DENVER, Aug. 4 /PRNewswire-FirstCall/ -- Gasco Energy (NYSE Amex:
GSX) today reported financial and operating results for the second
quarter ended June 30, 2009. Second Quarter 2009 Financial Results
For the second quarter 2009, Gasco reported a net loss attributable
to common shareholders of $3.9 million, or $0.04 per share, as
compared to a net loss of $0.8 million, or $0.01 per share, for the
same period in 2008. All per-share figures are basic and diluted.
Included in the second quarter 2009 results are derivative losses
of $1.2 million attributed to hedge effect, which are comprised of
an unrealized loss of $10.1 million partially offset by a realized
gain of $8.9 million. Included in the second quarter 2008 results
are derivative losses of $5.0 million attributed to hedge effect,
of which a loss of $3.6 million is unrealized and a loss of $1.4
million is realized. The Company reported oil and gas sales for the
second quarter 2009 of $3.4 million, as compared to $12.6 million
for the same period in 2008. The decrease in oil and gas sales
during the second quarter 2009, as compared to the prior-year
period, is primarily attributed to a 72% decrease in prices
received for sales of the Company's natural gas and a 55% decrease
in prices received for oil volumes, combined with a 9% decrease in
production quarter-over-quarter. Gathering and processing revenues
from Gasco's midstream assets were $1.0 million for the second
quarter 2009, as compared to $1.1 million in the prior-year period.
Total revenues for the second quarter 2009 were $4.4 million, as
compared to $14.1 million in the second quarter 2008. Gasco's
average realized gas price including the effect of realized
derivative gains and losses and excluding proceeds from the
monetization of certain hedge contracts was $2.94 per thousand
cubic feet of natural gas (Mcf) for the second quarter of 2009
compared to $8.10 per Mcf for the second quarter of 2008. The
Company's risk management activities increased its average gas
price by $0.34 per Mcf during the second quarter of 2009 and
decreased its average gas price by $1.15 during the second quarter
of 2008. Prior to the impact of hedges, the Company's average price
received for its natural gas production during the second quarter
of 2009 was approximately $2.60 per Mcf, as compared to $9.25 per
Mcf in the prior-year period. The average realized oil price was
$44.34 per barrel for the second quarter of 2009, a 55% decrease
from the $98.84 per barrel received during the second quarter of
2008. Gasco does not hedge its crude oil volumes. Unit Cost
Comparisons - LOE / DD&A / G&A Lease operating expense
(LOE) for the second quarter 2009 was $1.1 million, as compared to
$1.9 million in the prior-year period, a 42% decrease. On a
per-unit basis, LOE was $0.92 per thousand cubic feet of natural
gas equivalent (Mcfe) in the second quarter 2009, as compared to
$1.48 per Mcfe in the prior-year period. Lower LOE
quarter-over-quarter is attributed to decreased operating expenses
($0.33 per Mcfe lower) and to reduced production taxes ($0.23 per
Mcfe lower). The decrease in LOE in the second quarter 2009 is
attributed to reduced chemical costs in well treatments, decreased
workover expense and to sharply lower commodity prices on which
production taxes are based. Depletion, depreciation and
amortization (DD&A) was $1.1 million for the second quarter
2009, as compared to $3.2 million for the same period in 2008. On a
per-unit basis, DD&A for the second quarter 2009 was $0.92 per
Mcfe, as compared to $2.43 in the 2008 period. Lower DD&A is
attributed to the decrease in the full cost pool as a result of the
first quarter 2009 impairment charge of $41.0 million. The Company
reported general and administrative (G&A) expense of $2.0
million in the second quarter 2009, versus $2.5 million in the same
period in 2008. On a per-unit basis, total G&A expense for
second quarter 2009 was $1.69 per Mcfe, as compared to $1.91 per
Mcfe for the same period in 2008. G&A expense for the second
quarter 2009 includes $0.5 million of non-cash, stock-based
compensation expense, or, on a per-unit basis, $0.39 per Mcfe, as
compared to the prior-period total of $0.8 million, or $0.62 per
Mcfe. Gathering operations expense decreased to $0.8 million in the
second quarter 2009 from $1.0 million in the second quarter 2008.
Six-Month Period Gasco reported a net loss attributable to common
shareholders for the six-months ended June 30, 2009 of $47.7
million, or $0.44 per share, as compared to a net loss for the
first half of 2008 of $5.2 million, or $0.05 per share. Included in
the 2009 results are derivative gains of $2.3 million attributed to
hedge effect. Also included in the first half 2009's operating
expenses is a non-cash charge of $41.0 million related to an
impairment of the carrying value of oil and gas properties during
the first quarter and a $4.7 million cash payment to the Company's
rig contractor for early termination of a rig contract. Before the
impairment charge and the early termination payment, and excluding
the effect of unrealized derivative gains, a non-GAAP measure,
Gasco would have posted a net loss of $2.0 million or $0.02 per
share. Oil and gas sales for the first half of 2009 were $7.6
million, as compared to $21.1 million for the same period in 2008.
