DENVER,
April 18 /PRNewswire-FirstCall/ -- Gasco Energy, Inc.
(Amex: GSX
- News)
today provided results of its recent estimated probable
and possible reserve analysis, also known as 3-P reserve
estimates. Gasco is providing these results to provide
additional insight into the future potential of Gasco's
Riverbend Project in Utah's Uinta Basin. In accordance
with SEC guidelines, only proved reserves can be included
in documents filed with the SEC. Gasco's previously
reported 2004 year-end proved reserves were 41.3 billion
cubic feet equivalent (Bcfe).
3-P
Estimates
Estimates
of probable and possible reserves were prepared
by independent reservoir engineering consultants,
Netherland Sewell and Associates, the same firm
that engineers Gasco's year-end proved reserves.
The analysis encompasses approximately 34,000 gross
acres of Gasco's Riverbend Project. At December
31, 2004, Gasco owned or controlled approximately
136,777 gross acres and 68,959 net acres in the
Riverbend Project. The 3-P estimates below reflect
approximately 25% of Gasco's gross Riverbend acreage
position. The analysis does not include petroleum
resource potential over the remaining 75% of Gasco's
Riverbend acreage.
Gasco Energy, Inc. 3-P at 12/31/04
Gross Gasco Net Interest
Bbls MMcf MMcfe Bbls MMcf MMcfe
Proved 526,318 72,634 75,792 289,075 37,824 39,558
Probable 2,650,200 378,600 394,500 1,668,600 231,218 241,232
Possible 14,551,600 2,078,800 2,166,112 6,707,655 929,471 969,719
Total 17,727,118 2,530,034 2,636,404 8,665,330 1,198,513 1,250,509
The
estimated probable reserve analysis was based on
approximately 252 potential well locations. The
estimated possible reserve analysis was based on
approximately 1,403 potential well locations. The
price deck used in calculating the estimated probable
and possible reserves was $5.50 per Mcf and $45.00
per barrel of crude oil net at the wellhead.
Definition
-- Reserves
Reserves
are those quantities of crude oil, natural gas,
and natural gas liquids that are anticipated to
be commercially recovered from known accumulations
from a given date forward. Reserve estimates involve
varying degrees of uncertainty, depending largely
on the amount of reliable geological and engineering
data available at the time of the estimate and the
interpretation of the data. The relative degree
of uncertainty can be conveyed by broadly placing
reserves into one of two categories -- proved or
unproved.
Two
basic methods are commonly used by industry to prepare
reserve estimates -- the deterministic and probabilistic
methods. The deterministic method yields a single
best estimate of reserves based on known geological,
engineering and economic data. The probabilistic
method uses known geological, engineering and economic
data to generate a range of estimated reserve quantities
and their associated probabilities. Each reserve
classification gives an indication of the probability
of recovery.
Definition
-- Proved Reserves
Proved
reserves are those quantities of crude oil, natural
gas, and natural gas liquids which geological and
engineering data demonstrate with reasonable certainty
to be recoverable in future years from known reservoirs
under existing economic and operating conditions.
Proved developed reserves include proved developed
producing reserves and proved developed behind-pipe
reserves. Proved developed producing reserves are
only those reserves expected to be recovered from
existing completion intervals in existing wells.
Proved developed behind-pipe reserves are those
reserves expected to be recovered from existing
wells where a relatively minor capital expenditure
is required for recompletion. Proved undeveloped
reserves are those reserves expected to be recovered
from new wells on undrilled acreage or from existing
wells where a relatively major expenditure is required
for recompletion.
Definition
-- Unproved Reserves
Unproved
reserves are considered less certain to be recovered
than proved reserves. Estimates of unproved reserves
are based on geologic and/or engineering data similar
to that used to estimate proved reserves, but technical,
contractual, economic considerations and/or SEC,
state or other regulations preclude such reserves
from being classified as proved. Unproved reserves
may be further sub-classified as probable and possible
to denote progressively increasing uncertainty of
recoverability.
Importantly,
estimation of unproved reserves may assume future
economic conditions different than those prevailing
at the time of the estimate. The effect of possible
future improvements in economic conditions and technological
developments can be expressed by allocating appropriate
quantities of reserves to the probable and possible
classifications.
Definition
-- Probable Reserves
Probable
reserves are estimates of unproved reserves which
analysis of geological and engineering data suggests
are more likely than not to be recoverable. For
estimates of probable reserves based on probabilistic
methods, there should be at least a 50% probability
that the quantities of reserves actually recoverable
will equal or exceed the sum of the estimated proved
plus probable reserves.
Probable reserves may include:
1. reserves in formations known to be productive where SEC regulations
limit recognition of proved reserves to direct-offset locations one
legal spacing-unit away from a producing well;
2. reserves anticipated to be proved by normal step-out drilling where
subsurface control is currently inadequate to classify these
reserves as proved;
3. reserves in formations that appear to be productive based on
well-log characteristics but lack core data or other definitive
tests to indicate productive potential and which are not analogous
to producing or proved reserves in the area;
4. incremental reserves attributable to infill drilling that could have
been classified as proved if closer statutory spacing had been
approved at the time of the estimate;
5. reserves attributable to improved recovery methods that have been
established by repeated commercially successful applications where:
a. a project or pilot is planned but not in operation; and
b. rock, fluid and reservoir characteristics appear favorable for
commercial application;
6. reserves in an area of the formation that appears to be separated
from the proved area by faulting and where geologic interpretation
indicates that the area is structurally higher than the proved area;
7. reserves attributable to future workover, treatment, re-treatment,
change of equipment, or other mechanical procedures, where such
mechanical procedure has not been proved successful in wells which
exhibit similar behavior in analogous reservoirs; and/or
8. incremental reserves in proved reservoirs where an alternative
interpretation of performance or volumetric data indicates more
reserves are present than can be classified as proved.
Definition -- Possible Reserves
Possible
reserves are estimates of unproved reserves which
analysis of geological and engineering data suggests
are less likely to be recovered than probable reserves.
For estimates of possible reserves based on probabilistic
methods, there should be at least a 10% probability
that the quantities of reserves actually recovered
will equal or exceed the sum of the estimated proved
plus probable plus possible reserves.
Possible reserves may include:
1. reserves which, based on geological interpretations, could possibly
extend beyond areas classified as probable;
2. reserves in formations that appear to be petroleum bearing based on
log and core analysis but may not be productive at commercial rates;
3. incremental reserves attributed to infill drilling that are subject
to technical uncertainty;
4. reserves attributed to improved recovery methods where:
a. a project or pilot is planned but not in operation; and
b. rock, fluid and reservoir characteristics are such that there
is a reasonable doubt that the project will be commercial;
and/or
5. reserves in an area of the formation that appears to be separated
from the proved area by faulting and where geological interpretation
indicates the area is structurally lower than the proved area.
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
The
SEC has generally permitted oil and gas companies,
in filings made with the SEC, to disclose only proved
reserves that a company has demonstrated by actual
production or conclusive formation tests to be economically
and legally producible under existing economic and
operating conditions. We use the terms "probable"
and "possible" reserves or other descriptions of
volumes of reserves potentially recoverable through
additional drilling or recovery techniques that
the SEC's guidelines may prohibit us from including
in filings with the SEC. These estimates are by
their nature more speculative than estimates of
proved reserves and accordingly are subject to substantially
greater risk of being actually realized by the company.
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 Form 10-K filed with the Securities and Exchange
Commission on March 16, 2005.
Contact for Gasco Energy, Inc.: Investor Relations:
303-483-0044
