Gasco Energy (Amex: GSX) today announced preliminary financial and operating results for the fourth quarter and full-year ended December 31, 2005. The company expects to file its filing on Form 10-K with the Securities and Exchange Commission this week.

Full-year 2005 Financial Results

For the year-ended December 31, 2005, Gasco reported a net loss attributable to common shareholders of $71,000, or breakeven results of $0.00 per share, as compared to a net loss for 2004 of $4.3 million, or $0.07 per share. All per share figures are basic and diluted. Total revenues grew by 369% to a company-record $16.9 million, as compared to $3.6 million in 2004. The growth in total revenue is attributed to increased natural gas production and higher prices received for sales of the company's natural gas.

Oil and gas sales for 2005 were a company-record $14.1 million as compared to $3.1 million for the same period in 2004. The $10.9 million increase in oil and gas sales during 2005 is comprised of $9.6 million related to the production increase and $1.3 million related to the increase in commodity prices. Gathering revenues from the company's pipeline constructed in 2004 grew to $1.4 million from $0.1 million in 2004. The revenue growth is attributed to increased throughput as well to a full-year of operations in 2005.

Gasco's total assets rose to a record $201.2 million at year-end, up 71 percent from $117.4 million at year-end 2004. Working capital at year-end 2005 was $86.0 million versus $52.7 million at year-end 2004.

Net cash provided by operating activities for 2005 was a record $2.1 million as compared to a deficit of $0.9 million in 2004.

Fourth Quarter 2005 Financial Results

For the quarter-ended December 31, 2005, Gasco reported net income of $2.0 million, or $0.03 per share, as compared to a net loss for 2004 of $2.4 million, or $0.03 per share. Total revenues grew by 621% to a company-record $8.3 million, as compared to $1.2 million in 2004. The growth in total revenue is attributed to increased natural gas production and higher prices received for sales of the company's natural gas. Oil and gas sales for the fourth quarter 2005 were a company-record $7.4 million as compared to $0.8 million for the same period in 2004.

Record Quarterly and Annual Production

Estimated cumulative net production for the year-ended December 31, 2005 was 1,713 million cubic feet of natural gas equivalent (MMcfe), an increase of 220% over full-year 2004 production of 536.0 MMcfe.

For the full year, the average prices received for Gasco's natural gas and liquids increased to $8.16 per thousand cubic feet of gas (Mcf) and $56.91 per barrel of liquid hydrocarbons. This compares to $5.79 per Mcf and $38.43 per barrel for 2004. The company has no hedges in place.

Estimated cumulative net production for the quarter ended December 31, 2005 was 776.1 MMcfe, an increase of 59% over third quarter 2005 production of 489.3 MMcfe, and 488% above fourth quarter 2004's production of 132.0 MMcfe. Net production increases are attributed to the completion of new wells and to a higher average working interest in those wells partially offset by normal production declines in existing wells.

For the fourth quarter of 2005, the average price received for sales of Gasco's natural gas and liquids was $9.58 per Mcf and $58.37 per barrel of liquid hydrocarbons. This compares to $5.82 per Mcf and $45.00 per barrel for the same period in 2004.

Proved Reserves up 86% over 2004

Gasco's year-end, estimated total proved reserves were approximately 76.7 billion cubic feet of natural gas equivalent (Bcfe), comprised of 74.4 Bcf of natural gas and 377,288 barrels of liquids. Gasco's total proved reserves grew by 86% over year-end 2004's estimated total of 41.3 Bcfe. The company's reserve mix is 97% natural gas and 3% liquid hydrocarbons. Liquids reserves include condensate. Approximately 26% of total reserves are categorized as proved developed, 74% were proved undeveloped. 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 was $107.8 million The 2005 PV-10 calculation used net year-end commodity prices of $8.01 per Mcf of natural gas and $59.87 per barrel of crude oil. Reserve estimates are engineered by independent reservoir engineering consultants, NSAI 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.

