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PICKS 3/15/2010.Gasco Energy, Inc.(AMEX: GSX)

SHE'S BACK IN PLAY FOLKS AND JUST WAITING FOR MONDAY BELL !! CHECK OUT THIS CHART 8-)
SEE .33 BEING STRONG SUPPORT ! THATS THE NUMBER TO WATCH. IMO SHE HAS CONFIRMED.

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LAST FINANCIALS

Gasco Energy Announces Fourth Quarter and Year-End 2009 Financial Results

DENVER, March 3 /PRNewswire-FirstCall/ -- Gasco Energy (NYSE Amex: GSX) today announced financial and operating results for the fourth quarter and full-year ended December 31, 2009.

Full-year 2009 Financial Results

For the year-ended December 31, 2009, Gasco reported a net loss of $50.2 million, or $0.47 per share, as compared to net income in 2008 of $14.5 million, or $0.13 per share on a fully diluted basis. Included in the full-year 2009 operating expenses is a non-cash charge of $41.0 million related to impairments to the carrying value of oil and gas properties that were incurred during 2009. Impairment charges for 2008 totaled $3.5 million related to a decrease in the carrying value of a Gasco-owned drilling rig.

Included in the 2009 results are unrealized derivative losses of $11.5 million attributed to hedge effect. Excluding the effect of unrealized derivative gains and the $41.0 million impairment charge, Gasco would have posted net income of $2.4 million, a non-GAAP measure, or $0.02 per share.

Included in the 2008 results are unrealized derivative gains of $9.2 million attributed to hedge effect. Excluding the effect of unrealized derivative gains and the $3.5 million impairment charge, Gasco would have posted net income of $8.8 million, a non-GAAP measure, or $0.08 per share on a fully diluted basis.

Total revenues during 2009 decreased by approximately 50% to $21.1 million, as compared to $41.9 million in 2008. Oil and gas sales for 2009 declined by 56% to $15.7 million, as compared to $35.6 million for the same period in 2008. The year-over-year decrease in oil and gas sales is primarily attributed to a 54% decrease in prices received for sales of Gasco’s natural gas and a 42% decrease in prices received for oil volumes, combined with a 6% decrease in equivalent production during the comparable annual periods. Gathering revenues from Gasco’s midstream assets were $5.0 million, a 4% increase from the $4.8 million posted in 2008. Subsequent to the end of 2009, Gasco closed on the previously announced sale of its midstream assets for cash consideration of $23.0 million.

For the full year 2009, average prices received for Gasco's natural gas and liquids were $3.23 per thousand cubic feet of natural gas (Mcf) and $45.47 per barrel of liquid hydrocarbons. This compares to $7.05 per Mcf and $77.71 per barrel for 2008. Gasco’s risk management activities increased its average gas price by $3.06 per Mcf during 2009, and by $0.12 per Mcf during the 2008 reporting period. Including the impact of hedges, Gasco’s average price received for its natural gas production during 2009 was approximately $6.28 per Mcf, as compared to $7.18 per Mcf in the prior-year period.

Gasco's total assets at year-end 2009 were $104.7 million, as compared to $153.9 million at year-end 2008. Stockholders’ equity at year-end 2009 was a deficit of $4.2 million, as compared to a positive $44.0 million at year-end 2008. Net cash provided by operating activities for 2009 was $16.2 million, as compared to $18.2 million in the comparable 2008 reporting period. Cash and investments were $10.6 million at December 31, 2009.

As of December 31, 2009, Gasco had a $250 million credit facility with JPMorgan, of which $35.0 million was available for borrowing capacity with $34.5 million drawn in borrowing and $0.5 million drawn in letters of credit. Pursuant to the Ninth Amendment to its credit facility, effective February 1, 2010, Gasco’s borrowing base was to be reduced to $16 million by incremental fixed amounts in connection with certain contemplated asset sales, and, effective as of April 1, 2010, to automatically reduce to $16 million, regardless of whether any of the contemplated asset sales were consummated. Effective February 26, 2010, in connection with the consummation of the previously referenced sale of Gasco’s midstream assets and the application of the proceeds therefore to pay down outstanding borrowings under the credit facility, Gasco elected to reduce the borrowing base to $16.0 million effective immediately.

As of March 1, 2010, Gasco had cash and equivalents of approximately $12.5 million and had outstanding borrowings under its credit facility of approximately $11.5 million.

Unit Cost Comparisons – LOE / DD&A / G&A

Lease operating expense (LOE) for the full-year 2009 decreased to $4.4 million from $6.7 million in the same period in 2008. On a per-unit basis, total LOE, including production taxes, was $0.96 per thousand cubic feet of natural gas equivalent (Mcfe), as compared to $1.38 per Mcfe in 2008. The decrease in per-unit LOE is attributed to reduced production taxes ($0.18 per Mcfe lower) and to decreased operating expenses ($0.24 per Mcfe lower). The 34% decrease in total LOE in 2009 is attributed to reduced chemical costs in well treatments, decreased workover expense, to sharply lower commodity prices on which production taxes are based and to the use of severance tax exemptions related to certain of Gasco’s natural gas wells.

Depletion, depreciation and amortization (DD&A) was $5.6 million for the full-year 2009, as compared to $9.5 million for the same period in 2008. On a per-unit basis, DD&A in 2009 declined to $1.23 per Mcfe from $1.96 per Mcfe in the 2008 period. The 41% lower DD&A is attributed to a decrease in the depletable base during 2009 due to impairment charges incurred by Gasco during the year, specifically in the first quarter of 2009.

