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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE
ACT
Commission file number 0-26321
GASCO ENERGY, INC.
(Exact name of registrant issuer as specified in its charter)
Nevada 98-0204105
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
14 Inverness Drive East, Suite H-236, Englewood, Colorado 80112
(Address of principal executive offices)
(303) 483-0044
(Issuer's telephone number)
No Change
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was require to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12 b-2 of the Exchange Act). Yes [ ] No [X]
Number of Common shares outstanding as of May 12, 2004: 64,115,587
1
ITEM I - FINANCIAL INFORMATION
PART 1 - FINANCIAL STATEMENTS
GASCO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
ASSETS 2004 2003
CURRENT ASSETS
Cash and cash equivalents $16,969,862 $ 3,081,109
Restricted cash 250,000 250,000
Prepaid expenses 165,309 555,786
Accounts receivable 870,076 499,363
Inventory 614,825 -
----------- ---------
Total 18,870,072 4,386,258
----------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost
Oil and gas properties (full cost method)
Proved mineral interests 18,546,503 16,386,252
Unproved mineral interests 15,447,562 13,212,039
Furniture, fixtures and other 177,017 166,051
---------- -----------
Total 34,171,082 29,764,342
---------- ----------
Less accumulated depreciation, depletion, amortization and property impairment (1,464,937) (1,232,634)
----------- -----------
Total 32,706,145 28,531,708
----------- ----------
OTHER ASSET
Deferred financing costs 131,903 141,213
---------- -----------
TOTAL ASSETS $ 51,708,120 $ 33,059,179
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,119,582 $ 2,260,492
Accrued expenses 89,300 933,520
---------- ---------
Total 2,208,882 3,194,012
---------- ---------
NONCURRENT LIABILITES
8% Convertible Debentures, net of unamortized discount $151,388 in
2004 and $159,722 in 2003 2,348,612 2,340,278
Asset retirement obligation 201,850 142,806
--------- ---------
Total 2,550,462 2,483,084
--------- ---------
STOCKHOLDERS' EQUITY
Series B Convertible Preferred stock - $.001 par value; 20,000 shares
authorized; 5,137 shares issued and outstanding with a liquidation
preference of $2,260,280 in 2004 and 11,734 shares issued and outstanding
with a liquidation preference of $5,162,960 in 2003 5 12
Common stock - $.0001 par value; 100,000,000 shares authorized;
64,189,287 shares issued and 64,115,587 outstanding in 2004;
40,887,500 shares issued and 40,813,800 shares outstanding in 2003 6,419 4,568
Additional paid in capital 73,060,604 52,979,325
Deferred compensation (152,110) (179,766)
Accumulated deficit (25,835,847) (25,291,761)
Less cost of treasury stock of 73,700 common shares (130,295) (130,295)
----------- ----------
Total 46,948,776 27,382,083
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 51,708,120 $ 33,059,179
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
2
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------------------------------------
2004 2003
REVENUES
Gas $ 701,624 $ 158,850
Oil 49,894 -
Interest 15,257 3,212
------- -------
Total 766,775 162,062
------- -------
OPERATING EXPENSES
General and administrative 845,151 733,171
Lease operating 161,068 66,448
Depletion, depreciation and amortization 237,135 76,748
Interest 67,507 23,473
--------- -------
Total 1,310,861 899,840
--------- -------
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (544,086) (737,778)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE - (9,687)
--------- ---------
NET LOSS (544,086) (747,465)
Preferred stock dividends (33,993) (43,436)
----------- ----------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (578,079) $ (790,901)
=========== ===========
PER COMMON SHARE - BASIC AND DILUTED
Loss before cumulative effect of change in accounting principle $ (0.01) $ (0.02)
Cumulative effect of change in accounting principle - -
--------- ---------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.01) $ (0.02)
========= =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 55,570,587 40,288,800
========== ==========
The accompanying notes are an integral part of the
consolidated financial statements.
3
GASCO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
-------------------------------------
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(544,086) $ (747,465)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation, depletion and impairment expense 232,303 73,396
Accretion of asset retirement obligation 4,832 3,352
Amortization of deferred compensation 27,656 26,437
Amortization of beneficial conversion feature 8,334 -
Amortization of deferred offering costs 9,310 -
Cumulative effect of change in accounting principle - 9,687
Changes in operating assets and liabilities:
Prepaid expenses 390,477 (126,281)
Accounts receivable (370,713) (105,778)
Inventory (614,825) -
Accounts payable (140,911) (262,658)
Accrued expenses (844,220) 509,549
---------- ---------
Net cash used in operating activities (1,841,843) (619,761)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture, fixtures and other (10,966) (2,592)
Cash paid for acquisitions, development and exploration (4,341,561) (1,816,294)
----------- -----------
Net cash used in investing activities (4,352,527) (1,818,886)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 21,500,001 -
Proceeds from sale of preferred stock - 4,818,880
Cash paid for offering costs (1,429,659) (65,471)
Exercise of options to purchase common stock 33,336 -
Preferred dividends (20,555) -
Repayment of note payable - (1,400,000)
------------ -----------
Net cash provided by financing activities 20,083,123 3,353,409
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,888,753 914,762
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 3,081,109 2,089,062
----------- ----------
END OF PERIOD $ 16,969,862 $ 3,003,824
============ ===========
The accompanying notes are an integral part of the
consolidated financial statements.
4
GASCO ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2004 AND 2003
NOTE 1 - ORGANIZATION
Gasco Energy, Inc. ("Gasco" or the "Company") is an independent energy company
engaged in the exploration, development and acquisition and production of crude
oil and natural gas reserves in the western United States.