Reserve Quantities Gas Oil Equivalents

Mcf Bbl Mcfe

Balance, December 31, 2004 39,700,156 274,074 41,344,600

Extensions and 49,217,928 222,943 50,555,586

discoveries

Revisions of previous (12,814,086) (109,093) (13,468,644)

estimates

Sales of reserves in -- -- --

place

Purchases of reserves -- -- --

in place

Production (1,648,870) (10,636) (1,712,686)

Balance 74,455,128 377,288 76,718,856

Proved Developed Reserves 18,974,697 111,655 19,644,627

Management Outlook

Commenting on the 2005 results, Gasco CEO and President, Mark Erickson said: "In 2005, we set records in production, revenue, reserves, wells drilled and other metrics, but we look to 2006 as an even more important year for Gasco. Our strong Uinta Basin net leasehold position continues to benefit Gasco and its shareholders in a number of ways. We have much to keep us busy. Our initial $80 million 2006 capital budget, which we intend to fund through cash flow and our existing cash position, targets 32 gross and 15 net wells in the Uinta, three wells in Wyoming and also strategic infrastructure. One of the key opportunities presented to Gasco is that we have created a project of size and substance that we can exploit. A project of such magnitude requires talented people, services, rigs and capital, all of which we have. With quality onshore oil and gas properties in short supply, our ability to work in the Uinta for several years going forward is truly a company-strength that I believe should be appreciated by the Street and by industry. We also deliver investors potential upside in our Wyoming projects. Should we prove commerciality in Wyoming, each of the Riverbend benefits I described above can be applied to Wyoming."

Teleconference Call

A conference call with investors, analysts and other interested parties is scheduled for 10:30 a.m. EST on Tuesday, February 28, 2006 to discuss 2005 financial and operating results. You are invited to listen to the call which will be broadcast live over the Internet at http://www.gascoenergy.com.

Date: Tuesday, February 28, 2006

Time: 10:30 a.m. EST

9:30 a.m. CST

8:30 a.m. MST

7:30 a.m. PST

Call: (866) 392-4171 (US/Canada) and (706) 634-6345 (International),

passcode 5682033

Internet: Live and rebroadcast over the Internet: log on to

http://www.gascoenergy.com

Replay: Available through Thursday, March 2 at (800) 642-1687

(US/Canada) and (706) 645-9291 (International) using passcode

5682033 and for 30 days at http://www.gascoenergy.com

[Financial and Operational Tables Accompany this News Release] The notes accompanying the financial statements are an integral part of the consolidated financial statements and can be found in Gasco's filing on Form

10-K to be filed this week.

About Gasco Energy

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 controls acreage in the Greater Green River Basin of Wyoming. To learn more, visit http://www.gascoenergy.com.

Forward-looking statements

Certain statements set forth in this press release relate to management's future plans, objectives and expectations. Such statements are forward-looking within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release, including, without limitation, statements regarding the Company's future financial position, potential resources, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "project," "estimate," "anticipate," "believe," or "continue" or the negative thereof or similar terminology. Although any forward-looking statements contained in this press release are to the knowledge or in the judgment of the officers and directors of the Company, believed to be reasonable, there can be no assurances that any of these expectations will prove correct or that any of the actions that are planned will be taken. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual performance and financial results in future periods to differ materially from any projection, estimate or forecasted result. Some of the key factors that may cause actual results to vary from those the Company expects include inherent uncertainties in interpreting engineering and reserve or production data; operating hazards; delays or cancellations of drilling operations because of weather and other natural and economic forces; fluctuations in oil and natural gas prices in response to changes in supply; competition from other companies with greater resources; environmental and other government regulations; defects in title to properties; increases in the Company's cost of borrowing or inability or unavailability of capital resources to fund capital expenditures; and other risks described under "Risk Factors" in Item 1. of the Company's 2004 filing on Form 10-K filed with the Securities and Exchange Commission on March 16, 2005.

