Natrium LLC in Marshall County, West Virginia, requesting a temporary injunction.

In doing so, Hummel agreed with Gastar’s position that Eagle was legally precluded from retrying its claims in West Virginia after losing a nearly identical lawsuit in Pennsylvania earlier.

Less than a week later, the trial court threw out the lawsuit’s remaining claims against the West Virginia Department of Environmental Protection, which Eagle was pursuing in an effort to invalidate operator permits issued to Gastar.

Last October, a similar lawsuit Gastar faced in Pennsylvania was shut down after Allegheny County Court of Common Pleas Judge Christine Ward found that Eagle failed to prove that Gastar’s hydraulic fracturing activities in West Virginia present a threat to Eagle’s adjacent salt mining operations.

Porter said Gastar plans to fracture treat the three Goudy wells impacted by the Axiall lawsuits in the first quarter of this year.

New technique

Gastar has recently completed and brought on line 10 new Marcellus wells in Marshall County, West Virginia. These wells are producing at a combined gross rate of 28,700 Mcfd of unprocessed natural gas and 3,300 barrels of condensate per day on a restricted basis while still flowing back significant amounts of completion fluid.

These are the first wells Gastar has completed using an enhanced completion technique designed to segregate and stimulate differently pressured portions of the horizontal wellbore.