Gasco Energy, Inc. GSX today announced that its subsidiary, Gasco Production Company ("Gasco" or the "Company"), has signed agreements, subject to customary closing conditions, to enter into a series of transactions with Wapiti Oil & Gas II, L.L.C., a Delaware limited liability company ("Wapiti"), pursuant to which it will, at closing, (I) sell to Wapiti an undivided 50% interest in its Uinta Basin producing oil and gas assets for $20.75 million in cash and (II) transfer to Wapiti an undivided 50% interest in its Uinta Basin non-producing oil and gas assets in exchange for, among other agreements, Wapiti's commitment to fund $30 million of the drilling and completion costs associated with the exploration and development of the transferred assets.
Of Wapiti's funding commitment, $15 million will be paid on behalf of the Company, and the Company has agreed provide an additional $7.5 million of drilling and completion costs. Accordingly, the total program will be $37.5 million; provided that, if on February 23, 2013, the 5-year NYMEX natural gas strip pricing is at least $5.00/MMBTU, the drilling and completion program will be expanded by $6.25 million to $43.75 million with Wapiti paying for $5 million of the additional costs.
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