Gasco
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Energy
For Immediate Release on, Tuesday, May 9, 2006
GASCO ENERGY ANNOUNCES FIRST QUARTER 2006
FINANCIAL AND OPERATIONAL RESULTS
- REVENUE GROWTH OF 465%
- OIL AND GAS SALES OF $5.9 MILLION
- RECORD OPERATING CASH FLOW OF $1.1 MILLION
- PRODUCTION GROWTH OF 512% QUARTER-OVER-QUARTER AND 16% SEQUENTIALLY
DENVER - May 9, 2006 - (PRNewswire) - Gasco Energy (AMEX: GSX) today reported
its financial and operating results for the quarter ended March 31, 2006.
Financial Results
For the first quarter 2006, Gasco reported a net loss attributable to common
shareholders of $0.2 million, or breakeven results of $0.00 per share, as
compared to a net loss for the same period in 2005 of $1.7 million, or $0.02 per
share. All per share figures are basic and diluted. Included in the quarter's
G&A expense is $1.0 million in expenses related to the adoption of FAS 123R
which requires public companies to expense employee share-based compensation, a
non-cash item, each quarter.
Total revenues grew by 465% to a company-record $7.3 million, as compared to
$1.3 million in the first quarter 2005. The growth in total revenue is
attributed to increased natural gas production and higher prices received for
sales of the company's natural gas.
Oil and gas sales for the first quarter 2006 were $5.9 million as compared to
$0.8 million for the same period in 2005, an increase of 649%. Gathering
revenues grew to $0.5 million from $0.1 million in 2005. The revenue growth is
attributed to increased natural gas throughput.
Gasco's total assets were $205.4 million at March 31, 2006, up 75% from $117.3
million at March 31, 2005. Cash and investments were $70.4 million as compared
to $46 million in the same period in 2005. Working capital at March 31, 2006 was
$73.4 million versus $45.4 million at March 31, 2005. Net cash provided by
operating activities for the first quarter 2006 was a record $1.1 million as
compared to a deficit of $0.5 million in the year-ago period.
Record Quarterly Production
Estimated cumulative net production for the quarter ended March 31, 2006 was
901.0 million cubic feet of natural gas equivalents, an increase of 16% over
fourth quarter 2005 production of 776.1 MMcfe, and 512% above first quarter
2005's production of 147.1 MMcfe. Net production increases are attributed to the
completion of new wells and behind-pipe recompletions partially offset by normal
production declines in existing wells. Net production for the quarter was 6%
higher than volumes reported in the company's operations update dated April 10,
2006.
For the first quarter of 2006, the average price received for sales of Gasco's
natural gas and liquids was $6.50 per Mcf and $57.08 per barrel of liquid
hydrocarbons. This compares to $5.19 per Mcf and $49.58 per barrel for the same
period in 2005. The company has no hedges in place.
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Conference Call
A conference call with investors, analysts and other interested parties is
scheduled for 11:00 a.m. EDT on Wednesday, May 10, 2006 to discuss first quarter
2006 financial and operating results. You are invited to listen to the call
which will be broadcast live over the Internet at www.gascoenergy.com.
Date: Wednesday, May 10, 2006
Time: 11:00 a.m. EDT
10:00 a.m. CDT
9:00 a.m. MDT
8:00 a.m. PDT
Call: (866) 392-4171 (US/Canada) and (706) 634-6345 (International),
passcode 8486202
Internet: Live and rebroadcast over the Internet: log on to
www.gascoenergy.com
Replay: Available through Friday, May 12 at (800) 642-1687 (US/Canada) and (706)
645-9291 (International) using passcode 8486202 and for 30 days at
www.gascoenergy.com
[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-Q dated
May 9, 2006.
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
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 3, 2006.
