Record Quarterly and Annual Production Estimated cumulative net production for the quarter ended March 31, 2007 was a record 1,129 million cubic feet equivalent (MMcfe), an increase of 3.3% over fourth quarter 2006 production of 1,092 MMcfe, and 25% above first quarter 2006's production of 901 MMcfe. Utah operations constitute approximately 100% of Gasco's net production.
The Company attributes the rise in sequential production volumes to increased well completion activity during the first quarter 2007 which more than off-set normal production declines. As mentioned in our earnings news release of February 28, 2007 the extreme cold weather experienced in the field in January 2007 reduced production by approximately 50% for approximately two weeks. For the first quarter 2007 we estimate that the weather reduced natural gas production by approximately 8% compared to what it otherwise may have been.
Gasco Energy Net Production Detail* Three-months Ended Three-months Ended Mar. 31, Dec. 31, % Mar. 31, Mar. 31, % 2007* 2006 Change 2007* 2006 Change Natural Gas/MMcf 1,076 1,048 2.7% 1,076 877 23% Oil/MBbls 8.8 7.3 21% 8.8 4.1 115% Natural Gas Equivalents/ MMcfe 1,129 1,092 3.3% 1,129 901 25% * Includes Q107 preliminary production estimates. Company estimates may differ from the actual results to be reported in its forthcoming filing on Form 10-Q for the quarter-ended March 31, 2007.
During the first quarter of 2007, Gasco spudded five gross wells (4.7 net) and reached total depth (TD) on six gross wells (4.9 net) in Utah. The Company also participated in one outside-operated well in Utah (0.25 net) that was spud and reached TD during the quarter. The Company is currently running three drilling rigs on its Riverbend project. Average time to TD on the four Gasco-operated wells that both spud and reached TD during the quarter was 19 days with the longest taking 25 days and the shortest 13 days. The Company has now drilled two wells into the Blackhawk formation in less than 15 days. Reducing drilling days is a cost component within Gasco's control that it is intently focused upon in order to lower per-well investment in an effort to continue improving economics in the Riverbend Play.
Also during the quarter, Gasco conducted initial completion operations on seven wells (4.7 net), re-entered one well (1.0 net) to complete behind-pipe pay zones and participated in the completion of one outside-operated well (0.25 net).
At March 31, 2007, Gasco operated 95 gross wells with one additional well awaiting completion activities. The Company currently has an inventory of 17 operated wells with up-hole recompletions.
Mancos Shale Test - Riverbend Project, Utah
The Company recently set intermediate casing at 10,445' on the Federal 14-31 (100% WI - GSX operates) which will test the productive potential of the Wasatch, upper and lower Mesaverde and Blackhawk formations, the Mancos Shale, Juana Lopez and Dakota / Morrison sandstones. The well is permitted to a proposed total depth of 16,650 feet.
Gasco expects to announce its first quarter results on May 2, 2007. The Company will schedule a conference call to discuss financial and operational results, which will be announced at a later date.
Note that in previous operations updates the Company has reported gross production in addition to its net production for the quarter. During the first quarter of 2007 the Company's production figures began to include production from four outside-operated wells in which it has a 25% working interest. In the first quarter of 2007 gross production from these wells increased Gasco's gross production by more than 10% over what it was without these wells. Sequential and year-over-year changes in production are, therefore, no longer meaningful or comparable and will no longer be reported in the operational updates each quarter.
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 in the Greater Green River Basin of Wyoming.
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