The unaudited financial statements included herein were prepared from the
records of the Company in accordance with generally accepted accounting
principles in the United States applicable to interim financial statements and
reflect all adjustments which are, in the opinion of management, necessary to
provide a fair statement of the results of operations and financial position for
the interim periods. Such financial statements generally conform to the
presentation reflected in the Company's Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 2003. The current interim
period reported herein should be read in conjunction with the Company's Form
10-K for the year ended December 31, 2003.
The results of operations for the three months ended March 31, 2004 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004. All significant intercompany transactions have been
eliminated.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include Gasco and its wholly
owned subsidiaries.
Property, Plant and Equipment
The Company follows the full cost method of accounting whereby all costs related
to the acquisition and development of oil and gas properties are capitalized
into a single cost center ("full cost pool"). Such costs include lease
acquisition costs, geological and geophysical expenses, overhead directly
related to exploration and development activities and costs of drilling both
productive and non-productive wells. Proceeds from property sales are generally
credited to the full cost pool without gain or loss recognition unless such a
sale would significantly alter the relationship between capitalized costs and
the proved reserves attributable to these costs. A significant alteration would
typically involve a sale of 25% or more of the proved reserves related to a
single full cost pool.
Depletion of exploration and development costs and depreciation of production
equipment is computed using the units of production method based upon estimated
proved oil and gas reserves. The costs of unproved properties are withheld from
the depletion base until such time as they are either developed or abandoned.
The properties are reviewed periodically for impairment. Total well costs are
transferred to the depletable pool even when multiple targeted zones have not
been fully evaluated. For depletion and depreciation purposes, relative volumes
5
of oil and gas production and reserves are converted at the energy equivalent
rate of six thousand cubic feet of natural gas to one barrel of crude oil.
Under the full cost method of accounting, capitalized oil and gas property costs
less accumulated depletion and net of deferred income taxes may not exceed an
amount equal to the present value, discounted at 10%, of estimated future net
revenues from proved oil and gas reserves, plus the lower of cost, or estimated
fair value of unproved properties. Should capitalized costs exceed this ceiling,
an impairment is recognized. The present value of estimated future net revenues
is computed by applying current prices of oil and gas to estimated future
production of proved oil and gas reserves as of period-end, less estimated
future expenditures to be incurred in developing and producing the proved
reserves assuming the continuation of existing economic conditions.
Asset Retirement Obligation
In June 2001 the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations, " which required that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it was incurred if a
reasonable estimate of fair value could be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
The asset retirement liability will be allocated to operating expense by using a
systematic and rational method. The Company adopted this statement as of January
1, 2003 and recorded a net asset of $139,247, a related liability of $148,934
(using a 9% discount rate and a 2% inflation rate) and a cumulative effect of
change in accounting principle on prior years of $9,687. The information below
reconciles the value of the asset retirement obligation during the period
indicated.
Three Months Ended March 31,
2004 2003
Balance beginning of period $142,806 $ 148,934
Liabilities incurred 54,212 -
Liabilities settled - -
Revisions in estimated cash flows - -
Accretion expense 4,832 3,352
-------- ---------
Balance end of period $ 201,850 $ 152,286
========== =========
Computation of Net Loss Per Share
Basic net loss per share is computed by dividing net loss attributable to the
common stockholders by the weighted average number of common shares outstanding
during the reporting period. The shares of restricted common stock granted to
certain officers and directors are included in the computation only after the
shares become fully vested. Diluted net income per common share includes the
potential dilution that could occur upon exercise of the options to acquire
common stock computed using the treasury stock method which assumes that the
increase in the number of shares is reduced by the number of shares which could
have been repurchased by the Company with the proceeds from the exercise of the
options (which were assumed to have been made at the average market price of the
common shares during the reporting period). The Series B Convertible Preferred
Stock ("Preferred Stock") and the outstanding common stock options have not been
6
included in the computation of diluted net loss per share during all periods
because their inclusion would have been anti-dilutive.
Stock Based Compensation
The Company accounts for its stock-based compensation using Accounting
Principles Board's Opinion No. 25 ("APB No. 25") and related interpretations.
Under APB 25, compensation expense is recognized for stock options with an
exercise price that is less than the market price on the grant date of the
option. For stock options with exercise prices at or above the market value of
the stock on the grant date, the Company adopted the disclosure-only provisions
of Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" ("SFAS 123"). The Company has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation ("SFAS 123") for the stock options
granted to the employees and directors of the Company. Accordingly, no
compensation cost has been recognized for these options. Had compensation
expense for the options granted been determined based on the fair value at the
grant date for the options, consistent with the provisions of SFAS 123, the
Company's net loss and net loss per share for the quarters ended March 31, 2004
and 2003 would have been increased to the pro forma amounts indicated below:
For the Three Months Ended
March 31,
2004 2003
---- ----
Net loss attributable to common shareholders:
As reported $ (578,079) $ (790,901)
Add: Stock-base employee compensation
included in net loss (a) 27,656 -
Less: Stock based employee compensation
determined under the fair value based method 117,537 280,821
--------- -----------
Pro forma $(667,960) $(1,071,722)
========== ============
Net loss per common share:
As reported $ (0.01) $ (0.02)
======== ========
Pro forma $ (0.01) $ (0.03)
======== ========
(a) Represents the compensation expense associated with the Company's restricted
stock awards.
The fair value of the common stock options granted during 2003, for disclosure
purposes was estimated on the grant dates using the Black Scholes Pricing Model
and the following assumptions.
