EXHIBIT 99.1
Gasco
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Energy
For Immediate Release on Thursday, November 3, 2005
GASCO ENERGY ANNOUNCES THIRD QUARTER 2005
FINANCIAL AND OPERATIONAL RESULTS
DENVER - November 3, 2005 - (PRNewswire) - Gasco Energy (AMEX: GSX) today
reported its financial and operating results for the quarter and nine months
ended September 30, 2005.
Financial Results
For the first time in company history, Gasco reported net income for a reporting
period. Net income for the third quarter 2005 was $643,000, or $0.01 per share,
as compared to a net loss for the third quarter of 2004 of $564,000 or $0.01 per
share. All per share figures are basic and diluted. Total revenues grew by 446%
to a company-record $4.7 million, as compared to $860,000 in the same period in
2004. The growth in total revenue is attributed to higher commodity prices
received, increased production and growing gathering system revenues.
Oil and gas sales for the third quarter 2005 were a company record $4.0 million
as compared to $817,000 for the same period in 2004. The company attributes the
390% increase in oil and gas sales to higher sales volumes and an increase in
average commodity prices received.
9-month Period
Gasco reported a net loss for the nine months ended September 30, 2005 of
approximately $2.1 million, or $0.03 per share, as compared to a net loss for
the same period in 2004 of $1.9 million or $0.03 per share. Total revenues grew
by 250% to another company record $8.5 million, as compared to $2.4 million in
the same period in 2004. The growth in total revenue is attributed to higher
commodity prices received, increased production and growing gathering system
revenues.
Oil and gas sales for the nine-month period of 2005 were $6.6 million as
compared to $2.3 million for the same period in 2004. The company attributes the
186% increase in oil and gas sales to higher average commodity prices received
in the second and third quarters of 2005 and to higher sales volumes in the
nine-month period of 2005.
Net cash provided by operating activities for the nine months ended September
30, 2005 was $2.2 million. This compares to net cash used in operating
activities of $1.7 million in the same period in 2004. It is the first time
Gasco has posted operating cash flow.
Operations
Gasco posted record quarterly production of 489 million cubic feet of natural
gas equivalent (MMcfe) versus 138 MMcfe for the third quarter 2004, an increase
of 254%. The average price received for sales of Gasco's natural gas and liquids
was $8.02 per thousand cubic feet of gas (Mcf) and $62.40 per barrel of liquid
hydrocarbons for the third quarter 2005. This compares to $5.84 per Mcf and
$42.22 per barrel for the same period in 2004.
Gasco posted record nine-month production of 937 MMcfe versus 404 MMcfe for the
same period in 2004, a 132% increase. For the nine months of 2005, the average
price received for sales of Gasco's natural gas and liquids was $6.98 per Mcf
and $55.93 per barrel of liquid hydrocarbons. This compares to $5.78 per Mcf and
$37.07 per barrel for the same period in 2004.
During the first nine months of 2005, the company spudded 16 wells (11.1 net)
and reached total depth on 14 gross wells (9.1 net wells) in the Riverbend area.
Other activity included initial completion operations on 16 wells and the
re-entry of nine wells to complete behind-pipe pay zones. Exiting the third
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quarter 2005, Gasco had 35 gross wells on production and one additional gross
well in completion. Currently, three drilling rigs are operating in the
Riverbend project area, two for Gasco Energy and one drilling inside of the
JVEA.
2005 CAPEX Increased to $50 Million
The Company's 2005 initial capital expenditure budget of $38 million has been
increased to $50 million to allow for increased activity in the fourth quarter.
Upon completion of its 2005 drilling program, Gasco anticipates that it will
have spudded 22 wells, drilled and completed 20 wells (13 net) and conducted
completion operations on two additional wells. The increased budget includes
spudding two additional wells, initial completion operations on two wells, and
increased costs associated with the company's drilling program.