GASCO ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

December 31,

2005 2004

ASSETS

CURRENT ASSETS

Cash and cash equivalents $62,661,368 $25,717,081

Restricted investment 10,139,000 3,535,055

Short-term investments 15,000,000 27,000,000

Accounts receivable

Joint interest billings 1,792,038 429,779

Revenue 3,115,154 615,265

Inventory 1,182,982 1,009,914

Prepaid expenses 645,554 458,555

Total 94,536,096 58,765,649

PROPERTY, PLANT AND EQUIPMENT, at cost

Oil and gas properties (full cost

method)

Proved mineral interests 83,972,300 29,811,483

Unproved mineral interests 13,323,712 18,449,330

Gathering assets 4,831,050 2,469,580

Equipment 5,148,388 89,900

Furniture, fixtures and other 175,607 158,590

Total 107,451,057 50,978,883

Less accumulated depreciation,

depletion and amortization (6,986,662) (2,247,032)

Total 100,464,395 48,731,851

NON-CURRENT ASSETS

Restricted investment 3,565,020 6,778,040

Deferred financing costs 2,634,461 3,092,628

6,199,481 9,870,668

TOTAL ASSETS $201,199,972 $117,368,168

The accompanying notes are an integral part of the consolidated financial

statements.

GASCO ENERGY, INC.

CONSOLIDATED BALANCE SHEETS (continued)

December 31,

2005 2004

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable $907,772 $1,447,149

Revenue payable 1,658,141 334,765

Advances from joint interest owners 2,476,080 891,999

Accrued interest 844,098 695,139

Accrued expenses 2,571,047 2,677,352

Total 8,457,138 6,046,404

NONCURRENT LIABILITIES

5.5% Convertible Senior Notes 65,000,000 65,000,000

Asset retirement obligation 223,947 108,566

Deferred rent expense 78,727 --

Total 65,302,674 65,108,566

COMMITMENTS AND CONTINGENCIES

(NOTES 5, 13, 14)

STOCKHOLDERS' EQUITY

Series B Convertible Preferred

stock - $.001 par value; 20,000

shares authorized; 763 shares issued

and outstanding with a liquidation

preference of $335,720 in 2005 and

2,255 shares issued and outstanding

with a liquidation preference of

$992,200 in 2004 1 2

Common stock - $.0001 par value;

300,000,000 shares authorized;

85,041,492 shares issued and

84,967,792 outstanding in 2005;

70,590,909 shares issued and

70,517,209 shares outstanding in

2004 8,504 7,059

Additional paid in capital 157,540,755 76,346,463

Deferred compensation (443,579) (512,440)

Accumulated deficit (29,535,226) (29,497,591)

Less cost of treasury stock of

73,700 common shares (130,295) (130,295)

Total 127,440,160 46,213,198

TOTAL LIABILITIES AND STOCKHOLDERS'

EQUITY $201,199,972 $117,368,168

The accompanying notes are an integral part of the consolidated financial

statements.

GASCO ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31,

2005 2004 2003

REVENUES

Gas $13,462,977 $2,928,689 $1,206,741

Oil 605,330 195,199 56,702

Gathering 1,411,259 143,326 --

Interest income 1,383,859 325,001 11,987

Total 16,863,425 3,592,215 1,275,430

OPERATING EXPENSES

Lease operating 870,593 638,267 337,278

Gathering operations 1,166,841 267,450 --

Depletion, depreciation,

amortization and asset

retirement liability accretion 4,843,439 1,102,575 552,923

General and administrative 5,987,019 4,191,978 2,819,675

Interest expense 4,033,168 1,597,775 82,392

Total 16,901,060 7,798,045 3,792,268

LOSS BEFORE CUMULATIVE EFFECT OF

CHANGE IN ACCOUNTING PRINCIPLE (37,635) (4,205,830) (2,516,838)

CUMULATIVE EFFECT OF CHANGE IN

ACCOUNTING

PRINCIPLE -- -- (9,687)

NET LOSS (37,635) (4,205,830) (2,526,525)

Preferred stock dividends (33,347) (140,853) (304,172)

NET LOSS ATTRIBUTABLE TO COMMON

STOCKHOLDERS $(70,982) $(4,346,683) $(2,830,697)

PER COMMON SHARE DATA - BASIC AND

DILUTED:

Loss before cumulative effect of

change in accounting principle $(0.00) $(0.07) $(0.07)

Cumulative effect of change in

accounting principle -- -- --

NET LOSS PER COMMON SHARE - BASIC

AND DILUTED $(0.00) $(0.07) $(0.07)

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING - BASIC AND DILUTED 72,152,977 63,194,223 41,262,778

The accompanying notes are an integral part of the consolidated financial

statements.

