Exhibit 99.1
For Release at 4:30 PM EDT on Tuesday, May 6, 2008
Gasco Energy Announces First Quarter 2008
Financial and Operational Results
- Record Cash Flow From Operations
- Record Oil & Gas Sales
- Mancos Shale Operations Update Provided
DENVER, May 6 /PRNewswire-FirstCall/ -- Gasco Energy (Amex: GSX - News) today
reported its financial and operating results for the quarter ended March 31,
2008.
Financial Results
For the first quarter 2008, Gasco reported a net loss attributable to common
shareholders of $4.4 million, or $0.04 per share, as compared to $0.2 million,
or breakeven results of $0.00 per share, for the same period in 2007. All
per-share figures are basic and diluted. Included in the first quarter 2008
results are derivative losses of $6.4 million attributed to hedge effect which
is discussed below. Excluding the effect of unrealized derivative losses, a
non-GAAP measure, Gasco would have posted net income of $1.5 million or $0.01
per share. The Company did not hedge its volumes in the comparable period in
2007.
The Company reported record oil and gas sales for the first quarter 2008 of $8.5
million as compared to $5.9 million for the same period in 2007. The increase in
oil and gas sales during the first quarter 2008 is attributed to higher prices
received for sales of the Company's natural gas and oil volumes and to greater
oil and gas sales volumes during the quarter. Gathering revenues from Gasco's
midstream assets were also a Company-record $0.9 million for the first quarter
2008 as compared to $0.5 million in the prior-year period. Greater throughput of
third-party natural gas volumes contributed to the rise in gathering revenue.
Total revenues for the first quarter were $3.4 million, as compared to $6.4
million in the first quarter 2007. The decrease in total revenues is attributed
to the derivative loss.
Gasco's average realized gas price was $7.19 per thousand cubic feet of natural
gas (Mcf) for the first quarter of 2008, including the effect of hedges,
compared to $5.47 per Mcf for the first quarter of 2007. The Company's risk
management activities decreased its average gas price by $0.42 per Mcf during
the first quarter of 2008. Prior to the impact of hedges, the Company's average
price received for its natural gas production during the first quarter of 2008
was approximately $7.61 per Mcf as compared to $5.47 in the prior-year period.
The Company did not hedge its volumes in the comparable period in 2007.
The average realized oil price was $75.28 per barrel for the first quarter of
2008, up from $45.38 per barrel for the first quarter of 2007. Gasco does not
hedge its crude oil volumes.
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Unit Cost Comparisons - LOE / DD&A / G&A
Lease operating expense (LOE) for the first quarter increased to $1.3 million
from $0.6 million in the same period in 2007. On a per-unit basis, LOE was at
$1.17 per thousand cubic feet of natural gas equivalent (Mcfe) in the first
quarter 2008, as compared to $0.57 per Mcfe in the year-ago period. The increase
in LOE quarter-over-quarter is attributed to increased operating expenses and
production taxes primarily due to the increase in natural gas prices as well as
an increase in the number of producing wells. Additionally, Gasco engineers are
using a more active wellbore treatment program to inhibit scale build-up and
improve rates, which contributed to LOE.
With unprecedented crude oil prices, Gasco recently embarked on a Green River
oil producer workover program to help improve production from this inventory of
wells which it acquired from Dominion in 2006. By comparison, LOE unit costs
were down by $0.19 per Mcfe in the first quarter of 2008, as compared to the
fourth quarter of 2007.
Depletion, depreciation and amortization (DD&A) was $2.4 million for the first
quarter 2008, as compared to $2.3 million for the same period in 2007. On a
per-unit basis, DD&A for the first quarter 2008 was $2.25 per Mcfe, as compared
to $2.22 in the 2007 period.
The Company reported general and administrative expense (G&A) of $2.2 million in
the first quarter 2008 versus $2.3 million in the same period in 2007. On a
per-unit basis, total G&A for first quarter 2008 was $2.02 per Mcfe, as compared
to $2.21 per Mcfe for the same period in 2007. G&A expense for the first quarter
2008 includes $0.7 million of non-cash, stock-based compensation expense, or, on
a per-unit basis, $0.67 per Mcfe, as compared to the prior-period total of $1.0
million, or $0.91 per Mcfe. Gathering operations expense increased to $0.7
million from $0.4 million in the first quarter 2007.
Gasco's total assets at March 31, 2008 were $125.6 million, as compared to
$122.5 million at year-end 2007. Net cash provided by operating activities for
the first quarter 2008 was a Company-record $5.9 million, as compared to $1.7
million in the same period in 2007. Cash and investments were $2.4 million at
March 31, 2008. Also at March 31, 2008, the Company had $12 million drawn on its
$250 million reserve-based revolving line of credit with JPMorgan, of which $45
million is currently available for borrowing.
Quarterly Production
Cumulative net production for the quarter ended March 31, 2008 was 1,085 MMcfe,
an increase of 3% from the prior-year net production of 1,051 MMcfe.
