Updates Third Quarter 2009 Operations DENVER, Oct. 14
/PRNewswire-FirstCall/ -- Gasco Energy, Inc. (NYSE Amex: GSX) today
announced detailed information on its California projects and
provided an interim operations update on its Riverbend Project in
Utah's Uinta Basin. California Projects - San Joaquin Basin Gasco's
San Joaquin Basin leasehold interest as of September 15, 2009 is
approximately 24,164 gross acres (19,215 net) in Kern and San Luis
Obispo Counties of Southern California. The Company has secured
industry partners with the intent of drilling high-ranking
prospects in 2009 and 2010. Gasco is carried on these wells which
are summarized below. Certain of the leasehold is in close
proximity to the recent hydrocarbon discovery announced by
Occidental Petroleum in July 2009. The prospects are on trend with
prolific oil fields such as Midway-Sunset, Belgian Anticline,
McKittrick, Cymric and South Belridge. A summary of selected
prospects for the shallow plays and the deeper exploratory plays is
provided below. Gasco's California strategy is three-fold: -- Focus
on lower-risk, shallow diatomite and heavy oil plays similar to
fields currently being developed by other operators in the area; --
Target deeper, higher-risk / higher-reward subthrust potential in
the basin with high-quality reservoirs characterized by thick
pay-zones proximate to existing oil fields where shallow,
long-lived legacy production has not generated the need for deeper
exploratory work by operators in the area; and -- Bring in partners
to recoup upfront investment in identifying and acquiring the
prospects and to help mitigate exploration risk capital while
retaining exposure to upside potential in the prospects. Gasco
currently controls nine untested prospects within this prolific
trend of the San Joaquin Basin and has recently secured two
industry partners to test the Southwest Cymric and Northwest
McKittrick prospects. In the two recently sold prospects, Gasco
will be carried in the drilling of three test wells, with options
to be carried for up to two additional wells that will each test
the different hydrocarbon-bearing pay horizons at different
structural settings. Total unrisked gross potential of the two
prospects is up to 40 million barrels of oil (MMBO). These
prospects target shallow diatomite and Tulare Sands and range in
depth from 700 feet to 1,200 feet. The remaining seven prospects
target these same shallow intervals discussed above, along with
prospects targeting sands in subthrust and/or footwall structural
positions, namely the Temblor Formation sandstone members
(including Carneros), the Point of Rocks sandstones and the Mabury
sandstones at depths of 8,500 feet to 12,000 feet. The remaining
prospects have total unrisked gross potential of more than 900 MMBO
and 2.0 trillion cubic feet (Tcf) of natural gas. Commenting on the
California prospects, Gasco's President and CEO Mark Erickson said:
"California has always held keen interest to us due to its large
potential associated with the high-quality, oil-prone reservoirs
present in the region. We were able to assemble the prospects,
which may yield significant upside to investors, ahead of industry
interest with only modest investment. Industry interest in these
prospects has allowed us to close two separate transactions that
should allow for drilling to commence later in 2009. "Seeking a
blend of oil and gas reserves has been a Company strategy since
inception and does not indicate any less enthusiasm toward our core
Riverbend Project natural gas asset. Adding crude oil potential to
our resource mix may help mitigate commodity price risk and may
further provide a separate, non-operated growth vehicle that
complements our operated Uinta Basin play." Prospects With Planned
Drilling SW Cymric The Southwest Cymric Prospect is a shallow
anticline covering 1,352 gross acres in the hanging wall of the
McKittrick fault and lies about one mile southwest of the Cymric
oil field. The prospect has two principal reservoir targets --
diatomite at the top of the Monterey Formation and sands within the
Tulare Formation -- that are prolific heavy oil producers in the
nearby Cymric and McKittrick oil fields. Secondary reservoir
targets are a 200-foot-thick chert zone within the Antelope Shale
of the Monterey Formation and basal sands of the shallower
Etchegoin Formation. Gasco will be carried for 33.33% working
interest (WI) on two wells through production casing. The first
well is scheduled to test the chert as well as the diatomite. Total
unrisked gross potential for this prospect is approximately 25
MMBO. The first well is currently in its final stages of permitting
and is expected to be spud before the end of 2009. The permitting
for the second well is also nearing finalization and it is
anticipated that it will be drilled shortly after the testing is
completed on the first well. NW McKittrick The Northwest McKittrick
Prospect is a subthrust prospect covering 599 gross acres targeting
Olig, Tulare, McKittrick and Stevens sands draped over a faulted
anticlinal nose as interpreted from well data and surface geology.
