Gasco Energy — The Oil & Gas Conference Denver 2006
40 slides from Gasco Energy's conference presentation, Aug 15, 2006
Slide 1: The Oil & Gas Conference Denver
Mark Erickson, CEO & President Mike Decker, COO King Grant, CFO AMEX: GSX The Oil & Gas Conference Denver August 14-17, 2006
Slide 2: Forward-Looking Statements
Forward-Looking Statements The SEC has generally permitted oil and gas companies, in filings made with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and op
Slide 3: Regional Gas Potential
Regional Gas Potential 346 Tcf #2 Green River Basin - 18.5 Tcf #1 Uinta Basin - > than 30.7 Tcf Source: USGS & Potential Gas Committee Shale gas production CBM production Tight gas sands production Source: EIA & A.G. Edwards U.S. Unconventional Gas Production (Bcf per day) Large Resource Base, Tight
Slide 4: Rocky Mountain Natural Gas Focus
Rocky Mountain Natural Gas Focus Predictable, low-risk reserve adds going forward Low geologic risk, statistical play in stacked sands Large inventory of exploitation well locations with re-investment opportunity Experienced Management Team Proven gas finders and company builders Each with 20+ years
Slide 5: Production
Production Q101-Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 East 0 17.5 9.8 8.7 28 20 38.2 108 66 59 136 130 138.2 131.5 147.1 300.2 489.3 776.1 901 862.7 MMcfe 862.7 MMcfe Q206 Production: 187% increase over Q205 FY 2005 Production 1.7 Bcfe
Slide 6: Reserves
2005 proved reserves: 76.7 Bcfe (26% proved developed, 97% gas, 100% in Utah) Reserves Q101-Q301 Q401 Q102 Q202 Q302 Q402 2002 2003 2004 2005 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 East 0 17.5 9.8 8.7 28 20 21.5 14.2 41.3 76.7 136 130 138.2 131.5 147.1 300.2 489.3 744.4 76.7 Bcfe Bcfe 86% increase
Slide 7: Riverbend Project Estimated 2-P Reserves
6 miles 10% Riverbend Project Uinta Basin, Utah Estimated 2-P Reserves (6/30/06) Gasco Energy, Inc. Proved + Probable Comparison Gasco Energy, Inc. Proved + Probable Comparison Gasco Energy, Inc. Proved + Probable Comparison Gasco Energy, Inc. Proved + Probable Comparison Gasco Energy, Inc. Proved +
Slide 8: Recent Events
Recent Events YTD Activity Reached TD on 11 gross (6.7 net) wells Behind-pipe completions 9 gross (4.1. net) wells Reduced completion costs by $500,000 on recent well Reduced drilling time to 30 days Operate 51 gross wells $57MM cash at 6/30/06 Fourth rig Move In Rig Up Two rigs under contract for W
Slide 9: Operational Goals
Operational Goals Focus on improving operating efficiencies in Utah Reduce drilling days Aggressively bid services whenever possible Reduce reliance on expensive rental equipment Shoot seismic in Utah Expand GPM business in Utah Grow oilfield services subsidiary to leverage cost benefits Expose GSX
Slide 10: Uinta Basin, Utah A Legacy Asset
Uinta Basin, Utah A Legacy Asset Federal Units Gasco Leases Wells & Locations Gas Fields Oil Fields Riverbend Gasco acreage Federal 77%, State/Fee 23% 124,281 gross (74,471 net) acres at 12/31/05 100% of Gasco's reserves/ production located in Utah 51 operated wells 40-acre spacing Natural Buttes Mo
Slide 11: Riverbend Project Competitive Landscape
Riverbend Project Competitive Landscape Gasco Leases D / EOG Samson WGR (APC pending) D / STR / EOG EOG 6 miles BBG / EOG SGY / NFX / Yates BBG / BRY Samson APC (Acq Kerr McGee)
Slide 12: Riverbend Cross Section
Riverbend Cross Section Wasatch (7000' - 9000') Upper Mesaverde (9000' - 10,500') Lower Mesaverde (10,500' - 12,000') 0.5 to 1.5 Bcf Estimated 0.75 Bcf average 0.25 to 1.0 Bcf Estimated 0.4 Bcf average 0.25 to 1.0 Bcf Estimated 0.4 Bcf average Over-pressured Gas Normal-pressured Gas Normal-pressured