Teleconference Call
A conference call with investors, analysts and other interested parties is
scheduled for 11:00 a.m. EST on Friday, November 4, 2005 to discuss 2005 third
quarter financial and operating results. You are invited to listen to the call
which will be broadcast live over the Internet at www.gascoenergy.com. Included
in the conference call will be a slide show highlighting financial and operating
results. Gasco will also cover in detail the recently identified Blackhawk
Formation Spring Canyon marine trend and its impact on exploitation
opportunities in the Riverbend Project. The slides that accompany the conference
call will be available at 9:00 a.m. EST at www.gascoenergy.com and will also be
presented in conjunction with the webcast.
Date: Friday, November 4, 2005
Time: 11:00 a.m. EST
10:00 a.m. CST
9:00 a.m. MST
8:00 a.m. PST
Call: (866) 392-4171 (US/Canada) and (706) 634-6345 (International),
pass code 1843031
Internet: Live and rebroadcast over the Internet: log on to
www.gascoenergy.com
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Replay: Available through Monday, November 7 at (800) 642-1687
(US/Canada) and (706) 645-9291 (International) using pass
code 1843031and for 30 days at www.gascoenergy.com
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[Financial and Operational Tables Accompany this
News Release in a Separate File]
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-Q dated November 3, 2005.
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
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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
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 16, 2005.
Contact for Gasco Energy, Inc.: Investor Relations: 303-483-0044
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2005 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents $12,651,002 $ 25,717,081
Restricted investment 3,575,000 3,535,055
Short-term investments 10,000,000 27,000,000
Accounts receivable
Joint interest billings 204,788 429,779
Revenue 2,254,314 615,265
Inventory 1,836,054 1,009,914
Prepaid expenses 251,419 458,555
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Total 30,772,577 58,765,649
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PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 67,973,865 29,811,483
Unproved mineral interests 13,003,729 18,449,330
Gathering assets 4,302,260 2,469,580
Equipment 118,144 89,900
Furniture, fixtures and other 185,326 158,590
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Total 85,583,324 50,978,883
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Less accumulated depreciation, depletion and amortization (4,530,199) (2,247,032)
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Total 81,053,125 48,731,851
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OTHER ASSETS
Restricted investment 5,307,884 6,778,040
Deferred financing costs 2,749,002 3,092,628
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Total 8,056,886 9,870,668
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TOTAL ASSETS $ 119,882,588 $ 117,368,168
============= =============
Accompanying notes are an integral part of the
consolidated financial statements and are in Gasco's 10-Q filed on 11/3/05.
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)
September 30, December 31,
2005 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 598,616 $ 1,447,149
Revenue payable 1,340,885 334,765
Advances from joint interest owners 1,235,305 891,999
Accrued interest 1,737,849 695,139
Accrued expenses 4,223,089 2,677,352
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Total 9,135,744 6,046,404
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NONCURRENT LIABILITES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Asset retirement obligation 167,745 108,566
Deferred rent expense 69,897 -
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Total 65,237,642 65,108,566
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STOCKHOLDERS' EQUITY
Series B Convertible Preferred stock - $.001 par value;
20,000 shares authorized; 763 shares issued and outstanding
with a liquidation preference of $335,720 in 2005 and 2,255
shares issued and outstanding with a liquidation preference
of $992,200 in 2004 1 2
Common stock - $.0001 par value; 300,000,000 shares authorized;
71,978,392 shares issued and 71,904,692 outstanding in 2005;
70,590,909 shares issued and 70,517,209 shares outstanding in 2004 7,198 7,059
Additional paid in capital 77,517,563 76,346,463
Deferred compensation (337,982) (512,440)
Accumulated deficit (31,547,283) (29,497,591)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
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Total 45,509,202 46,213,198
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 119,882,588 $ 117,368,168
============== =============
Accompanying notes are an integral part of the
consolidated financial statements and are in Gasco's 10-Q filed on 11/3/05.
