DENVER,
Feb. 27 /PRNewswire-FirstCall/ -- Gasco Energy (Amex:
GSX
- News)
today announced preliminary financial and operating
results for the fourth quarter and full-year ended December
31, 2005. The company expects to file its filing on
Form 10-K with the Securities and Exchange Commission
this week.
Full-year
2005 Financial Results
For
the year-ended December 31, 2005, Gasco reported a
net loss attributable to common shareholders of $71,000,
or breakeven results of $0.00 per share, as compared
to a net loss for 2004 of $4.3 million, or $0.07 per
share. All per share figures are basic and diluted.
Total revenues grew by 369% to a company-record $16.9
million, as compared to $3.6 million in 2004. 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 2005 were a company-record $14.1
million as compared to $3.1 million for the same period
in 2004. The $10.9 million increase in oil and gas
sales during 2005 is comprised of $9.6 million related
to the production increase and $1.3 million related
to the increase in commodity prices. Gathering revenues
from the company's pipeline constructed in 2004 grew
to $1.4 million from $0.1 million in 2004. The revenue
growth is attributed to increased throughput as well
to a full-year of operations in 2005.
Gasco's
total assets rose to a record $201.2 million at year-end,
up 71 percent from $117.4 million at year-end 2004.
Working capital at year-end 2005 was $86.0 million
versus $52.7 million at year-end 2004.
Net
cash provided by operating activities for 2005 was
a record $2.1 million as compared to a deficit of
$0.9 million in 2004.
Fourth
Quarter 2005 Financial Results
For
the quarter-ended December 31, 2005, Gasco reported
net income of $2.0 million, or $0.03 per share, as
compared to a net loss for 2004 of $2.4 million, or
$0.03 per share. Total revenues grew by 621% to a
company-record $8.3 million, as compared to $1.2 million
in 2004. 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 fourth quarter 2005 were a company-record
$7.4 million as compared to $0.8 million for the same
period in 2004.
Record
Quarterly and Annual Production
Estimated
cumulative net production for the year-ended December
31, 2005 was 1,713 million cubic feet of natural gas
equivalent (MMcfe), an increase of 220% over full-year
2004 production of 536.0 MMcfe.
For
the full year, the average prices received for Gasco's
natural gas and liquids increased to $8.16 per thousand
cubic feet of gas (Mcf) and $56.91 per barrel of liquid
hydrocarbons. This compares to $5.79 per Mcf and $38.43
per barrel for 2004. The company has no hedges in
place.
Estimated
cumulative net production for the quarter ended December
31, 2005 was 776.1 MMcfe, an increase of 59% over
third quarter 2005 production of 489.3 MMcfe, and
488% above fourth quarter 2004's production of 132.0
MMcfe. Net production increases are attributed to
the completion of new wells and to a higher average
working interest in those wells partially offset by
normal production declines in existing wells.
For
the fourth quarter of 2005, the average price received
for sales of Gasco's natural gas and liquids was $9.58
per Mcf and $58.37 per barrel of liquid hydrocarbons.
This compares to $5.82 per Mcf and $45.00 per barrel
for the same period in 2004.
Proved
Reserves up 86% over 2004
Gasco's
year-end, estimated total proved reserves were approximately
76.7 billion cubic feet of natural gas equivalent
(Bcfe), comprised of 74.4 Bcf of natural gas and 377,288
barrels of liquids. Gasco's total proved reserves
grew by 86% over year-end 2004's estimated total of
41.3 Bcfe. The company's reserve mix is 97% natural
gas and 3% liquid hydrocarbons. Liquids reserves include
condensate. Approximately 26% of total reserves are
categorized as proved developed, 74% were proved undeveloped.
In accordance with SEC guidelines, reserve estimates
do not include any probable or possible reserves which
may exist for Gasco's properties.
Gasco's
estimated, pre-tax future net cash flows discounted
at 10% (commonly known as the SEC PV-10 figure) for
proved reserves at year-end was $107.8 million The
2005 PV-10 calculation used net year-end commodity
prices of $8.01 per Mcf of natural gas and $59.87
per barrel of crude oil. Reserve estimates are engineered
by independent reservoir engineering consultants,
NSAI and conform to the definition as set forth in
the SEC Regulation S-X Part 210.4-10 (a) as clarified
by subsequent Commission Staff Accounting bulletins.
The proved reserves are also in accordance with Financial
Accounting Standards Board Statement No. 69 requirements.
