Replies to post #654 on Gasco Energy, Inc.(fka GSXN)

[Timothy Smith]

Vero it is hard to say exactly what the break even is for GSX as I haven't evaluated their holdings or related expenses close enough however there is some general comparisons to consider.

The cost benefits of NGLs in the shale production process have reduced the break-even price point for natural gas producers because NGLs are stripped away, priced in conjunction with crude oil prices, and then sold independently of the natural gas.

Liquid-rich regions of the Marcellus Shale region can be profitable even when the price of natural gas is near $3 per MMBtu.

Similarly, the Eagle Ford Shale, which is considered one of the most liquid-rich plays in the nation, has an estimated break-even price point for natural gas that is below $2 per MMBtu.

[Timothy Smith]

Additionally it may be interesting to compare the spending habits based on the price per MMBtu. Natural gas producers are changing the way they view the forward natural gas market.

They are budgeting at lower price levels, and they are looking for additional ways to reduce expenditures in order to continue to operate in what is projected to be a lower-priced natural gas environment.

Producers now indicate that they will increase spending in the natural gas market if prices reach $5 per MMBtu, whereas one year ago, they indicated they would increase spending at $6 per MMBtu.

Similarly, producers now indicate that they would likely cut spending at $3.50 per MMBtu, whereas one year ago, they indicated they would likely cut spending at $4 per MMBtu.