Gasco's Year-End Proved Reserves Increase 162%
Gasco Energy reported 2007 year-end proved reserves of 110.7 billion cubic feet of natural gas equivalent (Bcfe), comprised of 104.3 Bcf of natural gas and 1,071 thousand barrels of liquids. Gasco's total proved reserves grew by 162% over year-end 2006's estimated total of 42.2 Bcfe. The company's reserve mix is 94% natural gas and 6% liquid hydrocarbons. Liquids reserves include condensate. The proved developed to proved undeveloped composition is approximately 50% proved developed.
For 2007, Gasco replaced 482% of production exclusive of price-related and well performance revisions. Gasco increased proved developed reserves by 34% to 55 Bcfe. Extensions and discoveries from drilling added 24.8 Bcfe, while revisions attributed to a combination of well performance and improved commodity prices, added 38.7 Bcfe. The closing of the fourth quarter 2007 Brek Energy acquisition added approximately 10 Bcfe of proved developed reserves. In accordance with SEC guidelines, reserve estimates do not include any probable or possible reserves which may exist for Gasco's properties.
Gasco's estimated, pre-tax future net cash flows discounted at 10% (commonly known as the SEC PV-10 figure) for proved reserves at year-end is $161.8 million. The 2007 PV-10 calculation used net year-end commodity prices of $6.53 per Mcf of natural gas and $73.95 per barrel of crude oil. This compares to commodity prices of $4.47 per Mcf of natural gas and $43.21 per barrel of crude oil at year-end 2006. By way of comparison, the company's 2006 SEC PV-10 value was $63.2 million.
All of the reserves valued in the report are located in Gasco's Riverbend Project area in Carbon, Duchesne, and Uintah Counties in Utah's Uinta Basin. Reserve estimates are engineered by independent reservoir engineering consultants, Netherland, Sewell & Associates, Inc. and conform to the definition as set forth in the SEC Regulation S-X Part 210.4-10 (a) as clarified by subsequent Commission Staff Accounting bulletins. The proved reserves are also in accordance with Financial Accounting Standards Board Statement No. 69 requirements.
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