EXHIBIT 99.1
Gasco
- ------
Energy
For Immediate Release on Tuesday, November 4, 2008
Gasco Energy Announces Third Quarter 2008
Financial and Operational Results
- Oil & Gas Sales Increase 202% Quarter-over-Quarter
- Record Net Income of $0.17 per share
- Record Net Income of $0.03 per share, net of hedging gains, (Non-GAAP)
DENVER, November 4, 2008 /PRNewswire-FirstCall/ -- Gasco Energy (NYSE Alternext
US: GSX) today reported financial and operating results for the quarter ended
September 30, 2008.
Third Quarter Financial Results
For the third quarter 2008, Gasco reported net income attributable to common
shareholders of $21.0 million, or $0.17 per diluted share, as compared to a net
loss of $35.1 million, or $0.37 per basic and diluted share, for the same period
in 2007. All per-share figures for the third quarter 2008 are on a diluted
basis. All per-share figures for the third quarter 2007 are on a basic and
diluted basis. Included in the third quarter 2008 results are derivative gains
of $17.1 million attributed to hedge effect. Excluding the effect of derivative
gains, a non-GAAP measure, Gasco would have posted net income of $3.9 million or
$0.03 per share. The Company did not hedge its volumes in the comparable period
in 2007.
Included in the third quarter 2007's operating expenses is a non-cash charge of
$32.8 million related to an impairment of the carrying value of oil and gas
properties. Before the impairment charge, Gasco would have posted a net loss of
$2.4 million, or $0.03 per share, for the third quarter 2007.
The Company reported record oil and gas sales for the third quarter 2008 of $9.7
million, as compared to $3.2 million for the same period in 2007. The 202%
quarter-over-quarter increase in oil and gas sales is primarily attributed to
both markedly higher prices received for sales of the Company's natural gas and
oil volumes and to a 25% increase in oil and gas sales volumes during the
quarter. Gathering and processing revenues from Gasco's midstream assets were
also a Company-record $1.2 million for the third quarter 2008, as compared to
$0.4 million in the prior-year period. Increased Riverbend natural gas
production and higher prices for natural gas and natural gas liquids both
contributed to the rise in gathering and processing revenue. Total revenues for
the third quarter 2008 were $28.3 million, as compared to $4.0 million in the
prior-year period, a 602% increase. The increase is attributed primarily to net
derivative gains of $17.1 million and to the 202% increase in oil and gas sales.
Gasco's average realized gas price was $7.38 per thousand cubic feet of natural
gas (Mcf) for the third quarter of 2008, excluding the effect of hedges,
compared to $2.89 per Mcf for the third quarter of 2007. The Company's risk
management activities increased its average gas price by $0.36 per Mcf during
the third quarter of 2008. After the impact of hedges, the Company's average
price received for its natural gas production during the third quarter of 2008
was approximately $7.74 per Mcf, as compared to $2.89 per Mcf in the prior-year
period. The Company did not hedge production volumes in the comparable period in
2007.
1
The average realized oil price was $98.46 per barrel for the third quarter of
2008, up from $56.82 per barrel for the third quarter of 2007. Gasco does not
hedge its crude oil volumes.
Unit Cost Comparisons - LOE / DD&A / G&A
Lease operating expense (LOE) for the third quarter increased to $1.2 million
from $1.0 million in the same period in 2007. On a per-unit basis, LOE was $1.00
per thousand cubic feet of natural gas equivalent (Mcfe) in the third quarter
2008, as compared to $1.05 per Mcfe in the prior-year period. The decrease in
per-unit LOE quarter-over-quarter is attributed to lower operating expenses
($0.25 per Mcfe lower) offset in part by higher production taxes ($0.20 per Mcfe
higher) primarily due to higher natural gas prices, increased production and to
a greater number of producing wells.
Depletion, depreciation and amortization (DD&A) was $1.7 million for the third
quarter 2008, as compared to $2.1 million for the same period in 2007. On a
per-unit basis, DD&A for the third quarter 2008 was $1.40 per Mcfe, as compared
to $2.14 in the 2007 period. Lower DD&A in the third quarter 2008 is attributed
to a decrease in the depletable base during 2008 due to 2007 impairment charges.
