EXHIBIT 99.1
GASCO
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ENERGY EXECUTIVE SUMMARY
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"AN UNPRECEDENTED 183,000 MEGAWATTS (MW) OF NEW ELECTRIC GENERATING CAPACITY IS
PLANNED IN THE U.S. OVER THE NEXT THREE YEARS - THE EQUIVALENT OF 366
UTILITY-SCALE, 500-MW PLANTS WITH 95% OF THE NEW CAPACITY FIRED BY NATURAL GAS."
Platts, June 11, 2001
CORPORATE OVERVIEW
DENVER-BASED GASCO ENERGY INC. (GASCO OR THE COMPANY) IS AN INDEPENDENT
EXPLOITATION COMPANY FOCUSED ON DEVELOPING LARGE NATURAL GAS PROSPECTS IN
THE ROCKY MOUNTAIN REGION OF THE U.S. Gasco's mission is to create
shareholder value through the generation and development of high-potential
exploitation prospects in the U.S. Rocky Mountains.
The Rockies represents the largest untapped, drillable potential for
natural gas supply in North America. The National Petroleum Council (NPC)
estimates ultimate recovery of total gas reserves in the Rockies at 388
trillion cubic feet (Tcf). Of this estimated amount, only 15% of the
region's hydrocarbons have been produced, compared to 58% along the Gulf
Coast, 54% in the Mid-Continent and 30% in the Gulf of Mexico.
The NPC estimates the greatest potential for non-associated natural gas in
the Rocky Mountain region is concentrated in southwestern and south-central
Wyoming, adjacent northwestern Colorado and northeastern Utah. This region
includes the Uinta, Piceance and Greater Green River Basins. The Uinta
Basin continues to hold the area's largest hydrocarbon resource potential
from surface to 15,000 feet. About 25 to 30 percent of the drilling
activity in these basins has been focused on targets at depths of less than
15,000 feet.
GASCO'S RIVERBEND PROJECT
The Company has its primary focus (approximately 45% average working
interest) in 135,000 acres in the Uinta Basin of northeastern Utah, a
proven basin rich in natural gas. Phillips Petroleum, in a strategic
alliance with Gasco, has drilled three wells on Gasco acreage. The first
well was a successful natural gas discovery, finding an expected minimum
2.0 billion cubic feet (Bcf) of gross natural gas reserves. The well is
awaiting hookup to pipeline. As of the date of this report, the remaining
two wells are drilling or waiting on completion.
The Riverbend Project is centrally located in the Uinta Basin of
northeastern Utah. This basin is one of the few basins in North America
with significant remaining gas reserves. The basin has already produced one
trillion cubic feet (Tcf) of gas from approximately 2,100 wells at depths
ranging from 5,000 to 14,000 feet. The project is regionally extensive and
covers large areas of potential basin-centered gas accumulations. The
Company has interests in over 135,000 gross acres, with most of the acreage
accumulated prior to the recent industry focus in the Uinta Basin.
Gasco's geologic and engineering focus is concentrated on two tight sand
formations in the basin: the underlying upper cretaceous Mesaverde
formation and the lower tertiary Wasatch formation. Gasco's interests are
relatively close to recent wells testing the Mesaverde formation. During
the past 12 months Coastal Oil & Gas Corp, a subsidiary of El Paso
Corporation, and Dominion Exploration & Production have drilled and
completed more than 60 wells into or through the Mesaverde formation with
100% success. The information gathered from the wells in the Riverbend area
has enabled Gasco to develop the geological
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model for the Mesaverde. It has also provided additional evidence on the
commercial viability of the thick tight gas formations underlying Gasco's
lands.
COMPANY STRENGTHS, HIGHLIGHTS AND GROWTH STRATEGY
o Gasco's highly experienced management team has a proven track record in
natural gas exploration and development, including the development of
several start-up exploration companies with an aggregate combined
market capitalization exceeding $1 billion.
o Gasco currently has 135,000 gross acres in its Riverbend Project,
located in the northeastern Utah. This large, contiguous acreage
position in the Uinta Basin was principally contracted with third
parties prior to the increase in natural gas prices and the industry's
focus in the basin.
o Gasco's properties are within close proximity to existing natural gas
fields and pipelines. Gas plants operated by CIG, Questar and Williams
provide immediate natural gas take-away capacity for the area.
