Less than two months after gaining a financially able partner to develop some of its Marcellus Shale acreage, Gastar Exploration Ltd. on Wednesday said it would buy another 59,000 net acres in the West Virginia portion of the play.

The additional leasehold is concentrated in Preston, Tucker and Pendleton counties, WV. Included is a 41-mile gathering system, a salt water disposal well and seven producing conventional wells with current output of about 500 Mcf/d.

Financial details were not disclosed; the transaction is set to close by mid-December.

Before executing the agreement, Gastar said it had obtained an exclusive option with the right to conduct operations to test the leasehold’s shale potential.

In the test, the Houston-based producer said it “deepened an existing well” with a vertical well producing “at more than 1.1 MMcf/d.” Gastar also recompleted another existing vertical well in the West Virginia acreage and tested that well “at rates as high as 1 MMcf/d.”

“This acquisition significantly increases Gastar’s exposure to the Marcellus Shale and positions the company for long-term reserve and production growth,” said CEO J. Russell Porter. “This was a unique opportunity structured by Gastar to allow us to essentially derisk the acreage from a Marcellus Shale perspective prior to committing to the acquisition.

“The results of the work undertaken by Gastar, and the fact that this acreage is on trend with other successful Marcellus Shale wells, confirm the attractiveness of this opportunity.”

Gastar in September inked a joint venture (JV) agreement with South Korean investment firm Atinum Partners Co. to develop Marcellus Shale acreage in West Virginia and Pennsylvania (see Daily GPI, Sept. 23). The JV also includes a plan by the partners to review potential shale acreage that Gastar has for future potential acquisitions.

Because of the JV agreement, Atinum “has the right to participate in this acquisition on pre-determined terms,” Porter noted. “Once we know our joint venture partner’s intentions, we will determine whether any external financing will be sought. Either way, Gastar has the ability to close the transaction with existing sources of capital.”

During the third quarter Gastar began drilling its first operated horizontal Marcellus Shale test, the Wengerd No. 1 in Marshall County, WV, which was the initial activity within its JV agreement. Atinum is to pay 87.5% of the cost of the well for a 50% interest.

“We expect to have the well fracked [hydraulically fractured] by the late first quarter 2011, and if successful, it would go on production shortly thereafter,” Porter said in late October.

Atinum and Gastar are also participating in a seven-well program to test the Marcellus Shale on acreage pooled with an offset operator in Butler County, PA. Atinum and Gastar collectively own 38.4% of the seven wells, and Atinum again is to pay 87.5% of the combined net cost.

The vertical sections of the Pennsylvania wells have been drilled from one pad, with a larger rig scheduled to drill horizontal sections in all seven wells early next year. Completion activity is expected to begin in the second quarter of 2011, with the wells scheduled to be fracked and put on production beginning in the middle of 2011.

“With the closing of our Atinum joint venture, we are dramatically stepping up our development activity in our Appalachia acreage and expect to have an interest in at least eight wells producing from the Marcellus Shale by mid-2011,” said the CEO. “Additionally, we have an even more active drilling program planned for 2011, with at least another dozen operated horizontal wells planned. Our focus will be to initially target wells near infrastructure and in areas that are expected to have higher liquids content.

“With over half of our total Marcellus Shale acreage expected to generate production with meaningful liquids content, we believe this strategy will enhance our returns if natural gas prices remain low.”

Marcellus Shale heavyweight Chesapeake Energy Corp. is the top institutional shareholder in Gastar, with an estimated 24% of total holdings and 13.5% of shares outstanding.