The Company reported general and administrative (G&A) expense of $2.1 million in
the third quarter 2008, versus $1.9 million in the same period in 2007. On a
per-unit basis, total G&A expense for third quarter 2008 was $1.73 per Mcfe, as
compared to $1.91 per Mcfe for the same period in 2007. G&A expense for the
third quarter 2008 includes $0.7 million of non-cash, stock-based compensation
expense, or, on a per-unit basis, $0.54 per Mcfe, as compared to the
prior-period total of $0.6 million, or $0.60 per Mcfe.
Gathering operations expense increased to $1.0 million from $0.5 million in the
third quarter 2007. The increase is attributed to additional compression and to
greater throughput volumes.
Nine-Month Period
Gasco reported net income attributable to common shareholders for the
nine-months ended September 30, 2008 of $15.8 million, or $0.14 per diluted
share, as compared to a net loss of $101.6 million, or $1.11 per basic and
diluted share for the prior-year period. Included in the 2008 results are net
derivative gains of $5.7 million, attributed to hedge effect. Excluding the
effect of net derivative gains, a non-GAAP measure, Gasco would have posted net
income of $10.1 million or $0.09 per diluted share. The Company did not hedge
its volumes in the comparable period in 2007. Included in the 2007 periods'
operating expenses are non-cash charges of $97.1 million related to the
impairment of the carrying value of oil and gas properties.
Oil and gas sales for the first nine months of 2008 were a Company-record $30.7
million, as compared to $14.2 million for the same period in 2007, an increase
of 117%.
For the first nine months of 2008 total revenues were $40.8 million, as compared
to $16.6 million in the same period in 2007, an increase of 146%. For the first
nine months of 2008, gathering system revenues accounted for $3.2 million as
compared $1.3 million during 2007. Gathering income was $0.5 million for 2008's
nine-month period as compared to breakeven results in the same period in 2007.
At September 30, 2008, cash and investments were $2.0 million, compared to $1.8
million at December 31, 2007.
The Company has a reserve-based credit facility with JPMorgan. The bank recently
completed its mid-year borrowing base re-determination and maintained total
available credit at $45 million. Drawings under the credit facility were $12.0
million at September 30, 2008 as compared to $9.0 million at December 31, 2007.
Current outstandings under the credit facility are $20.0 million including a
$6.6 million letter of credit leaving $18.4 million available for additional
borrowings.
2
Gasco's total assets at September 30, 2008 were $139.9 million, as compared to
$122.5 million at year-end 2007. Net cash provided by operating activities for
the first nine months of 2008 was a Company-record $19.4 million as compared to
$9.7 million for the same period in 2007.
Production Volumes
Cumulative net production for the quarter ended September 30, 2008 was a
Company-record 1,220 MMcfe, an increase of 25% from the prior-year net
production of 975 MMcfe. During the third quarter of 2008, Gasco elected to
curtail production by approximately 90 MMcfe during September 2008. For the
nine-month period, Gasco produced a Company-record 3,610 MMcfe, as compared to
3,149 MMcfe in the year-ago nine-month period, representing a 15% increase for
comparable nine-month periods.
Operations Update & Subsequent Events
Mancos/Dakota Update
In its Mancos/Dakota program, Gasco has drilled two wells through the Dakota
Formation, of which one is a full Mancos producer and the other is currently
being completed in the Dakota and the Morrison formations. The Company now has
drilled 16 wells to the Upper Mancos. This does not include the Federal 32-20
that was only drilled 300' into the Upper Mancos. Of these 16 wells, 12 are
currently producing, two are cleaning up, and two are awaiting completion. One
additional Upper Mancos well is drilling ahead and one recently reached total
depth.
