Gastar Exploration Earnings: Here’s Why the Stock is Rising Now

Gastar Exploration (AMEX:GST) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.56%.

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Gastar Exploration Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $0.09 in the quarter versus EPS of $-0.06 in the year-earlier quarter.

Revenue: Rose 23.5% to $11.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Gastar Exploration reported adjusted EPS income of $0.09 per share. By that measure, the company beat the mean analyst estimate of $0.02. It missed the average revenue estimate of $17.16 million.

Quoting Management: J. Russell Porter, Gastar’s President and CEO, stated, “Since the beginning of 2013, we have announced several important achievements that are rapidly transforming Gastar into a much stronger company with growing cash flow from expanding liquids production. Within the last two months we have announced very encouraging results from our second well in our Hunton Limestone play in Oklahoma and our intent to acquire 157,000 net additional acres near our current position in Oklahoma from Chesapeake Energy. As part of the Chesapeake transaction, we are settling all outstanding litigation between our two companies, and we have agreed to repurchase 6,781,768 shares of Gastar common stock held by Chesapeake for $9.8 million or $1.44 per share, which is a significant discount to the current trading price of our common stock.
“We have also announced that we have agreed to divest our East Texas natural gas producing assets in order to redeploy capital to our liquids-rich and higher-return projects in the Marcellus Shale and Hunton Limestone. Once these transactions are completed and funding has been secured, we expect to have a large inventory of attractive, high-return, liquids-focused drilling opportunities.
“We are also pleased that after several delays, the third-party gathering system and pipeline operator in West Virginia has expanded its dehydration capacity, which should allow production from our operated Marcellus Shale assets to materially increase,” added Porter

Key Stats (on next page)…

Revenue decreased 35.13% from $17.42 million in the previous quarter. EPS increased 28.57% from $0.07 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.01 to a profit $0.04. For the current year, the average estimate has moved up from a profit of $0.05 to a profit of $0.13 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]