Gasco Energy Provides Operations Update; Q4 Estimated Cumulative Net Production Down 23.7% YoY
Gasco Energy, Inc. (NYSE: GSX) 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
Green River Oil Well Completion Operations
In December 2011, Gasco reached total depth in the Green River Formation on two wells, the Federal #34-19G-9-19 [100% working interest (WI) / 79.3% net revenue interest (NRI)] and the Federal #23-30-G-9-19 (100% WI / 72.8% NRI). Successive completion operations for the wells commenced in mid-January and completion fluid flow back and production testing are underway.
The Federal #34-19G-9-19 well, a 5,574-foot vertical producer, was successfully completed in three stages in the oil-bearing Green River Formation.
The Federal #23-30-G-9-19 well, a 5,473-foot vertical producer, was successfully completed in four stages in the oil-bearing Green River Formation.
Both wells are performing as anticipated. Gasco expects to provide further well updates once production testing has been completed.
Natural Gas Completion Operations
During Q4-11, Gasco recompleted three gross wells (2.25 net) natural gas wells to target up-hole pay zones in exiting wellbores. As of January 12, 2012, Gasco operated 133 gross wells. Gasco currently has an inventory of 15 operated wells with up-hole recompletions and has one Upper Mancos well awaiting initial completion activities. The Company contracts drilling rigs as needed and does not currently have a rig under contract at this time.
Estimated cumulative net production for the quarter ended December 31, 2011 was 870.1 million cubic feet equivalent (MMcfe), a 23.7% decrease from Q4-10 production of 1,140 MMcfe, and a 6.5% decline from sequential Q3-11 production of 930.3 MMcfe Approximately 50% of the of the 6.5% decline in sequential quarterly equivalent production is attributed to pigging operations in the third-party midstream company's gathering lines. The remaining 50% is due to high line pressures before the gathering system was pigged and the normal decline associated with tight sand reservoirs. The gathering system operator has devised a more rigorous maintenance plan, including regular pigging operations to better manage line pressures and to provide for improved volume throughput.
Gasco had decreased liquids volumes due to pigging operations, high line pressures, workover operations, and normal production declines. Gasco produced approximately 7,871 barrels of liquids during Q3-11. This compares to 8,424 barrels of liquids production during Q3-11, or a 6.6% decrease.
Natural gas volumes of 822.9 MMcf for Q4-11 were down 6.5% sequentially, as compared to 879.8 MMcf in Q3-11.
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