Gasco reported general and administrative expense (G&A) of $8.1 million in 2009 versus $9.2 million in the same period in 2008, or a 12% decrease. On a per-unit basis, total G&A for 2009 was $1.80 per Mcfe, as compared to $1.90 per Mcfe for the same period in 2008. G&A expense for 2009 includes $1.9 million of non-cash, stock-based compensation expense, or, on a per-unit basis, $0.43 per Mcfe, as compared to the 2008 total of $3.1 million, or $0.64 per Mcfe.

Fourth Quarter 2009 Financial Results

For the quarter-ended December 31, 2009, Gasco reported net income of $0.443 million, or breakeven results of $0.00 per share, as compared to a net loss in 2008 of $1.3 million, or $0.01 per share.

Included in the fourth quarter 2009 results are derivative gains of $0.789 million. Excluding the effect of derivative gains, Gasco would have posted net loss of $0.346 million, a non-GAAP measure, or breakeven results of $0.00 per share.

Included in the fourth quarter 2008 results are derivative gains of $4.1 million and an impairment of the carrying value of Gasco-owned rig of $3.5 million. Excluding the effect of derivative gains and the asset impairment, Gasco would have posted net loss of $1.9 million, a non-GAAP measure, or $0.02 per share.

Total revenues for the fourth quarter 2009 were flat at $6.8 million, as compared to $6.8 million in 2008. Oil and gas sales for the fourth quarter 2009 were $4.5 million, as compared to $4.9 million for the same period in 2008. For the fourth quarter of 2009, the average price received for sales of Gasco's natural gas and liquid hydrocarbons was $4.09 per Mcf and $55.79 per barrel of liquids. This compares to $3.92 per Mcf and $30.74 per barrel for the same period in 2008.

Quarterly and Annual Production

Estimated cumulative net production for the quarter-ended December 31, 2009 was 1,043 million cubic feet of natural gas equivalent (MMcfe), as compared to 1,228 MMcfe in the year-ago period, a 15% decrease. Estimated cumulative net production for the year-ended December 31, 2009 was 4,528 MMcfe, a decrease of 6% as compared to full-year 2008 net production of 4,838 MMcfe. Included in the full-year 2009 equivalent calculation is 42,151 barrels of liquid hydrocarbons, or flat when compared to 2008 liquids volumes of 42,545 barrels. Net production changes are attributed to normal production declines in existing wells, which are partially offset by the completion of new wells and recompletions of existing wells.

During the fourth quarter 2009, Gasco conducted initial completion operations on two Upper Mancos wells, but did not spud any new wells and did not re-enter any behind-pipe pay zones. Gasco continued to perform workover operations on certain Green River Formation oil wells to enhance oil production during the improved crude oil prices received during the quarter. For the full-year 2009, Gasco invested approximately $5.0 million in oil and gas activities in the Uinta Basin of Utah.

At December 31, 2009, Gasco operated 132 gross wells. Gasco currently has an inventory of 34 operated wells with up-hole recompletions and has one Upper Mancos well awaiting initial completion activities. Gasco began initial operations on two Upper Mancos wells in December.

2009 Proved Reserves

As previously announced, Gasco’s 2009 year-end total proved reserves totaled 46.9 billion cubic feet of natural gas equivalent (Bcfe), comprised of 44.2 Bcf of natural gas and 451,000 barrels of liquids. Gasco's reserve mix is 94% natural gas and 6% liquid hydrocarbons, including condensate volumes. At year-end 2009, 100% of Gasco’s reserves were classified as proved developed. The price deck used for calculating 2009 proved reserves was $3.06 per MMBtu of natural gas and $46.26 per barrel of crude oil. Based on these prices, the estimated discounted net present value of Gasco’s proved reserves, before projected income taxes, using a 10% per annum discount rate (“PV-10”) was $35.6 million at December 31, 2009.

Operations Update & Subsequent Events

Completion Operations

Gasco commenced its up-hole recompletion program in early February 2010. Since that time, it has successfully completed the initial stages on one Upper Mancos well, recompleted two wells and expects to recomplete an additional well by the end of the first quarter. Recompletions are subject to oilfield service availability and to weather conditions.

Producing Property Acquisition

In late February 2010, Gasco completed the acquisition of certain oil and gas leases and lands from Petro-Canada Resources (USA) Inc. for a purchase price of $0.482 million, subject to customary post-closing terms and conditions. Included in the transaction are approximately 3.0 Bcfe of proved developed reserves from two wells and approximately 5,582 net mineral acres located in Gasco’s core Riverbend Project area in Duchesne County, Utah. Current production is 400 Mcf per day net to Gasco. Engineers are currently designing an extensive workover and recompletion program for the two wells in the Mancos, Blackhawk and Mesaverde formations so as to increase production. Gasco funded the acquisition with cash flow from operating activities.

Risk Management

At recent production levels, approximately 65% of Gasco’s net production volumes were hedged through the following instruments:



Gasco 2010-2011 Swap Agreements
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Floating
Agreement Remaining Price Gasco
Type Term Quantity Index Price (a) Payer (a)
--------- --------- -------- --------------- -----------
3,500 MMBtu
Swap (b) 1/10 – 12/10 per day $4.418 / MMBtu NW Rockies
-------- ------------ ------------ -------------- ----------
3,000 MMBtu
Swap 1/10 – 3/11 per day $4.825 / MMBtu NW Rockies
---- ----------- ------------ -------------- ----------
2,000 MMBtu
Swap (b) 1/11 – 3/11 per day $4.418 / MMBtu NW Rockies
-------- ----------- ------------ -------------- ----------

(a) Northwest Pipeline Rocky Mountains - Inside FERC first of
month index price
(b) Weighted average price from June 2009 through March 2011.