- ----------------------------------------------------------------------------------------------------------------------------
GSX Mancos Shale Well Data
- ----------------------------------------------------------------------------------------------------------------------------
24-hour Initial
Initiated Flow Rate
Well Completion Comment
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Full Mancos; added BH and MV on 2/11/08, commingled
Federal 14-31 6/25/07 1.132 MMcf production (12/64" choke)
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Federal 21-19 10/23/07 1.764 MMcf Upper Mancos (10/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
SW Federal 32-25 12/3/07 1.980 MMcf Upper Mancos / Spring Canyon commingled (12/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
SW Federal 12-25 3/10/08 1.495 MMcf Upper Mancos (12/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Upper Mancos - 5/20/08 commingled
State 21-32b 3/25/08 0.934 MMcf Production (8/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
State 21-32a 3/25/08 0.403 MMcf Upper Mancos / BH / MV commingled (8/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Federal 34-30 5/13/08 1.755 MMcf Upper Mancos / Spring Canyon commingled (12/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
SW Federal 23-26 6/9/08 0.788 MMcf Upper Mancos / Spring Canyon commingled (10/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Federal 14-19 7/15/08 1.375 MMcf Upper Mancos / Spring Canyon commingled (10/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Federal 32-19 7/31/08 1.213 MMcf Upper Mancos / Spring Canyon commingled (10/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Awaiting --
Lamb Trust 12-23 Completion Upper Mancos
- ----------------------------------------------------------------------------------------------------------------------------
3
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Being Completed --
GC State 23-16 Mancos / Dakota test
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Uteland State 34-2 8/14/08 1.059 MMcf Upper Mancos (10/64")
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Upper Mancos / Spring Canyon commingled (10/64")
SW Federal 41-26 10/14/08 1.053 MMcf
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Upper Mancos / Spring Canyon commingled (10/64")
Uteland Federal 42-11 9/22/08 0.752 MMcf
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Awaiting --
DSF 41-1 Completion Upper Mancos
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
--
Lamb Trust 14-14 Drilling Proposed TD of 15,250'
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Federal 11-19 Drilling -- Proposed TD of 15,200'
- ----------------------------- ----------------- ---------------- -----------------------------------------------------------
Commenting on the Mancos results, Gasco CEO and President Mark Erickson said:
"We have made significant improvement in our Mancos completion designs resulting
in a positive impact on results. The early-time flow data is clouded due to
flowing the wells initially with a very small choke that maintains a high
flowing pressure and constrains the initial production. Longer term it appears
that these wells are demonstrating better flow rates that should yield higher
per-well reserves. In the future, we are planning to set deeper surface casing
allowing us to drill the full Mancos section. Vertical Mancos drilling is
working economically and compares very favorably to other shale plays that need
horizontal technology to be profitable. We believe horizontal drilling has the
potential to make a bigger impact on the Mancos and are in the early stages of
planning a single horizontal lateral within the Mancos, hopefully testing the
concept in 2009. This would be the first step for testing horizontal drilling in
the Mancos which, ultimately may lead to multiple laterals within one well
bore."
Liquidity and Risk Management
2009 Initial Capital Expenditure Program
Gasco also today announced an initial budget of $30 million for its 2009 capital
expenditure (Capex) program subject to Board of Directors' approval. The program
will primarily cover the drilling and completion of approximately seven net
wells on Gasco's Riverbend Project located in the Uinta Basin of Utah and the
installation of associated pipeline infrastructure, distribution facilities and
geophysical operations. The budget will be funded primarily from cash on hand,
cash flow from operations and borrowings under the Company's reserve-based
revolving line of credit.
The initial 2009 CAPEX budget is subject to market conditions, drilling results,
oilfield service availability, and commodity prices.
The credit markets are undergoing significant volatility. Many financial
institutions have liquidity concerns, prompting government intervention to
mitigate pressure on the credit market. Gasco's exposure to the current credit
market crisis includes its revolving credit facility and counterparty
performance risk.
Additionally, debt and equity capital markets have been negatively impacted in
recent months, which has resulted in more restrictive access by issuers and with
higher costs. While Gasco currently has no plans to access debt or equity
capital markets, should the Company decide to do so in the near-term, the terms,
size and cost of a new debt issue would be less favorable and an equity
transaction, due to the Company's reduced stock price, would be more dilutive
than in recent years.
4
Current market conditions also elevate concern over counterparty risks related
to Gasco's commodity derivative instruments. Gasco has all of its commodity
derivative instruments with a major financial institution. Should this financial
counterparty not perform, the Company may not realize the benefit of some of its
hedges under lower commodity prices.
