DENVER, March 10 /PRNewswire-FirstCall/ -- Gasco Energy, Inc. (OTC Bulletin Board: GASE -News ) today announced the acquisition of working interests and gathering system assets from an unrelated partner in Gasco's Riverbend exploitation area in Utah. The purchase price was $3.175 million and paid for from cash on hand. The effective date of the transaction is Jan. 1, 2004. Gasco will be the operator of the acquired properties and assets. Associated with the acquisition are current gross and net daily production of approximately 1,000 Mcf and 650 Mcf, respectively. Proved reserves are estimated to be 6.5 Bcfe of which 16% are developed and producing. Net leasehold totaling 13,062 acres is also included in the acquisition. Already familiar with the acquired producing properties, Gasco's engineers are designing completions for potentially productive behind-pipe zones. The Company forecasts these efforts will add new production during 2004's second quarter. Per an existing contract an unrelated third party has the right to purchase 25% of the acquired properties at the acquisition price within 30 days.
Mark Erickson, Gasco President and CEO, said: "This transaction, for obvious reasons, is a good one for Gasco. First, it is accretive for shareholders. We realize an immediate increase to reserves and production, decrease to lease operating expenses and requisite increases to revenues and cash flow. The transaction eliminates vertical segregation of ownership, allowing the opportunity for more orderly and improved economic development. The acquisition increases our average working interest in our core Riverbend project area. The gathering assets enhance the acquisition, offering us greater control of our daily volumetric output, which we expect will improve our net operating margins.
"On a separate, but as important, note, we recently ran production casing in the Gate Canyon 31-21-11-15 well in anticipation of completing it and placing the well on line. The well was drilled into the Blackhawk Formation, its exploration target, to a total depth of 11,430 feet. We have not completed our full evaluation of the well and its apparent producing zones; therefore, we cannot estimate initial production volumes. The rig is presently moving to the next location, the Wilkin Ridge 12-32-10-17, with a proposed drilling depth of 13,100 feet to test the Wasatch/Mesaverde and Blackhawk formations."
About Gasco Energy
Gasco Energy, Inc. is a Denver-based natural gas and oil exploitation and development company that focuses on natural-gas-rich prospects in the Rocky Mountain area of the United States. The Company currently is active in the Uinta Basin in Utah and has a substantial acreage position in the Greater Green River Basin of Wyoming. To learn more, visit www.gascoenergy.com.
Certain statements set forth in this press release relate to management's future plans, objectives and expectations. Such statements are forward-looking 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 the Company's future financial position, potential resources, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "project," "estimate," "anticipate," "believe," or "continue" or the negative thereof or similar terminology. Although any forward-looking statements contained in this press release are to the knowledge or in the judgment of the officers and directors of 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 that may cause the Company'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 the Company 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; and other risks described under "Risk Factors" in Part I, Item 1 of the Company's latest Annual Report on Form 10-K filed with the Securities and Exchange Commission. Source: Gasco Energy, Inc.