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For Release at 8:30 AM EDT on Thursday,
October 5, 2006
GASCO ENERGY PROVIDES OPERATIONS UPDATE
945 MMCFE SETS QUARTERLY PRODUCTION RECORD
DENVER – (PR
Newswire) – October 5, 2006 – Gasco
Energy, Inc. (AMEX: GSX) today provided an interim
operations update on its Riverbend Project in Utah’s
Uinta Basin and on its Wyoming Projects in the Green
River Basin.
Quarterly Production
Estimated cumulative net production for the quarter
ended September 30, 2006 was 944.7 million cubic feet
equivalent (MMcfe), an increase of 93% from third
quarter 2005 net production of 489.3 MMcfe and an
increase of 10% from second quarter 2006 net production
of 862.7 MMcfe. For the first nine months of 2006,
net production was 2639.8 MMcfe, all of which was
from the Riverbend Project.
Estimated third quarter
2006 gross production was 1,968 MMcfe, an increase
of 59% from gross production of approximately 1,239
MMcfe during the same period in 2005 and an increase
of 15% from second quarter 2006 gross production of
approximately 1,716 MMcfe. For the first nine months
of 2006, gross production was approximately 5,321 MMcfe,
all of which was from the Riverbend Project.
The Company attributes
the rise in sequential production volumes to increased
well completion activity during the third quarter of
2006 and to the resumption of drilling activity subsequent
to the completion of previously announced rig repairs
that occurred during the second quarter of 2006. In
addition, as a result of running three rigs for over
a year, during the third quarter of 2006, the incremental
production from new wells drilled and completed more
than offset production declines from wells completed
during earlier periods.
Gasco
Energy Net Production Detail*
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|
|
|
Three
months ended
|
Three months ended
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Nine months ended
|
|
|
Sept.30,
2006
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June 30,
2006
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% Change
|
Sept.30,
2006
|
Sept.30,
2005
|
% Change
|
Sept.30,
2006
|
Sept.30
2005
|
% Change
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|
|
Natural
Gas/MMcf
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903.0
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832.7
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8%
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903.0
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473.2
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91%
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2543.1
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898.5
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183%
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Oil
/ MBbls
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6.9
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5.0
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34%
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6.9
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2.7
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156%
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16.1
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6.3
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156%
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Natural
Gas Equivalents/MMcfe
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944.7
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862.7
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10%
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944.7
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489.3
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93%
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2639.8
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936.6
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182%
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*Includes
Q306 preliminary production estimates. Company estimates
may differ from the actual results scheduled
to be reported in its forthcoming filing on Form 10-Q
for Q306.
Drilling Activity
During the third quarter of 2006, Gasco spudded 12
gross wells (7.7 net), including three non-operated
wells (.75 net), and reached total depth on nine gross
wells (5.0 net). The Company is currently running
four drilling rigs on its Riverbend project, having
taken delivery of the fourth rig in August 2006.
Year-to-date in Utah, Gasco has spudded 22 gross
wells (13.4 net) and reached total depth on 20 gross
wells (11.7 net).
Completion Activity
During the third quarter of 2006, Gasco conducted initial
completion operations on five wells (2.6 net) and reentered
five wells (3.2 net) to complete behind-pipe pay zones.
During the first nine months of 2006, Gasco conducted
initial completion operations on 15 wells (8.9 net)
and re-entered 14 wells (7.3 net) to complete behind-pipe
pay zones. At September 30, 2006, Gasco operated 72
gross wells with five additional wells awaiting completion
activities.
Gross and net data provided
for wells spudded and wells to total depth include
three non-operated wells in which Gasco participated
with a 25% working interest. Two of the wells spudded
during the quarter were in Gasco’s
Wyoming Projects.
Wyoming Activity
Daniel Anticline Prospect
Gasco and its partner Hunt Petroleum are currently
drilling on the Cottonwood Ranch 24-21, which is permitted
to test natural gas potential in the Lance, Mesaverde,
Ericson, Rock Springs and Hilliard Shale formations
to a proposed total depth of 16,500 feet. The preliminary
well cost estimate to drill and complete the well is
$8.0 million ($2.0 million net to Gasco). Gasco is
the operator and has a 25% working interest in the
project.
Muddy Creek Prospect
In Wyoming, Gasco is currently drilling on its Billy
Canyon 2-11 well, in which it has a 100% working interest.
The well is permitted to test natural gas potential
in the Lance and Mesaverde formations to a proposed
total depth of 9,600 feet. The Company plans on setting
9 5/8 inch intermediate casing at 9,600 feet in anticipation
of drilling the well to a new total depth of 14,400
feet to test the Rock Springs and Hilliard Shale.
The prospect is located approximately eight miles
north of the 67 Draw Field that was recently spaced
for production from the Mesaverde Group, including
the Rock Springs and Ericson formations, and Baxter
Shale, equivalent to the Hilliard Shale.
Management
Comment
Mark Erickson, Gasco’s CEO and President said: “Increased
production is a positive event for the quarter, but more
important is our drilling and completion performance
on the quarter’s wells. In Riverbend, we continue
to make marked operational improvements in reducing
drilling days and lowering costs. Our three most modern
rigs are now consistently drilling Blackhawk wells
in 30 days or less. Of particular importance is that
we reached total depth on a well in Wilkin Ridge in
a record 25 days. Gasco engineers took the drilling
challenges of the Wilkin Ridge project head-on, in
an area where we had previously experienced much slower
drilling times. The efforts resulted in our fastest
well yet in this area and equaled our best well to
date in the entire Riverbend project. Improved operational
performance is another example of how we take seriously
the directive of lowering costs which are in our control.
Wilkin Ridge, where part of the Kenilworth trend lies,
is an area where we are working hard to improve commerciality
in order to recognize its full reserve potential. We
believe we are on our way to accomplishing this goal.
“Gasco
engineers and field personnel are also dramatically
reducing completion costs throughout the field. Hydraulic
fracturing costs are being reduced by as much as 50%
when compared to costs realized at the beginning of
the year. With the combination of reduced drilling
time and reduced stimulation costs, Gasco employees
are making significant strides in reducing overall
well costs.”
Third Quarter Financial
Results
Gasco expects to announce its third quarter 2006 results
in early November 2006. The Company will schedule a
conference call to be announced at a later date to
discuss the quarter’s operational and financial
results.
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 2005
Form 10- K filed with the Securities and Exchange Commission
on March 3, 2006.
Contact for Gasco Energy,
Inc.: Investor Relations: 303-483-0044 |
