EXHIBIT 99.1
For Release at 8:45 AM EST on, March 17, 2005
GASCO ENERGY ANNOUNCES 2004 FINANCIAL AND OPERATIONAL RESULTS
REVENUES INCREASE 177%, TOTAL ASSETS UP 255%, PRODUCTION GROWTH 99%
DENVER - March 17, 2005 - (PRNewswire) - Gasco Energy (AMEX: GSX) today
announced financial and operating results for the year-ended December 31, 2004.
Financial Results
The company reported a net loss for 2004 of $4.2 million, or $0.07 per share, as
compared to a net loss for 2003 of $2.5 million, or $0.07 per share. All per
share figures are basic and diluted. Total revenues grew by 177% to a
company-record $3.6 million, as compared to $1.3 million in 2003. The growth in
revenue is attributed to increased natural gas production and higher prices
received for sales of the company's natural gas. Gasco's total assets rose to a
record $117.4 million at year end, up 255 percent from $33.1 million at year-end
2003. Working capital at year-end 2004 was $52.7 million versus $1.2 million at
year-end 2003.
Net cash used in operating activities for 2004 was a deficit of $0.9 million,
down 59% from a deficit of $2.2 million for 2003. The decreased deficit was due
to the increased component of non-cash items in the company's net loss for the
year and the net change in operating assets and liabilities as a result of the
company's increased level of operations in 2004 as compared to 2003, offset by
the larger net loss in 2004 as compared to 2003.
Operations
For 2004, Gasco posted record production of 536.4 million cubic feet equivalent
(MMcfe) versus 269.0 MMcfe for 2003, an increase of 99%. Average price received
for sales of Gasco's natural gas and liquids increased to $5.79 per thousand
cubic feet of gas (Mcf) and $38.43 per barrel of liquid hydrocarbons for 2004.
This compares to $4.69 per Mcf and $28.52 per barrel for 2003. Year-end 2004
proved reserves, as previously announced, were 41.3 billion cubic feet
equivalent (Bcfe) compared to 14.2 Bcfe for year-end 2003.
Management Comment
Commenting on the 2004 results, Gasco CEO and President, Mark Erickson said:
"Gasco accomplished many things in 2004. We put necessary capital in place to
continue proving up our large Uinta Basin leasehold; we drilled a record number
of wells, we had record production and total revenue and set the stage for
improving on these numbers in 2005. The operational metrics posted for 2004
provide the company with a benchmark going forward. With three rigs currently
running, we continue to learn and improve as we drill wells. In 2005, we will
leverage our experience from 2004 to further define the geologic and productive
characteristics of our position in the Uinta Basin."
Sarbanes-Oxley 404 Compliance
In June 2004, Gasco became an accelerated-filer for the first time due to its
market capitalization as of June 30, 2004. As a result of reaching this
threshold, the company is required to report its evaluation of its internal
controls over financial reporting in its annual report for 2004, rather than in
its 2005 annual report. The company therefore effectively had only nine months
to complete its evaluation of internal controls. Companies that were accelerated
filers as of the implementation of the rules effectively had more than 18 months
to complete this evaluation. A change in auditors in the third quarter of 2004
further complicated the company's efforts to complete its evaluation in a timely
manner. In November 2004 the SEC issued an order granting accelerated filers
with market capitalization of less than $700 million as of June 30, 2004 an
additional 45 days to include the required report and attestation in their
annual reports on Form 10-K. The SEC recognized the hardship that small cap
filers faced in their race to meet the requirements of Sarbanes-Oxley.
Due to the factors discussed above, Gasco's annual report for the year ended
December 31, 2004 filed today with the SEC on Form 10-K did not include
management's annual report on internal control over financial reporting and the
related attestation report of its registered public accounting firm. Gasco
anticipates no difficulty in completing its evaluation of the internal controls
within the 45-day period following March 16, 2005, and will file an amended 10-K
that will include management's report on internal control over financial
reporting required by Item 308(a) of Regulation S-K, and the related attestation
report of the registered public accounting firm required by Item 308(b) of
Regulation S-K.
