ECHIBIT 99.1
Gasco
- -----
Energy
For Release at 8:00 AM EST on Monday, March 29, 2004
GASCO ANNOUNCES 2003 FINANCIAL AND OPERATIONAL RESULTS
AND YEAR-END RESERVES
DENVER- (PRNewswire) - March 29, 2004 - Gasco Energy (OTCBB: GASE) today
announced financial and operational results for the year ended December 31,
2003. Selected financial data for 2003 includes total revenues of $1,275,430, up
430% from 2002's total revenues of $240,648. Higher revenues are attributed to
greater oil and gas production and higher average prices received from sales of
oil and gas. The net loss for 2003 was $2.5 million, or $0.07 per basic and
diluted share, as compared to 2002's net loss of $5.6 million, or $0.16 per
basic and diluted share. The lower net loss for 2003 is attributed to increased
revenues and a reduction in general and administrative (G&A) expense. G&A for
2003 was $2.8 million, as compared to $5.1 million in 2002. Lower G&A expense is
attributed to a reduction in both management salaries and general overhead.
Working capital at year end was $1.2 million versus negative working capital at
year-end 2002 of $2.9 million. Total assets grew to $33 million, up from
year-end 2002's total assets of $27.5 million.
Operations
Stronger operating results in 2003 are primarily attributable to higher
commodity prices and markedly higher oil and gas production. The average price
per thousand cubic feet (Mcf) received in 2003 was $4.69 compared to $2.47 in
2002. Gasco's annual equivalent production in 2003 was 269 million cubic feet
equivalent (MMcfe), a robust increase over 2002's 66 MMcfe. Natural gas
accounted for 96% of 2003's equivalent production. The Company drilled no new
wells during 2003, but performed completion work on various well bores that
boosted production during the year.
Proved Reserves
Preliminary estimated 2003 year-end, proved reserves were approximately 14.2
billion cubic feet equivalent (Bcfe) as compared to approximately 21.4 Bcfe at
year-end 2002. The reduction in proved reserve estimates is primarily attributed
to revisions of previous estimates due to a failed recompletion on a well in the
fourth quarter which resulted in a reduction of reserves attributed to the
proved developed location and the loss of the surrounding proved undeveloped
locations. Gasco's reserve mix is 96% natural gas and 4% liquid hydrocarbons,
with approximately 22% of total reserves designated as proved developed. At
year-end 2002, approximately 28% of reserves were proved developed.
Gasco's estimated, pre-tax future net cash flows discounted at 10% (commonly
known as the Securities and Exchange Commission PV-10 figure) for proved
reserves at year-end was $16.2 million, versus $12.3 million at year-end 2002.
The 2003 PV-10 calculation used net year-end commodity prices of $5.89 per Mcf
of natural gas and $29.69 per barrel of crude oil. The 2002 PV-10 calculation
used net year-end commodity prices of $3.39 Mcf of gas and $29.60 per barrel of
crude oil.
Reserves for 2003 were estimated by Netherland, Sewell & Associates, an
independent third-party engineering firm and conform to the definition as set
forth in the SEC Regulation S-X Part 210.4-10 (a) as clarified by subsequent
Commission Staff Accounting bulletins. The proved reserves are also in
accordance with Financial Accounting Standards Board Statement No. 69
requirements. Reserves for 2002 were estimated by James R. Stell, independent
petroleum engineer in accordance with all necessary financial requirements.
February 2004 Equity Financing
Subsequent to December 31, 2003, Gasco completed the sale through a private
placement of 14,333,334 shares of its common stock to a group of accredited
investors at a price of $1.50 per share. Proceeds to the Company, net of fees
and estimated expenses were approximately $20,072,000. The financing improved
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Gasco's financial situation with regard to working capital and cash and cash
equivalents available for operations. The Company intends to use the funds from
this transaction and its cash on hand to fund the following projects:
- Complete the recently announced acquisition of additional interests in
six producing wells, 13,062 net acres and certain other assets located
in the Uinta Basin in Utah for approximately $3,175,000.
- 2004 CAPEX budget of $13 million for the drilling, completion and
pipeline connection of wells in the Riverbend Project area.