Operations Update & Subsequent Events
Mancos Update
In its Mancos program, Gasco has one Full Mancos producer and has drilled 10
wells to the Upper Mancos. Of these 10 wells, four are currently producing, two
are flowing back frac fluid, and four are awaiting completion. Gasco is
currently drilling an additional Upper Mancos well and a Mancos/Dakota deep
test.
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- ----------------------------------------------------------------------------------------------------------------------------
Gasco Energy
Mancos Shale Well Data
- ----------------------------------------------------------------------------------------------------------------------------
Initiated 24-hour Initial
Well Completion Flow Rate Comment
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Full Mancos; added BH and Mv on 2/11/08,
Federal 14-31 6/25/07 1.132 MMcf commingled production
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Federal 21-19 10/23/07 1.764 MMcf Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Federal 32-20 10/23/07 0.200 MMcf Only 300' of Upper Mancos drilled
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
State 21-32b 3/25/08 0.934 MMcf Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
SW Federal 12-25 4/7/08 1.495 MMcf Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
State 21-32a 4/15/08 Cleaning up Upper Mancos / BH commingled
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
SW Federal 32-25 4/22/08 Cleaning up Upper Mancos / Spring Canyon commingled
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Federal 34-30 Awaiting completion -- Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Lamb Trust 12-23 Awaiting completion -- Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
SW Federal 23-26 Awaiting completion -- Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Federal 14-19 Awaiting completion -- Recently reached TD in Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Federal 32-19 Drilling -- Drilling ahead to Upper Mancos
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
GC State 23-16 Drilling -- Rig on down time; Mancos / Dakota test
- -------------------------------- ----------------------- ---------------- --------------------------------------------------
Riverbend Area
The Company is currently drilling below 9,500 feet in the Federal 32-19
(GSX-operated - 33.33% WI) and recently reached total depth of 14,960 feet on
the Federal 14-19 (GSX-operated - 33.33% WI).
Gate Canyon Area
The Gate Canyon State 23-16 (GSX-operated - 25% WI), a Mancos/Dakota deep test,
is currently 2,000 feet below the top of the Mancos Formation, at a depth of
approximately 13,550 feet. The drilling rig is on "down time" while the drilling
contractor addresses mechanical issues with the rig. Gasco is not responsible
for the day-rate charges until the mechanical issues are resolved. Gasco has not
received an estimated time at which drilling will recommence. The well was
drilled with numerous gas shows and associated flares in the target intervals.
The well's proposed total depth is 16,500 feet.
Gasco originally estimated that the well would reach total depth in early May,
which it believes would have achieved were it not for the rig problems.
Other
The Company is currently documenting a commitment for a financial partner to
take 25% of Gasco's working interest in a 10-well Mancos shale drilling program.
Gasco continues to work with its partner NFR Energy to take up to 41.7% of
Gasco's working interest in the program.
The Riverbend Environmental Impact Statement (EIS) is progressing. The Draft EIS
is anticipated to be available for public comment in the coming months and is a
top priority for Gasco.
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Gasco is currently in the process of completing an update of its 3P and Resource
report. It expects the results to be available during the second quarter of
2008. Netherland Sewell & Associates, Inc. Gasco's independent reserve
engineering firm, is preparing the evaluation.
Management Comment
Commenting on the first quarter operations and results, Gasco President and CEO
Mark Erickson said: "The first quarter was a great start for the year. We
demonstrated record cash flow from operations. We are currently producing at
record daily rates averaging 31.4 MMcf gross and 14.4 MMcf net production during
April 2008. Rockies producers continue to enjoy robust commodity prices for this
time of year.
"We are encouraged with the results from our Mancos completion program which
have demonstrated high initial flow rates with strong flowing pressures. We have
made important technological advances with our Mancos completion designs,
although there is still much to learn on how to best stimulate the
over-pressured interval. Early data, including mud log shows and flares from the
Gate Canyon well, indicates potential in each of our historical producing uphole
intervals in addition to the Mancos. We are looking forward to evaluating the
deeper potential pay zones including the Dakota, which has proven successful for
other Uinta operators.
"We are more firmly committed to the long-term potential of our large acreage
position in the Uinta Basin. We are focused during the remainder of 2008 and
beyond to best position the Company to define and capture its leasehold value as
highlighted by recent Uinta Basin M&A activity."
Conference Call
A conference call with investors, analysts and other interested parties is
scheduled for 11:00 a.m. EDT on Wednesday, May 7, 2008 to discuss first quarter
2008 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 7, 2008
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: 44571302
Internet: Live and rebroadcast over the Internet: log on to
http://www.gascoenergy.com or to
http://www.videonewswire.com/event.asp?id=47896
Replay: Available through Sunday, May 11, 2008 at (800) 642-1687
(US/Canada) and (706) 645-9291 (International) using passcode
44571302 and for 30 days at http://www.gascoenergy.com
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 http://www.gascoenergy.com.
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SOURCE Gasco Energy, Inc.
Audio: http://www.videonewswire.com/event.asp?id=47896
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 http://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 Gasco'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 Gasco, 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 Gasco'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 Gasco 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 1. of the Company's 2007
filing on Form 10-K filed with the Securities and Exchange Commission on March
4, 2008.