Teleconference Call
Management anticipates scheduling its quarterly teleconference call and Internet
broadcast of the call to discuss financial and operational results upon
completion of the first quarter 2005. Investors and analysts will be invited to
join management on the call at that time. There is no conference call scheduled
to discuss 2004 results.
[Financial and Operational Tables Accompany this News Release]
The notes accompanying the financial statements are an integral part
of the consolidated financial statements and can be found in Gasco's
filing on Form 10-K dated March 16, 2005.
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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
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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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------------------
2004 2003
ASSETS
CURRENT ASSETS
Cash and cash equivalents $25,717,081 $ 3,081,109
Restricted investment 3,535,055 250,000
Short-term investments 27,000,000 -
Accounts receivable 1,045,044 499,363
Inventory 1,009,914 -
Prepaid expenses 458,555 555,786
----------- ---------
Total 58,765,649 4,386,258
----------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 29,811,483 16,386,252
Unproved mineral interests 18,449,330 13,212,039
Gathering assets 2,469,580 -
Equipment 89,900 -
Furniture, fixtures and other 158,590 166,051
---------- ----------
Total 50,978,883 29,764,342
---------- ----------
Less accumulated depreciation, depletion and
amortization (2,247,032) (1,232,634)
----------- -----------
Total 48,731,851 28,531,708
----------- ----------
NON-CURRENT ASSETS
Restricted investment 6,778,040 -
Deferred financing costs 3,092,628 141,213
----------- ----------
9,870,668 141,213
----------- ----------
TOTAL ASSETS $ 117,368,168 $ 33,059,179
============= ============
The notes accompanying the financial statements are an integral part of
the consolidated financial statements and can be found in Gasco's filing on
Form 10-K dated March 16, 2005.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
December 31,
----------------------------------------
2004 2003
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,447,149 $ 2,016,979
Revenue payable 334,765 243,513
Advances from joint interest owners 891,999 -
Accrued interest 695,139 -
Accrued expenses 2,677,352 933,520
---------- ---------
Total 6,046,404 3,194,012
---------- ---------
NONCURRENT LIABILITES
5.5% Convertible Senior Notes 65,000,000 -
8% Convertible Debentures, net of unamortized discount of $159,722 - 2,340,278
Asset retirement obligation 108,566 142,806
---------- ---------
Total 65,108,566 2,483,084
---------- ---------
COMMITMENTS AND CONTINGENCIES (NOTES 5, 13, 16)
STOCKHOLDERS' EQUITY
Series B Convertible Preferred stock - $.001 par value; 20,000 shares
authorized; 2,255 shares issued and outstanding with a liquidation
preference of $992,200 in 2004 and 11,734 shares issued and
outstanding with a liquidation preference of $5,162,960 in 2003 2 12
Common stock - $.0001 par value; 100,000,000 shares authorized;
70,590,909 shares issued and 70,517,209 outstanding in 2004;
45,675,936 shares issued and 45,602,236 shares outstanding in 2003 7,059 4,568
Additional paid in capital 76,346,463 52,979,325
Deferred compensation (512,440) (179,766)
Accumulated deficit (29,497,591) (25,291,761)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
----------- ----------
Total 46,213,198 27,382,083
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 117,368,168 $ 33,059,179
=============- ============
The notes accompanying the financial statements are an integral part of
the consolidated financial statements and can be found in Gasco's filing on
Form 10-K dated March 16, 2005.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31,
------------------------------------------------
2004 2003 2002
REVENUES
Gas $ 2,928,689 $ 1,206,741 $ 164,508
Oil 195,199 56,702
-
Gathering 143,326 - -
Interest income 325,001 11,987 76,140
--------- --------- -------
Total 3,592,215 1,275,430 240,648
--------- --------- -------
OPERATING EXPENSES
