Gasco Energy Provides Fourth Quarter 2012 Operations Update
DENVER, Jan. 16, 2013 /PRNewswire/ -- Gasco Energy, Inc. (NYSE MKT: GSX) ("Gasco" or the "Company") today provided an interim operations update on its Riverbend Project in Utah's Uinta Basin and on its California projects in the San Joaquin Basin.
Riverbend Project Operations Update
During Q1-12, Gasco conveyed a 50% interest in certain of its Uinta Basin properties to its joint venture partner concurrent with the March 22, 2012 closing of the joint venture. Q4-12 is the third full reporting period in which Gasco's Uinta Basin net production reflects this conveyance. Due to the 50% interest conveyance, operational and financial results for the three-month and 12-month periods ended December 31, 2012 are not similarly comparable to the same periods ended December 31, 2011. The Uinta Basin accounts for 100% of Gasco's production.
Estimated cumulative net production for the quarter ended December 31, 2012 was 516 million cubic feet equivalent (MMcfe). By commodity for Q4-12, Gasco reported net crude oil volumes of 6,254 barrels and net natural gas volumes of 478 MMcf. Crude oil volumes for Q4-12 represent a 45% increase, as compared to Q3-12 crude oil volumes.
Estimated cumulative net production for the year ended December 31, 2012 was 2,537 MMcfe, as compared to 2011's full-year production of 3,881 MMcfe. The year-over-year decrease in production is primarily the result of the 50% conveyance in Q1-12. The reduction is also attributable to fewer completions of up-hole zones, curtailed new drilling activity during 2012 and normal production decline from existing wells.
Gasco Energy Net Production Detail*
Seq. Quarterly Chg.
Natural Gas / MMcf
Oil / Bbls
Natural Gas Equivalents / MMcfe
*Due to the 50% interest conveyance, net production volumes for the three-month and 12-month periods ended December 31, 2012 are not similarly comparable to the same periods ended December 31, 2011.
**Includes preliminary production estimates for Q4-12 and the 12-month period ended December 31, 2012 and reflects Gasco's 50% interest in its Uinta Basin joint venture effective as of March 22, 2012.
2013 Drilling Plans
The six-well Green River oil well program is now fully permitted. However, the newly issued permits included burrowing owl and golden eagle drilling stipulations that will delay the spudding of these six wells until Q3-13. Five additional, high-graded Green River oil well locations are in process of being permitted by regulatory agencies and we anticipate that these will be issued before Q3-13 and added to the drilling schedule along with the six existing permits. The Company is also in the process of permitting its Uinta Basin natural gas pad-well drilling program.
Green River Horizontal Well
Gasco also plans to participate in a horizontal well (GSX 7.14% WI / non-operated) to test the productive potential of the oil-prone Uteland Butte member of the Green River Formation. The well, with a proposed 4,250 foot lateral length, will be operated by an industry partner that has successfully drilled several horizontal Green River oil wells in the Uinta Basin. The operator plans to spud the well in Q2-13.
Green River Oil Well Workover Program
During Q4-12, Gasco continued its workover program which targets by-passed oil in older Wasatch / Mesaverde wells and Green River oil wells. Since the workover program commenced in the second half of 2012, Gasco engineers have performed eight workovers (three during Q4-12) in the Green River Formation which have yielded a per-well average of a 15% to 20% increase in net oil production, as compared to rates recorded prior to the well workovers.
Gasco believes the workover program presents a low-cost opportunity to boost oil production. The Company continues to identify wells suitable for by-passed oil workovers, and has identified an additional three wells for workover activities and further production enhancement.
California Projects Update
The operator of the Northwest McKittrick prospect recently reached total depth on the first of three earning wells on which Gasco is carried for a 20% working interest. Well logs identified the presence of a structure which helps confirm the Company's geologic model; however, the well penetrated the primary objective 300 feet down-dip from the targeted depth.
While the initial test well came in 300 feet low, the test well did not condemn the prospect. New mapping suggests that a second well could still test a structure with approximately 9.5 million barrels (MMBO) of gross unrisked oil potential (1.9 MMBO net unrisked potential).
As part of the terms of the farm-out agreement, the partner in Northwest McKittrick has until March 12, 2013 to spud the second test well to continue to fully earn into the prospect.
King Grant, Gasco's president and CEO commented: "The fourth quarter 2012 operational results were in line with our expectations. Our continued efforts in enhancing Uinta Basin oil production are exemplified by the 45% oil production growth, when compared to the third quarter 2012. Oil prices remain strong in the Uinta where we are currently netting between $80 to 85 per barrel at the wellhead.
"In our California exploratory projects, we have four additional carried wells which are expected to spud during 2013, including the next Northwest McKittrick well as mentioned above. The second Northwest McKittrick well is targeted for a mid-March spud date, while the second Willow Springs prospect well is projected to spud in late April. Our ongoing geologic and geophysical work continues to identify structures in the targeted prospect areas."