The NW McKittrick prospect is estimated to have total unrisked
gross potential of nearly 15 MMBO. Gasco is to be carried for 20%
WI on three wells that will test through the Stevens sands. Gasco's
industry partner is currently permitting the wells and it is
anticipated that the first well will be spud in the second quarter
of 2010. Other Prospects Willow Springs The Willow Springs Prospect
is a faulted anticline located below the McKittrick thrust fault,
as interpreted from well data and reprocessed seismic lines.
Several wells with oil and gas shows have been drilled into the
downdip portions of the anticline, but none have tested the traps
near their structural highs. The Willow Springs prospect is
estimated to have total unrisked gross prospect potential up to 75
MMBO. Antelope Valley Trend Gasco has identified six separate
prospects in the greater Antelope Valley Trend. This trend is one
of the few remaining areas in the San Joaquin Basin prospective for
large untested anticlines and other structural traps with
established reservoir targets and source rocks. The moderate-depth
targets are the Monterey Formation sandstone and shale, the Temblor
Formation (including the Carneros sandstone), the Point of Rocks
and Mabury (Gatchell), and Lodo sandstones which range from 800
feet to 12,500 feet. The total unrisked gross potential of all
seven prospects is estimated to be more than 850 MMBO and 2.2 Tcf
of natural gas. The Sawtooth Ridge Prospect is a large anticline
below the Antelope Valley thrust that is delineated by seismic
data, surface geology, well data and cross sections. The total
unrisked gross prospect potential is estimated to be up more than
500 MMBO and nearly 1.0 Tcf of natural gas from the Temblor, Point
of Rocks and Mabury sandstones. The West Shale Hills Prospect is a
seismically defined anticlinal trap. The total unrisked gross
prospect potential is estimated to be more than 300 MMBO and 275
Bcf of natural gas from the Temblor, Point of Rocks sandstone and
Mabury sandstones. In addition, the oil-saturated Monterey shale
section may be prospective for horizontal drilling applications.
The Central Shale Hills Prospect is a shallow
stratigraphic-structural trap involving a pinch-out of the Temblor
Formation sandstone across the plunge of a faulted anticline. An
analogous trap style is present at the nearby Blackwells Corner oil
field. The Central Shale Hills Prospect is estimated to have total
unrisked gross prospect potential up to 10 MMBO at a depth between
800 feet to 2,000 feet in depth. The Antelope Valley Prospect is a
seismically defined anticlinal trap beneath the Antelope Valley
thrust. Total unrisked gross prospect potential is estimated to
more than 90 MMBO and 445 Bcf from the Temblor, Point of Rocks and
Mabury sandstones. The Roden Prospect is a seismically defined
faulted anticlinal trap beneath the Antelope Valley thrust. Total
unrisked gross prospect potential is estimated to be 230 Bcf within
the Mabury sandstone and adjacent strata. Gasco California Gross
Net Unrisked Prospect Prospects Acreage Acreage Potential Status
------------ -------- ----- ----------------- ------------
Finalizing permitting process, SW Cymric 1,352 448* 25 MMBO spud
Q409 --------- ----- --- ------- ------------ Permitting; tentative
NW McKittrick 599 120* 15 MMBO spud Q210 ----------- ---- ----
------- ------------ Antelope Valley Prospect 2,311 2,311 90 MMBO /
445 Bcf -- --------- ----- ----- ----------------- ------------
Mabury Prospects 3,882 3,521 215 Bcf -- ---------- ----- -----
----------------- ------------ Sawtooth Ridge 2,472 2,223 520 MMBO
/ 990 Bcf -- -------- ----- ----- ------------------ ------------
West Shale Hills / Central 300 MMBO / 280 Bcf / Shale Hills 3,360
3,360 10 MMBO -- ------------ ----- ----- --------------------
------------ Roden ** ** 230 Bcf -- ----- ---- ---- -------
------------ Misc. BLM No Potential Acreage 7,553 5,358 Assigned --
------------ ----- ----- ---------------- ------------ Willow
Springs 2,635 1,874 75 MMBO -- -------- ----- -----
---------------- ------------ TOTAL GSX CALIFORNIA 24,164 19,215
1,035 MMBO / 2,160 Bcf ------------ ------ ------
---------------------- * Net acreage assumes that partner fully
earns. ** Roden Prospect acreage included in Antelope Valley.
