U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

       [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934

                   For the fiscal Year Ended December 31, 2002

       [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934

                         Commission file number: 0-26321

                               GASCO ENERGY, INC.
             (Exact name of registrant as specified in its charter)

            NEVADA                                              98-0204105
(State or other jurisdiction of                              (I.R.S. Employer
  incorporation or organization)                            Identification No.)

       14 Inverness Drive East, Building H, Suite 236, Englewood, CO  80112
         (Address of principal executive offices)                   (ZipCode)

       Registrant's telephone number, including area code: (303) 483-0044

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, $0.0001 PAR VALUE
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the registrant's  knowledge,  in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).
Yes __ No X

As of June 28, 2002,  approximately 41,438,800 shares of Common Stock, par value
$0.0001  per  share  were  outstanding  and the  aggregate  market  value of the
outstanding  shares of Common  Stock of the Company held by  non-affiliates  was
approximately $61,813,882.

As of March 26, 2003, approximately 40,288,800 shares of Common Stock, par value
$0.0001 per share were outstanding.

                      Documents incorporated by reference:
                                      None.



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<PAGE>

PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Business of Gasco

Gasco  Energy,  Inc.  ("Gasco" or "the  Company") is a natural gas and petroleum
exploitation  and  development   company  engaged  in  locating  and  developing
hydrocarbon  prospects,  primarily in the Rocky Mountain  region.  The Company's
mission is to enhance  shareholder  value by using new  technologies to generate
and develop  high-potential  exploitation  prospects in this area. The Company's
principal  business is the  acquisition of leasehold  interests in petroleum and
natural gas rights,  either  directly or indirectly,  and the  exploitation  and
development of properties subject to these leases.

History

Gasco (formerly known as San Joaquin  Resources Inc.  ("SJRI")) was incorporated
on April 21, 1997 under the laws of the State of Nevada, as "LEK  International,
Inc." The Company  operated as a "shell"  company until December 31, 1999,  when
the Company combined with San Joaquin Oil & Gas Ltd., a Nevada corporation ("Oil
& Gas").  Prior to  closing  of this  transaction,  the  Company  had a total of
3,700,000  shares of common stock  issued and  outstanding.  The Company  issued
8,069,000  new  shares of common  stock in  exchange  for all of the  issued and
outstanding  common stock of Oil & Gas. As a result of that  transaction,  Oil &
Gas became a wholly owned subsidiary of Gasco.

On February 1, 2001, a subsidiary of the Company merged with  Pannonian  Energy,
Inc.  ("Pannonian"),  a private  corporation  incorporated under the laws of the
State of Delaware. In connection with this merger, the Company issued 14,000,000
shares  of common  stock to the  stockholders  of  Pannonian.  Pannonian  was an
independent   energy  company  engaged  in  the  exploration,   development  and
acquisition of crude oil and natural gas reserves in the western United States.

Under the terms of the Pannonian  Agreement,  Pannonian  was required,  prior to
closing  of the  merger on March 30,  2001,  to divest  itself of all assets not
associated with its "Riverbend" area of interest (the  "non-Riverbend  assets").
The "spin-offs" were accounted for at the recorded  amounts.  The net book value
of the non-Riverbend assets in the United States transferred,  including cash of
$1,000,000  and  liabilities  of $555,185,  was  approximately  $1,850,000.  The
non-Riverbend assets located outside of the United States were held by Pannonian
International  Ltd.  ("PIL"),  the  shares  of  which  were  distributed  to the
Pannonian stockholders. The net book value of PIL as of the date of distribution
was approximately $174,000.

Certain  shareholders of SJRI  surrendered  for  cancellation  2,438,930  common
shares  of  the  Company's  capital  stock  on  completion  of  the  transaction
contemplated by the Pannonian Agreement.

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<PAGE>

Upon completion of the  transaction,  Pannonian became a wholly owned subsidiary
of the  Company.  However,  since  this  transaction  resulted  in the  existing
shareholders  of  Pannonian  acquiring  control of the  Company,  for  financial
reporting  purposes  the  business  combination  is  accounted  for as a reverse
acquisition with Pannonian as the accounting acquirer. All information presented
for periods prior to March 30, 2001  represents  the  historical  information of
Pannonian.