General and administrative 4,191,978 2,819,675 5,080,287
Lease operating 638,267 337,278 119,809
Gathering operations 267,450 - -
Depletion, depreciation, amortization and asset retirement
liability accretion 1,102,575 552,923 149,109
Impairment - - 541,125
Interest expense 1,597,775 82,392 -
--------- --------- ---------
Total 7,798,045 3,792,268 5,890,330
--------- --------- ---------
LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (4,205,830) (2,516,838) (5,649,682)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE - (9,687) -
------------ ----------- ----------
NET LOSS (4,205,830) (2,526,525) (5,649,682)
Preferred stock dividends (140,853) (304,172) -
------------ ----------- ----------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (4,346,683) $ (2,830,697) $(5,649,682)
============= ============= ============
PER COMMON SHARE DATA - BASIC AND DILUTED:
Loss before cumulative effect of change in accounting principle $ (0.07) $ (0.07) $ (0.16)
Cumulative effect of change in accounting principle - - -
----------- ----------- ------------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.07) $ (0.07) $ (0.16)
========= ========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 63,194,223 41,262,778 36,439,074
============= =========== ===========
The notes accompanying the financial statements are an integral part of
the consolidated financial statements and can be found in Gasco's filing on
Form 10-K dated March 16, 2005.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
--------------------------------------------------
2004 2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(4,205,830) $(2,526,525) $(5,649,682)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation, depletion and impairment expense 1,085,912 541,128 690,234
Accretion of asset retirement obligation 16,663 11,795 -
Amortization of deferred compensation 415,483 94,317 208,542
Amortization of beneficial conversion feature 161,514 6,945 -
Amortization of offering costs 294,993 7,758 -
Cumulative effect of change in accounting principle - 9,687 -
Changes in operating assets and liabilities:
Accounts receivable (545,681) (403,219) (63,397)
Inventory (1,009,914) - -
Prepaid expenses 59,992 (320,059) (74,139)
Accounts payable (600,723) 164,303 1,303,823
Revenue payable 91,252 185,215 58,298
Advances from joint interest owners 891,999 - -
Accrued interest 695,139 - -
Accrued expenses 1,743,832 36,741 2,136,015
---------- ----------- -------------
Net cash used in operating activities (905,369) (2,191,914) (1,390,306)
---------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (64,053) (3,264) (103,342)
Cash paid for acquisitions, development and exploration (25,736,066) (5,283,426) (14,437,855)
Proceeds from property sales 4,463,161 - -
Investment in short-term investments (27,000,000) - -
------------ ----------- ------------
Net cash used in investing activities (48,336,958) (5,286,690) (14,541,197)
------------ --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of convertible notes 65,000,000 - -
Cash designated as restricted (10,313,095) (250,000) (250,000)
Cash undesignated as restricted 250,000 250,000 -
Preferred dividends (61,973) (4,092) -
Exercise of options to purchase common stock 33,336 - -
Proceeds from sale of preferred stock - 4,862,840 -
Proceeds from sale of common stock 21,500,001 2,777,292 6,500,000
Proceeds from sale of convertible debentures - 2,500,000 -
Cash paid for offering costs (4,636,828) (266,721) (526,020)
Repayment of note payable - (1,400,000) -
Proceeds from 16b violation 106,858 1,332 -
----------- ----------- ---------
Net cash provided by financing activities 71,878,299 8,470,651 5,723,980
------------ ----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 22,635,972 992,047 (10,207,523)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 3,081,109 2,089,062 12,296,585
---------- ----------- -----------
END OF PERIOD $25,717,081 $ 3,081,109 $ 2,089,062
=========== =========== ===========
The notes accompanying the financial statements are an integral part of
the consolidated financial statements and can be found in Gasco's filing on
Form 10-K dated March 16, 2005.