Expected dividend yield --
Expected price volatility 82%
Risk-free interest rate 2.9%
Expected life of options 5 years
7
Use of Estimates
The preparation of the financial statements for the Company in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Recent Accounting Pronouncements
Statement of Financial Accounting Standards No. 141, "Business Combinations"
(SFAS 141) and Statement of Financial Accounting Standards No. 142, "Goodwill
and Intangible Assets" (SFAS 142), were issued by the Financial Accounting
Standards Board (FASB) in June 2001 and became effective for the Company on July
1, 2001 and January 1, 2002, respectively. The FASB, the Securities and Exchange
Commission (SEC) and others are engaged in deliberations on the issue of whether
SFAS 141 and 142 require interests held under oil, gas and mineral leases or
other contractual arrangements to be classified as intangible assets. If such
interests were deemed to be intangible assets, mineral interest use rights for
both undeveloped and developed leaseholds would be classified separate from oil
and gas properties as intangible assets on the Company's balance sheets only,
but these costs would continue to be aggregated with other costs of oil and gas
properties in the notes to the financial statements in accordance with Statement
of Financial Accounting Standards No. 69, "Disclosures about Oil and Gas
Producing Activities" (SFAS 69). Additional disclosures required by SFAS 141 and
142 would also be included in the notes to financial statements. Historically,
and to the Company's knowledge, we and all other oil and gas companies have
continued to include these oil and gas leasehold interests as part of oil and
gas properties after SFAS 141 and 142 became effective. The Company believes
that few oil and natural gas companies have adopted this interpretation or
changed their balance sheet presentation for oil and gas leaseholds since the
implementation of SFAS 141 and 142.
As applied to companies like Gasco that have adopted full cost accounting for
oil and gas activities, the Company understands that this interpretation of SFAS
141 and 142 would only affect its balance sheet classification of proved oil and
gas leaseholds acquired after June 30, 2001 and its unproved oil and gas
leaseholds. The Company's results of operations would not be affected, since
these leasehold costs would continue to be amortized in accordance with full
cost accounting rules. At March 31, 2004 and December 31, 2003, the Company had
undeveloped leaseholds of approximately $15,447,562 and $13,212,039,
respectively, that would be classified on the balance sheet as "intangible
undeveloped leasehold" if the Company applied the interpretation currently being
deliberated. This classification would require the Company to make the
disclosures set forth under SFAS 142 related to these interests. The Company's
current disclosures are those required by SFAS 69. The Company will continue to
classify its oil and gas leaseholds as tangible oil and gas properties until
further guidance is provided. Although most of the Company's oil and gas
property interests are held under oil and gas leases, it is not expected that
this interpretation, if adopted, would have a material impact on the Company's
financial condition or results of operations.
8
NOTE 3 - STOCK OFFERING
On February 11, 2004 the Company completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share. Proceeds to the Company, net of fees and expenses were
approximately $20,070,000. The proceeds from this sale will be used for general
corporate purposes including the development and exploitation of Gasco's
Riverbend Project in the Uinta Basin in Uintah County, Utah.
NOTE 4 - PROPERTY ACQUISITION
On March 9, 2004 the Company completed the acquisition of additional working
interests in six producing wells, 13,062 net acres and gathering system assets
located in the Uinta Basin in Utah for approximately $3,175,000. The effective
date of the acquisition was January 1, 2004 however; the net revenue from the
producing wells during the period from January 1, 2004 through March 9, 2004 was
recorded as a reduction to the purchase price. During May 2004 an unrelated
third party exercised its right, pursuant to an existing contract, to purchase
25% of the acquired properties at the acquisition price. The acquisition has
been recorded in the accompanying financial statements at 100% of its value.
The following unaudited pro forma consolidated results of operations are
presented as if the acquisition occurred on January 1, 2003.
For the Three Months Ended
March 31,
2004 2003
---- ----
Revenue $ 917,146 $247,407
Net Loss (474,889) (692,550)
Net Loss Attributable to Common Stockholders (488,327) (735,986)
Net Loss per Common Share - Basic and Diluted $ (0.01) $ (0.02)
NOTE 5 - SERVICE PARTIES' AGREEMENT
On January 20, 2004 the Company entered into agreements with a group of industry
providers (together, the "Service Parties") to accelerate the development of
Gasco's oil and gas properties by drilling up to 50 wells in Gasco's Riverbend
Project in Utah's Uinta Basin.
Gasco has agreed that the Service Parties, which includes Schlumberger Oilfield
Services, will have the exclusive right to provide their services in the
development of the Riverbend acreage. The agreement provides for the group to
proceed initially with the first 10-well bundle, which approximates one year of
drilling with a single rig. If the group agrees, drilling may be accelerated
using additional rigs. Gasco's 2004 capital budget is approximately $13 million
for the drilling, completion and pipeline connection of wells in this area.
General Terms of the Agreement:
o Contract Area consists of Gasco Energy's leasehold position in portions of
Carbon, Duschesne and Uintah Counties, Utah.
9
o Gasco can continue to independently develop its acreage subject to certain
limitations and provisions of this agreement.
o Decisions will be made by a committee chaired by a Gasco representative.
o Schlumberger will coordinate certain activities under Gasco's direction as
operator of record.
o Gasco will elect to fund up to 20% of each of the first three bundles and
up to 30% of the last two bundles. Gasco's interest in the production
stream from a bundle, net of royalties, taxes and lease operating expenses,
is estimated to equal the proportion of the total well costs that it funds.
o The Service Parties include certain investors that have undertaken to
provide, on a best efforts basis, up to 35% of the costs of each project
bundle.
To secure its obligations under the agreement, described above, the Company has
pledged its interests in each of the wells in each bundle.