Contact for Gasco Energy, Inc.: Investor Relations: 303-483-0044
[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 6, 2008.
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2008 2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents $2,412,332 $1,843,425
Accounts receivable
Joint interest billings 4,724,037 5,639,174
Revenue 4,552,178 3,872,959
Inventory 2,428,328 1,160,325
Prepaid expenses 219,099 327,030
----------- -----------
Total 14,335,974 12,842,913
----------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 220,362,367 215,273,593
Unproved mineral interests 40,409,506 41,644,348
Wells in progress 1,202,792 1,058,727
Gathering assets 15,832,449 15,708,353
Facilities and equipment 9,739,600 9,680,010
Furniture, fixtures and other 295,264 284,791
------------ -----------
Total 287,841,978 283,649,822
Less accumulated depletion, depreciation, amortization and impairment (178,453,713) (175,973,720)
------------- -------------
Total 109,388,265 107,676,102
------------ -----------
OTHER ASSETS
Deposit 139,500 139,500
Deferred financing costs 1,723,716 1,853,274
--------- ---------
Total 1,863,216 1,992,774
--------- ---------
TOTAL ASSETS $125,587,455 $ 122,511,789
============ =============
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 6, 2008.
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GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)
March 31, December 31,
2008 2007
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,700,952 $13,206,767
Revenue payable 2,856,872 1,477,268
Advances from joint interest owners 6,770,930 5,718,234
Derivative instruments 4,571,404 343,759
Accrued interest 1,760,594 844,094
Accrued expenses 487,000 583,000
----------- ----------
Total 24,147,752 22,173,122
----------- ----------
NONCURRENT LIABILITIES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Long-term debt 12,000,000 9,000,000
Derivative instruments 1,705,537 -
Asset retirement obligation 1,053,739 1,030,283
Deferred rent expense 56,838 60,593
---------- ----------
Total 79,816,114 75,090,876
---------- ----------
STOCKHOLDERS' EQUITY
Series B Convertible Preferred stock - $0.001 par value; 20,000 shares
authorized; zero shares outstanding - -
Common stock - $.0001 par value; 300,000,000 shares authorized;
107,304,119 shares issued and 107,230,419 outstanding as of
March 31, 2008 and 107,290,471 shares issued and 107,216,771
outstanding as of December 31, 2007 10,730 10,729
Additional paid-in capital 215,880,185 215,094,271
Accumulated deficit (194,137,031) (189,726,914)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
----------- ----------
Total 21,623,589 25,247,791
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 125,587,455 $ 122,511,789
=============- =============
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 6, 2008.
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
-------------------------------------------
2008 2007
REVENUES
Gas $ 7,897,480 $ 5,471,938
Oil 587,637 380,767
Gathering 908,356 486,666
Rental income 362,250 -
Derivative losses (6,372,452) -
Interest income 15,222 100,360
--------- ---------
Total 3,398,493 6,439,731
--------- ---------
OPERATING EXPENSES
Lease operating 1,266,727 596,262
Gathering operations 656,499 354,720
Depletion, depreciation, amortization and accretion 2,449,802 2,336,118
General and administrative 2,188,033 2,326,077
Interest expense 1,247,549 1,002,728
--------- ---------
Total 7,808,610 6,615,905
--------- ---------
NET LOSS $ (4,410,117) $ (176,174)
============= ===========
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.04) $ (0.00)
============= ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC AND DILUTED 106,903,548 85,734,095
=========== ==========
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 6,
2008.
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GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
---------------------------------
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(4,410,117) $ (176,174)
Adjustment to reconcile net loss to net cash provided by
operating activities
Depletion, depreciation, amortization and impairment expense 2,426,412 2,314,603
Accretion of asset retirement obligation 23,390 21,515
Stock-based compensation 721,260 957,344
Unrealized derivative loss 5,933,182 -
Amortization of deferred rent (3,755) (4,932)
Amortization of deferred financing costs 129,558 129,558
Changes in operating assets and liabilities:
Accounts receivable 235,918 2,891,823
Inventory (1,268,003) (820,478)
Prepaid expenses 107,931 149,528
Accounts payable (1,269,339) (2,454,844)
Revenue payable 1,379,604 (164,665)
Advances from joint interest owners 1,052,696 (1,773,078)
Accrued interest 916,500 893,751
Accrued expenses (96,000) (249,265)
-------- ---------
Net cash provided by operating activities 5,879,237 1,714,686
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (10,473) (8,239)
Cash paid for acquisitions, development and exploration (8,336,355) (26,085,541)
Proceeds from sale of short-term investments - 6,000,000
----------- ------------
Net cash used in investing activities (8,346,828) (20,093,780)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit 12,000,000 12,000,000
Repayment of borrowings (9,000,000) -
Exercise of options to purchase common stock 36,498 -
----------- -----------
Net cash provided by financing activities 3,036,498 12,000,000
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 568,907 (6,379,094)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 1,843,425 12,876,879
--------- ----------
END OF PERIOD $2,412,332 $6,497,785
========== ==========
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 6,
2008.
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