Acquisition, Exploration and Development Expenses

During  the  year  ended  December  31,  2001,  the  Company  spent   $7,395,867
identifying and acquiring  petroleum and natural gas leases and prospect rights,
and during the year ended  December 31, 2002,  the Company  spent an  additional
$32,962,855,  including the issuance of 9,500,000  shares of common stock valued
at $18,525,000,  in the acquisition of additional  leases and in the development
and exploitation of the properties  subject to these leases.  As of December 31,
2002,  the Company held working  interests in 227,991  gross acres  (109,327 net
acres)  located in Utah,  Wyoming and  California.  As of December 31, 2002, the
Company held an interest in 13 gross (5.2 net)  producing  gas wells and 4 gross
(4.0 net) shut-in gas wells located on these properties. We currently operate 10
wells,  of  which  6 are  currently  producing.  See  "Item 2 -  Description  of
Properties".

Principal Products or Services and Markets

Gasco  focuses its  exploitation  activities  on locating  natural gas and crude
petroleum.   The  principal  markets  for  these  commodities  are  natural  gas
transmission  pipeline  companies,  utilities,  refining  companies  and private
industry end-users. Historically, nearly all of the Company's sales have been to
a few customers.  However, Gasco is not confined to, nor dependent upon, any one
purchaser  or  small  group  of  purchasers.  Accordingly,  the loss of a single
purchaser would not materially  affect the Company's  business because there are
numerous other  purchasers in the areas in which Gasco sells it production.  For
the years ended December 31, 2002 and 2001, purchases by the following companies
exceeded 10% of the total oil and gas revenues of the Company.  Gasco had no oil
and gas sales during the year ended December 31, 2000.

                                           For the Year Ended December 31,
                                     -------------------------------------------
                                     -------------------- ----------------------
                                             2002                  2001
                                             ----                  ----

      ConocoPhillips Company                 98%                    60%
      Wasatch Energy Corporation                                    37%


Competitive  Business  Conditions,  Competitive  Position  in the  Industry  and
Methods of Competition

The Company's natural gas and petroleum  exploration  activities take place in a
highly  competitive and speculative  business  atmosphere.  In seeking  suitable
natural gas and petroleum  properties  for  acquisition,  Gasco  competes with a
number of other  companies  operating in its areas of interest,  including large


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<PAGE>

oil and gas companies and other  independent  operators  with greater  financial
resources.  Management does not believe that Gasco's competitive position in the
petroleum and natural gas industry will be significant.

Management  anticipates  a competitive  market for  obtaining  drilling rigs and
services,  and the  manpower  to run them.  The  current  high level of drilling
activity in Gasco's areas of exploration  may have a significant  adverse impact
on the timing and profitability of Gasco's operations. In addition, as discussed
under Risk Factors,  Gasco will be required to obtain  drilling  permits for its
wells,  and there is no assurance that such permits will be available  timely or
at all.

The prices of the  Company's  products  are  controlled  by  domestic  and world
markets.  However,  competition  in the  petroleum  and natural gas  exploration
industry also exists in the form of  competition  to acquire the most  promising
acreage  blocks and obtaining the most  favorable  prices for  transporting  the
product.  Gasco,  and ventures in which it  participates,  are relatively  small
compared to other petroleum and natural gas  exploration  companies and may have
difficulty acquiring additional acreage and/or projects, and may have difficulty
arranging for the transportation of product, in the event Gasco, or a venture in
which it participates, is successful in its exploration efforts.

Governmental Regulations and Environmental Laws

Gasco and any venture in which it  participates,  is  required  to obtain  state
and/or federal and other permits for drilling oil or gas wells.

Exploration and production activities relating to oil and gas leases are subject
to numerous  environmental laws, rules and regulations.  The Federal Clean Water
Act requires Gasco to construct a fresh water  containment  barrier  between the
surface of each drilling site and the underlying water table.