NOTE 6 - STATEMENT OF CASH FLOWS
During the three months ended March 31, 2004, the Company's non-cash investing
and financing activities consisted of the following transactions:
Recognition of an asset retirement obligation for the plugging and
abandonment costs related to the Company's oil and gas properties valued at
$54,212.
Conversion of 6,597 shares of Preferred Stock into 4,146,684 shares of
common stock.
During the three months ended March 31, 2003, the Company's non-cash investing
activity consisted of the following transaction:
Recognition of an asset retirement obligation for the plugging and
abandonment costs related to the Company's oil and gas properties valued at
$148,934.
Cash paid for interest during the three months ended March 31, 2004 and 2003 was
$49,863 and $23,473, respectively.
NOTE 7 - LITIGATION
On June 9, 2003, Pannonian was named as a defendant in a lawsuit filed in the
United States District Court of Midland County, Texas. On July 15, 2003, Gasco
was also named as defendant in the same lawsuit. The plaintiffs, Burlington
Resources Oil & Gas Company LP by BROG GP Inc. its sole General Partner
("Burlington Resources") claim that Pannonian and Gasco owe them $1,007,894.14
in unpaid invoices. During March 2004, the Company repaid $900,723 of this
liability and is currently negotiating the settlement of the remaining balance.
The unpaid balance is accrued within the accompanying financial statements.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
Forward Looking Statements
Please refer to the section entitled "Cautionary Statement Regarding Forward
10
Looking Statements" at the end of this section for a discussion of factors which
could affect the outcome of forward looking statements used by the Company.
Overview
Gasco is a natural gas and petroleum exploitation, development and production
company engaged in locating and developing hydrocarbon prospects, primarily in
the Rocky Mountain region. The Company's mission is to enhance shareholder value
by using new technologies to generate and develop high-potential exploitation
prospects in this area. The Company'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.
The Company's corporate strategy is to grow through drilling projects. The
Company has been focusing its drilling efforts in the Riverbend Project located
in the Uinta Basin of northeastern Utah. The higher oil and gas prices during
2003 and through the first quarter of 2004 due to factors such as reduced levels
of gas storage, colder temperatures in the northeastern part of the country and
decreased gas imports from Canada, have increased the profitability of the
Company's drilling projects in this area. The increased drilling activity
resulting from the higher oil and gas prices may also decrease the availability
of drilling rigs and experienced personnel.
First Quarter of 2004 Update
On January 20, 2004 the Company entered into agreements with a group of industry
providers (together, the "Service Parties") to accelerate the development of
Gasco's oil and gas properties by drilling up to 50 wells in Gasco's Riverbend
Project in Utah's Uinta Basin.
Gasco has agreed that the Service Parties, which includes Schlumberger Oilfield
Services, will have the exclusive right to provide their services in the
development of the Riverbend acreage. The agreement provides for the group to
initially proceed with the first 10-well bundle, which approximates one year of
drilling with a single rig. If the group agrees, drilling may be accelerated
using additional rigs. Gasco's 2004 capital budget is approximately $13 million
for the drilling, completion and pipeline connection of wells in this area.
General Terms of the Agreement:
o Contract Area consists of Gasco Energy's leasehold position in portions of
Carbon, Duschesne and Uintah Counties, Utah.
o Gasco can continue to independently develop its acreage subject to certain
limitations and provisions of this agreement.
o Decisions will be made by a committee chaired by a Gasco representative.
o Schlumberger will coordinate certain activities under Gasco's direction as
operator of record.
o Gasco will elect to fund up to 20% of each of the first three bundles and
up to 30% of the last two bundles. Gasco's interest in the production
stream from a bundle, net of royalties, taxes and lease operating expenses,
is estimated to equal the proportion of the total well costs that it funds.
o The Service Parties include certain investors that have undertaken to
provide, on a best efforts basis, up to 35% of the costs of each project
bundle.
11
To secure its obligations under the agreement, described above, the Company has
pledged its interests in each of the wells in each bundle.
During the first quarter of 2004, the Company drilled two wells in the Riverbend
area, which are part of the 10 well bundle contemplated by the agreements with
the Service Parties, as described above. Both wells were drilled to total depth
and are currently awaiting completion design and pipeline hookup. The Company
anticipates completing these wells during the second quarter of 2004.
On February 11, 2004 the Company completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share. Proceeds to the Company, net of fees and expenses were
approximately $20,070,000. The proceeds from this sale will be used for general
corporate purposes including the development and exploitation of Gasco's
Riverbend Project in the Uinta Basin in Uintah County, Utah.
In March 2004, the Company completed the acquisition of additional interests in
six producing wells, 13,062 net acres and certain other assets located in the
Uinta Basin in Utah for approximately $3,175,000. The effective date of the
acquisition was January 1, 2004; however, the net revenue from the producing
wells during the period from January 1, 2004 through March 9, 2004 was recorded
as a reduction to the purchase price. During May 2004, an unrelated third party
exercised its right, pursuant to an existing contract, to purchase 25% of the
acquired properties at the acquisition price.
The Company is considering several options for its properties in the Greater
Green River Basin Area in Wyoming such as the farm-out or sale of some of its
acreage and other similar type transactions.
The following table presents the Company's production and price information
during the three months ended March 31, 2004 and 2003. The Mcfe calculations
assume a conversion of 6 Mcfs for each Bbl of oil.
For the Three Months Ended March 31,
2004 2003
------------- ---------------
Natural gas production (Mcf) 126,808 38,222
Average sales price per Mcf $5.53 $ 4.16
Oil production (Bbl) 1,520 -
Average sales price per Bbl $32.83 -
Production (Mcfe) 135,928 38,222
During 2004, the Company's oil and gas production increased by approximately
325% primarily due to the completions, recompletions and the compressor
installation that took place during 2003 as well as the Company's acquisition of
additional interests in six wells in the Riverbend area as discussed above.