GASCO ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

2005 2004 2003

CASH FLOWS FROM OPERATING

ACTIVITIES

Net loss $(37,635) $(4,205,830) $(2,526,525)

Adjustment to reconcile net loss

to net cash used in operating

activities

Depreciation, depletion and

impairment expense 4,829,403 1,085,912 541,128

Accretion of asset retirement

obligation 14,036 16,663 11,795

Stock compensation 744,235 415,483 94,317

Non-cash rent expense 48,727

Landlord incentive payment 30,000

Amortization of beneficial

conversion feature -- 161,514 6,945

Amortization of deferred

financing costs 458,167 294,993 7,758

Cumulative effect of change in

accounting principle -- -- 9,687

Changes in operating assets

and liabilities:

Accounts receivable (3,862,148) (545,681) (403,219)

Inventory (173,068) (1,009,914) --

Prepaid expenses (186,999) 59,992 (320,059)

Accounts payable (679,797) (600,723) 164,303

Revenue payable 1,323,376 91,252 185,215

Advances from joint

interest owners 1,584,081 891,999 --

Accrued interest 148,959 695,139 --

Accrued expenses (2,106,305) 1,743,832 36,741

Net cash provided

by (used in)

operating activities 2,135,032 (905,369) (2,191,914)

CASH FLOWS FROM INVESTING

ACTIVITIES

Cash paid for acquisitions,

development and exploration (55,181,914) (25,736,066) (5,283,426)

Cash paid for furniture, fixtures

and other (106,790) (64,053) (3,264)

Proceeds from property sales 828,102 4,463,161 --

Investment in short-term

investments -- (27,000,000) --

Proceeds from the sale of short

term investments 12,000,000 -- --

Cash designated as restricted (6,816,967) (10,313,095) (250,000)

Cash undesignated as restricted 3,426,042 250,000 250,000

Net cash used in

investing activities (45,851,527) (58,400,053) (5,286,690)

CASH FLOWS FROM FINANCING

ACTIVITIES

Proceeds from sale of common

stock 79,693,764 21,500,001 2,777,292

Issuance of convertible notes -- 65,000,000 --

Exercise of options to purchase

common stock 1,275,743 33,336 --

Cash paid for offering costs (275,378) (4,636,828) (266,721)

Preferred dividends (33,347) (61,973) (4,092)

Proceeds from sale of preferred

stock -- -- 4,862,840

Proceeds from sale of convertible

debentures -- -- 2,500,000

Repayment of note payable -- -- (1,400,000)

Proceeds from 16b violation -- 106,858 1,332

Net cash provided

by financing activities 80,660,782 81,941,394 8,470,651

NET INCREASE IN CASH AND CASH

EQUIVALENTS 36,944,287 22,635,972 992,047

CASH AND CASH EQUIVALENTS:

BEGINNING OF PERIOD 25,717,081 3,081,109 2,089,062

END OF PERIOD $62,661,368 $25,717,081 $3,081,109

The accompanying notes are an integral part of the consolidated financial

statements.

GASCO ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended December 31,

2005 2004

PRODUCTION INFORMATION

Gas production 750,392 mcf 126,860 mcf

Gas price $9.58 per mcf $5.82 per mcf

Oil production 4,289 bbl 868 bbl

Oil price $58.37 per bbl $45.00 per bbl

REVENUES

Gas $7,194,049 $738,829

Oil 250,367 39,061

Gathering 483,884 143,326

Interest income 404,151 233,531

Total 8,332,451 1,154,747

OPERATING EXPENSES

Lease operating 272,478 42,214

Gathering operations 482,521 267,450

Depletion, depreciation and

amortization 2,492,183 317,714

General and administrative 2,064,922 1,558,762

Interest expense 1,008,290 1,368,959

Total 6,320,394 3,555,099

NET INCOME 2,012,057 (2,400,352)

Preferred stock dividends (5,914) (17,506)

NET INCOME ATTRIBUTABLE TO COMMON

STOCKHOLDERS $2,006,143 ($2,417,858)

NET INCOME PER COMMON SHARE - BASIC

AND DILUTED $0.03 ($0.03)

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

BASIC 76,656,206 70,517,209

DILUTED 77,135,806 70,517,209

Source: prnewswire

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