Gasco Energy Inc., Denver, (NYSE: GSX) says its year-end total proved reserves totaled 53.1 billion cubic feet of natural gas equivalent, less than half its proved reserves of 110.7 billion cubic feet equivalent during 2007.
All of Gasco's reserves at the end of 2008 were classified as proved developed, whereas half of its reserves in 2007 were considered proved undeveloped and half proved developed. The 2008 reserve mix is 96% natural gas and 4% liquid hydrocarbons.
The reserves, which were estimated by Netherland, Sewell & Associates Inc., are located in Gasco's Riverbend project area in Carbon, Duchesne and Uintah counties in the Uinta Basin.
Gasco says its board of directors has also cut its 2009 capital expenditure budget from $20 million to $10 million due to weakened commodity prices, high service costs for drilling and completing wells and limited capital markets. The revised budget calls for the completion of the Gate Canyon State #23-16 well, the drilling and completion of approximately two gross wells and 12 gross recompletions of uphole zones on Gasco's Riverbend project in Utah.
The company says it will fund its budget through cash flow from operations and, as a result, may accelerate or delay investment based on commodity prices and other market conditions.
Gasco says its rig will be released after it completes operations on the well it is currently drilling. It says it must pay the rig contractor approximately $4.6 million for early termination of the drilling contract, which was set to expire March 15, 2010.
Gasco has a $250 million reserve-base revolving line of credit with a borrowing base of $45 million; $35 million of that was drawn as of Dec. 31, 2008.
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