Questar's twenty-inch diameter system passes through the Company's
Riverbend Project. Additional access to excellent gas markets on both
coasts of the U.S. is available through five interstate and intrastate
pipelines including CIG, NW, Kern, Questar and PSCO.
o Phillips Petroleum Company, a top ten U.S. integrated energy company,
entered into a joint operating agreement with Gasco in December 2000.
Under this agreement, Phillips has now drilled and completed one well
in the Riverbend Project within the Uinta Basin. The well is awaiting
pipeline connection, and Phillips is currently drilling the second and
third wells required of its 4 to 5 well earning requirement.
o Gasco has received US$25.8 million in private placement equity
financing to implement its exploitation and development strategy in the
Uinta Basin. The Company anticipates the necessity of raising
additional capital next year to finance its strategy of increasing
shareholder value by:
> Developing the Company's large contiguous acreage positions
utilizing modern drilling and completion technologies.
> Continuing to selectively expand its acreage holdings in the Rocky
Mountain area through a well-managed acquisition program.
> Reducing risk and enhancing expertise through strategic industry
alliances.
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STRONG GEO-TECHNICAL AND PETROLEUM ENGINEERING SUPPORT
SPROULE ASSOCIATES INC. TECHNICAL EVALUATION
Gasco retained Sproule Associates Inc. to prepare a prospect evaluation on
the Riverbend area in order to obtain an independent assessment of the
potential gas reserves and economic value of the Company's River Bend
Project. Among their conclusions, Sproule confirmed that the reserves in
the Wasatch and Mesaverde formations are similar to or better than those in
analogous tight gas sand reservoirs in the Rocky Mountain region, and that
there is significant potential to increase gas recoveries by using
technologically advanced drilling and completion techniques similar to
development work done in analogous fields throughout the Rocky Mountain
area.
NETHERLAND, SEWELL & ASSOCIATES ENGINEERING EVALUATION
Dallas-based Netherland, Sewell & Associates is in the process of
completing a detailed reservoir engineering and probabilistic reserve
economics summary for the Company. The report is due for completion in
mid-August.
NATURAL GAS INDUSTRY TRENDS
The increased demand for natural gas has driven prices to historical highs.
Following are some of the factors affecting the demand:
o The majority of natural gas consumed in the U.S. is domestically
produced (85%). In comparison, 50% of the oil consumed in the U.S. is
domestically produced. Currently, natural gas provides more than 23% of
all U.S. energy needs. As a result, natural gas consumption in the U.S.
is expected to grow from approximately 22 trillion cubic feet (Tcf) in
2000 to approximately 30 Tcf by the year 2010.
o Natural gas is the cleanest burning fossil fuel. It is used in
electricity generation, and in industrial and residential applications
because of its lower Btu costs and more environmentally "friendly"
properties.
o The improving pipeline infrastructure in the Rocky Mountains is
enabling easier natural gas deliveries throughout the U.S.
EXCHANGE LISTING AND SHARE STRUCTURE
Gasco is a reporting company under the Securities Exchange Act of 1934 and
has a trading symbol, GASE, on the NASDAQ Over-the-Counter Bulletin Board
system. The Company's goal is to obtain a listing on The American Stock
Exchange during the second half of 2001. Gasco has 26,000,000 primary
outstanding shares, 39,952,500 shares on a fully diluted basis.
CONTACT INFORMATION
GASCO ENERGY, INC.
14 Inverness Drive East, Suite H-236
Englewood, CO 80112 USA
Phone: (303) 483-0044
Fax: (303) 483-0011
Website: www.gascoenergy.com
Email: INVEST@GASCOENERGY.COM
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FORWARD-LOOKING STATEMENTS AND RISK
The information included in this report includes forward-looking statements
regarding Gasco Energy, Inc., its future plans and expected performance based on
assumptions we believe to be reasonable. A number of risks and uncertainties
could cause actual performance to differ materially from these statements,
including without limitation, fluctuations in the price of natural gas and crude
oil, the success rate of drilling efforts, expected production levels, operating
expenses, capital expenditures, completion of gathering and pipeline projects as
expected, the ability of Gasco to secure needed capital, and availability of
equipment and personnel, as well as other risk factors described from time to
time in presentation of this plan. All of the assumptions of value and drilling
require funding over what can currently be provided by Gasco.
This report prepared for GASCO Energy, Inc. as a matter of information and is
not intended to be a complete description of the Company or its investment
merits. The information contained herein has been obtained from the Company, as
well as sources believed to be reliable, but is not guaranteed as to its
accuracy or completeness. This report is not to be construed as an offer or
solicitation to buy or sell securities.
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