Riverbend Project Third Quarter Operations Update Production
Gasco's estimated cumulative net production for the third quarter
ended September 30, 2009 was 1,130 million cubic feet equivalent
(MMcfe), a decrease of 7.4% from third quarter 2008 production of
1,220 MMcfe. Gasco's estimated cumulative net production for the
nine months ended September 30, 2009 was 3,571 MMcfe, or down 1.1%
when compared to the 2008 period's production of 3,610 MMcfe.
Production declines represent normal production declines expected
from existing wells. Gasco Energy Net Production Detail
Three-months Ended Nine-months Ended -------------------
------------------ Sept. 30, Sept. 30, % Sept. 30, Sept. 30, %
2009* 2008 Change 2009* 2008 Change -------- --------- --------
-------- --------- -------- Natural Gas / MMcf 1,063 1,146 (7.2%)
3,368 3,417 (1.4%) --------------- ----- ----- ----- ----- -----
----- Oil / MBbls 11.1 12.3 (9.8%) 33.8 32.1 6.2% ---------------
----- ---- ----- ---- ---- ---- Natural Gas Equivalents / MMcfe
1,130 1,220 (7.4%) 3,571 3,610 (1.1%) --------------- ----- -----
----- ----- ----- ----- * Includes preliminary production estimates
for the third quarter of 2009 Drilling and Completion Activity
During the quarter, Gasco did not spud any new wells, conducted no
initial completion operations and did not re-enter any behind-pipe
pay zones. The Company continued limited workover operations on
certain Green River Formation oil wells to enhance oil production
during the improved oil prices received during the quarter. At
September 30, 2009, Gasco operated 130 gross wells. The Company
currently has an inventory of 32 operated wells with up-hole
recompletions and has four Upper Mancos wells awaiting initial
completion activities. Due to low gas prices in the Rockies, for
2009 the Company is delaying completion and recompletion operations
until natural gas prices improve. Gate Canyon State #23-16 The Gate
Canyon State #23-16 well, which has been producing for more than
seven months, came on at an initial production rate of 5.7 million
cubic feet of natural gas per day (MMcf/d) flowing up 5 1/2" casing
while cleaning up frac fluid. The well averaged 3.2 MMcf/d and 2.6
MMcf/d for the first 30 and 60 days, respectively. After seven
months, the well is still averaging 0.9 MMcf/d. Third Quarter 2009
Financial and Operating Results Gasco expects to announce its
second quarter results after the close of trading on November 3,
2009. The Company will schedule a conference call to discuss second
quarter operational and financial results on November 4, 2009, the
details of which will be announced at a later date. 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. DATASOURCE: Gasco Energy, Inc. CONTACT: Investor
Relations, +1-303-483-0044, for Gasco Energy, Inc. Web Site:
http://www.gascoenergy.com/
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