12
During 2004 Gasco's 2004 capital budget is approximately $13 million for the
drilling, completion and pipeline connection of wells in the Riverbend Project.
The Company leased a second rig, which began drilling during April 2004. The
Company expects to spud a total of four Gasco-operated wells during the second
quarter of 2004 using both of these rigs. The Company anticipates an overall
increase in its compensation expense because it will have to hire additional
personnel to manage the workload associated with its operational plan for 2004.
Management believes it has sufficient capital for its 2004 operational budget,
but will need to raise additional capital for its capital budget in 2005. The
Company will consider several options for raising additional funds such as
entering into a revolving line of credit, selling securities, selling assets or
farm-outs or similar type arrangements. Any financing obtained through the sale
of Gasco equity will likely result in substantial dilution to the Company's
stockholders.
Liquidity and Capital Resources
The following table summarizes the Company's sources and uses of cash for each
of the three months ended March 31, 2004 and 2003.
For the Three Months Ended March 31,
------------------------------------
2004 2003
---- ----
Net cash used in operations $ (1,841,843) $ (619,761)
Net cash used in investing activities (4,352,527) (1,818,886)
Net cash provided by financing activities 20,083,123 3,353,409
Net increase in cash 13,888,753 914,762
Cash used in operations during 2004 and 2003 is primarily comprised of the
Company's general and administrative expenses partially offset by gas revenue
from the Company's producing wells. The increase in cash used in operations
during 2004 is primarily the result of fluctuations in the Company's operating
assets and liabilities due to the Company's increased drilling and completion
activity partially offset by higher cash flow from operations due to increased
revenue resulting from a 256% increase in production resulting from the
Company's drilling activity during 2003 and 2004 and a 34% increase in gas
prices. See further discussion under Results of Operations.
The Company's investing activities during 2004 and 2003 related primarily to the
Company's development and exploration activities. These activities consisted of
the Company's drilling projects in the Riverbend area and the costs associated
with the Company's acreage in Wyoming and Utah. The investing activities during
2004 included the Company's $3,175,000 property acquisition as described above.
Historically, the Company has relied on the sale of equity capital and farm-outs
and other similar types of transactions to fund working capital, the acquisition
of its prospects and its drilling and development activities. The financing
activity during 2003 consists primarily of the sale of Series B Preferred Stock
partially offset by the repayment of a $1,400,000 note payable. The financing
activity during 2004 represents the sale of 14,333,334 shares of common stock as
further described above.
13
Capital Budget
On January 16, 2004 the Company entered into agreements with a group of industry
providers (together, the "Service Parties") to accelerate the development of
Gasco's oil and gas properties by drilling up to 50 wells in Gasco's Riverbend
Project in Utah's Uinta Basin. Gasco has agreed that the Service Parties will
have the exclusive right to provide their services in the development of the
Riverbend acreage. The agreement provides for the group to initially proceed
with the first 10-well bundle, which approximates one year of drilling with a
single rig. If the group agrees, drilling may be accelerated using additional
rigs. Gasco's 2004 capital budget is approximately $13 million for the drilling,
completion and pipeline connection of wells in this area. Gasco may elect to
fund up to 20% of the cost of the wells in the first three bundles and up to 30%
of the cost in the last two bundles. Gasco's interest in the production stream
from a bundle, net of royalties, taxes and lease operating expenses is estimated
to equal the proportion of the total well costs that it funds.
To secure its obligations under the agreement described above, the Company has
pledged its interests in each of the wells in each bundle.
On February 11, 2004 the Company completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share. Proceeds to the Company, net of fees and estimated
expenses were approximately $20,070,000. The proceeds from this sale will be
used for general corporate purposes including the development and exploitation
of Gasco's Riverbend Project in the Uinta Basin in Uintah County, Utah.
The Company intends to use the funds from this transaction and its cash on hand
to fund the following projects:
- - The March 9, 2004 acquisition of additional interests in six producing
wells, 13,062 net acres and certain other assets located in the Uinta Basin
in Utah for approximately $3,175,000 (subject to the option of a third
party to purchase 25% of such interests at the acquisition cost by May 14,
2004).
- - The Company plans to spend approximately $12,425,000 for the drilling,
completion and pipeline connection of wells in this area.
- - The Company is also considering investing approximately $2,400,000 in a
gathering system within the Riverbend Area.
Management believes it has sufficient capital for its 2004 operational budget,
but will need to raise additional capital for its capital budget in 2005. The
Company will consider several options for raising additional funds such as
entering into a revolving line of credit, selling securities, selling assets or
farm-outs or similar type arrangements. Any financing obtained through the sale
of Gasco equity will likely result in substantial dilution to the Company's
stockholders.
Schedule of Contractual Obligations
The following table summarizes the Company's obligations and commitments to make
future payments under its note payable, operating leases, employment contracts
and consulting agreement for the periods specified as of March 31, 2004.
14
Payments due by Period
Contractual Obligations Total 1 year 2-3 years 4-5 years After 5 years
Convertible Debentures $2,500,000 $ - $ 525,000 $ 1,975,000 $ -
Operating Lease - office space 32,195 32,195 - - -
Employment Contracts 979,167 470,000 470,000 39,167 -
Consulting Agreement 250,000 120,000 120,000 10,000 -
--------- ------- ---------- ---------- ------
Total Contractual Cash Obligations $3,761,362 $ 622,195 $1,115,000 $ 2,024,167 $ -
========== ========= ========== =========== ======
The table above assumes that the Debentures will be outstanding until maturity,
however if they are converted prior to maturity, the future obligations will be
eliminated and the Company's outstanding common stock will increase by 4,166,667
shares.
