NEW YORK, September 2, 2003 (PRIMEZONE) -- Institutional coverage of Gastar Exploration Ltd. (TSX Venture Exchange:YGA) (Other OTC:GSREF) has been initiated by Investrend Research analyst Waheed Hassan, CFA, with a 'Buy' rating, and a target valuation of $7.80 per share.
A recent joint venture agreement with Pinnacle Gas Resources is likely to be instrumental in enabling Gastar fund exploration and production activities in the Powder River Basin. Moreover, preliminary studies about the PEL 238 and Gippsland Basin properties in Australia suggest presence of very large quantities of CBM reserves. Our target valuation estimate is based on estimated present value of reserves.
Also, drilling of the second Deep Bossier well in East Texas, can potentially act as the catalyst for increased investor interest in Gastar. Estimates indicate that over 200BCF can be easily recovered from Gastar's position in this play. The cost of the second well is estimated at approximately $12 million.
Risks include volatility of earnings due to changing product prices, and unsuccessful drilling projects.
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Mr. Hassan is a CFA charter holder and a member of AIMR. He worked as senior research analyst at an affiliate of Merrill Lynch, Warburg Dillon Read, and Indosuez W.I. Carr Securities. He was rated amongst #1 Financial Sector research analysts by Asian Corporates in The Reuters Survey of Global Emerging Markets 1998. Similarly, he was a member of the #1 rated research team according to The Reuters Survey of Global Emerging Markets 1999 and Euromoney Awards for Excellence 2000. He was also the in-house economist at WDR and Indosuez W.I. Carr Securities and regularly contributed to international economic research publications. He received his MBA from Vanderbilt University.
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