Various federal,  state and local laws and regulations covering the discharge of
materials into the environment,  or otherwise  relating to the protection of the
environment,  may affect the Company's operations and costs through their effect
on oil and gas exploration, development and production operations. Environmental
laws and  regulations  have changed  substantially  and rapidly over the last 30
years,  and Gasco  anticipates that there will be continuing  changes.  Laws and
regulations  protecting the environment  have generally become more stringent in
recent  years,  and may in  certain  circumstances  impose  "strict  liability,"
rendering a  corporation  liable for  environmental  damages  without  regard to
negligence or fault on the part of such  corporation.  Such laws and regulations
may expose Gasco to liability for the conduct of operations or conditions caused
by others, or for acts of Gasco that were in compliance with all applicable laws
at  the  time  such  acts  were  performed.  Increasingly  strict  environmental
restrictions  and  limitations  have resulted in increased  operating  costs for
Gasco and other businesses throughout the United States, and it is possible that
the costs of compliance with environmental laws and regulations will continue to
increase.  The  modification  of existing laws or regulations or the adoption of
new laws or regulations relating to environmental  matters could have a material
adverse effect on Gasco's operations. In addition, Gasco's existing and proposed
operations could result in liability for fires, blowouts, oil spills,  discharge
of  hazardous   materials  into  surface  and  subsurface   aquifers  and  other


                                       4
<PAGE>

environmental  damage, any one of which could result in personal injury, loss of
life, property damage or destruction or suspension of operations.

The  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("CERCLA"),  also known as the "Superfund" law, requires payments for cleanup of
certain  abandoned  waste  disposal  sites,  even  though  such  waste  disposal
activities were undertaken in compliance with regulations applicable at the time
of  disposal.   Under  the   Superfund   law,  one  party  may,   under  certain
circumstances,  be required to bear more than its proportional  share of cleanup
costs at a site where it has  responsibility  pursuant  to the  legislation,  if
payments cannot be obtained from other  responsible  parties.  Other legislation
mandates  cleanup of  certain  wastes at  facilities  that are  currently  being
operated.  States also have regulatory  programs that can mandate waste cleanup.
CERCLA  authorizes  the  Environmental  Protection  Agency  ("EPA") and, in some
cases, third parties to take actions in response to threats to the public health
or the  environment  and to seek to  recover  from the  responsible  classes  of
persons the costs they incur. The scope of financial  liability under these laws
involves inherent uncertainties.

It is not  anticipated  that the Company  will be required in the near future to
expend  material  amounts because of  environmental  laws and  regulations,  but
inasmuch as such laws and  regulations  are frequently  changed,  the Company is
unable to predict the ultimate future cost of compliance. It is anticipated that
before full field  development can occur the Company will be required to conduct
Environmental  Assessments  and/or  Environmental  Impact  Statements  which may
result in material  delays and/or  limitations  to developing all or part of the
Company's leasehold. The Company believes it is presently in compliance with all
applicable  federal,  state or local  environmental  laws, rules or regulations;
however,  continued compliance (or failure to comply) and future legislation may
have an  adverse  impact on the  Company's  present  and  contemplated  business
operations. No assurance can be given as to what effect these present and future
laws, rules and regulations will have on Gasco's current and future operations.

Number of Total Employees and Number of Full-Time Employees

As of March 26, 2003, Gasco has ten full-time employees.

Risk Factors

Due to the nature of the Company's business and the present stage of exploration
on its oil and gas  prospects,  the  following  risk  factors  apply to  Gasco's
operations:

         Accumulated Losses

To date the Company's  operations have not generated  sufficient  operating cash
flows to provide working capital for the Company's ongoing overhead, the funding
of  its  lease  acquisitions  and  the  exploration  and  development  of  these
properties.  Without  adequate  financing,  the  Company  may  not  be  able  to
successfully  develop any  prospects  that it acquires or achieve  profitability
from its operations in the near future or at all.

                                       5
<PAGE>

During the year ended  December 31, 2002,  Gasco  incurred a loss of $5,649,682,
and has an accumulated  deficit of $22,765,236  since  inception,  including the
Series  A  Convertible   Redeemable   Preferred  Stock  deemed  distribution  of
$11,400,000  as  further  described  in  Note 11 of the  accompanying  financial
statements.

