DENVER,
March 29 /PRNewswire-FirstCall/ -- Gasco Energy (OTC
Bulletin Board: GASE
- News)
today announced financial and operational results for
the year ended December 31, 2003. Selected financial
data for 2003 includes total revenues of $1,275,430,
up 430% from 2002's total revenues of $240,648. Higher
revenues are attributed to greater oil and gas production
and higher average prices received from sales of oil
and gas. The net loss for 2003 was $2.5 million, or
$0.07 per basic and diluted share, as compared to 2002's
net loss of $5.6 million, or $0.16 per basic and diluted
share. The lower net loss for 2003 is attributed to
increased revenues and a reduction in general and administrative
(G&A) expense. G&A for 2003 was $2.8 million,
as compared to $5.1 million in 2002. Lower G&A expense
is attributed to a reduction in both management salaries
and general overhead.
Working capital at
year end was $1.2 million versus negative working
capital at year-end 2002 of $2.9 million. Total assets
grew to $33 million, up from year-end 2002's total
assets of $27.5 million.
Operations
Stronger operating
results in 2003 are primarily attributable to higher
commodity prices and markedly higher oil and gas production.
The average price per thousand cubic feet (Mcf) received
in 2003 was $4.69 compared to $2.47 in 2002. Gasco's
annual equivalent production in 2003 was 269 million
cubic feet equivalent (MMcfe), a robust increase over
2002's 66 MMcfe. Natural gas accounted for 96% of
2003's equivalent production. The Company drilled
no new wells during 2003, but performed completion
work on various well bores that boosted production
during the year.
Proved Reserves
Preliminary estimated
2003 year-end, proved reserves were approximately
14.2 billion cubic feet equivalent (Bcfe) as compared
to approximately 21.4 Bcfe at year-end 2002. The reduction
in proved reserve estimates is primarily attributed
to revisions of previous estimates due to a failed
recompletion on a well in the fourth quarter which
resulted in a reduction of reserves attributed to
the proved developed location and the loss of the
surrounding proved undeveloped locations. Gasco's
reserve mix is 96% natural gas and 4% liquid hydrocarbons,
with approximately 22% of total reserves designated
as proved developed. At year-end 2002, approximately
28% of reserves were proved developed.
Gasco's estimated,
pre-tax future net cash flows discounted at 10% (commonly
known as the Securities and Exchange Commission PV-10
figure) for proved reserves at year-end was $16.2
million, versus $12.3 million at year-end 2002. The
2003 PV-10 calculation used net year-end commodity
prices of $5.89 per Mcf of natural gas and $29.69
per barrel of crude oil. The 2002 PV-10 calculation
used net year-end commodity prices of $3.39 Mcf of
gas and $29.60 per barrel of crude oil.
Reserves for 2003
were estimated by Netherland, Sewell & Associates,
an independent third-party engineering firm 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. Reserves for
2002 were estimated by James R. Stell, independent
petroleum engineer in accordance with all necessary
financial requirements.
February 2004 Equity
Financing
Subsequent to December
31, 2003, Gasco completed the sale through a private
placement of 14,333,334 shares of its common stock
to a group of accredited investors at a price of $1.50
per share. Proceeds to the Company, net of fees and
estimated expenses were approximately $20,072,000.
The financing improved Gasco's financial situation
with regard to working capital and cash and cash equivalents
available for operations. The Company intends to use
the funds from this transaction and its cash on hand
to fund the following projects:
-- Complete the recently announced acquisition of additional interests in
six producing wells, 13,062 net acres and certain other assets located
in the Uinta Basin in Utah for approximately $3,175,000.
-- 2004 CAPEX budget of $13 million for the drilling, completion and
pipeline connection of wells in the Riverbend Project area.
-- General corporate purposes.
Management's View
Commenting on 2003's
results and prospects for future growth, Gasco CEO,
Mark Erickson said: "Gasco is pleased to announce
the preliminary use of proceeds from our recent offering.
We are excited to ramp up drilling on our Riverbend
exploitation project and look forward to our continued
partnership with the service parties involved in the
Joint Value Enhancement Agreement that we signed in
January 2004. Our financial and operational results
for 2003 are indicative of a company in transition
from early stage acreage aggregator to field-wide
exploitation operator. While our oil and gas activity
was insignificant, we were able to accomplish production
growth and revenue growth while making a concerted
effort to control our overhead and other expenses.
Gasco enters 2004 a lean company that is well funded
and motivated to improve in every financial and operating
category. This is the year that we expect to begin
setting benchmarks in reserves, production and cash
flow, among other metrics, by which investors might
judge our performance going forward."