Oil and gas prices are also volatile and have declined significantly since the
end of the quarter. This will reduce Gasco's cash flows from operations. To
mitigate the impact of lower commodity prices on the Company's cash flows, Gasco
has entered into commodity derivative instruments for the remainder of 2008 and
2009. In the event of a global recession, commodity prices may stay depressed or
reduce further, thereby causing a prolonged downturn, which would further reduce
the Company's cash flows from operations. This could cause the Company to alter
its business plans, including reducing our exploration and development plans.
The Company believes that it will have adequate cash on hand and availability
under its Credit Agreement to fund its capital expenditures for 2008 and 2009.
Risk Management
Gasco's curtailed volumes are designed to meet its risk management program gas
sales obligations as reported in the most recent filing on Form 10-Q for the
period ending September 30, 2008.
- ---------------------------------------------------------------------------------------------------------------------------------
GSX 2008 / 2009 Swap Agreements
- ---------------------------------------------------------------------------------------------------------------------------------
Swap 10/08 - 12/08 3,000 MMBtu per day $6.11 / MMBtu NW Rockies
- --------------------------- -------------------- ----------------------------- ------------------------ -------------------------
Swap 10/08 - 12/08 2,000 MMBtu per day $6.91 / MMBtu NW Rockies
- --------------------------- -------------------- ----------------------------- ------------------------ -------------------------
Swap 1/09 - 12/09 3,000 MMBtu per day $7.025 / MMBtu NW Rockies
- --------------------------- -------------------- ----------------------------- ------------------------ -------------------------
Swap 1/09 - 12/09 3,000 MMBtu per day $7.015 / MMBtu NW Rockies
- --------------------------- -------------------- ----------------------------- ------------------------ -------------------------
GSX 2008 / 2009 Costless Collar Agreements
- ---------------------------------------------------------------------------------------------------------------------------------
Call Price
Remaining Counterparty Put Price Gasco
Agreement Type Term Quantity Index Price (a) Buyer Buyer
- -------------------------- ---------------- -------------------- --------------------- --------------------- --------------------
Costless Collar 10/08 - 12/08 3,000 MMBtu per day NW Rockies $6.90 / MMBtu $6.00 / MMBtu
- -------------------------- ---------------- -------------------- --------------------- --------------------- --------------------
Costless Collar 1/09 - 12/09 3,000 MMBtu per day NW Rockies $7.50 / MMBtu $6.50 / MMBtu
- -------------------------- ---------------- -------------------- --------------------- --------------------- --------------------
(a) Northwest Pipeline Rocky Mountains -- Inside FERC first of month index price
- ------- -------------------------------------------------------------------------------------------------------------------------
Erickson continued: "Our 2008 hedge book has helped mitigate some of the
commodity price swings that we have recently experienced. In the near term, we
expect gas price to strengthen as we move into the winter heating season. Next
year commodity prices will largely depend on the severity of the 2008-2009
winter and its impact on storage levels. For 2009, we have 9,000 MMBtu/day
hedged at attractive prices."
Management Comment
Commenting on the third quarter operations and results, Erickson concluded:
"Financially and operationally, 2008 has been the best in the Company's history.
We have been producing at record levels and generating record amounts of cash
flow from operations. Looking forward to 2009, we expect continued but
moderating market turmoil with expectations for lower commodity prices. Next
year will bring many challenges for our industry along with much uncertainty. We
have addressed Rockies gas price fluctuations and are taking steps to address
these risks to ensure that we remain financially strong while continuing with
5
our long-term goal of expanding the Riverbend project. We will maintain strong
cash flow from operations due to the natural gas hedges that are in place for
approximately 50% of our expected 2009 production.
"As previously announced, we are laying down a rig upon reaching total depth on
its current well. This allows us to keep our most efficient rig active, Rig #99,
for next year's drilling program. Our preliminary capital budget, estimated at
$30 million, will be similar to the 2008 program, but will allow us to have
ample drilling activity to grow production and reserves. We believe that we can
comfortably manage this budget with internally generated cash flow from
operations, cash on hand and use of our revolving line of credit."