         Uncertainty of Reserve Estimates

Estimating  accumulations  of gas and oil is complex and is not exact because of
the  numerous  uncertainties  inherent in the  process.  The  process  relies on
interpretations of available geological, geophysical, engineering and production
data. The extent,  quality and  reliability of this technical data can vary. The
process also requires certain economic  assumptions,  some of which are mandated
by the Securities and Exchange Commission  ("SEC"),  such as gas and oil prices,
drilling and operating expenses, capital expenditures, taxes and availability of
funds. The accuracy of a reserve estimate is a function of:

     o    the quality and quantity of available data;

     o    the interpretation of that data;

     o    the accuracy of various mandated economic assumptions; and

     o    the judgment of the persons preparing the estimate.

The proved reserve information included herein is based on estimates prepared by
James R. Stell,  independent  petroleum  engineer.  Estimates prepared by others
could differ materially from these estimates.


The most accurate method of determining proved reserve estimates is based upon a
decline  analysis  method,  which  consists of  extrapolating  future  reservoir
pressure and production from historical  pressure  decline and production  data.
The accuracy of the decline analysis method generally  increases with the length
of the production history. Since most of the Company's wells have been producing
less than two months,  their  production  history is relatively  short, so other
(generally less accurate) methods such as volumetric analysis and analogy to the
production  history of wells of other  operators in the same reservoir were used
in  conjunction  with the decline  analysis  method to determine  the  Company's
estimates of proved reserves.  As the Company's wells are produced over time and
more data is available, the estimated proved reserves will be redetermined on an
annual basis and may be adjusted based on that data.


Actual  future  production,  gas and oil prices,  revenues,  taxes,  development
expenditures,  operating  expenses and  quantities  of  recoverable  gas and oil
reserves most likely will vary from the  Company's  estimates.  Any  significant
variance  could  materially  affect  the  quantities  and  present  value of the
Company's  reserves.  In  addition,  the Company may adjust  estimates of proved
reserves to reflect production  history,  results of exploration and development
and  prevailing  gas  and  oil  prices.  The  Company's  reserves  may  also  be
susceptible to drainage by operators on adjacent properties.

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<PAGE>

It  should  not be  assumed  that the  present  value of future  net cash  flows
included  herein is the current market value of the Company's  estimated  proved
gas and oil reserves. In accordance with SEC requirements, the Company generally
bases the  estimated  discounted  future net cash flows from proved  reserves on
prices and costs on the date of the estimate. Actual future prices and costs may
be  materially  higher or lower  than the prices and costs as of the date of the
estimate.

         Potential Future Impairment

The Company may be required to writedown  the carrying  value of its gas and oil
properties  when gas and oil prices are low or if there is substantial  downward
adjustments  to the  estimated  proved  reserves,  increases in the estimates of
development costs or deterioration in the exploration results.

The Company follows the full cost method of accounting, under which, capitalized
gas and oil property costs less accumulated depletion and net of deferred income
taxes may not exceed an amount equal to the present value, discounted at 10%, of
estimated future net revenues from proved gas and oil reserves plus the cost, or
estimated fair value, if lower of unproved properties.  Should capitalized costs
exceed this ceiling, an impairment is recognized. The present value of estimated
future net  revenues is computed  by applying  current  prices of gas and oil to
estimated  future  production  of proved gas and oil reserves as of  period-end,
less estimated  future  expenditures  to be incurred in developing and producing
the proved reserves assuming the continuation of existing  economic  conditions.
Once an impairment of gas and oil properties is recognized, is not reversible at
a later date even if oil or gas prices increase.

         Absence of a Mature Public Market

The Company's  common stock is highly  speculative  and has only been trading in
the public markets since January 2001. The Company's  common stock trades on the
over-the-counter  market.  Holders  of Gasco's  common  stock may not be able to
liquidate  their  investment in a short time period or at the market prices that
currently  exist at the time a holder  decides to sell.  Because of this limited
liquidity,  it is unlikely that Gasco's common stock will be accepted by lenders
as collateral for loans.

