Gasco's
Unrisked Resource Potential Set at 913 Bcfe
Preliminary Gross Drilling Inventory Set at 1,815
Locations
September
18, 2001 - Gasco Energy, Inc. (OTC BB: GASE),
) - today announced that the engineering firm Netherland
Sewell & Associates, Inc. (NSAI) performed an
unrisked resource and future revenue potential assessment
on the company's Riverbend assets in the Uinta Basin.
NSAI presented the following figures under a most
likely scenario:
| |
Unrisked
Net Resources |
Unrisked
Net Revenue (M$) |
| Formation |
Condensate
(Barrels) |
Gas
(MCF) |
Total |
Present
Worth at 10% |
| Mesaverde
Wasatch |
|
843,102,000
61,594,400 |
$
$ |
2,246,695
171,082 |
$
$ |
181,383
61,069 |
| Total |
1,449,786 |
904,696,400 |
$ |
2,417,777 |
$ |
242,452 |
The
table above is based on a price deck based on average
NYMEX prices for the period September 2000 through
August 2002. Wellhead gas prices used in the report
are $3.56 per MMBtu, escalated 3 percent per year
to a maximum of $4.15 per MMBtu. Condensate prices
were held constant at $25.00 per barrel throughout
the life of the properties. On a low price deck of
$1.65 per MMBtu for wellhead gas, holding condensate
at $25.00 per barrel (and adjusting drilling costs
to reflect late 1999 and early 2000, when NYMEX prices
were approximately $2.50 per MMBTU), Gasco's present
worth, discounted at 10 percent, is $129.6 million.
NSAI
identified a total of 1,815 gross drilling locations
- 1,711 Mesaverde and 104 Wasatch locations. While
each of the Wasatch locations is coincident with a
Mesaverde location, for purposes of analysis, NSAI
assumed that all of the Wasatch resources would be
drilled and produced via wells that did not penetrate
the deeper Mesaverde. In the report, NSAI notes that
the Wasatch and Mesaverde wells can be produced and
commingled via the same wellbore. The report cited
lowered costs when the formations are combined, saying,
"If the Wasatch and Mesaverde Formations are
commingled in the same wellbore, there is potential
to reduce capital costs by 60 percent for the Wasatch
wells."
Mark
A. Erickson, Gasco President and CEO, said: "Netherland,
Sewell validated our internal analysis of the Riverbend
region. When we began the process of evaluating our
reserves, both parties exchanged their professional
opinions on what our acreage held - "how big"
and "how many" was the centerpiece in the
overall analysis. I'm pleased with the report. In
the low price case, the report reflects a net asset
valuation of $3.23 per share, fully diluted. What
is important to note, however, is our financial strength
and operational know-how to execute our plan during
this period of commodity price instability. As the
global industrial markets ramp up production, demand
for energy will follow, unlocking real value for these
important natural gas assets. Gasco believes a long-term
demand/supply perspective is key for our future success."
The
Summary Letter of the NSAI report and accompanying
tables are being filed by the Company in a Form 8-K
and will be available for viewing on the Company's
Website at www.gascoenergy.com.
About
Gasco Energy
Gasco Energy is a Denver based natural gas and oil
exploration and
development company that focuses in the Rocky Mountain
area of the United States. The Company currently holds
interests in properties located in the Uinta Basin
of northeastern Utah, which are being developed pursuant
to an agreement with Phillips Petroleum.
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