Gasco’s 2007 preliminary capital expenditure budget is set at $40 million. The 2007 CAPEX focuses on its Riverbend Project in Duchesne and Uintah Counties in Utah. Riverbend is a statistical play yielding predictable, low-risk reserve adds marked by low geologic risk. The key to the project is in leveraging proven drilling and completion technologies, in particular stage fracing techniques, to best recover the gas in place. Gasco’s large acreage inventory of approximately* 124,000 gross acres (74,000 net) provides the company with a large inventory of potential well locations.

The Wasatch, Mesaverde and Blackhawk formations are the target gas-bearing sands in the Riverbend Project. The formations are found at these approximate depths: Wasatch from 7,000’ to 9,000’, Upper Mesaverde from 9,000’ to 10,500’, Lower Mesaverde from 10,500’ to 12,000’ and Blackhawk from 12,000’ to 14,000’.

The Blackhawk is an important primary target for Gasco due its potential to add an estimated 0.25 – 2.0 Bcf of incremental reserves. The formation is an additional 1,500’ to drill and can be drilled and completed for an estimated $750,000. The Blackhawk sandbodies are over-pressured and underlie Gasco's entire leasehold position. These stacked pay zones are found in multiple fluvial trends which Gasco continues to define through its active drilling program. Gasco geology indicates Blackhawk pay as a fluvial coastal plain environment across the entire Riverbend Project, with predictable trends in higher-quality marine shoreface environments. These marine trends are currently being successfully developed in two areas of the Riverbend Project.

The Wasatch, Mesaverde, and Upper Blackhawk formations are normal to over-pressured, discontinuous, stacked, fluvial sandstones yielding multiple completion opportunities. The normal-pressured Wasatch formation, where present, typically yields 0.25 – 1.0 Bcf of estimated ultimate recovery. The over-pressured Upper Mesaverde yields estimated recoveries of 0.25 – 1.0 Bcf. The Lower Mesaverde, also over-pressured, with estimated ultimate recoveries of 0.5 – 1.5 Bcf. The over-pressured Blackhawk yields .25 – 2.0 Bcf. A typical well is currently estimated to yield 1.5 – 3.5 Bcf .

Gasco’s current completion methodology involves initial completion of over-pressure Blackhawk and Lower Mesaverde pays where the gas is flowed directly to sales while the zones produce for a period of six to 12 months as the reservoir experiences a drop in pressure. Once the pressure is reduced allowing production from the lower pressure uphole zones, engineers recomplete the Upper Mesaverde and Wastach formations with improved success from these gas-charged reservoirs.

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* at 12/31/06