NEW YORK (TheStreet) -- Gastar Exploration (GST) stock is declining 40.55% to $1.29 on heavy trading volume on Friday afternoon after the oil and gas company reported a loss of 22 cents per share for the 2016 first quarter. Analysts were expecting a loss of 18 cents per share.

Revenue dropped 57% year over year to $14.81 million for the quarter, but was in line with estimates.

Production averaged 6.4 million barrels of oil equivalent per day, up from 6.1 million barrels of oil equivalent a day for the same quarter last year.

"GST reported a light 1Q16, missing production by 8%," KeyBanc analysts said in a note released this morning.

KeyBanc downgraded Gastar Exploration's stock to "sector weight" from "overweight" because of lack of visibility on liquidity.

"The company remains in liquidity maximizing mode and has no future scheduled completions after its recently online second Meramec well," analysts explained. "Production will inevitably decline until a capital infusion takes place."

So far today, 4.47 million shares of Houston-based Gastar Exploration have exchanged hands, significantly higher than its average daily volume of 912,674 shares.

Separately, Gastar Exploration has a "sell" rating and a letter grade of E+ at TheStreet Ratings because of the company's deteriorating net income, weak operating cash flow, generally disappointing stock performance and feeble earnings per share growth.

You can view the full analysis from the report here: GST

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

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