Gastar Exploration entered a bid with the State of West Virginia about a year ago, and in January 2015 they were notified that they had won the bid at $3,500/acre and 20% royalty.  The 20% was because that was the lowest royalty the State would entertain.  We appreciate the State’s efforts to bump up royalty amounts ’round these parts, but it doesn’t seem to have worked in this case.

The bid had been won, but there were still details to iron out, and Gastar and the State never got those details worked out.  In the meantime, Gastar decided to sell its Marcellus and Utica acreage and focus on other areas of the United States.  While that doesn’t seem like a very smart move considering the low cost of doing business in the Marcellus/Utica play, that’s what they did.

The State has decided that the bid with Gastar is no longer going to go through, and they are very likely to rescind it.

That leaves a bunch of acreage up for bid.  It’s nice acreage, contiguous with one owner.  Somebody’s going to jump on it, most likely Antero.  It won’t go for nearly as much this time, though.  It would be nice to see the State wait a couple years on it, as prices should improve in that time period.