The decrease in oil and gas sales during the first half 2009 as
compared to the prior-year period is primarily attributed to a 65%
decrease in prices received for sales of the Company's natural gas
and a 60% decrease in prices received for oil volumes, partially
offset by a 2% increase in oil and gas production. Total revenue
for the first six months of 2009 was $9.8 million, as compared to
$23.8 million in the same period in 2008. For the first half of
2009, gathering system revenues accounted for $1.8 million as
compared $2.0 million during 2008. At June 30, 2009, cash and
equivalents were $9.6 million as compared to $1.1 million at
December 31, 2008. Long-term debt was $34.9 million at June 30,
2009 as compared to $31.0 million at December 31, 2007. The Company
currently has a $250 million credit facility with JPMorgan, of
which $35 million is available for borrowing capacity and $34.9
million is drawn. Gasco's total assets at June 30, 2009 were $103.5
million, as compared to $153.9 million at year-end 2008. Net cash
provided by operating activities for the first half of 2009 was
$13.0 million as compared to $13.1 million for the same period in
2008. Quarterly Production Cumulative net production for the
quarter ended June 30, 2009 was 1,186 MMcfe, a decrease of 9% from
the prior-year net production of 1,305 MMcfe. For the first half of
2009, Gasco produced a Company-record 2,441 MMcfe, as compared to
2,390 MMcfe in the year-ago six-month period, representing a 2%
increase for comparable six-month periods. Subsequent Events On
July 22, 2009, a large oil and gas company announced a significant
discovery of oil and gas reserves estimated to range from 150
million to 250 million barrels of oil equivalent in Kern County,
Calif. The discovery is located approximately 10 miles from certain
of Gasco's San Joaquin Basin leasehold. Gasco owns or controls
approximately 18,655 gross acres and 14,750 net mineral acres Kern
and San Luis Obispo Counties. Company geologists are currently
evaluating the productive potential of its leasehold due to
heightened interest in leasing activity and in potential farm-outs,
drilling partners or other possible joint venture opportunities in
the area proximate to the significant discovery. Notice from the
NYSE Amex LLC On June 25, 2009, Gasco received a notice from the
NYSE Amex informing the Company that it is non-compliant with
certain NYSE Amex continued listing standards. The Company was
informed that it did not meet minimum shareholders' equity
requirements of $2.0 million and that it had net losses in two of
the last three fiscal years. It is also not compliant in meeting
minimum stockholders' equity requirements of $4.0 million and it
posted net losses in three out its last four fiscal years. As per
the NYSE Amex instructions, and within the allotted time, Gasco
submitted its plan of compliance to the NYSE Amex that addresses
how Gasco intends to regain compliance with the deficient listing
regulations by December 27, 2010. Gasco prepared and submitted a
plan within the required time frame. However, there can be no
assurance that NYSE Amex will accept the plan, or if the plan is
accepted, that the Company will be able to achieve compliance with
Sections 1003(a)(i) and 1003(a)(ii) of the NYSE Amex Company Guide
within the required time frame. If the plan is not accepted by NYSE
Amex, or if the Company is not able to achieve compliance with
Sections 1003(a)(i) and 1003(a)(ii) of the NYSE Amex Company Guide
by December 27, 2010, the Company will be subject to delisting
procedures as set forth in the NYSE Amex Company Guide. For
additional information regarding the risks currently facing Gasco's
business, please see the information set forth under "Risk Factors"
in Item 1 of the Company's Annual Report on Form 10-K for the year
ended December 31, 2008 filed with the Securities and Exchange
Commission (the "SEC") on March 4, 2009 and under "Risk Factors" in
Item 1A of the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2009 filed with the SEC on August
4, 2009. Through the beginning of June 2009, the Company owned a
drilling rig that it leased to an operator for the drilling of
wells that Gasco did not operate. During June 2009 the Company sold
the drilling rig for proceeds of $1,000,000 which consisted of a
cash payment of $500,000 and a promissory note of $500,000, with a
maturity date of June 30, 2012. The Company recognized a loss of
$905,850 on the sale. If the Company needs additional liquidity for
future activities, including paying amounts owed in connection with
a borrowing base reduction, if any, the Company may be required to
consider several options for raising additional funds, such as
selling securities, selling assets or farm-outs or similar
arrangements, but it may be unable to complete any of these
transactions on terms acceptable to the Company or at all. Any
financing obtained through the sale of Gasco's equity will likely
result in substantial dilution to the Company's stockholders.
