Gastar Exploration has signed a joint venture agreement with South Korean investment firm Atinum Marcellus I, an affiliate of Atinum Partners, valued at $70m to develop the gas explorer's Marcellus Shale interests in West Virginia and Pennsylvania.
Atinum will pay Gastar $30m for an initial 21.43% stake in the Pennsylvania and West Virginia assets, which total about 34,200 acres, and $40m of drilling costs after which Atinum will have a 50% share in the properties.
Gastar will continue to serve as operator of all of the Marcellus Shale interests in the JV.
The transaction is expected to close within 30 to 45 days and is contingent upon the receipt of certain required approvals from government agencies in the Republic of Korea and other customary closing conditions.
Gastar and Atinum are pursuing an initial three-year development program that calls for the partners to drill one horizontal Marcellus Shale well during the remainder of 2010 and a minimum of 12 horizontal wells in 2011 and 24 horizontal wells in each of 2012 and 2013.
An initial area of mutual interests (AMI) will be established for potential additional acreage acquisitions in Ohio and New York along with the counties in West Virginia and Pennsylvania in which the existing interests are located.