Gastar Exploration says that Proved and Probable (2P) gas reserves in the Bohena Project Area of PEL 238, located in New South Wales, Australia, have been independently estimated by Netherland Sewell & Associates, Inc. Initial gross 2P gas reserves total 59 Bcf, including 21 Bcf of gross Proved (1P) reserves.

"This is a major milestone for the PEL 238 coalbed methane project and the first step in an ongoing process to prove up the existence of significant gas reserves to underwrite gas supply commitments for local markets," said J. Russell Porter, Gastar's President and CEO.

"Demand for natural gas as a clean-burning alternative to coal for power generation in Australia is very strong, and the recognition of Proved and Probable gas reserves is a positive development for the project and for the asset value that Gastar believes will be created through future activities.

"The Proved and Probable reserves recognized covers less than 1 percent of the acreage known to be underlain by coals within PEL 238, and we believe that reserve certification on the remaining project acreage involves low geologic risk, based on results of previous drilling and core work on our acreage," he said.

Gastar and its operating joint venture partner, Eastern Star Gas, executed a memorandum of understanding in March 2007 to potentially supply up to 500 Bcf of gas to the New South Wales government-owned electricity generator Macquarie Generation.

Mr. Porter added, "The joint venture's goal is to increase the independently estimated gross gas reserves within PEL 238 to 600 Bcf by 2010 in order to be in a position to deliver initial gas volumes into the Macquarie contract or to one of several other gas contracts currently under consideration. Plans for additional production pilots and core hole drilling programs are being finalized as a part of the process to obtain future independent gas reserves certifications on PEL 238."

Gastar owns a 35% working interest (31% net revenue interest) in the project, and Eastern Star Gas, the operator, holds a 65% working interest (57% net revenue interest).