Gastar Exploration Inc.’s (GST) said Jan. 12 that its first operated test of the Stack Formation’s Meramec Shale play in Kingfisher County, Okla., moved the productive outline of the Meramec play farther northeast than previously defined.

The Deep River 30-1H posted a gross post IP 30-day average sales rate of 956 barrels of oil equivalent per day (boe/d), 68% oil.

The well commenced flow back in late October and in December produced a peak 24-hour rate of 1,094 boe/d, 71% oil.

Gastar's independent reservoir engineer has estimated the ultimate recovery (EUR) for the Deep River 30-1H well to be 705 Mboe as of Dec. 31, 2015, with crude oil comprising 50% on a wet gas basis.

The EUR estimate was 40% above the high end of the company’s pre-drill estimates, said J. Russell Porter, Gastar's president and CEO.

“We plan to continue to delineate our acreage to de-risk our Meramec position and are confident that this play can generate acceptable returns even with today's commodity prices," he said.

Gastar said that after the successful Deep River 30-1H well it intends to spud a second Meramec well, the Holiday Road, in Kingfisher County in February. The Holiday Road well will be located in Section 2 18N, 6W approximately four miles north and three miles east of the Deep River 30-1H well.

The Deep River 30-1H was completed with 34 frack stages for $6.4 million. Future Meramec wells will cost about $5.5 million to drill and complete, the company said.

Gordon Douthat, senior analyst, Wells Fargo Securities, said the IP results and EUR are a positive and above initial expectations “while the mix may be gassier than expected.”

Douthat said the well is the farthest northeast Gastar has drilled and that it should see oiler production as it heads in that direction.

The company has not yet provided its 2016 capex budget but given its initial success, Gastar’s program will be focused on the Meramec, said Gabriele Sorbara, analyst, Topeka Capital Markets.

“We see a solid setup with its position in Oklahoma although, management needs to enhance its liquidity and reduce leverage at current strip prices,” he said.

Gastar paid about $43 million in December to acquired interest and operatorship and 15,700 net undeveloped acres in Kingfisher and Garfield counties, Okla. The company said its intention is to transform into a pure play Oklahoma company.

Gastar is marketing 11,000 net acres in Marshall and Wetzel counties, W.Va., though they are expected to be a tough sell in the present commodity market, Sorbara said.

In its November investor presentation, Gastar said offset operators IPs have ranged up to 1,600 boe/d, 90% oil. The Meramec play is naturally fractured carbonate that is similar to the Hunton.

Gastar has a 100% working interest and 80% NRI in the Deep River well.

Darren Barbee can be reached at dbarbee@hartenergy.com.