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For Release at 4:45 PM EDT on Wednesday, May
2, 2007
Gasco Energy Announces First Quarter 2007 Financial and Operational Results
DENVER, May 2 /PRNewswire-FirstCall/ -- Gasco Energy (Amex: GSX - News) today reported its financial and operating results for the quarter ended March 31, 2007.
Financial Results
For the first quarter 2007, Gasco reported a net loss attributable to common shareholders of $0.2 million, or breakeven results of $0.00 per share, as compared to $0.2 million, or breakeven results of $0.00 per share, for the same period in 2006. All per share figures are basic and diluted.
Total revenues were $6.4 million, as compared to $7.3 million in the first quarter 2006. The 11.3% decrease in total revenue is attributed primarily to a reduction in interest income due to lower cash balances carried by the Company in the first quarter.
Oil and gas sales for the first quarter 2007 were unchanged at $5.9 million as compared to $5.9 million for the same period in 2006. Average prices received in the first quarter for oil and gas sales were lower by $1.03 per thousand cubic feet of natural gas (Mcf) and $11.70 per barrel as compared to the first quarter 2006. Gathering revenues were also unchanged at $0.5 million for both reporting periods.
Depletion, depreciation and amortization (DD&A) was $2.3 million for the first quarter of 2007 as compared to $2.8 million for the same period in 2006. Lower DD&A is attributed to a lower depletion base due to an impairment charge incurred by Gasco in the second quarter of 2006. On a per-unit basis, DD&A for the first quarter 2007 was $2.22 per Mcfe as compared to $3.14 per Mcfe for the same period in 2006.
The Company also lowered its general and administrative expense (G&A) to $2.3 million in the first quarter of 2007 from $2.7 million in the first quarter of 2006. The 13% decrease in G&A expense for the quarter is primarily due to lower consulting and legal expenses partially offset by the hiring of additional personnel. G&A expense includes $1.0 million in expenses in both the 2007 and 2006 periods related to employee share-based compensation, a non-cash item. On a per-unit basis, G&A for the first quarter 2007 was $2.21 per Mcfe as compared to $2.98 per Mcfe for the same period in 2006.
Net cash provided by operating activities for the first quarter of 2007 was a record $1.7 million as compared to $1.1 million in the same period of 2006.
Quarterly Production
Cumulative net production for the quarter ended March 31, 2007 was 1,051 million cubic feet of natural gas equivalents (MMcfe), a decrease of 4% from fourth quarter 2006 net production of 1,092 MMcfe, and 17% above first quarter 2006's production of 901 MMcfe. Net production for the quarter varied by 7% from the volumes based on field estimates reported in the Company's operations update dated April 12, 2007. The previously announced severe cold weather experienced in the field during January 2007 had a greater impact on field production than reflected in our earlier estimate. The field estimates for production, while generally reliable, are subject to fluctuations, both positive and negative, to actual volumes sold in the quarter.
For the first quarter of 2007, the average price received for sales of Gasco's natural gas and liquids was $5.47 per Mcf and $45.38 per barrel of liquid hydrocarbons. This compares to $6.50 per Mcf and $57.08 per barrel for the same period in 2006. The Company has no hedges in place, but recently sold forward approximately 18,000 MMBtu per day of gross natural gas production for a one-year period. It will receive the first-of-the-month IFERC CIG index price, net of transportation, marketing and fuel expenses. The total quantity sold forward represents approximately 81% of the average of first quarter 2007 gross daily gas production.
Operations Update & Subsequent Events
* The Company's cash and cash equivalents position at March 31, 2007 was
approximately $6.5 million. Gasco recently completed a secondary
offering of 10 million shares of common stock at $1.93 per share, the
proceeds of which were approximately $19.2 million net of
offering-related expenses. The Company intends to use the net proceeds
of this offering for general corporate purposes.
* The Board of Directors approved an initial capital expenditure budget
for 2007 of $40 million for 10 net wells and associated pipelines and
facilities in the Riverbend Project of Utah's Uinta Basin.
* One hundred linear miles of high resolution 2-D seismic program have
been shot by CGG Veritas in the eastern portion of the Riverbend Project
area and are currently being processed. An additional 89 linear miles
are expected to be shot by the end of the second quarter. Seismic is
expected to help delineate structural features and provide further
definition of the Blackhawk marine trends.
* Gasco continues to drill with three rigs. The recently delivered Nabors
Rig 99 is drilling its first well. Gasco released its Company-owned
Frontier Rig 6. This rig is currently drilling for another operator
under a one-year contract. Nabors rigs 270 and 611 continue drilling
Riverbend Project wells.
Mancos Shale Test -- Riverbend Project, Utah
Gasco is nearing total depth of 16,680 feet, drilling on its 80th day, on a deep well to test the productive potential of the Wasatch, upper and lower Mesaverde and Blackhawk formations, the Mancos Shale, and Dakota / Morrison sandstones. During drilling, the well encountered numerous gas shows in the target intervals along with gas flares and indicated over-pressuring from mud weights in the deeper horizons, specifically in the Mancos Shale and associated sandstones. While these shows indicate the presence of hydrocarbons, open-hole logging and completion testing are necessary to evaluate the resource potential from the Federal 14-31.