Conference Call A conference call with investors, analysts and
other interested parties is scheduled for 11:00 a.m. EDT on
Wednesday, August 5, 2009 to discuss second quarter 2009 financial
and operating results. You are invited to listen to the call which
will be broadcast live over the Internet. Date: Wednesday, August
5, 2009 Time: 11:00 a.m. EDT 10:00 a.m. CDT 9:00 a.m. MDT 8:00 a.m.
PDT Call: (866) 392-4171 (US/Canada) and (706) 634-6345
(International), Passcode / Conference ID #: 18972905 Internet:
Live and rebroadcast over the Internet: log on to
http://www.gascoenergy.com/ or to
http://www.videonewswire.com/event.asp?id=60257 Replay: Available
through Monday, August 10, 2009 at (800) 642-1687 (US/Canada) and
(706) 645-9291 (International) using Passcode 18972905 and for 30
days at http://www.gascoenergy.com/ About Gasco Energy Denver-based
Gasco Energy, Inc. is 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, forwardlooking 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 Item 1 of the Company's Annual
Report on Form 10-K for the year ended December 31, 2008 filed with
the SEC on March 4, 2009 and under "Risk Factors" in Item 1A of the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2009 filed with the SEC on August 4, 2009. 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. [Financial and Operational Tables Accompany this News
Release] The notes accompanying the financial statements are an
integral part of the consolidated financial statements and can be
found in Gasco's filing on Form 10-Q for the quarterly period ended
June 30, 2009 dated August 4, 2009. GASCO ENERGY, INC. CONSOLIDATED
BALANCE SHEETS (Unaudited) June 30, December 31, 2009 2008 ASSETS
CURRENT ASSETS Cash and cash equivalents $9,606,802 $1,053,216
Accounts receivable Joint interest billings 609,196 5,436,636
Revenue 2,306,036 3,827,950 Inventory 1,251,828 4,177,967
Derivative instruments 968,844 8,855,947 Prepaid expenses 42,803
188,810 ------ ------- Total 14,785,509 23,540,526 ----------
---------- PROPERTY, PLANT AND EQUIPMENT, at cost Oil and gas
properties (full cost method) Proved properties 252,386,533
247,976,854 Unproved properties 39,832,456 39,314,406 Wells in
progress - 644,688 Gathering assets 17,693,815 17,440,680
Facilities and equipment 6,190,062 8,549,928 Furniture, fixtures
and other 371,673 371,605 ------- ------- Total 316,474,539
314,298,161 Less accumulated depletion, depreciation, amortization
and impairment (229,578,890) (185,585,582) ----------- -----------
Total 86,895,649 128,712,579 ---------- ----------- OTHER ASSETS
Deposit 139,500 139,500 Note receivable 500,000 - Deferred
financing costs 1,165,973 1,492,903 --------- --------- Total
1,805,473 1,632,403 --------- --------- TOTAL ASSETS $103,486,631
$153,885,508 ============ ============ GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS (continued) (Unaudited) June 30,
December 31, 2009 2008 LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) CURRENT LIABILITIES Accounts payable $660,006 $5,879,150
Revenue payable 1,218,404 3,840,985 Advances from joint interest
owners - 612,222 Accrued interest 861,854 1,187,495 Accrued
expenses 793,000 1,126,000 ------- --------- Total 3,533,264
12,645,852 --------- ---------- NONCURRENT LIABILITIES 5.5%
Convertible Senior Notes 65,000,000 65,000,000 Long-term debt
34,856,269 31,000,000 Derivative instruments 1,579,781 - Asset
retirement obligation 1,204,100 1,150,179 Deferred rent expense
33,572 46,589 ------ ------ Total 102,673,722 97,196,768
----------- ---------- STOCKHOLDERS' EQUITY (DEFICIT) Series B
Convertible Preferred stock - $0.001 par value; 20,000 shares
authorized; zero shares outstanding - - Common stock - $.0001 par
value; 300,000,000 shares authorized; 107,802,498 shares issued and
107,728,798 outstanding as of June 30, 2009 and 107,825,998 shares
issued and 107,752,298 outstanding as of December 31, 2008 10,780
10,783 Additional paid-in capital 220,337,009 219,375,369
Accumulated deficit (222,937,849) (175,212,969) Less cost of
treasury stock of 73,700 common shares (130,295) (130,295) -------
------- Total (2,720,355) 44,042,888 --------- ---------- TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $103,486,631