Slide 13: Blackhawk in Geologic Time
Blackhawk in Geologic Time Marine Turbidite Deposition Marine Bar Sand Deposition Marine Shoreface Deposition Coastal Plain Fluvial Deposition WEST EAST
Slide 14: Spring Canyon Potential Locations
Based on 40-acre spacing 374 Gross Spring Canyon Potential Locations (250 Net) 100% Operated Locations Estimated EUR: 1.5 - 2.5 Bcf BH, LMV, $3.0 MM D&C 0.5 - 1.0 Bcf W, UMV; $0.5 MM recompletion EUR Source: Gasco Estimate GSX Producing Gas Wells Spring Canyon Potential Locations Spring Canyon Poten
Slide 15: Riverbend Spring Canyon Typecurve
Riverbend Spring Canyon Typecurve Wells with BH and/or LMV completions [1st MOB] with WAS/UMV uplift State 4-32B State 7-36A Federal 43-30 Federal 41-31 Federal 12-29 Federal 24-31 Actual Typecurve BH/LMV Completion: Qi = 28,000 mcf/mo; De = 59%; B = 1.8; Initial EUR = 1.29 BCF Uplift Completion: Qi
Slide 16: Riverbend Sensitivities
Riverbend Sensitivities Expected Case Reduce CAPEX 10.0% Increase Reserves / Gas Price 15% Reduce LOE 20% - -- Expected IRR 27% NPV (10%) $1,971,000 NPV (10%) $1.28/Net Mcf Base Case Assumptions Gas/Cond 1.9 BCF & 5B/MM Gas/Oil Price (Questar) $6.00 & $60 CWC $3,500,000 LOE $4,000/month - -- Current
Slide 17: Kenilworth Potential Locations
Based on 40-acre spacing 1,857 Gross Kenilworth Potential Locations (1,216 Net) 100% Operated Locations 65% Avg. WI Estimated EUR: 1.0 - 1.5 Bcf BH, LMV, $3.2 MM D&C 0.25- 0.75 Bcf W, UMV; $0.5 MM recompletion EUR Source: Gasco Estimate GSX Kenilworth Producers Kenilworth Potential Fairway Kenilwort
Slide 18: Kenilworth Actual & Conceptual Typecurves
Kenilworth Actual & Conceptual Typecurves Typecurves Kenilworth/LMV Completion: Actual Typecurve Qi = 25,930 mcf/mo; De = 57%; B = 1.8; EUR = 1.26 BCF LMV/UMV/Was Uplift: Conceptual Typecurve Qi = 31,000 mcf/mo; De = 50%; B = 1.8; FINAL EUR: 2.03 BCF Wells with BH/LMV completions [1st MOB] Wilkin Ri
Slide 19: Wilkin Ridge Sensitivities
Wilkin Ridge Sensitivities Expected Case Reduce CAPEX 15% Increase Reserves / Gas Price 15% Reduce LOE 20% - -- Expected IRR 22% NPV (10%) $1,230,000 NPV (10%) $1.09/Net Mcf Base Case Assumptions Gas/Cond 1.3 BCF & 5 B/MM Gas/Oil Price (Questar) $6.00 & $60 CWC $3,175,000 LOE $4,000/month - -- Curre
Slide 20: Riverbend - WAS/Mv/Desert/Grassy
Riverbend - WAS/Mv/Desert/Grassy Actual Typecurve Actual Typecurve Desert/Grassy/LMV Completion: Qi = 28,000 mcf/mo; De = 63%; B = 1.8 Initial EUR = 1.12 BCF WAS/UMV Uplift Completion: Qi = 25,000 mcf/mo; De = 50%; B = 1.8; Total EUR: 1.60 BCF Months from Uplift Gas Production Mcf/ Month Wells with
Slide 21: Uinta Basin NAV Per Share
Uinta Basin NAV Per Share $4.88 per share (W/Mv/BH, See Assumptions) Assumptions Risked W/Mv/BH locations Value from Expected Case No value assigned to Uinta Basin & Green River Basin exploration upside No value assigned to mid-stream assets
Slide 22: Assumptions
Assumptions Natural Gas Growth
Slide 23: Emerging Deep Gas Activity
Emerging Deep Gas Activity UT CO WY UINTA BASIN GREATER GREEN RIVER BASIN KMG (APC pending), STR, EOG, BBG Mancos, Entrada, Navajo, Wingate STR, KOG, DVN Baxter, Frontier, Dakota STR, UPL, WGR (APC pending) Rock Springs, Blair, Hilliard VERMILLION BASIN WASHAKIE BASIN
Slide 24: Uinta Basin Deep Gas Activity
Uinta Basin Deep Gas Activity Regional Exploratory Wells Natural Buttes Monument Butte 6 MILES Brundage Canyon GASCO GASCO RIVERBEND PROJECT Green River West Tavaputs Deep Test Mancos Shale, Entrada, Wingate
Slide 25: Uinta Deep Cross Section
