Exhibit 99.1
Gasco
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Energy
For Release at 10:00 AM EST on Monday, December 6, 2004
GASCO ENERGY PROVIDES OIL & GAS OPERATIONS UPDATE
DENVER - (PR Newswire) - December 6, 2004 - Gasco Energy, Inc. (AMEX: GSX) today
provided an interim oil and gas activities and operational update on its
Riverbend Project in Utah's Uinta Basin.
Drilling Activity
Gasco is currently drilling its tenth and eleventh wells of the fiscal year. At
the beginning of December, the Company was at total depth and preparing to log
the Federal 22-30-10-18. This well will test the Mesaverde and Blackhawk
formations. In addition, Gasco continues drilling operations on the Federal
43-30-9-19, a Wasatch, Mesaverde and Blackhawk test in the Riverbend area.
The 43-30 is the first well in the second bundle under the Joint Value
Enhancement Agreement (JVEA). The JVEA is an agreement among a subsidiary of
Gasco and a group of industry service providers that contemplates the
development of up to 50 wells in Gasco's Riverbend Project located in Utah's
Uinta Basin. The wells are expected to be developed in 10-well bundles to be
approved by the parties on an ongoing basis. Pursuant to the terms of the JVEA,
Gasco is expected to fund 30% of the development costs of each well drilled, a
third party capital provider is expected to fund 25% of such costs and the
service providers are expected to provide the remainder of required costs in the
form of drilling and completion services, up to a maximum of $13.5 million in
services for a given bundle. Gasco's interest in the production from each
10-well bundle of wells, net of royalties, taxes and lease operating expenses,
is estimated to equal the proportion of the total well costs that it funds
The Company recently entered into a contract for a third Nabors drilling rig
which is expected to spud the Federal 31-21-9-19 (Gasco 75% minimum working
interest) during December 2004. The rig will be moving from Wyoming where it was
recently drilling on the Pinedale Anticline. The Federal 31-21 is located in
Gasco's Riverbend Area and will test the Wasatch, Mesaverde and the Blackhawk
formations.
Completion Activity
At the end of November one well was undergoing completion operations and is
currently flowing back frac fluid.
Riverbend Gas Gathering System
During the month of November Gasco completed the installation of compression on
the Riverbend Area system. This brings the total horsepower to 1180 and the
capacity to 11 million cubic feet per day (MMcfd). Gasco also installed 300
horsepower of compression in the Wilkin Ridge area, allowing for 3 MMcfd of
capacity.
Production
Cumulative monthly production for November 2004 was 166.8 million cubic feet
equivalent (MMcfe) gross, or 41.5 MMcfe net. This is a 26.1% increase from
October cumulative gross production of 132.3 MMcfe and a 17.9% increase from
October net production of 35.2 MMcfe. Production increases are attributed to
adding new wells, well workovers, and the completion of the Riverbend gathering
system expansion.
Management Comment
Commenting on the Riverbend Project, Gasco CEO and President, Mark Erickson
said: "We are pleased to report incremental month-over-month production
increases. Our commitment to the Uinta Basin is evidenced by our focus on
driving down costs while improving efficiencies and economies of scale. This
month's anticipated addition of a third rig should provide further improvements
in production rates and in drilling time and cost reductions as we continue to
get better at exploiting our Uinta Basin leasehold. The additional rig will
drill for a higher working interest net to Gasco as compared to the other two
rigs currently working for Gasco"
Institutional Investor Conference
Gasco Energy President and CEO, Mark Erickson will present at the First Albany
Capital Growth Conference in New York on Wednesday, December 8, 2004. Slides
from Mr. Erickson's presentation will be available at www.gascoenergy.com. You
may also access the slides by visiting the conference site at
http://w.on24.com/r.htm?e=9725&s=1&k=9832287946ACC550F70AD3FA5E77BA6
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
Item 8.01 of the Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on October 14, 2004.
Contact for Gasco Energy, Inc.: Investor Relations: 303-483-0044
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