         Exploration and Production Risks

The business of exploring  for and  producing oil and gas involves a substantial
risk of investment  loss that even a combination  of  experience,  knowledge and
careful  evaluation  may not be able to  overcome.  Drilling  oil and gas  wells
involves  the risk  that  the  wells  will be  unproductive  or  that,  although
productive,  the wells do not  produce  oil and/or gas in  economic  quantities.
Other hazards, such as unusual or unexpected geological  formations,  pressures,
fires, blowouts,  loss of circulation of drilling fluids or other conditions may
substantially   delay  or  prevent  completion  of  any  well.  Adverse  weather
conditions can also hinder drilling operations.

A productive well may become  uneconomic in the event water or other deleterious
substances are encountered, which impair or prevent the production of oil and/or


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<PAGE>

gas from the well. In addition,  production from any well may be unmarketable if
it is impregnated with water or other deleterious substances.

         Financing Risks

Gasco  has  relied  in the past  primarily  on the sale of  equity  capital  and
farm-out and other similar types of transactions to fund working capital and the
acquisition of its prospects and related leases.  Failure to generate  operating
cash flow or to obtain additional financing for the development of the Company's
properties could result in substantial  dilution of Gasco's property  interests,
or delay or cause indefinite postponement of further exploration and development
of its prospects  with the possible loss of such  properties.  For example,  the
Company    entered   into   an   agreement   with    ConocoPhillips    Petroleum
("ConocoPhillips")  to conduct drilling operations on approximately 60,000 acres
within the Riverbend project. ConocoPhillips will fund its share of drilling and
completion  costs of wells that it drills within that area.  This  agreement was
subsequently amended to reduce the area that it covers to 30,000 acres. In order
to  maximize  its   interests  in  any  future   Riverbend   wells   drilled  by
ConocoPhillips,  the Company must fund its  proportionate  share of the drilling
and completion costs of such wells.  Generally, if Gasco funds its proportionate
share of drilling and completion costs in a well drilled by  ConocoPhillips,  it
will retain a 14% working interest (which becomes a 10.5% working interest after
payout) in the well drilled by  ConocoPhillips  and the spacing unit surrounding
the  well.  If  Gasco  does not fund its  proportionate  share of  drilling  and
completion  costs in a well drilled by  ConocoPhillips,  its  interests  will be
reduced to a 0.35%  overriding  interest  in the well and  spacing  unit  before
payout,  which will convert to a 2.10% working  interest after such well reaches
payout.

This project and other projects will require significant new funding.  Gasco has
not yet  secured  specific  sources  of  adequate  financing  forthis  and other
projects,  and it may be unable to timely  secure  financing  on terms  that are
favorable to the Company or at all. Any future financing through the issuance of
Company  common  stock will  likely  result in  substantial  dilution to Gasco's
stockholders.

         Uninsurable Risks

Although  management  believes the operator of any properties in which Gasco may
acquire interests will acquire and maintain  appropriate  insurance  coverage in
accordance  with  standard  industry  practice,  Gasco may  suffer  losses  from
uninsurable  hazards or from hazards  which the operator or Gasco has chosen not
to insure  against  because of high premium  costs or other  reasons.  Gasco may
become subject to liability for pollution, fire, explosion,  blowouts, cratering
and oil spills  against  which the Company  cannot  insure or against  which the
Company may elect not to insure.  Such events could result in substantial damage
to oil and gas wells,  producing  facilities  and other  property  and  personal
injury.  The payment of any such  liabilities may have a material adverse effect
on Gasco's financial position.

         No Assurance of Titles

If an  examination  of the  title  history  of  property  that the  Company  has
purchased  reveals that a petroleum and natural gas lease has been  purchased in
error from a person who is not the owner of the mineral  interest  desired,  the


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<PAGE>

Company's interest would be worthless.  In such an instance, the amount paid for
such petroleum and natural gas lease or leases would be lost.

It is Gasco's  practice,  in  acquiring  petroleum  and natural  gas leases,  or
undivided  interests  in  petroleum  and natural gas leases,  not to undergo the
expense of retaining  lawyers to examine the title to the mineral interest to be
placed under lease or already placed under lease.  Rather,  Gasco will rely upon
the judgment of petroleum  and natural gas lease  brokers or landmen who perform
the fieldwork in examining records in the appropriate governmental office before
attempting to place under lease a specific mineral interest.