- General corporate purposes.
Management's View
Commenting on 2003's results and prospects for future growth, Gasco CEO, Mark
Erickson said: "Gasco is pleased to announce the preliminary use of proceeds
from our recent offering. We are excited to ramp up drilling on our Riverbend
exploitation project and look forward to our continued partnership with the
service parties involved in the Joint Value Enhancement Agreement that we signed
in January 2004. Our financial and operational results for 2003 are indicative
of a company in transition from early stage acreage aggregator to field-wide
exploitation operator. While our oil and gas activity was insignificant, we were
able to accomplish production growth and revenue growth while making a concerted
effort to control our overhead and other expenses. Gasco enters 2004 a lean
company that is well funded and motivated to improve in every financial and
operating category. This is the year that we expect to begin setting benchmarks
in reserves, production and cash flow, among other metrics, by which investors
might judge our performance going forward."
[Financial and Operational Tables Follow]
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2003 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $3,081,109 $2,089,062
Restricted cash 250,000 250,000
Prepaid expenses and other assets 555,786 198,491
Accounts receivable 499,363 96,144
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Total 4,386,258 2,633,697
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PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 16,386,252 10,283,488
Well in progress - 1,138,571
Unproved mineral interests 13,212,039 13,984,536
Furniture, fixtures and other 166,051 162,787
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Total 29,764,342 25,569,382
Less accumulated depreciation, depletion, amortization and property impairment (1,232,634) (697,578)
----------- -----------
Total 28,531,708 24,871,804
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OTHER ASSET
Deferred financing costs 141,213 -
------------ -----------
TOTAL ASSETS $ 33,059,179 $ 27,505,501
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,260,492 $ 1,910,974
Accrued expenses 933,520 2,180,262
Note payable - 1,400,000
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Total 3,194,012 5,491,236
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NONCURRENT LIABILITIES
8% Convertible Debentures, net of unamortized discount $159,722 2,340,278 -
Asset retirement obligation 142,806 -
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Total 2,483,084 -
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STOCKHOLDERS' EQUITY
Series B Convertible Preferred stock - $.001 par value; 20,000 shares
authorized; 11,734 shares issued and outstanding in 2003 12 -
Common stock - $.0001 par value; 100,000,000 shares authorized;
45,675,936 shares issued and 45,602,236 shares outstanding in 2003; and
40,362,500 shares issued and 40,288,800 shares outstanding in 2002 4,568 4,036
Additional paid in capital 52,979,325 44,958,593
Deferred compensation (179,766) (52,833)
Accumulated deficit (25,291,761) (22,765,236)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
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Total 27,382,083 22,014,265
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 33,059,179 $ 27,505,501
============ ============
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Year Ended December 31,
-------------------------------------------------
2003 2002 2001
REVENUES
Gas $ 1,206,741 $ 164,508 $ 36,850
Oil 56,702 - -
Interest 11,987 76,140 193,352
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Total 1,275,430 240,648 230,202
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OPERATING EXPENSES
General and administrative 2,819,675 5,080,287 4,326,065
Lease operating 337,278 119,809 12,679
Depletion, depreciation, amortization and asset retirement
liability accretion 552,923 149,109 5,760
Impairment - 541,125 -
Interest 82,392 - 67,363
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Total 3,792,268 5,890,330 4,411,867
--------- --------- ---------
OTHER INCOME - - 52,206
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LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (2,516,838) (5,649,682) (4,129,459)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE (9,687) - -
----------- ----------- ----------
NET LOSS (2,526,525) (5,649,682) (4,129,459)
Preferred stock dividends (304,172) - -
Preferred stock deemed distribution - - 11,400,000
------------ ------------ -----------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (2,830,697) $(5,649,682) $ (15,529,459)
============= ============= ==============
PER COMMON SHARE DATA - BASIC AND DILUTED:
Loss before cumulative effect of change in accounting principle $ (0.07) $ (0.16) $ (0.63)
Cumulative effect of change in accounting principle - - -
---------- --------- ---------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.07) $ (0.16) $ (0.63)
========= ========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 41,262,778 36,439,074 24,835,144
========== ========== ==========