Reserve Quantities Gas Oil Equivalents
Mcf Bbl Mcfe
Balance, December 31, 2004 39,700,156 274,074 41,344,600
Extensions and 49,217,928 222,943 50,555,586
discoveries
Revisions of previous (12,814,086) (109,093) (13,468,644)
estimates
Sales of reserves in -- -- --
place
Purchases of reserves -- -- --
in place
Production (1,648,870) (10,636) (1,712,686)
Balance 74,455,128 377,288 76,718,856
Proved Developed Reserves 18,974,697 111,655 19,644,627
Management Outlook
Commenting on the 2005 results,
Gasco CEO and President, Mark Erickson said: "In 2005,
we set records in production, revenue, reserves, wells
drilled and other metrics, but we look to 2006 as
an even more important year for Gasco. Our strong
Uinta Basin net leasehold position continues to benefit
Gasco and its shareholders in a number of ways. We
have much to keep us busy. Our initial $80 million
2006 capital budget, which we intend to fund through
cash flow and our existing cash position, targets
32 gross and 15 net wells in the Uinta, three wells
in Wyoming and also strategic infrastructure. One
of the key opportunities presented to Gasco is that
we have created a project of size and substance that
we can exploit. A project of such magnitude requires
talented people, services, rigs and capital, all of
which we have. With quality onshore oil and gas properties
in short supply, our ability to work in the Uinta
for several years going forward is truly a company-strength
that I believe should be appreciated by the Street
and by industry. We also deliver investors potential
upside in our Wyoming projects. Should we prove commerciality
in Wyoming, each of the Riverbend benefits I described
above can be applied to Wyoming."
Teleconference Call
A conference call with investors,
analysts and other interested parties is scheduled
for 10:30 a.m. EST on Tuesday, February 28, 2006 to
discuss 2005 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: Tuesday, February 28, 2006
Time: 10:30 a.m. EST
9:30 a.m. CST
8:30 a.m. MST
7:30 a.m. PST
Call: (866) 392-4171 (US/Canada) and (706) 634-6345 (International),
passcode 5682033
Internet: Live and rebroadcast over the Internet: log on to
www.gascoenergy.com
Replay: Available through Thursday, March 2 at (800) 642-1687
(US/Canada) and (706) 645-9291 (International) using passcode
5682033 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-K to be filed this week.
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 1. of
the Company's 2004 filing on Form 10-K filed with
the Securities and Exchange Commission on March 16,
2005.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2005 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents $62,661,368 $25,717,081
Restricted investment 10,139,000 3,535,055
Short-term investments 15,000,000 27,000,000
Accounts receivable
Joint interest billings 1,792,038 429,779
Revenue 3,115,154 615,265
Inventory 1,182,982 1,009,914
Prepaid expenses 645,554 458,555
Total 94,536,096 58,765,649
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost
method)
Proved mineral interests 83,972,300 29,811,483
Unproved mineral interests 13,323,712 18,449,330
Gathering assets 4,831,050 2,469,580
Equipment 5,148,388 89,900
Furniture, fixtures and other 175,607 158,590
Total 107,451,057 50,978,883
Less accumulated depreciation,
depletion and amortization (6,986,662) (2,247,032)
Total 100,464,395 48,731,851
NON-CURRENT ASSETS
Restricted investment 3,565,020 6,778,040
Deferred financing costs 2,634,461 3,092,628
6,199,481 9,870,668
TOTAL ASSETS $201,199,972 $117,368,168
The accompanying notes are an integral part of the consolidated financial
statements.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued)
December 31,
2005 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $907,772 $1,447,149
Revenue payable 1,658,141 334,765
Advances from joint interest owners 2,476,080 891,999
Accrued interest 844,098 695,139
Accrued expenses 2,571,047 2,677,352
Total 8,457,138 6,046,404
NONCURRENT LIABILITIES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Asset retirement obligation 223,947 108,566
Deferred rent expense 78,727 --
Total 65,302,674 65,108,566
COMMITMENTS AND CONTINGENCIES
(NOTES 5, 13, 14)
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;
85,041,492 shares issued and
84,967,792 outstanding in 2005;
70,590,909 shares issued and
70,517,209 shares outstanding in
2004 8,504 7,059
Additional paid in capital 157,540,755 76,346,463
Deferred compensation (443,579) (512,440)
Accumulated deficit (29,535,226) (29,497,591)
Less cost of treasury stock of
73,700 common shares (130,295) (130,295)
Total 127,440,160 46,213,198
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $201,199,972 $117,368,168
The accompanying notes are an integral part of the consolidated financial
statements.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31,
2005 2004 2003
REVENUES
