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): March 9, 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 8.01 Other Events
As reported in the Current Report on Form 8-K of Gasco Energy, Inc. (the
"Company") filed with the Commission on March 17, 2004, the Company acquired
certain working interests and gathering system assets located in the Company's
Riverbend exploitation area in Utah (the "Acquired Assets") for a purchase price
of $3,175,000 on March 9, 2004. The Company filed a Current Report on Form 8-K/A
with the Commission on April 14, 2004, that included its pro forma consolidated
statement of operations for the year ended December 31, 2003, reflecting the
Acquired Assets.
As reported in the Company's Current Report on Form 8-K filed with the
Commission on September 24, 2004, the Company completed the second and final
part of a disposition of a net profits interest in 8 oil and gas wells located
in the Company's Riverbend exploitation area in Utah, (the "Net Profits
Disposition") resulting in total consideration received by the Company (for both
parts of the transaction) of $4,314,984. The Company filed a Current Report on
Form 8-K/A with the Commission on October 8, 2004, that included its pro forma
condensed consolidated balance sheet as of June 30, 2004 and pro forma condensed
consolidated statements of operations for the six months ended June 30, 2004 and
the year ended December 31, 2003, reflecting the Net Profits Disposition.
The purpose of this Current Report on Form 8-K is to file the Company's pro
forma condensed consolidated balance sheet as of June 30, 2004 and pro forma
condensed consolidated statements of operations for the six months ended June
30, 2004 and the year ended December 31, 2003, each of which reflect the
Acquired Assets and the Net Profits Disposition.
Item 9.01 Financial Statements and Exhibits
(a) None
(b) Pro Forma Condensed Consolidated Balance Sheet for the six months
ended June 30, 2004 and Pro forma Condensed Consolidated Statements of
Operations for the six months ended June 30, 2004 and for the year
ended December 31, 2003.
(c) None
2
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.
October 13, 2004 By: /s/ W. King Grant
-----------------
W. King Grant
Chief Financial Officer
3
GASCO ENERGY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2004
(Unaudited)
Pro Forma Adjustments
------------------------------------------
Acquired Net Profits
As Reported Assets Disposition Pro Forma
ASSETS
Current Assets $16,629,790 4,314,984 a $ 20,944,774
Property, Plant and Equipment, net 35,593,693 (4,314,984) a 31,278,709
Other Assets 122,593 122,593
------------ ---------- ---------- ------------
TOTAL ASSETS $ 52,346,076 $ - $ - $ 52,346,076
============ ========== ========= ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities $ 3,491,796 $ 3,491,796
Noncurrent Liabilities 2,563,627 2,563,627
Stockholders' Equity
Series B Convertible Preferred Stock 5 5
Common Stock 6,463 6,463
Additional Paid In Capital 73,808,707 73,808,707
Deferred Compensation (837,399) (837,399)
Accumulated Deficit (26,556,828) (26,556,828)
Treasury Stock (130,295) (130,295)
------------- ---------- -------- -----------
Total Stockholders' Equity 46,290,653 46,290,653
------------- ---------- -------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $52,346,076 $ - $ - $52,346,076
=========== ======== ======== ===========
See accompanying pro forma notes to the
condensed financial information.
4
GASCO ENERGY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(Unaudited)
Pro Forma Adjustments
-------------------------------
Acquired Net Profits
As Reported Assets Disposition Pro Forma
Total Revenues $1,577,078 $ 150,371 b $(343,756) b $ 1,383,693
Total Costs and Expenses 2,842,145 81,274 b (62,220) b 2,966,201
105,002 c
Net Income (Loss) (1,265,067) 69,097 (386,538) (1,582,508)
Preferred stock dividends (112,886) - - (112,886)
----------- --------- --------- -----------
Net Income (Loss) Attributable
to Common Stockholders $ (1,377,953) $ 69,097 $ (386,538) $ (1,695,394)
============= ======== =========== =============
Net Loss per Common Share -
Basic and Diluted $ (0.02) $ (0.03)
========= =========
Weighted Average Common Shares
Outstanding - Basic and Diluted 59,271,942 59,271,942
========== ==========
See accompanying pro forma
notes to the condensed financial information.