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Years Ended December 31,
-------------------------------------------------------
2003 2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,526,525) $(5,649,682) $ (4,129,459)
Adjustment to reconcile net loss to net cash used
in operating activities
Depreciation, depletion and impairment expense 541,128 690,234 5,760
Accretion of asset retirement obligation 11,795 - -
Amortization of deferred compensation 94,317 208,542 423,594
Amortization of beneficial conversion feature 6,945 - -
Amortization of offering costs 7,758 - -
Cumulative effect of change in accounting principle 9,687 - -
Changes in operating assets and liabilities:
Prepaid expenses (320,059) (74,139) (121,171)
Accounts receivable (403,219) (63,397) 132,494
Accounts payable 349,518 1,362,121 (51,872)
Accrued expenses 36,741 2,136,015 -
----------- ----------- -----------
Net cash used in operating activities (2,191,914) (1,390,306) (3,740,654)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (3,264) (103,342) (49,876)
Cash paid for development and exploration (5,283,426) (14,437,855) (7,395,867)
Cash received upon recapitalization and merger - - 265,029
----------- ------------ -----------
Net cash used in investing activities (5,286,690) (14,541,197) (7,180,714)
----------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash designated as restricted (250,000) (250,000) -
Cash undesignated as restricted 250,000 - -
Preferred dividends (4,092) - -
Proceeds from sale of preferred stock 4,862,840 - 19,000,000
Proceeds from sale of common stock 2,777,292 6,500,000 6,826,218
Proceeds from sale of convertible debentures 2,500,000 - -
Cash paid for offering costs (266,721) (526,020) (2,144,468)
Proceeds from short-term borrowings - - 500,000
Repayment of short-term borrowings - - (714,543)
Repayment of note payable (1,400,000) -
-
Repurchase of common stock - - (130,295)
Distribution to Rubicon Oil and Gas, Inc. (1,000,000)
Other 1,332 - -
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Net cash provided by financing activities 8,470,651 5,723,980 22,336,912
---------- ---------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 992,047 (10,207,523) 11,415,544
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 2,089,062 12,296,585 881,041
----------- ----------- -----------
END OF PERIOD $ 3,081,109 $ 2,089,062 $ 12,296,585
=========== =========== ============
The accompanying notes found in Gasco's filing on form 10-K are an
integral part of the consolidated financial statements.
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About Gasco Energy
Gasco Energy, Inc. is a Denver-based natural gas and oil exploitation and
development company that focuses on natural-gas-rich prospects in the Rocky
Mountain area of the United States. The Company currently is active in the Uinta
Basin in Utah and controls acreage in the Greater Green River Basin of Wyoming.
To learn more, visit www.gascoenergy.com.
Forward-looking statements
Certain statements set forth in this press release relate to management's future
plans, objectives and expectations. Such statements are forward-looking within
the meanings of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this press release,
including, without limitation, statements regarding the Company's future
financial position, potential resources, business strategy, budgets, projected
costs and plans and objectives of management for future operations, are
forward-looking statements. In addition, forward-looking statements generally
can be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "intend," "project," "estimate," "anticipate," "believe," or
"continue" or the negative thereof or similar terminology. Although any
forward-looking statements contained in this press release are to the knowledge
or in the judgment of the officers and directors of the Company, believed to be
reasonable, there can be no assurances that any of these expectations will prove
correct or that any of the actions that are planned will be taken.
Forward-looking statements involve known and unknown risks and uncertainties
that may cause the Company's actual performance and financial results in future
periods to differ materially from any projection, estimate or forecasted result.
Some of the key factors that may cause actual results to vary from those the
Company expects include inherent uncertainties in interpreting engineering and
reserve or production data; operating hazards; delays or cancellations of
drilling operations because of weather and other natural and economic forces;
fluctuations in oil and natural gas prices in response to changes in supply;
competition from other companies with greater resources; environmental and other
government regulations; defects in title to properties; increases in the
Company's cost of borrowing or inability or unavailability of capital resources
to fund capital expenditures; and other risks described under "Risk Factors" in
Part I, Item 1 of the Company's latest Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
Contact for Gasco Energy, Inc.: Investor Relations: 303-483-0044
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