Contact for Gasco Energy, Inc.: Investor Relations: 303-483-0044
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2006 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents $40,408,462 $62,661,368
Restricted investment 3,575,000 10,139,000
Short-term investments 30,000,000 15,000,000
Accounts receivable
Joint interest billings 3,065,919 1,792,038
Revenue 2,412,480 3,115,154
Inventory 4,572,897 1,182,982
Prepaid expenses 543,137 645,554
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Total 84,577,895 94,536,096
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PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 95,796,379 83,972,300
Unproved mineral interests 13,892,137 13,323,712
Wells in progress 2,868,283 -
Gathering assets 6,243,162 4,831,050
Equipment 5,306,332 5,148,388
Furniture, fixtures and other 229,857 175,607
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Total 124,336,150 107,451,057
Less accumulated depreciation, depletion and amortization (9,805,274) (6,986,662)
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Total 114,530,876 100,464,395
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OTHER ASSETS
Restricted investment 3,602,243 3,565,020
Deferred financing costs 2,519,919 2,634,461
Debt issuance costs 208,051 -
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Total 6,330,213 6,199,481
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TOTAL ASSETS $ 205,438,984 $ 201,199,972
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)
March 31, December 31,
2006 2005
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,167,045 $ 907,772
Revenue payable 1,326,593 1,658,141
Advances from joint interest owners 3,076,101 2,476,080
Accrued interest 1,737,849 844,098
Accrued expenses 3,843,141 2,571,047
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Total 11,150,729 8,457,138
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NONCURRENT LIABILITIES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Asset retirement obligation 243,669 223,947
Deferred rent expense 78,343 78,727
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Total 65,322,012 65,302,674
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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 - 1
Common stock - $.0001 par value; 300,000,000 shares authorized;
85,675,256 shares issued and 85,601,556 outstanding in 2006
85,041,492 shares issued and 84,967,792 shares outstanding in 2005 8,572 8,504
Additional paid in capital 158,800,349 157,540,755
Deferred compensation - (443,579)
Accumulated deficit (29,712,383) (29,535,226)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
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Total 128,966,243 127,440,160
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 205,438,984 $ 201,199,972
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------------------------------------
2006 2005
REVENUES
Gas $ 5,697,115 $ 714,732
Oil 232,562 76,795
Gathering 483,139 133,767
Interest income 846,706 360,053
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Total 7,259,522 1,285,347
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OPERATING EXPENSES
Lease operating 530,015 156,432
Gathering operations 387,793 224,747
Depletion, depreciation and amortization 2,826,542 372,236
General and administrative 2,684,036 1,223,798
Interest expense 1,008,293 1,008,262
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Total 7,436,679 2,985,475
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NET LOSS (177,157) (1,700,128)
Preferred stock dividends (1,393) (7,162)
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NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ (178,550) $ (1,707,290)
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NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.00) $ (0.02)
========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 84,643,556 70,042,691
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
-----------------------------------
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(177,157) $ (1,700,128)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation, depletion and impairment expense 2,821,205 369,596
Accretion of asset retirement obligation 5,338 2,640
Stock compensation 989,417 125,400
Amortization of deferred rent (384) 13,735
Amortization of deferred financing costs 114,542 114,542
Changes in operating assets and liabilities:
Accounts receivable (571,207) (534,959)
Inventory (3,389,915) (498,282)
Prepaid expenses 102,417 126,403
Accounts payable 259,273 (1,136,233)
Revenue payable (331,548) 75,213
Advances from joint interest owners 600,021 333,535
Accrued interest 893,751 893,750
Accrued expenses (211,664) 1,294,736
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Net cash provided by (used in) operating activities 1,104,089 (520,052)
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CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (56,843) (44,522)
Cash paid for acquisitions, development and exploration (15,174,942) (6,639,094)
Proceeds from property sales - 828,102
Increase in short-term investments (15,000,000) -
Proceeds from sale of short-term investments - 5,000,000
Cash designated as restricted (37,223) (105,617)
Cash undesignated as restricted 6,564,000 -
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Net cash used in investing activities (23,705,008) (961,131)
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CASH FLOWS FROM FINANCING ACTIVITIES
Preferred dividends (1,393) (6,809)
Exercise of options to purchase common stock 557,457 -
Cash paid for debt issuance costs (208,051) -
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Net cash provided by (used in) financing activities 348,013 (6,809)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (22,252,906) (1,487,992)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 62,661,368 25,717,081
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END OF PERIOD $ 40,408,462 $ 24,229,089
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