5
GASCO ENERGY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT FO OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(Unaudited)
Pro Forma Adjustments
-----------------------------------------
Net Profits
As Reported Acquired Assets Disposition Pro Forma
Total Revenues $1,275,430 1,087,616 b (52,582) b $2,310,464
Total Costs and Expenses 3,792,268 489,229 b (6,891) b 4,317,780
43,174 c
Loss Before Cumulative Effect of
Change in Accounting Principle (2,516,838) 598,387 (88,865) (2,007,316)
Cumulative Effect of Change in
Accounting Principle (9,687) (9,687)
----------- ---------- --------- ----------
Net Income (Loss) (2,526,525) 598,387 (88,865) (2,017,003)
Preferred stock dividends (304,172) (304,172)
------------ -------- --------- ------------
Net Income (Loss) Attributable to Common
Stockholders $ (2,830,697) $598,387 $ (88,865) $ (2,321,175)
============= ======== ========== =============
Per Common Share Data - Basic and Diluted
Loss before cumulative effect of
change in accounting principle $ (0.07) $ (0.06)
Cumulative effect of change in accounting
principle - -
--------- --------
Net Loss per Common Share - Basic and
Diluted $ (0.07) $ (0.06)
========= =========
Weighted Average Common Shares
Outstanding - Basic and Diluted 41,262,778 41,262,778
========== ==========
See accompanying pro forma notes to the
condensed financial information.
6
GASCO ENERGY, INC.
PRO FORMA NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
NOTE 1 - PRO FORMA ADJUSTMENTS
On March 9, 2004 the Company completed the acquisition of additional working
interests in six producing wells, 13,062 net acres and gathering system assets
located in the Uinta Basin in Utah for approximately $3,175,000. During May 2004
an unrelated third party exercised its right to purchase 25% of the acquired
properties at the acquisition price, which had the effect of reducing the
purchase price to approximately $2,400,000 and reducing the Company's interest
in the acquisition to 75%.
On September 20, 2004, the Company completed the second and final part of a
disposition of a net profits interest of between 18.75% and 25% in a total of 8
oil and gas wells in the Company's Riverbend exploitation area in Utah (the "Net
Profits Disposition"). The first part of the Disposition was completed on August
20, 2004. The total cash consideration received by the Company for both portions
of this transaction was cash in the amount of $4,314,984. The purchase price for
the Disposition was based on an effective date of November 2003. Under generally
accepted accounting principles, the transaction was recorded based on the
closing dates. Therefore, revenue of $396,338 and lease operating expense of
$69,111 attributable to the interests in the properties sold between the
effective date and the closing date are recognized by the Company. The purchase
price was accordingly reduced by the amount of the revenues and increased by the
amount of the lease operating expenses. In connection with the Disposition, the
Company agreed to pay a 3.25% financing fee to Red Oak Investors for all amounts
invested by Red Oak Investors. At the closing of the Disposition $148,176 was
paid to Red Oak Investors by the Company. The Company is recording these costs
as financing fees and will expense such amounts as future investments are made
by Red Oak Investors. As such, total consideration received was:
Purchase price $4,790,387
Revenue (396,338)
Lease operating expense 69,111
Financing costs (148,176)
----------
Cash received $4,314,984
==========
Under the agreement, Red Oak Investors are to reimburse the Company for the
costs incurred (excluding leasehold costs, which are the sole responsibility of
the Company) by the Company in the future development of the properties in
proportion to the Red Oak Investors' interest in the properties. Depletion
incurred to date on the property interests sold has been insignificant.
The accompanying unaudited condensed pro forma consolidated balance sheet as of
June 30, 2004 sets forth the pro forma adjustments as if the Acquired Assets and
the Net Profits Disposition transactions had occurred on June 30, 2004. There
are no pro forma adjustments for the Acquired Assets transaction in the June 30,
2004 balance sheet because the historical balances already reflect this
transaction. The accompanying unaudited condensed pro forma consolidated
statement of operations for the six months ended June 30, 2004 and for the
twelve months ended December 31, 2003 presents the results of operations of the
Company as if both transactions had occurred at the beginning of the period
presented. These statements are not necessarily be indicative of future
operations or the actual results that would have occurred if the Acquired Asset
and Net Profits Disposition transactions had been consummated at the beginning
of the period indicated. The pro forma financial statements should be read in
conjunction with the historical consolidated financial statements of the
Company.
The accompanying unaudited pro forma condensed consolidated financial
information reflects the following adjustments:
(a) To reflect the disposition of net profits interest associated with the
Net Profits Disposition and the payment of the cash purchase price.
(b) To reflect the revenue and expenses related to the Net Profits
Disposition and the Acquired Asset transactions.
(c) To reflect the payment of financing costs associated with the Net
Profits Disposition.
8