Gas $13,462,977 $2,928,689 $1,206,741
Oil 605,330 195,199 56,702
Gathering 1,411,259 143,326 --
Interest income 1,383,859 325,001 11,987
Total 16,863,425 3,592,215 1,275,430
OPERATING EXPENSES
Lease operating 870,593 638,267 337,278
Gathering operations 1,166,841 267,450 --
Depletion, depreciation,
amortization and asset
retirement liability accretion 4,843,439 1,102,575 552,923
General and administrative 5,987,019 4,191,978 2,819,675
Interest expense 4,033,168 1,597,775 82,392
Total 16,901,060 7,798,045 3,792,268
LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (37,635) (4,205,830) (2,516,838)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING
PRINCIPLE -- -- (9,687)
NET LOSS (37,635) (4,205,830) (2,526,525)
Preferred stock dividends (33,347) (140,853) (304,172)
NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(70,982) $(4,346,683) $(2,830,697)
PER COMMON SHARE DATA - BASIC AND
DILUTED:
Loss before cumulative effect of
change in accounting principle $(0.00) $(0.07) $(0.07)
Cumulative effect of change in
accounting principle -- -- --
NET LOSS PER COMMON SHARE - BASIC
AND DILUTED $(0.00) $(0.07) $(0.07)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 72,152,977 63,194,223 41,262,778
The accompanying notes are an integral part of the consolidated financial
statements.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2005 2004 2003
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(37,635) $(4,205,830) $(2,526,525)
Adjustment to reconcile net loss
to net cash used in operating
activities
Depreciation, depletion and
impairment expense 4,829,403 1,085,912 541,128
Accretion of asset retirement
obligation 14,036 16,663 11,795
Stock compensation 744,235 415,483 94,317
Non-cash rent expense 48,727
Landlord incentive payment 30,000
Amortization of beneficial
conversion feature -- 161,514 6,945
Amortization of deferred
financing costs 458,167 294,993 7,758
Cumulative effect of change in
accounting principle -- -- 9,687
Changes in operating assets
and liabilities:
Accounts receivable (3,862,148) (545,681) (403,219)
Inventory (173,068) (1,009,914) --
Prepaid expenses (186,999) 59,992 (320,059)
Accounts payable (679,797) (600,723) 164,303
Revenue payable 1,323,376 91,252 185,215
Advances from joint
interest owners 1,584,081 891,999 --
Accrued interest 148,959 695,139 --
Accrued expenses (2,106,305) 1,743,832 36,741
Net cash provided
by (used in)
operating activities 2,135,032 (905,369) (2,191,914)
CASH FLOWS FROM INVESTING
ACTIVITIES
Cash paid for acquisitions,
development and exploration (55,181,914) (25,736,066) (5,283,426)
Cash paid for furniture, fixtures
and other (106,790) (64,053) (3,264)
Proceeds from property sales 828,102 4,463,161 --
Investment in short-term
investments -- (27,000,000) --
Proceeds from the sale of short
term investments 12,000,000 -- --
Cash designated as restricted (6,816,967) (10,313,095) (250,000)
Cash undesignated as restricted 3,426,042 250,000 250,000
Net cash used in
investing activities (45,851,527) (58,400,053) (5,286,690)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from sale of common
stock 79,693,764 21,500,001 2,777,292
Issuance of convertible notes -- 65,000,000 --
Exercise of options to purchase
common stock 1,275,743 33,336 --
Cash paid for offering costs (275,378) (4,636,828) (266,721)
Preferred dividends (33,347) (61,973) (4,092)
Proceeds from sale of preferred
stock -- -- 4,862,840
Proceeds from sale of convertible
debentures -- -- 2,500,000
Repayment of note payable -- -- (1,400,000)
Proceeds from 16b violation -- 106,858 1,332
Net cash provided
by financing activities 80,660,782 81,941,394 8,470,651
NET INCREASE IN CASH AND CASH
EQUIVALENTS 36,944,287 22,635,972 992,047
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 25,717,081 3,081,109 2,089,062
END OF PERIOD $62,661,368 $25,717,081 $3,081,109
The accompanying notes are an integral part of the consolidated financial
statements.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31,
2005 2004
PRODUCTION INFORMATION
Gas production 750,392 mcf 126,860 mcf
Gas price $9.58 per mcf $5.82 per mcf
Oil production 4,289 bbl 868 bbl
Oil price $58.37 per bbl $45.00 per bbl
REVENUES
Gas $7,194,049 $738,829
Oil 250,367 39,061
Gathering 483,884 143,326
Interest income 404,151 233,531
Total 8,332,451 1,154,747
OPERATING EXPENSES
Lease operating 272,478 42,214
Gathering operations 482,521 267,450
Depletion, depreciation and
amortization 2,492,183 317,714
General and administrative 2,064,922 1,558,762
Interest expense 1,008,290 1,368,959
Total 6,320,394 3,555,099
NET INCOME 2,012,057 (2,400,352)
Preferred stock dividends (5,914) (17,506)
NET INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS $2,006,143 ($2,417,858)
NET INCOME PER COMMON SHARE - BASIC
AND DILUTED $0.03 ($0.03)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
BASIC 76,656,206 70,517,209
DILUTED 77,135,806 70,517,209
