For
the first quarter 2006, Gasco reported a net loss
attributable to common
shareholders of $0.2 million, or breakeven results
of $0.00 per share,
as compared to a net loss for the same period in 2005 of $1.7 million, or
$0.02 per share. All per share figures are basic and diluted. Included in
the quarter's G&A expense is $1.0 million in expenses related to the adoption
of FAS 123R which requires public companies to expense employee share-based
compensation, a non-cash item, each quarter.
Total revenues grew by 465% to a company-record $7.3 million, as compared
to $1.3 million in the first quarter 2005. 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 first quarter 2006 were $5.9 million as compared
to $0.8 million for the same period in 2005, an increase of 649%. Gathering
revenues grew to $0.5 million from $0.1 million in 2005. The revenue growth
is attributed to increased natural gas throughput.
Gasco's total assets were $205.4 million at March 31, 2006, up 75% from
$117.3 million at March 31, 2005. Cash and investments were $70.4 million as
compared to $46 million in the same period in 2005. Working capital at
March 31, 2006 was $73.4 million versus $45.4 million at March 31, 2005. Net
cash provided by operating activities for the first quarter 2006 was a record
$1.1 million as compared to a deficit of $0.5 million in the year-ago period.
Record Quarterly Production
Estimated cumulative net production for the quarter ended March 31, 2006
was 901.0 million cubic feet of natural gas equivalents, an increase of
16% over fourth quarter 2005 production of 776.1 MMcfe, and 512% above first
quarter 2005's production of 147.1 MMcfe. Net production increases are
attributed to the completion of new wells and behind-pipe recompletions
partially offset by normal production declines in existing wells. Net
production for the quarter was 6% higher than volumes reported in the
company's operations update dated April 10, 2006.
For the first quarter of 2006, the average price received for sales of
Gasco's natural gas and liquids was $6.50 per Mcf and $57.08 per barrel of
liquid hydrocarbons. This compares to $5.19 per Mcf and $49.58 per barrel for
the same period in 2005. The company has no hedges in place.
Conference Call
A conference call with investors, analysts and other interested parties is
scheduled for 11:00 a.m. EDT on Wednesday, May 10, 2006 to discuss first
quarter 2006 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: Wednesday, May 10, 2006
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 8486202
Internet: Live and rebroadcast over the Internet: log on to
www.gascoenergy.com
Replay: Available through Friday, May 12 at (800) 642-1687 (US/Canada)
and (706) 645-9291 (International) using passcode 8486202 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-Q dated May 9, 2006.
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 the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 3, 2006.
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2006 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents $40,408,462 $62,661,368
Restricted investment 3,575,000 10,139,000
Short-term investments 30,000,000 15,000,000
Accounts receivable
Joint interest billings 3,065,919 1,792,038
Revenue 2,412,480 3,115,154
Inventory 4,572,897 1,182,982
Prepaid expenses 543,137 645,554
Total 84,577,895 94,536,096
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 95,796,379 83,972,300
Unproved mineral interests 13,892,137 13,323,712
Wells in progress 2,868,283 --
Gathering assets 6,243,162 4,831,050
Equipment 5,306,332 5,148,388
Furniture, fixtures and other 229,857 175,607
Total 124,336,150 107,451,057
Less accumulated depreciation,
depletion and amortization (9,805,274) (6,986,662)
Total 114,530,876 100,464,395
OTHER ASSETS
Restricted investment 3,602,243 3,565,020
Deferred financing costs 2,519,919 2,634,461
Debt issuance costs 208,051 --
Total 6,330,213 6,199,481
TOTAL ASSETS $205,438,984 $201,199,972
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,167,045 $907,772
Revenue payable 1,326,593 1,658,141
Advances from joint interest owners 3,076,101 2,476,080
Accrued interest 1,737,849 844,098
Accrued expenses 3,843,141 2,571,047
Total 11,150,729 8,457,138
NONCURRENT LIABILITIES
5.5% Convertible Senior Notes 65,000,000 65,000,000
Asset retirement obligation 243,669 223,947
Deferred rent expense 78,343 78,727
Total 65,322,012 65,302,674
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 -- 1
Common stock - $.0001 par value;
300,000,000 shares authorized;
85,675,256 shares issued and
85,601,556 outstanding in 2006
85,041,492 shares issued and
84,967,792 shares outstanding in 2005 8,572 8,504
Additional paid in capital 158,800,349 157,540,755
Deferred compensation -- (443,579)
Accumulated deficit (29,712,383) (29,535,226)
Less cost of treasury stock of
73,700 common shares (130,295) (130,295)
Total 128,966,243 127,440,160
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $205,438,984 $201,199,972
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2006 2005
REVENUES
Gas $5,697,115 $714,732
Oil 232,562 76,795
Gathering 483,139 133,767
Interest income 846,706 360,053
Total 7,259,522 1,285,347
OPERATING EXPENSES
Lease operating 530,015 156,432
Gathering operations 387,793 224,747
Depletion, depreciation and amortization 2,826,542 372,236
General and administrative 2,684,036 1,223,798
Interest expense 1,008,293 1,008,262
Total 7,436,679 2,985,475
NET LOSS (177,157) (1,700,128)
Preferred stock dividends (1,393) (7,162)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $(178,550) $(1,707,290)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $(0.00) $(0.02)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 84,643,556 70,042,691
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(177,157) $(1,700,128)
Adjustment to reconcile net loss to net cash
used in operating activities
Depreciation, depletion and
impairment expense 2,821,205 369,596
Accretion of asset retirement obligation 5,338 2,640
Stock compensation 989,417 125,400
Amortization of deferred rent (384) 13,735
Amortization of deferred financing costs 114,542 114,542
Changes in operating assets and
liabilities:
Accounts receivable (571,207) (534,959)
Inventory (3,389,915) (498,282)
Prepaid expenses 102,417 126,403
Accounts payable 259,273 (1,136,233)
Revenue payable (331,548) 75,213
Advances from joint interest owners 600,021 333,535
Accrued interest 893,751 893,750
Accrued expenses (211,664) 1,294,736
Net cash provided by (used in)
operating activities 1,104,089 (520,052)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and
other (56,843) (44,522)
Cash paid for acquisitions,
development and exploration (15,174,942) (6,639,094)
Proceeds from property sales -- 828,102
Increase in short-term investments (15,000,000) --
Proceeds from sale of
short-term investments -- 5,000,000
Cash designated as restricted (37,223) (105,617)
Cash undesignated as restricted 6,564,000 --
Net cash used in investing activities (23,705,008) (961,131)
CASH FLOWS FROM FINANCING ACTIVITIES
Preferred dividends (1,393) (6,809)
Exercise of options to purchase
common stock 557,457 --
Cash paid for debt issuance costs (208,051) --
Net cash provided by (used in)
financing activities 348,013 (6,809)
NET DECREASE IN CASH AND CASH EQUIVALENTS (22,252,906) (1,487,992)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 62,661,368 25,717,081
END OF PERIOD $40,408,462 $24,229,089
