Prospectus excerpt: We are offering 2,000,000 shares of our 10.75% Series B Cumulative Preferred Stock, par value $0.01 per share, which we refer to in this prospectus supplement as the ôSeries B Preferred Stock.ö The offering of Series B Preferred Stock contemplated by this prospectus supplement is the first issuance of shares of this series by us. With respect to shares of Series B Preferred Stock issued pursuant to this prospectus supplement, dividends will accrue from the date of issuance and payment will be made on December 31, 2013. Any other subsequently issued shares of Series B Preferred Stock will become entitled to dividends commencing on the first monthly record date following the date of issuance, and we anticipate setting record dates as of the fifteenth of every month with dividends to be paid at the end of the month to such holders of record. Dividends will be in the amount of $2.6875 per share each year, which is equivalent to 10.75% of the $25.00 liquidation preference per share. If the Series B Preferred Stock, however, is not listed on a ôNational Exchange,ö as defined in this prospectus supplement, for a total of at least 180 consecutive days after the Series B Preferred Stock becomes eligible for listing on a National Exchange or if we fail to pay cash dividends on the outstanding Series B Preferred Stock in full for any monthly dividend period within a quarterly period for a total of four consecutive or non-consecutive quarterly periods and such dividends remain accumulated, accrued and unpaid, subject to our right to remedy these matters as described in this prospectus supplement, investors will be entitled to receive cumulative cash dividends at the increased rate of 12.75% per annum of the $25.00 liquidation preference per share (equivalent to $3.1875 per year per share) as outlined in this prospectus supplement.
The Series B Preferred Stock will be subordinated to all of our existing and future debt and all future capital stock designated as senior to the Series B Preferred Stock. With respect to dividend and liquidation rights, our Series B Preferred Stock will rank senior to our common stock and pari passu with our outstanding 8.625% Series A Cumulative Preferred Stock (the ôSeries A Preferred Stockö). Our parent, Gastar Exploration Ltd., will fully and unconditionally guarantee the payment of dividends that have been declared by the board of directors of Gastar Exploration USA, Inc., 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 this prospectus supplement. Gastar Exploration Ltd.Æs obligations with respect to the guarantee will be effectively subordinated to all of its existing and future debt. Gastar Exploration Ltd.Æs guarantee of the Series B Preferred Stock is further described in this prospectus supplement under ôDescription of Guarantee of Preferred Securities.ö
Investors in the Series B Preferred Stock generally will have no voting rights other than with respect to the authorization or creation of shares ranking senior to the Series B Preferred Stock, matters directly impacting the rights of the holders and for certain share exchanges and other acquisitions. However, holders will have limited voting rights if the Series B Preferred Stock is not listed on a National Exchange for at least 180 consecutive days after the shares first become eligible for listing or if we fail to make a monthly dividend payment on the outstanding Series B Preferred Stock during a quarterly period for four or more consecutive or non-consecutive quarters, and under certain other circumstances. The voting rights of investors in the Series B Preferred Stock are further described in this prospectus supplement under ôDescription of Series B Preferred Stock ù Voting Rights.ö
We may not redeem the Series B Preferred Stock before November 15, 2018, except as described below. On or after November 15, 2018, we may, at our option, redeem the Series B Preferred Stock, in whole or in part, by paying $25.00 per share, plus any accrued and unpaid dividends to the redemption date. If at any time a ôChange of Ownership or Control,ö as defined in this prospectus supplement, occurs, we (or the acquiring company) will have the option to redeem the Series B Preferred Stock, in whole but not in part, within 90 days after the date on which the Change of Ownership or Control has occurred at specified redemption amounts as described in this prospectus supplement. If we exercise any of our redemption rights relating to shares of Series B Preferred Stock, the holders of Series B Preferred Stock will not have the conversion right described in this prospectus supplement with respect to the shares of Series B Preferred Stock called for redemption.