Gasco Energy Extends Credit Facility; Provides Update on Gate Canyon Test
December 11 2008 - 8:30AM
PR Newswire (US)
DENVER, Dec. 11 /PRNewswire-FirstCall/ -- Gasco Energy, Inc. (NYSE
Alternext US: GSX) today announced an amendment to its Credit
Agreement and provided an interim operations update on its
Riverbend Project in Utah's Uinta Basin. Amended Credit Facility On
December 10, 2008, the Company closed on an amendment to its Credit
Agreement led by JPMorgan pursuant to which the maturity date of
the facility was extended one year to March 29, 2011. The interest
rate pricing grid was increased 0.25% to the levels detailed below
and the commitment fee was changed to 0.50% from a variable grid
between 0.30% and 0.50%. The borrowing base of $45 million in place
prior to the amendment was maintained and the other commercial
terms of the Credit Agreement remain substantially unchanged.
Interest on borrowings under the Credit Agreement accrues at
variable interest rates at either, at Gasco's election, a
Eurodollar rate or an alternate base rate. The Eurodollar rate is
calculated as LIBOR plus an applicable margin that varies from
1.50% (for periods in which the Company has utilized less than 50%
of the borrowing base) to 2.25% (for periods in which the Company
has utilized greater than 90% of the borrowing base). The alternate
base rate is calculated as (1) the greater of (a) the Prime Rate,
(b) the Federal Funds Effective Rate plus 0.50% or (c) the Adjusted
LIBO Rate for a one month interest period on such day plus 1%, plus
(2) an applicable margin that varies from 0.25% (for periods in
which the Company has utilized less than 50% of the borrowing base)
to 1.00% (for periods in which the Company has utilized greater
than 90% of the borrowing base). Gasco elects the basis of the
interest rate at the time of each borrowing; however, under certain
circumstances, Gasco's lender may require it to use the non-elected
basis in the event the elected basis does not adequately and fairly
reflect the cost of making such loans. In addition, Gasco is
obligated to pay a commitment fee of 0.50% under the Credit
Agreement quarterly in arrears based on a percentage multiplied by
the daily amount that the aggregate commitments exceed borrowings
under the agreement. Gate Canyon Deep Test Update The Gate Canyon
23-16 (25% working interest, Gasco operated) has begun initial
completion operations. The well was completed in the Morrison
Formation with one frac job and in the Dakota Formation with three
frac jobs. The fracs were put away successfully according to
design. A coiled tubing unit was brought in to drill out
intermediate plugs so that testing of the well could begin. During
the drill-out procedure, the bottom-hole assembly became stuck, the
tubing was cut near the top of the stuck portion (the "fish") and
the coiled tubing unit was moved off location. A workover rig is on
location to recover the fish and finish drilling out the remaining
plugs. Management Comment Commenting on Uinta activities, Gasco CEO
and President, Mark Erickson said: "We are pleased with the
successful fracture stimulation of the Morrison and Dakota
intervals, but we are not yet able to report production testing
results for the GCS #23-16 completion due to mechanical issues with
the wellbore. The fishing operation to recover the remaining
bottom-hole assembly was delayed while the Company secured the
necessary tools and equipment. The fishing operation began this
week and, should take about two weeks to complete. Production
testing of the completed intervals will follow and then we plan to
proceed with completion of up-hole pay in the Mancos, Blackhawk and
Mesaverde. Additional details on the well, as they become
available, will be provided in the Company's fourth quarter 2008
operations update in early January 2009." About Gasco Energy
Denver-based Gasco Energy, Inc. is a natural gas and petroleum
exploitation, development and production company engaged in
locating and developing hydrocarbon resources, primarily in the
Rocky Mountain region. Gasco's principal business is the
acquisition of leasehold interests in petroleum and natural gas
rights, either directly or indirectly, and the exploitation and
development of properties subject to these leases. Gasco currently
focuses its drilling efforts in the Riverbend Project located in
the Uinta Basin of northeastern Utah, targeting the Wasatch,
Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations. To
learn more, visit http://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 forwardlooking 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
Gasco'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 Gasco, 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 Gasco'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 Gasco 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; fluctuations in
natural gas and oil prices; pipeline constraints; overall demand
for natural gas and oil in the United States; changes in general
economic conditions in the United States; our ability to manage
interest rate and commodity price exposure; changes in the
Company's borrowing arrangements; the condition of credit and
capital markets in the United States; and other risks described
under "Risk Factors" in each of Item 1 of the Company's Annual
Report on Form 10-K for the year ended December 31, 2007 filed with
the Securities and Exchange Commission on March 4, 2008 and in Item
1A of the Company's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 2008 and September 30, 2008 filed with the
Securities and Exchange Commission on August 4, 2008 and November
4, 2008, respectively. Any of these factors could cause our actual
results to differ materially from the results implied by these or
any other forward-looking statements made by us or on our behalf.
We cannot assure you that our future results will meet our
expectations. When you consider these forward-looking statements,
you should keep in mind these factors. All subsequent written and
oral forward-looking statements attributable to the Company, or
persons acting on its behalf, are expressly qualified in their
entirety by these factors. Our forward-looking statements speak
only as of the date made. The Company assumes no duty to update or
revise its forward-looking statements based on changes in internal
estimates or expectations or otherwise. DATASOURCE: Gasco Energy,
Inc. CONTACT: Investor Relations, Gasco Energy, Inc.,
+1-303-483-0044 Web Site: http://www.gascoenergy.com/
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