Conference Call
A conference call with investors, analysts and other interested parties is
scheduled for 11:00 a.m. EST on Wednesday, November 5, 2008 to discuss third
quarter 2008 financial and operating results. You are invited to listen to the
call which will be broadcast live over the Internet.
Date: Wednesday, November 5, 2008
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),
Passcode: 68105576
Internet: Live and rebroadcast over the Internet: log on to
http://www.gascoenergy.com or to
http://www.videonewswire.com/event.asp?id=52102
Replay: Available through Monday, November 10, 2008 at (800) 642-1687
(US/Canada) and (706) 645-9291 (International) using passcode
68105576 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.
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;
6
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;
fluctuations in natural gas and oil prices; pipeline constraints; overall demand
for natural gas and oil in the United States; changes in general economic
conditions in the United States; our ability to manage interest rate and
commodity price exposure; changes in the Company's borrowing arrangements; the
condition of credit and capital markets in the United States; and other risks
described under "Risk Factors" in each of Item 1 of the Company's Annual Report
on Form 10-K for the year ended December 31, 2007 filed with the Securities and
Exchange Commission on March 4, 2008 and in Item 1A of the Company's Quarterly
Reports on Form 10-Q for the quarters ended June 30, 2008 and September 30, 2008
filed with the Securities and Exchange Commission on August 4, 2008 and November
4, 2008, respectively.
Any of these factors could cause our actual results to differ materially from
the results implied by these or any other forward-looking statements made by us
or on our behalf. We cannot assure you that our future results will meet our
expectations. When you consider these forward-looking statements, you should
keep in mind these factors. All subsequent written and oral forward-looking
statements attributable to the Company, or persons acting on its behalf, are
expressly qualified in their entirety by these factors. Our forward-looking
statements speak only as of the date made. The Company assumes no duty to update
or revise its forward-looking statements based on changes in internal estimates
or expectations or otherwise.
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 November 4, 2008.
7
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2008 2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents $2,049,354 $1,843,425
Accounts receivable
Joint interest billings 6,304,849 5,639,174
Revenue 3,214,246 3,872,959
Inventory 2,846,565 1,160,325
Derivative instruments 5,599,895 -
Prepaid expenses 84,660 327,030
----------- -----------
Total 20,099,569 12,842,913
----------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 231,726,170 215,273,593
Unproved mineral interests 41,152,511 41,644,348
Wells in progress 569,695 1,058,727
Gathering assets 16,465,145 15,708,353
Facilities and equipment 10,080,527 9,680,010
Furniture, fixtures and other 358,605 284,791
----------- ------------
Total 300,352,653 283,649,822
Less accumulated depletion, depreciation, amortization and impairment (183,390,080) (175,973,720)
------------ ------------
Total 116,962,573 107,676,102
------------ -----------
OTHER ASSETS
Deposit 139,500 139,500
Derivative instruments 1,209,907 -
Deferred financing costs 1,464,599 1,853,274
--------- ---------
Total 2,814,006 1,992,774
--------- ---------
TOTAL ASSETS $139,876,148 $ 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 November 4, 2008.
8
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)
September 30, December 31,
2008 2007
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,216,221 $13,206,767
Revenue payable 5,791,839 1,477,268
Advances from joint interest owners 4,369,326 5,718,234
Derivative instruments - 343,759
Accrued interest 1,793,445 844,094
Accrued expenses 990,000 583,000
----------- ----------
Total 17,160,831 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
Asset retirement obligation 1,116,854 1,030,283
Deferred rent expense 53,097 60,593
---------- ----------
Total 78,169,951 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;
107,851,719 shares issued and 107,778,019 outstanding as of
September 30, 2008 and 107,290,471 shares issued and 107,216,771
outstanding as of December 31, 2007 10,785 10,729
Additional paid-in capital 218,550,617 215,094,271
Accumulated deficit (173,885,741) (189,726,914)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
-------------- -------------
Total 44,545,366 25,247,791
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 139,876,148 $ 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 November 4, 2008.