Conference Call
A conference call with investors, analysts and other interested parties is scheduled for 11:00 a.m. EDT on Thursday, May 3, 2007 to discuss first quarter 2007 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: Thursday, May 3, 2007
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 7569462
Internet: Live and rebroadcast over the Internet: log on to
www.gascoenergy.com
Replay: Available through Saturday, May 5, 2007 at (800) 642-1687
(US/Canada) and (706) 645-9291 (International) using passcode
7569462 and for 30 days at www.gascoenergy.com
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 2, 2007.
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 2006 amended Form 10-K filed with the Securities and Exchange Commission on April 5, 2007.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2007 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents $6,497,785 $12,876,879
Restricted investment 3,575,000 3,575,000
Short-term investments -- 6,000,000
Accounts receivable
Joint interest billings 2,430,997 5,955,186
Revenue 3,714,216 3,081,850
Inventory 2,117,976 1,297,498
Prepaid expenses 494,962 644,490
Total 18,830,936 33,430,903
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 173,230,202 159,407,481
Unproved mineral interests 13,961,554 12,538,067
Wells in progress 7,220,992 5,215,252
Gathering assets 13,156,647 12,703,346
Facilities and equipment 8,833,033 8,492,632
Furniture, fixtures and other 249,248 241,009
Total 216,651,676 198,597,787
Less accumulated depletion, depreciation,
amortization and impairment (71,370,403) (68,945,779)
Total 145,281,273 129,652,008
OTHER ASSETS
Deferred financing costs 2,241,949 2,371,507
TOTAL ASSETS $166,354,158 $165,454,418
The notes contained in Form 10-Q filed on May 2, 2007 are an integral part of the consolidated financial statements.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2007 2006
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $5,591,509 $16,228,056
Revenue payable 1,513,762 1,678,427
Advances from joint interest owners 1,182,298 2,955,376
Accrued interest 1,737,853 844,102
Accrued expenses 345,735 595,000
Total 10,371,157 22,300,961
NONCURRENT LIABILITIES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Long-term debt 12,000,000 --
Asset retirement obligation 957,634 908,543
Deferred rent expense 68,061 72,993
Total 78,025,695 65,981,536
STOCKHOLDERS' EQUITY
Common stock - $.0001 par value;
300,000,000 shares authorized;
86,173,715 shares issued and
86,100,015 outstanding as of
March 31, 2007 and December 31, 2006 8,617 8,617
Additional paid-in capital 163,608,151 162,646,592
Accumulated deficit (85,529,167) (85,352,993)
Less cost of treasury stock of
73,700 common shares (130,295) (130,295)
Total 77,957,306 77,171,921
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $166,354,158 $165,454,418
The notes contained in Form 10-Q filed on May 2, 2007 are an integral part of the consolidated financial statements
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2007 2006
REVENUES
Gas $5,471,938 $5,697,115
Oil 380,767 232,562
Gathering 486,666 483,139
Interest income 100,360 846,706
Total 6,439,731 7,259,522
OPERATING EXPENSES
Lease operating 596,262 530,015
Gathering operations 354,720 387,793
Depletion, depreciation and amortization 2,336,118 2,826,542
General and administrative 2,326,077 2,684,036
Interest expense 1,002,728 1,008,293
Total 6,615,905 7,436,679
NET LOSS (176,174) (177,157)
Preferred stock dividends -- (1,393)
NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(176,174) $(178,550)
NET LOSS PER COMMON SHARE --
BASIC AND DILUTED $(0.00) $(0.00)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC AND DILUTED 85,734,095 84,643,556
The notes contained in Form 10-Q filed on May 2, 2007 are an integral part of the consolidated financial statements.
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(176,174) $(177,157)
Adjustment to reconcile net loss to
net cash used in operating activities
Depletion, depreciation, amortization
and impairment expense 2,314,603 2,821,205
Accretion of asset retirement obligation 21,515 5,338
Stock-based compensation 957,344 989,417
Amortization of deferred rent (4,932) (384)
Amortization of deferred financing costs 129,558 114,542
Changes in operating assets and
liabilities:
Accounts receivable 2,891,823 (571,207)
Inventory (820,478) (3,389,915)
Prepaid expenses 149,528 102,417
Accounts payable (2,454,844) 201,609
Revenue payable (164,665) (331,548)
Advances from joint interest owners (1,773,078) 600,021
Accrued interest 893,751 893,751
Accrued expenses (249,265) (154,000)
Net cash provided by operating
activities 1,714,686 1,104,089
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures
and other (8,239) (56,843)
Cash paid for acquisitions,
development and exploration (26,085,541) (15,174,942)
Increase in short-term investments -- (15,000,000)
Proceeds from sale of short-term
investments 6,000,000 --
Cash designated as restricted -- (37,223)
Cash undesignated as restricted -- 6,564,000
Net cash used in investing
activities (20,093,780) (23,705,008)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit 12,000,000 --
Preferred dividends -- (1,393)
Exercise of options to purchase
common stock -- 557,457
Cash paid for debt issuance costs -- (208,051)
Net cash provided by
financing activities 12,000,000 348,013
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,379,094) (22,252,906)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 12,876,879 62,661,368
END OF PERIOD $ 6,497,785 $40,408,462
The notes contained in Form 10-Q filed on May 2, 2007 are an integral part of the consolidated financial statements. |
