DENVER, Sept. 12 /PRNewswire-FirstCall/ -- Gasco Energy, Inc. (OTC Bulletin Board: GASE - News) today provided an interim operations update on wells in its Riverbend Project in Utah's Uinta Basin and its Wyoming Projects in the Greater Green River Basin. Gasco's operations continue to progress steadily despite protracted lower natural gas prices due to a large Rocky Mountain price differential as the result of regional pipeline infrastructure constraints that create gas-on-gas price competition. Meanwhile, Gasco benefits from significantly reduced well drilling and completion costs due to lower industry-wide rig activity. Lower service costs enable the Company to stretch its capital dollars helping development activity on its significant leasehold positions.

Utah Operations Overview

Gasco recently began drilling the first of a planned five-well program and is continuing with completion operations on its two previously drilled wells, the Federal #23-29 and the Federal #42-29. The Company is experiencing temporary delays in completing these two wells due to capacity constraints on the gathering system. The constraints are a result of the success of Gasco's wells. The flow rates from the initial completions on the 23-29 and the 42-29 have significantly exceeded the current system capacity and are excluding other operators from flowing wells connected to the system. Since Gasco's gas flows are pursuant to an interruptible contract, it is the Gasco wells that are curtailed. Gasco, working closely with Burnett, Reid, Sims and Harpole (BRSH), a Denver-based consulting firm specializing in natural gas gathering and marketing, has developed near-term and long-term plans for gas gathering and marketing.

Federal #23-21 Spuds

Recently, Gasco began drilling the Federal #23-21, with an anticipated total depth of 11,750 feet, targeting the Mesaverde and Wasatch formations. Gasco's working interest in the well will be determined once it receives participation indication from its industry partners. This well is located within one mile of Gasco's Federal #42-29 well. The 42-29 well encountered 275 feet of Mesaverde pay and 75 feet of Wasatch pay. If successful, the 23-21 will earn the remaining interest that Gasco does not own within the Mesaverde Formation on a 320-acre block.

Completion Update

Federal #42-29 (Gasco-operated, Gasco approximately 40% WI) -- This well reached total depth of 11,770 feet in May. The two lowest Mesaverde frac stages, located between 10,936 feet and 11,499 feet, were completed in one day using Halliburton's flow-thru frac-plug technology. The two-zone completion used over 500,000 pounds of proppant and the zones flowed back extremely well at rates of over 1 million cubic feet per day (MMcfd) directly into the sales line. Production was shut in due to gathering system constraints. A test of the first anticipated frac stage, the Upper Castlegate, indicated very low permeability causing Gasco and its partner to jointly elect to leave the interval uncompleted. Seven more completion intervals are scheduled for this well.

Federal #23-29 (Gasco-operated, Gasco 25% WI) -- This well reached total depth of 10,659 feet in March. All Wasatch and Mesaverde intervals are now completed. Efficient engineering techniques allowed Gasco to complete three separate frac stages in one day in the Wasatch Formation. The flow-thru frac plugs have been drilled out within the Mesaverde and Wasatch frac stages, tubing was run and the well is currently flowing back natural gas and frac fluid. The 23-29 is currently flowing at 750 thousand cubic feet per day (Mcfd) and 60-75 barrels of fluid per day. The gas rate and flowing pressures are expected to increase as the frac fluid decreases in rate and is recovered.

Alger Pass Unit #1 (Gasco-operated, Gasco 35% WI) -- This is a recompletion of a well bore using modern frac and completion techniques. The 10,659 foot well continues to flow/swab back frac fluid from the two frac stages. Pressures continue to build and, as a result, a plunger lift has been installed to aid in clean up. However, mechanical problems with the compressor are yielding high line pressures causing operational difficulties for the plunger lift. Gasco engineers are working on the problem and expect normal operations to resume shortly.

Wyoming Projects Overview

Gasco is participating in increased activity within its Grindstone Butte and Muddy Creek projects. Three new wells, one recompletion, a 2-D seismic shoot and surveying of the 3-D seismic shoot are currently taking place on Gasco's Greater Green River Basin acreage position.

Gamma Ray 11-25 (Burlington-operated, Burlington 100% WI) -- Burlington is currently drilling this confidential exploratory well to a proposed total depth of 13,300 feet. It provides Burlington the right to earn an additional 640-acres from Gasco.

Federal CD 14-4 (Burlington-operated, Gasco 35% WI) -- Burlington Resources indicated to Gasco management that it intends to drill this well after the Gamma Ray 11-25. The 14-4 is proposed to 11,000 feet and will earn the participants additional farmout acreage totaling 21,000 gross acres from an unrelated third party.

Muddy Creek 13-3 (Burlington-operated, Gasco 35% WI) -- Burlington is currently drilling this offset to a proposed total depth of 9,700 feet. The 13-3 is a confirmation well to the Muddy Creek 33-27 and will earn the participants additional farmout acreage totaling 4,960 acres from a second unrelated third party.

Piney 10-16 (Gasco-operated, 100% WI) -- This well reached total depth of 9,230 feet in April 2001. Gasco engineers are designing a completion program to add additional production from this wellbore. They are also working with BRSH to determine the best course of action to get this well connected to a sales line. This well is a two-mile offset to Burlington's Muddy Creek 33-27 which is currently being tested.

Seismic Activity -- Burlington Resources has resumed shooting the high-resolution 2-D program. This additional 100 miles of seismic data is part of their obligation to earn into Gasco's acreage position. Gasco is also financially participating in a 3-D seismic program that will cover a large part of its Grindstone project and some of the Muddy Creek project. Surveying recently commenced on this seismic program. Completion of the 3-D program is anticipated before year-end.

Management's Comments

Commenting on recent developments, Gasco CEO and President, Mark Erickson, said: "Gasco's business model promotes activity on its acreage, and it's happening in both core areas. Burlington has two rigs running in Wyoming and Phillips just finished drilling its third well this year. For our own account, Gasco's new Utah drilling program just commenced. We are very pleased with initial results of the Federal #42-29. We believe that it has real potential to be the best Wasatch/Mesaverde well completed by any operator on the west side of the Green River to date. While gas prices are disappointing, the price environment creates an opportunity by reducing service costs that, in turn, allow us to develop more acreage with the same dollars. According to knowledgeable industry sources, Gasco can expect to see improved natural gas prices and a decrease in the Rocky Mountain differential with the advent of winter and more importantly with the Kern River pipeline expansion with an expected in-service date of May 2003. The expansion will add 900 MMcfd of takeaway capacity from the greater Utah and Wyoming region, thereby substantially decreasing the gas-on-gas competition."

Commenting on operations, Gasco EVP and COO, Mike Decker said: "We believe that Gasco and Halliburton joint completion designs are yielding better results. We continue to improve, refine and learn from each frac stage. Initial production results of the Federal #42-29 are a good example of the completion designs that are beginning to bear fruit from the Gasco and Halliburton joint technical team. We believe that the gathering constraints and excessive basis differential are only temporary and currently present no long-term impact to the project."

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 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.