The Company's office leases expire in August 2004. The Company intends to extend
these leases at current or lower rates. The table above does not include future
obligations that will exist once the Company enters into a new lease.
The Company has also not included asset retirement obligations as discussed in
Note 1 of the accompanying financial statements, as the Company cannot determine
with accuracy the timing of such payments.
Critical Accounting Policies and Estimates
The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles in the United States requires
management to make assumptions and estimates that affect the reported amounts of
assets, liabilities, revenues and expenses as well as the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
following is a summary of the significant accounting policies and related
estimates that affect the Company's financial disclosures.
Oil and Gas Reserves
Gasco follows the full cost method of accounting whereby all costs related to
the acquisition and development of oil and gas properties are capitalized into a
single cost center referred to as a full cost pool. Depletion of exploration and
development costs and depreciation of production equipment is computed using the
units of production method based upon estimated proved oil and gas reserves.
Under the full cost method of accounting, capitalized oil and gas property costs
less accumulated depletion and net of deferred income taxes may not exceed an
amount equal to the present value, discounted at 10%, of estimated future net
revenues from proved oil and gas reserves plus the cost, or estimated fair value
if lower, of unproved properties. Should capitalized costs exceed this ceiling,
an impairment is recognized.
Estimated reserve quantities and future net cash flows have the most significant
impact on the Company because these reserve estimates are used in providing a
15
measure of the Company's overall value. These estimates are also used in the
quarterly calculations of depletion, depreciation and impairment of the
Company's proved properties.
Estimating accumulations of gas and oil is complex and is not exact because of
the numerous uncertainties inherent in the process. The process relies on
interpretations of available geological, geophysical, engineering and production
data. The extent, quality and reliability of this technical data can vary. The
process also requires certain economic assumptions, some of which are mandated
by the Securities and Exchange Commission ("SEC"), such as gas and oil prices,
drilling and operating expenses, capital expenditures, taxes and availability of
funds. The accuracy of a reserve estimate is a function of the quality and
quantity of available data; the interpretation of that data; the accuracy of
various mandated economic assumptions; and the judgment of the persons preparing
the estimate.
The most accurate method of determining proved reserve estimates is based upon a
decline analysis method, which consists of extrapolating future reservoir
pressure and production from historical pressure decline and production data.
The accuracy of the decline analysis method generally increases with the length
of the production history. Since most of the Company's wells have been producing
less than two years, their production history is relatively short, so other
(generally less accurate) methods such as volumetric analysis and analogy to the
production history of wells of other operators in the same reservoir were used
in conjunction with the decline analysis method to determine the Company's
estimates of proved reserves. As the Company's wells are produced over time and
more data is available, the estimated proved reserves will be redetermined on an
annual basis and may be adjusted based on that data.
Actual future production, gas and oil prices, revenues, taxes, development
expenditures, operating expenses and quantities of recoverable gas and oil
reserves most likely will vary from the Company's estimates. Any significant
variance could materially affect the quantities and present value of the
Company's reserves. In addition, the Company may adjust estimates of proved
reserves to reflect production history, results of exploration and development
and prevailing gas and oil prices. The Company's reserves may also be
susceptible to drainage by operators on adjacent properties.
Revenue Recognition
The Company's revenue is derived from the sale of oil and gas production from
its producing wells. This revenue is recognized as income when the production is
produced and sold. The Company typically receives its payment for production
sold one to three months subsequent to the month the production is sold. For
this reason, the Company must estimate the revenue that has been earned but not
yet received by the Company as of the reporting date. The Company uses actual
production reports to estimate the quantities sold and the Questar Rocky
Mountain spot price less marketing and transportation adjustments to estimate
the price of the production. Variances between our estimates and the actual
amounts received are recorded in the month the payment is received.
16
Stock Based Compensation
The Company accounts for its stock-based compensation using the intrinsic value
recognition and measurement principles detailed in Accounting Principles Board's
Opinion No. 25 ("APB No. 25"). No stock-based compensation expense has been
reflected in the Company's financial statements for the options granted to its
employees as these options had exercise prices equal to or higher than the
market value of the underlying common stock on the date of grant. The Company
uses the Black-Scholes option valuation model to calculate the required
disclosures under SFAS 123. This model requires the Company to estimate a risk
free interest rate and the volatility of the Company's common stock price. The
use of a difference estimate for any one of these components could have a
material impact on the amount of calculated compensation expense.
Results of Operations
The following table presents information regarding the production volumes,
average sales prices received and average production costs associated with the
Company's sales of natural gas for the periods indicated. The Mcfe calculations
assume a conversion of 6 Mcfs for each Bbl of oil.
For the Three Months Ended March 31,
-------------------------------------------
2004 2003
---- ----
Natural gas production (Mcf) 126,808 38,222
Average sales price per Mcf $ 5.53 $ 4.16
Oil production (Bbl) 1,520 -
Average sales price per Bbl $32.83 -
Production per Mcfe 135,928 38,222
Expenses per Mcfe:
Lease operating $ 1.18 $ 1.74
Depletion and impairment $ 1.60 $ 1.57
The First Quarter of 2004 compared to First Quarter of 2003
Oil and gas revenue increased $592,668 during 2004 compared with 2003 due to an
increase in gas production from 38,222 Mcf during 2003 to 126,808 Mcf during
2004 combined with an increase in the average gas price from $4.16 during 2003
to $5.53 per Mcf during 2004. During 2004, the Company also produced 1,520 bbls
of oil at an average price of $32.83 per bbl. The increase in production is
primarily due to the Company's completion and recompletion activity during 2003
and 2004, the compressor installation during February 2003 and the acquisition
of additional working interests in six wells, as described above.