Uinta Deep Cross Section Mancos (13,000' - 16,000') Dakota / Morrison (16,000' - 16,500') Entrada / Navajo / Wingate (17,500' - 18,000') Over-pressured Gas Normal & over-pressured Gas Over-pressured Gas Over-pressured Gas Est. TD 16,500' Est. $6 MM D&C Spud date to be determined Initial Mancos / Dak
Slide 26: GRB Deep Gas Activity
GRB Deep Gas Activity Daniel Anticline Muddy Creek Trend Pinedale Anticline Daniel Anticline La Barge Platform 6 MILES Deep Test Rock Springs, Blair, Hilliard Shale Stewart Point* (UPL/STR) 19,520' Tested @ 10.7 MM/d 9C-33 (UPL/STR) Q406 Spud 19,500' WY Regional Exploratory Wells Jonah Field *Source
Slide 27: Daniel Anticline Cross Section
Daniel Anticline Cross Section Lance (9000' - 11,500') Ericson (11,500' - 12,000') Over-pressured Gas Over-pressured Gas Rock Springs / Blair (12,000' - 15,000') Over-pressured Gas Over-pressured Gas Hilliard Shale (15,000' - 16,500') Initial Hilliard Shale test permitted Est. $8 MM D&C First well G
Slide 28: Seismic
Seismic Redacted Natural Gas Growth
Slide 29: Capital Summary
Capital Summary Share Related at 12/31/05 Common shares outstanding Preferred series (converted) Convertible Debentures Total options1 Fully diluted shares Shares 000s 7,157 5,981 % Fully Diluted Shares 6.7% 5.6% 12.3% Shares 000s 84,968 479 16,250 4,530 106,227 Management Ownership Common Stock2 Op
Slide 30: Investing in Growth
Investing in Growth Rocky Mountain Natural Gas Focus Vast gas resource potential Stacked tight gas sands Low geologic risk, statistical plays High Quality Resource Base Acreage position is the "hole in the donut" of large independent producers 2005 proved reserves: 76.7 Bcfe (97% gas, 100% in Utah,
Slide 31: Appendix
APPENDIX Natural Gas Growth
Slide 32: 2006 CAPEX
2006 initial CAPEX of $80 MM 32 gross (15 net) Riverbend Project wells Plant, pipeline and seismic D & C up to 3 gross Wyoming wells 2006 CAPEX Q101-Q301 Q401 Q102 Q202 Q302 Q402 2002 2003 2004 2005 2006E Q204 Q304 Q404 Q105 Q205 Q305 Q405 East 0 17.5 9.8 8.7 28 20 21.5 5.8 21 50 80 130 138.2 131.5
Slide 33: Riverbend Project Uinta Basin, Utah Key Pipelines
Riverbend Project Uinta Basin, Utah Key Pipelines GSX Leases GSX Pipelines GSX Compression GSX Blackhawk Test GSX Operated Wells Wells & Locations Green River Significant Potential Activity C 6 miles Riverbend Area Gate Canyon Area Wilkin Ridge Area West Desert Area Mapped area approximately 50 mile
Slide 34: Rockies Pipelines
COLORADO INTERSTATE GAS OVERTHRUST SOUTHERN STAR KMI KERN RIVER NORTHWEST PIPELINE TRANS COLORADO LOST CREEK CHEYENNE PLAINS EXISTING PIPELINES WYOMING INTERSTATE COMPANY (WIC) TRAILBLAZER WILLISTON BASIN INTERSTATE FORT UNION THUNDER CREEK QUESTAR PENDING/PROPOSED EXPANSIONS WBI GRASSLANDS BISON NO
Slide 35: Rockies Express
Rockies Express 2 Bcf per day In-service 2008; $4B investment
Slide 36: Activity Not Keeping Up
Activity Not Keeping Up Source: EIA, BHI, Raymond James Increased rig count is not mitigating production decline + Katrina effect
Slide 37: Rockies Production by Basin
Rockies Production by Basin Source: Northern Border & Wood McKenzie Uinta and GGRB comprise approx. 50% of Rockies production
Slide 38: Rockies Production vs. Takeaway
Rockies Production vs. Takeaway Source: Williams Forecasted export capacity and local demand w/ Rockies Express in service
Slide 39: Questar NATGAS Price
Questar NATGAS Price $/ MMBtu $6.00 / MMBtu Economic Base Case
Slide 40: GSX vs. EnerCom Index
GSX vs. EnerCom Index Selected GSX Holders* Shares Date Advisory Research 11.3 MM 3/06 Morgan Stanley 6.7 MM 3/06 Keeley Asset Mgmt. 6.3 MM 6/06 Longwood Investment 3.8 MM 6/05 BFS US Special 3.9 MM 12/05 Penn Capital 3.4 MM 6/06 Dalton Greiner 3.1 MM 6/06 Jennison 2.1 MM 3/06 Sterling Johnson 1.8 M