Prior to the drilling of a petroleum  and natural gas well,  however,  it is the
normal  practice in the  petroleum  and natural gas  industry  for the person or
company acting as the operator of the well to obtain a preliminary  title review
of the spacing unit within which the proposed  petroleum and natural gas well is
to be drilled to ensure there are no obvious  deficiencies in title to the well.
Frequently, as a result of such examinations, certain curative work must be done
to correct  deficiencies in the  marketability  of the title,  and such curative
work entails expense. The work might include obtaining affidavits of heirship or
causing an estate to be administered.

         Natural Gas and Oil Prices

A sharp  decline in natural gas and oil prices  would  result in a  commensurate
reduction  in Gasco's  income for the  production  of oil and gas.  In the event
prices  fall  substantially,  Gasco may not be able to realize a profit from its
production  and would  continue to operate at a loss. In recent  decades,  there
have been  periods  of both  worldwide  overproduction  and  underproduction  of
hydrocarbons  and  periods of both  increased  and relaxed  energy  conservation
efforts.  Such  conditions  have  resulted  in periods of excess  supply of, and
reduced  demand  for,  crude oil on a  worldwide  basis and for natural gas on a
domestic basis.  These periods have been followed by periods of short supply of,
and increased  demand for, crude oil and natural gas. The excess or short supply
of crude oil and natural gas has resulted in dramatic  price  fluctuations  even
during  relatively  short periods of seasonal  market demand.  Among the factors
that can cause the price volatility are:

     o    Worldwide or regional demand for energy, which is affected by economic
          conditions;

     o    The domestic and foreign supply of natural gas and oil;

     o    Weather conditions;

     o    Domestic and foreign governmental regulations;

     o    Political conditions in natural gas or oil producing regions;

     o    The  ability of members of the  Organization  of  Petroleum  Exporting
          Countries to agree upon and maintain oil prices and production levels;
          and

     o    The price and availability of alternative fuels.

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<PAGE>

All of Gasco's  production  is currently  located in, and all of Gasco's  future
production is  anticipated  to be located in, the Rocky  Mountain  Region of the
United States.  The gas prices that the Company and other operators in the Rocky
Mountain  region  have  received  and  are  currently  receiving  are at a steep
discount to gas prices in other  parts of the  country.  Factors  that can cause
price volatility for crude oil and natural gas within this region are:

     o    The  availability  of gathering  systems with  sufficient  capacity to
          handle local production;

     o    Seasonal fluctuations in local demand for production;

     o    Local and national gas storage capacity;

     o    Interstate pipeline capacity; and

     o    The  availability and cost of gas  transportation  facilities from the
          Rocky Mountain region.

In  addition,  because of Gasco's  size the  Company  does not own or lease firm
capacity on any interstate pipelines. As a result, the Company's  transportation
costs are particularly subject to short-term fluctuations in the availability of
transportation  facilities.  The  Company's  management  believes that the steep
discount in the prices it receives may be due to pipeline constraints out of the
region,  but there is no  assurance  that  increased  capacity  will improve the
prices to levels seen in other  parts of the country in the future.  Even if the
Company acquires additional pipeline capacity, conditions may not improve due to
other factors listed above.

It is impossible to predict  natural gas and oil price movements with certainty.
Lower  natural gas and oil prices may not only  decrease  our  revenues on a per
unit basis but also may  reduce  the  amount of natural  gas and oil that we can
produce  economically.  A substantial or extended decline in natural gas and oil
prices may materially and adversely  affect Gasco's future  business,  financial
condition,  results of  operations,  liquidity  and  ability to finance  planned
capital  expenditures.  Further,  oil  prices  and  natural  gas  prices  do not
necessarily move together.

         Marketing

Several  factors beyond the control of Gasco may adversely  affect the Company's
ability to market the oil and gas that it may discover.  These  factors  include
the proximity and capacity of oil and gas  pipelines and  processing  equipment,
market  fluctuations  of  prices,  taxes,  royalties,   land  tenure,  allowable
production and environmental  protection.  The extent of these factors cannot be
accurately  predicted,  but any one or a combination of these factors may result
in Gasco's  inability  to sell its oil and gas at prices that would result in an
adequate  return on the Company's  invested  capital.  For example,  the Company
currently  distributes the gas that it produces  through a single  pipeline.  If
this pipeline  were to become  unavailable,  the Company would incur  additional
costs to  secure a  substitute  facility  in order to  deliver  the gas that the
Company  produces.  Gasco  relies upon the  services  of third  party  gathering
companies to transport  its natural gas to market.  A disruption in this service
could  materially  limit Gasco's ability to move its natural gas to market until
alternative  transportation can be arranged which may take an extended period of
time.