Interest income increased $12,045 from 2003 to 2004 primarily due to higher
average cash and cash equivalent balances during 2004 relating primarily to the
Company's stock offering during February 2004 as discussed above.
General and administrative expense increased from $111,980 during 2004 as
compared with 2003, primarily due to the Company's increased operational
activity. The $111,980 increase in these expenses is comprised of approximately
17
$25,000 in director fees due to the addition of three non-employee directors
during the last nine months of 2003 and $85,000 in costs related to increased
shareholder communications relating to the Company's expanded operational
activity. The remaining increase in general and administrative expenses is due
to the fluctuation in numerous other expenses, none of which are individually
significant.
Lease operating expense increased by $94,620, from $66,448 in 2003 to $161,068
in 2004, primarily due to increased operating costs and production taxes
relating to the increased production discussed above.
Depletion, depreciation and amortization expense during 2004 is comprised of
$218,000 of depletion expense related to the Company's proved oil and gas
properties, $14,303 of depreciation expense related to the Company's furniture,
fixtures and other assets and $4,832 of accretion expense related the Company's
asset retirement obligation. The corresponding expense during 2003 consists of
$60,000 of depletion expense, $13,396 of depreciation expense and $3,352 of
accretion expense. The increase in depletion expense during 2004 as compared
with 2003 is due primarily to the increase in production as well as the increase
in reserve quantities resulting from the property acquisition discussed above.
Interest expense during 2004 represents the interest expense related to the
Company's outstanding Debentures. The interest expense during 2003 represents
the interest incurred on the Company's outstanding note payable, which was
repaid during February 2003.
The cumulative effect of change in accounting principle during 2003 represents
the Company's recognition of an asset retirement obligation in connection with
the adoption of SFAS 143 on January 1, 2003.
Recent Accounting Pronouncements
Statement of Financial Accounting Standards No. 141, "Business Combinations"
(SFAS 141) and Statement of Financial Accounting Standards No. 142, "Goodwill
and Intangible Assets" (SFAS 142), were issued by the Financial Accounting
Standards Board (FASB) in June 2001 and became effective for the Company on July
1, 2001 and January 1, 2002, respectively. The FASB, the Securities and Exchange
Commission (SEC) and others are engaged in deliberations on the issue of whether
SFAS 141 and 142 require interests held under oil, gas and mineral leases or
other contractual arrangements to be classified as intangible assets. If such
interests were deemed to be intangible assets, mineral interest use rights for
both undeveloped and developed leaseholds would be classified separate from oil
and gas properties as intangible assets on the Company's balance sheets only,
but these costs would continue to be aggregated with other costs of oil and gas
properties in the notes to the financial statements in accordance with Statement
of Financial Accounting Standards No. 69, "Disclosures about Oil and Gas
Producing Activities" (SFAS 69). Additional disclosures required by SFAS 141 and
142 would also be included in the notes to financial statements. Historically,
and to the Company's knowledge, we and all other oil and gas companies have
continued to include these oil and gas leasehold interests as part of oil and
gas properties after SFAS 141 and 142 became effective. The Company believes
that few oil and natural gas companies have adopted this interpretation or
changed their balance sheet presentation for oil and gas leaseholds since the
implementation of SFAS 141 and 142.
18
As applied to companies like Gasco that have adopted full cost accounting for
oil and gas activities, the Company understands that this interpretation of SFAS
141 and 142 would only affect its balance sheet classification of proved oil and
gas leaseholds acquired after June 30, 2001 and its unproved oil and gas
leaseholds. The Company's results of operations would not be affected, since
these leasehold costs would continue to be amortized in accordance with full
cost accounting rules. At March 31, 2004 and December 31, 2003, the Company had
undeveloped leaseholds of approximately $15,447,562 and $13,212,039,
respectively, that would be classified on the balance sheet as "intangible
undeveloped leasehold" if the Company applied the interpretation currently being
deliberated. This classification would require the Company to make the
disclosures set forth under SFAS 142 related to these interests. The Company's
current disclosures are those required by SFAS 69.
The Company will continue to classify its oil and gas leaseholds as tangible oil
and gas properties until further guidance is provided. Although most of the
Company's oil and gas property interests are held under oil and gas leases, it
is not expected that this interpretation, if adopted, would have a material
impact on the Company's financial condition or results of operations.
Cautionary Statement Regarding Forward-Looking Statements
In the interest of providing the stockholders with certain information regarding
the Company's future plans and operations, certain statements set forth in this
Form 10-Q relate to management's future plans and objectives. Such statements
are forward-looking statements 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 report, including, without limitation, statements
regarding the Company's future financial position, 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 Form 10-Q or otherwise
expressed by or on behalf of the Company are, to the knowledge and 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
which may cause the Company's actual performance and financial results in future
periods to differ materially from any projection, estimate or forecasted result.
Important factors that could cause actual results to differ materially from the
Company expectations ("Cautionary Statements") include those discussed under the
caption "Risk Factors", in the Company's Form 10-K for the year ended December
31, 2003. 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 the Cautionary Statements. The Company assumes no
duty to update or revise its forward-looking statements based on changes in
internal estimates or expectations or otherwise.
19
ITEM 3A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk relates to changes in the pricing applicable
to the sales of gas production in the Uinta Basin of northeastern Utah and the
Greater Green River Basin of west central Wyoming. This risk will become more
significant to the Company as more wells are drilled and begin producing in
these areas. Although the Company is not using derivatives at this time to
mitigate the risk of adverse changes in commodity prices, it may consider using
them in the future.
