The companies also plan to form an area of mutual interest to explore 13 counties in East Texas.
Chesapeake said it will buy newly-issued common shares equal to 19.9% of Gastar's outstanding shares at a price between $2.66 and $2.80 a share at current exchange rates.
Gastar has about 135.2 million shares outstanding and will issue about 26.9 million new shares. It expects to raise between $72 million to $75 million in the offering, which it will use to accelerate its East Texas drilling programme and cut short-term debt.
Chesapeake