$153,885,508 ============ ============ GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended June 30, ---------------------- 2009 2008 REVENUES Gas
$2,895,707 $11,404,952 Oil 550,677 1,187,898 Gathering 965,929
1,079,201 Rental income - 420,875 --- ------- Total 4,412,313
14,092,926 --------- ---------- OPERATING EXPENSES Lease operating
1,088,049 1,935,374 Gathering operations 775,182 1,040,844
Depletion, depreciation, amortization and accretion 1,094,131
3,170,997 Loss on sale of assets, net 558,189 - General and
administrative 2,009,998 2,486,593 --------- --------- Total
5,525,549 8,633,808 --------- --------- OTHER INCOME (EXPENSE)
Interest expense (1,501,459) (1,231,262) Derivative losses
(1,249,059) (5,022,053) Interest income 4,120 5,589 ----- -----
Total (2,746,398) (6,247,726) --------- --------- NET LOSS
$(3,859,634) $(788,068) =========== ========= NET LOSS PER COMMON
SHARE - BASIC AND DILUTED $(0.04) $(0.01) ====== ====== WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED 107,539,679
107,018,242 =========== =========== GASCO ENERGY, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) Six Months Ended June 30,
---------------------- 2009 2008 REVENUES Gas $6,806,758
$19,302,432 Oil 811,648 1,775,535 Gathering 1,841,130 1,987,557
Rental income 366,399 783,125 ------- ------- Total 9,825,935
23,848,649 --------- ---------- OPERATING EXPENSES Lease operating
1,779,986 3,202,101 Gathering operations 1,482,696 1,697,343
Depletion, depreciation, amortization and accretion 3,677,101
5,620,799 Impairment 41,000,000 - Contract termination fee
4,701,000 - Loss on sale of assets, net 679,189 - General and
administrative 3,870,044 4,674,626 --------- --------- Total
57,190,016 15,194,869 ---------- ---------- OTHER INCOME (EXPENSE)
Interest expense (2,660,188) (2,478,811) Derivative gains (losses)
2,293,567 (11,394,505) Interest income 5,822 20,811 ----- ------
Total (360,799) (13,852,505) ------- ---------- NET LOSS
$(47,724,880) $(5,198,725) ============ =========== NET LOSS PER
COMMON SHARE - BASIC AND DILUTED $(0.44) $(0.05) ====== ======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED
107,548,336 107,011,167 =========== =========== GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended
June 30, ----------------------- 2009 2008 CASH FLOWS FROM
OPERATING ACTIVITIES Net loss $(47,724,880) $(5,198,725) Adjustment
to reconcile net loss to net cash provided by operating activities
Depletion, depreciation, amortization and impairment expense
44,623,405 5,573,235 Accretion of asset retirement obligation
53,696 47,564 Stock-based compensation 964,091 1,529,078 Change in
derivative instruments, net 9,466,884 9,532,345 Amortization of
deferred rent expense (13,017) (8,185) Amortization of deferred
financing costs 326,930 259,116 Loss on sale of assets, net 679,189
- Changes in operating assets and liabilities: Accounts receivable
6,349,354 (2,841,850) Inventory 3,152,800 (1,018,105) Prepaid
expenses 146,007 133,246 Accounts payable (1,762,384) 1,278,041
Revenue payable (2,622,581) 3,496,671 Accrued interest (325,641)
58,447 Accrued expenses (333,000) 233,000 ------- ------- Net cash
provided by operating activities 12,980,853 13,073,878 ----------
---------- CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for
furniture, fixtures and other (2,297) (36,046) Cash paid for
acquisitions, development and exploration (8,169,017) (19,435,759)
Proceeds from sale of assets 500,000 - Advances from (refunded to)
joint interest owners (612,222) 2,808,909 ------- --------- Net
cash used in investing activities (8,283,536) (16,662,896)
--------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit 13,000,000 14,000,000 Repayment of
borrowings (9,143,731) (9,000,000) Exercise of options to purchase
common stock - 1,156,284 --- --------- Net cash provided by
financing activities 3,856,269 6,156,284 --------- --------- NET
INCREASE IN CASH AND CASH EQUIVALENTS 8,553,586 2,567,266 CASH AND
CASH EQUIVALENTS: BEGINNING OF PERIOD 1,053,216 1,843,425 ---------
--------- END OF PERIOD $9,606,802 $4,410,691 ========== ==========
http://www.videonewswire.com/event.asp?id=60257DATASOURCE: Gasco
Energy, Inc. CONTACT: Investor Relations of Gasco Energy, Inc.,
+1-303-483-0044 Web Site: http://www.gascoenergy.com/
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