[Financial and Operational Tables Follow]
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2003 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $3,081,109 $2,089,062
Restricted cash 250,000 250,000
Prepaid expenses and other assets 555,786 198,491
Accounts receivable 499,363 96,144
Total 4,386,258 2,633,697
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties
(full cost method)
Proved mineral interests 16,386,252 10,283,488
Well in progress -- 1,138,571
Unproved mineral interests 13,212,039 13,984,536
Furniture, fixtures and other 166,051 162,787
Total 29,764,342 25,569,382
Less accumulated depreciation,
depletion, amortization and
property impairment (1,232,634) (697,578)
Total 28,531,708 24,871,804
OTHER ASSET
Deferred financing costs 141,213 --
TOTAL ASSETS $ 33,059,179 $ 27,505,501
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $2,260,492 $1,910,974
Accrued expenses 933,520 2,180,262
Note payable -- 1,400,000
Total 3,194,012 5,491,236
NONCURRENT LIABILITIES
8% Convertible Debentures, net of
unamortized discount $159,722 2,340,278 --
Asset retirement obligation 142,806 --
Total 2,483,084 --
STOCKHOLDERS' EQUITY
Series B Convertible Preferred
stock - $.001 par value;
20,000 shares authorized;
11,734 shares issued and
outstanding in 2003 12 --
Common stock - $.0001 par value;
100,000,000 shares authorized;
45,675,936 shares issued and
45,602,236 shares outstanding
in 2003; and 40,362,500 shares
issued and 40,288,800 shares
outstanding in 2002 4,568 4,036
Additional paid in capital 52,979,325 44,958,593
Deferred compensation (179,766) (52,833)
Accumulated deficit (25,291,761) (22,765,236)
Less cost of treasury stock of
73,700 common shares (130,295) (130,295)
Total 27,382,083 22,014,265
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 33,059,179 $ 27,505,501
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Year Ended December 31,
2003 2002 2001
REVENUES
Gas $1,206,741 $164,508 $36,850
Oil 56,702 -- --
Interest 11,987 76,140 193,352
Total 1,275,430 240,648 230,202
OPERATING EXPENSES
General and
administrative 2,819,675 5,080,287 4,326,065
Lease operating 337,278 119,809 12,679
Depletion, depreciation,
amortization and asset
retirement liability
accretion 552,923 149,109 5,760
Impairment 541,125 --
Interest 82,392 -- 67,363
Total 3,792,268 5,890,330 4,411,867
OTHER INCOME -- -- 52,206
LOSS BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (2,516,838) (5,649,682) (4,129,459)
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE (9,687) -- --
NET LOSS (2,526,525) (5,649,682) (4,129,459)
Preferred stock dividends (304,172) -- --
Preferred stock deemed
distribution -- -- 11,400,000
NET LOSS ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(2,830,697) $(5,649,682) $(15,529,459)
PER COMMON SHARE DATA
- BASIC AND DILUTED:
Loss before cumulative
effect of change in
accounting principle $(0.07) $(0.16) $(0.63)
Cumulative effect of
change in accounting
principle -- -- --
NET LOSS PER COMMON
SHARE - BASIC AND
DILUTED $(0.07) $(0.16) $(0.63)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING -
BASIC AND DILUTED 41,262,778 36,439,074 24,835,144
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Years Ended December 31,
2003 2002 2001
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(2,526,525) $(5,649,682) $(4,129,459)
Adjustment to reconcile
net loss to net cash
used in operating
activities
Depreciation, depletion
and impairment expense 541,128 690,234 5,760
Accretion of asset
retirement obligation 11,795 -- --
Amortization of
deferred compensation 94,317 208,542 423,594
Amortization of
beneficial conversion
feature 6,945 -- --
Amortization of offering
costs 7,758 -- --
Cumulative effect of
change in accounting
principle 9,687 -- --
Changes in operating
assets and liabilities:
Prepaid expenses (320,059) (74,139) (121,171)
Accounts receivable (403,219) (63,397) 132,494
Accounts payable 349,518 1,362,121 (51,872)
Accrued expenses 36,741 2,136,015 --
Net cash used in
operating
activities (2,191,914) (1,390,306) (3,740,654)
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash paid for furniture,
fixtures and other (3,264) (103,342) (49,876)
Cash paid for development
and exploration (5,283,426) (14,437,855) (7,395,867)
Cash received upon
recapitalization and merger -- -- 265,029
Net cash used in
investing
activities (5,286,690) (14,541,197) (7,180,714)
CASH FLOWS FROM
FINANCING ACTIVITIES
Cash designated as
restricted (250,000) (250,000) --
Cash undesignated as
restricted 250,000 -- --
Preferred dividends (4,092) -- --
Proceeds from sale
of preferred stock 4,862,840 -- 19,000,000
Proceeds from sale
of common stock 2,777,292 6,500,000 6,826,218
Proceeds from sale
of convertible
debentures 2,500,000 -- --
Cash paid for
offering costs (266,721) (526,020) (2,144,468)
Proceeds from
short-term borrowings -- -- 500,000
Repayment of
short-term borrowings -- -- (714,543)
Repayment of
note payable (1,400,000) -- --
Repurchase of
common stock -- -- (130,295)
Distribution to
Rubicon Oil and Gas, Inc. -- -- (1,000,000)
Other 1,332 -- --
Net cash provided
by financing
activities 8,470,651 5,723,980 22,336,912
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 992,047 (10,207,523) 11,415,544
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 2,089,062 12,296,585 881,041
END OF PERIOD $3,081,109 $2,089,062 $12,296,585
The accompanying notes found in Gasco's filing on form 10-K are an
integral part of the consolidated financial statements.
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 Part
I, Item 1 of the Company's latest Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