ITEM 4 - CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company has evaluated,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as defined in Exchange Act Rule 13a-15(e). Based upon that
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
Disclosure controls and procedures are controls and procedures that are designed
to ensure that information required to be disclosed in Company reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms.
There has been no change in the Company's internal control over financial
reporting identified in the above evaluation that occurred during the Company's
last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
20
PART II OTHER INFORMATION
Item 1 - Legal Proceedings
See Note 7 to the accompanying financial statements.
Item 2 - Changes in Securities and Use of Proceeds
On February 11, 2004, the Company completed the sale through a
private placement of 14,333,334 share of its common stock to a
group of accredited investors at a price of $1.50 per share
resulting in net proceeds of approximately $20,072,000. First
Albany Capital Inc. atransaction fee of $1,118,000 and Pritchard
Capital Partners LLC received a financial fee of $279,500. The
issuance of shares of the common in this transaction was exempt
from registration under Section 4(2) of the Securities Act of
1933, since the shares were offered and sold to a limited number
of accredited investors as defined in Regulation D under the
Securities Act of 1933, as amended.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number Exhibit
2.1 Purchase and Sale Agreement between ConocoPhillips and the
Company relating to the Riverbend Field, Uintah and Duchesne
Counties, Utah, Effective January 1, 2004 (incorporated by
reference to Exhibit 2.1 to the Company's Form 8-K dated March 9,
2004, filed on March 15, 2004).
3.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to the Company's Form 8-K dated December
31, 1999, filed on January 21, 2000).
3.2 Certificate of Amendment to Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company's Form
8-K/A dated January 31, 2001, filed on February 16, 2001).
21
3.3 Certificate of Designation for Series A Preferred Stock
(incorporated by reference to Exhibit 3.5 to the Company's Form
10-Q for the quarter ended September 30, 2001, filed on November
14, 2001).
3.4 Amended and Restated Bylaws (incorporated by reference to Exhibit
3.4 to the Company's Form 10-Q for the quarter ended March 31,
2002, filed on May 15, 2002).
3.5 Certificate of Designation for Series B Preferred Stock
(incorporated by reference to Exhibit 3.5 to the Company's Form
S-1 Registration Statement, File No. 333-10
4.1 Form of Subscription and Registration Rights Agreement, dated as
of August 14, 2002 between the Company and certain investors
Purchasing Common Stock in August, 2002. (Filed as Exhibit 10.21
to the Company's Form S-1 Registration Statement dated November
15, 2002, filed on November 15, 2002).
4.2 Form of Gasco Energy, Inc. 8.00% Convertible Debenture, dated
October 15, 2003 between each of The Frost National Bank,
Custodian FBO Renaissance US Growth & Investment Trust PLC Trust
No. W00740100, HSBC Global Custody Nominee (U.K.) Limited
Designation No. 896414 and The Frost National Bank, Custodian FBO
Renaissance Capital Growth & Income Fund III, Inc. Trust No.
W00740000 (incorporated by reference to Exhibit 4.6 to the
Company's Form 10-Q for the quarter ended September 30, 2003,
filed on November 10, 2003).
4.3 Deed of Trust and Security Agreement, dated October 15, 2003
between Pannonian and BFSUS Special Opportunities Trust PLC,
Renaissance Capital Growth & Income Fund III, Inc. and
Renaissance US Growth & Income Trust PLC (incorporated by
reference to Exhibit 4.7 to the Company's Form 10-Q for the
quarter ended September 30, 2003, filed on November 10, 2003).
4.4 Subsidiary Guaranty Agreement, dated October 15, 2003 between
Pannonian and Renn Capital Group, Inc (incorporated by reference
to Exhibit 4.8 to the Company's Form 10-Q for the quarter ended
September 30, 2003, filed on November 10, 2003).
4.5 Subsidiary Guaranty Agreement, dated October 15, 2003 between San
Joaquin Oil and Gas, Ltd. And Renn Capital Group, Inc
(incorporated by reference to Exhibit 4.9 to the Company's Form
10-Q for the quarter ended September 30, 2003, filed on November
10, 2003).
4.6 Form of Subscription and Registration Rights Agreement between
the Company and investors purchasing Common Stock in October 2003
(incorporated by reference to Exhibit 4.10 to the Company's Form
22
10-Q for the quarter ended September 30, 2003, filed on November
10, 2003).
4.7 Form of Subscription and Registration Rights Agreement between
the Company and investors purchasing Common Stock in February,
2004 (incorporated by reference to Exhibit 4.7 to the Company's
Form 10-K for the year ended December 31, 2003, filed on March
26, 2004.
*31 Rule 13a-14(a)/15d-14(a) Certifications.
*32 Section 1350 Certifications
* Filed herewith.
(b) Reports on Form 8-K: The following reports on Form 8-K were
filed during the period covered by this report:
Form 8-K dated January 20, 2004, filed January 21, 2004 Item 9, Item 7(c) - Press Release
Form 8-K dated February 11, 2004, filed February 12,2004 Item 9, Item 7(c) - Press Release
Form 8-K dated March 9, 2004, filed March 17, 2004 Item 2, Item 7(c) - Acquisition of Assets
Form 8-K dated March 29, 2004, filed March 29, 2004 Item 9, Item 7(c) - Financial Results
23
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GASCO ENERGY, INC.
Date: May 12, 2004 By:/s/W. King Grant
-----------------------
W. King Grant, Executive Vice President
Principal Financial and Accounting Officer
24