9
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
------------------------------------------
2008 2007
REVENUES
Gas $ 8,457,980 $ 2,642,799
Oil 1,210,047 554,891
Gathering 1,248,483 374,127
Rental income 312,344 354,562
Derivative gains, net 17,099,899 -
Interest income 4,681 110,670
---------- ---------
Total 28,333,434 4,037,049
---------- ---------
OPERATING EXPENSES
Lease operating 1,224,416 1,024,063
Gathering operations 1,004,061 458,241
Depletion, depreciation, amortization and accretion 1,702,682 2,082,408
Impairment - 32,790,000
General and administrative 2,113,675 1,858,566
Interest expense 1,248,702 970,496
--------- ----------
Total 7,293,536 39,183,774
--------- ----------
NET INCOME (LOSS) $ 21,039,898 $(35,146,725)
============ =============
NET INCOME (LOSS) PER COMMON SHARE
BASIC $ 0.20 $ (0.37)
=========== ==========
DILUTED $ 0.17 $ (0.37)
=========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC 107,499,883 95,696,066
=========== ==========
DILUTED 125,992,710 95,696,066
=========== ==========
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 4, 2008.
10
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
September 30,
------------------------------------
2008 2007
REVENUES
Gas $ 27,760,412 $12,650,364
Oil 2,985,582 1,524,238
Gathering 3,236,040 1,333,174
Rental income 1,095,469 698,437
Derivative gains, net 5,705,394 -
Interest income 25,492 382,037
---------- ----------
Total 40,808,389 16,588,250
---------- ----------
OPERATING EXPENSES
Lease operating 4,426,517 2,423,037
Gathering operations 2,701,404 1,365,192
Depletion, depreciation, amortization and accretion 7,323,481 7,785,923
Impairment - 97,090,000
General and administrative 6,788,301 6,405,221
Interest expense 3,727,513 3,136,418
--------- -----------
Total 24,967,216 118,205,791
---------- -----------
NET INCOME (LOSS) $ 15,841,173 $(101,617,541)
============ ==============
NET INCOME (LOSS) PER COMMON SHARE
BASIC $ 0.15 $ (1.11)
=========== ==========
DILUTED $ 0.14 $ (1.11)
=========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC 107,195,454 91,901,998
=========== ==========
DILUTED 109,561,398 91,901,998
=========== ==========
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 4, 2008.
11
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
----------------------------------------
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $15,841,173 $(101,617,541)
Adjustment to reconcile net income (loss) to net cash provided by
operating activities
Depletion, depreciation, amortization and impairment expense 7,251,087 104,809,828
Accretion of asset retirement obligation 72,394 66,095
Stock-based compensation 2,236,022 2,418,316
Unrealized derivative gain (7,153,561) -
Amortization of deferred rent (7,496) (8,645)
Amortization of deferred financing costs 388,675 388,675
Changes in operating assets and liabilities:
Accounts receivable (6,962) 5,324,220
Inventory (1,686,240) 298,316
Prepaid expenses 242,370 238,403
Accounts payable (3,415,980) (2,640,893)
Revenue payable 4,314,571 (175,937)
Accrued interest 949,351 906,493
Accrued expenses 407,000 (268,000)
---------- ----------
Net cash provided by operating activities 19,432,404 9,739,330
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (73,814) (33,684)
Cash paid for acquisitions, development and exploration (29,465,037) (56,401,472)
Advances from joint interest owners, net (1,348,908) 7,848,190
Proceeds from property sales 7,500,000 3,475,153
Proceeds from the sale of short-term investments - 6,000,000
Cash undesignated as restricted - 1,787,500
------------ ------------
Net cash used in investing activities (23,387,759) (37,324,313)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit 19,000,000 12,000,000
Repayment of borrowings (16,000,000) (9,000,000)
Proceeds from issuance of common stock - 19,300,000
Cash paid for debt issuance costs - (120,729)
Exercise of options to purchase common stock 1,161,284 -
--------- -----------
Net cash provided by financing activities 4,161,284 22,179,271
--------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 205,929 (5,405,712)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 1,843,425 12,876,879
---------- ----------
END OF PERIOD $2,049,354 $7,471,167
========== ==========
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 4, 2008.
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