Gastar Exploration Ltd. (NYSE: GST) announced Oct. 28 that its subsidiary is commencing an underwritten public offering of series B cumulative preferred stock, the proceeds of which will help pay for a recent acquisition.

In connection with the offering, Gastar Exploration USA Inc. intends to grant the underwriters a 30-day option to purchase additional shares of series B cumulative preferred stock to cover over-allotments, if any.

Net proceeds will be used to partially fund its ongoing capital expenditure program, including some of the costs associated with the previously announced acquisition of 24,000 net acres of Midcontinent oil and gas leasehold interests. The leaseholds are located in the West Edmond Hunton Lime Unit located in Kingfisher, Logan, Oklahoma and Canadian counties, Okla., which are expected to close in late November.

The company will guarantee payment of dividends that have been declared by the board of directors of Gastar USA, amounts payable upon redemption or liquidation, dissolution or winding up, and any other amounts due with respect to the series B preferred stock, to the extent described in the prospectus supplement. Upon issuance, the company anticipates that Gastar USA's series B preferred stock will be listed for trading on the NYSE MKT LLC under the ticker symbol "GST.PR.B."

Barclays Capital Inc., Credit Suisse Securities (USA) LLC, MLV & Co. LLC, and Sterne, Agee & Leach Inc. are joint book-running managers. Janney Montgomery Scott LLC is lead manager. Euro Pacific Capital Inc., IBERIA Capital Partners LLC, Imperial Capital LLC, Ladenburg Thalmann & Co. Inc., Maxim Group LLC, National Securities Corp., and Northland Securities Inc. are co-managers.

Gastar Exploration Ltd. is an independent energy company engaged in the exploration, development, and production of natural gas, condensate, oil, and NGLs in the U.S. The company is based in Houston.