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
---------------------------------------
2005 2004
REVENUES
Gas $ 3,793,771 $ 757,073
Oil 166,727 60,252
Gathering 471,478 -
Interest income 264,751 43,065
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Total 4,696,727 860,390
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OPERATING EXPENSES
Lease operating 236,413 179,241
Gathering operations 267,792 -
Depletion, depreciation and amortization 1,211,550 283,522
General and administrative 1,323,376 869,982
Interest expense 1,008,293 68,056
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Total 4,047,424 1,400,801
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NET INCOME (LOSS) 649,303 (540,411)
Preferred stock dividends (6,212) (23,754)
--------- -----------
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ 643,091 $ (564,165)
========= ===========
NET INCOME (LOSS) PER COMMON SHARE
BASIC $ 0.01 $ (0.01)
======= =========
DILUTED $ 0.01 $ (0.01)
======= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 70,991,812 65,835,129
========== ==========
DILUTED 75,838,798 65,835,129
========== ==========
Accompanying notes are an integral part of the
consolidated financial statements and are in Gasco's 10-Q filed on 11/3/05.
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
September 30,
----------------------------------------
2005 2004
REVENUES
Gas $ 6,268,928 $ 2,189,860
Oil 354,963 156,138
Gathering 927,375 -
Interest income 979,708 91,470
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Total 8,530,974 2,437,468
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OPERATING EXPENSES
Lease operating 598,115 596,053
Gathering operations 684,320 -
Depletion, depreciation and amortization 2,351,256 784,861
General and administrative 3,922,097 2,633,216
Interest expense 3,024,878 228,816
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Total 10,580,666 4,242,946
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NET LOSS (2,049,692) (1,805,478)
Preferred stock dividends (27,433) (136,640)
------------ -----------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (2,077,125) $ (1,942,118)
============= =============
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.03) $ (0.03)
========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 70,661,070 61,289,142
========== ==========
Accompanying notes are an integral part of the
consolidated financial statements and are in Gasco's 10-Q filed on 11/3/05.
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
----------------------------------
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,049,692) $ (1,805,478)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation, depletion and impairment expense 2,341,819 770,411
Accretion of asset retirement obligation 9,437 14,450
Stock compensation 539,378 241,002
Amortization of beneficial conversion feature - 25,002
Non-cash rent expense 39,897 -
Landlord incentive payment 30,000 -
Amortization of deferred financing costs 343,626 27,930
Changes in operating assets and liabilities:
Accounts receivable (1,414,058) 74,489
Inventory (826,140) -
Prepaid expenses 207,136 155,865
Accounts payable (988,953) (1,296,167)
Revenue payable 1,006,120 8,427
Advances from joint interest owners 343,306 971,272
Accrued interest 1,042,710 -
Accrued expenses 1,545,737 (908,416)
--------- -----------
Net cash provided by (used in) operating activities 2,170,323 (1,721,213)
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CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (85,388) (50,575)
Cash paid for acquisitions, development and exploration (35,356,065) (12,187,200)
Proceeds from property sales 828,102 4,314,984
Proceeds from sale of short-term investments 17,000,000 -
Cash designated as restricted (208,331) -
Cash undesignated as restricted 1,638,542 250,000
------------ -----------
Net cash used in investing activities (16,183,140) (7,672,791)
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CASH FLOWS FROM FINANCING ACTIVITIES
Preferred dividends (21,501) (26,962)
Exercise of options to purchase common stock 968,239 33,336
Proceeds from sale of common stock - 21,500,001
Cash paid for offering costs - (1,429,659)
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Net cash provided by financing activities 946,738 20,076,716
------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (13,066,079) 10,682,712
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 25,717,081 3,081,109
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END OF PERIOD $ 12,651,002 $ 13,763,821
============ ============
Accompanying notes are an integral part of the
consolidated financial statements and are in Gasco's 10-Q filed on 11/3/05.
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