UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 20, 2004
GASCO ENERGY, INC.
(Exact name of registrant as specified in its charter)
Nevada 0-26321 98-0204105
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
14 Inverness Drive East, Building H, Suite 236, Englewood, Colorado 80112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 483-0044
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.01. Completion of Acquisition or Disposition of Assets.
On August 20, 2004, Gasco Energy, Inc. (the "Company") completed the first
part of a disposition of interests in a total of 8 oil and gas wells in the
Company's Riverbend exploitation area in Utah. The purchasers in this
transaction were Red Oak Capital Management, LLC, MBG, LLC and MBGV Partition,
LLC, each of which is unrelated to the Company. The completion of the first
portion of this transaction resulted in the sale by the Company of a net profits
interest of between 18.75% and 25% in each of the following Company-operated
wells: Gate Canyon State 31-21-11-15, Federal 11-21-9-19, Federal 11-22-9-19,
Lytham 22-22-9-19 and Federal 32-31-9-19. The Company received cash in amount of
$2,924,024 which represented the purchase price for the first portion of the
transaction less adjustments of $231,104 for net revenue minus lease operating
expense for the properties from November 2003 and $98,223 representing a
commission to Red Oak Capital Management, the purchasers' financial advisor,
which the Company agreed to pay.
The closing of the second portion of this transaction is contingent on the
Company's resolution of certain title defects. In the second portion of the
transaction, the purchasers will purchase a net profits interest of between
18.75% and 25% in the following wells: Wilkin Ridge State 12-32-10-17, Federal
44-20-9-19 and Federal 24-20-9-19. The purchase price for the second portion of
the transaction is cash in an amount of $1,537,036, less net revenue minus lease
operating expense for the purchased wells from June 2004. The Company expects to
complete the second portion of the transaction prior to September 30, 2004.
We are the operator for each of the 8 wells in this transaction and maintain
a working interest in these properties of between 75% and 100%. Our economic
interest in these wells, which has been reduced by other net profits interests,
was between 41% and 55% prior to the closing of this transaction. The net profit
interests conveyed in this transaction expire twelve years from the date of
first production of each well. As of July 31, 2004, five of the eight wells were
producing with aggregate gross and net daily production of approximately 2,300
Mcf and 900 Mcf, respectively.
The completion of the first portion of this transaction did not result in
the disposition of a significant amount of assets, as such term is defined by
the SEC rules and regulations. However, we believe that the completion of the
second portion of this transaction, should it occur, when aggregated with the
first portion of this transaction will result in the Company's disposition of a
significant amount of assets. Accordingly, the Company anticipates that the
completion of the second portion of the transaction will require the Company to
file pro forma financial information with respect to the entire transaction. We
plan to file the required pro forma information by exhibit to a current report
on Form 8-K within the required time period following the second closing.
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Item 9.01. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
2.1 Net Profits Purchase Agreement between Gasco Production Company,
Red Oak Capital Management, LLC, MBG, LLC and MBGV Partition,
LLC, dated August 6, 2004
2.2 Purchase Supplement to Net Profits Purchase Agreement between Gasco
Production Company, Red Oak Capital Management, LLC, MBG, LLC and
MBGV Partition, LLC, dated August 20, 2004
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GASCO ENERGY, INC.
September 7, 2004 By: /s/ W. King Grant
-------------------------
W. King Grant
Chief Financial Officer
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