                                       10
<PAGE>

         Environmental Regulations

The Company's  exploration  and proposed  production  activities  are subject to
certain federal,  state and local laws and regulations relating to environmental
quality and pollution control.  These laws and regulations increase the costs of
these  activities and may prevent or delay the  commencement or continuance of a
given  operation.  Specifically,  Gasco  is  subject  to  legislation  regarding
emissions into the environment, water discharges, and storage and disposition of
hazardous wastes. In addition,  legislation has been enacted which requires well
and facility  sites to be abandoned and reclaimed to the  satisfaction  of state
authorities.  However, such laws and regulations have been frequently changed in
the past and Gasco is unable to predict the  ultimate  cost of  compliance  as a
result  of  any  future  changes.  It is  anticipated  that  before  full  field
development  can occur the Company  will be  required  to conduct  Environmental
Assessments and/or  Environmental Impact Statements which may result in material
delays and/or limitations to developing all or part of the Company's leasehold.

         Governmental Regulations

Petroleum and natural gas exploration, development and production are subject to
various types of regulation by local,  state and federal  agencies.  The Company
may be  required  to make large  expenditures  to comply  with these  regulatory
requirements.  Legislation  affecting  the petroleum and natural gas industry is
under constant review for amendment and expansion.  Also,  numerous  departments
and  agencies,  both federal and state,  are  authorized by statute to issue and
have  issued  rules and  regulations  binding on the  petroleum  and natural gas
industry and its individual members,  some of which carry substantial  penalties
for failure to comply.  Any increases in the regulatory  burden on the petroleum
and natural gas industry created by new legislation  would increase Gasco's cost
of doing business and, consequently, adversely affect its profitability. A major
risk inherent in drilling is the need to obtain drilling  permits from state and
federal authorities. Delays in obtaining drilling permits, the failure to obtain
a drilling permit for a well, or a permit with unreasonable  conditions or costs
could have a materially adverse effect on Gasco's ability to effectively develop
its properties.

          Competition

The  petroleum  and natural  gas  industry is  intensely  competitive  and Gasco
competes  with other  companies,  which  have  greater  resources.  Many of such
companies not only explore for and produce  crude  petroleum and natural gas but
also carry on refining  operations and market  petroleum and other products on a
regional,  national or worldwide  basis.  Such companies may be able to pay more
for productive petroleum and natural gas properties and exploratory prospects to
define,  evaluate,  bid for and  purchase  a greater  number of  properties  and
prospects than Gasco's financial or human resources  permit.  In addition,  such
companies may have a greater ability to continue  exploration  activities during
periods of low hydrocarbon market prices.  Gasco's ability to acquire additional
properties  and to discover  reserves in the future will be  dependent  upon its
ability  to  evaluate  and  select   suitable   properties   and  to  consummate
transactions in a highly competitive environment.

                                       11
<PAGE>

         Risks Associated with Management of Growth

Because of its small size, Gasco's growth in accordance with its business plans,
if achieved,  will place a significant strain on Gasco's  financial,  technical,
operational  and  management  resources.  As Gasco  expands its  activities  and
increases the number of projects it is  evaluating or in which it  participates,
there will be additional demands on Gasco's financial,  technical and management
resources. The failure to continue to upgrade Gasco's technical, administrative,
operating  and  financial  control  systems  or  the  occurrence  of  unexpected
expansion  difficulties,  including the recruitment and retention of experienced
managers,  geoscientists and engineers,  could have a material adverse effect on
Gasco's business,  financial condition and results of operations and its ability
to timely execute its business plan.

         Dependence upon Key Personnel

The success of Gasco's  operations  and activities is dependent to a significant
extent on the efforts and abilities of its  management.  The loss of services of
any of its key managers could have a material adverse effect on Gasco. Gasco has
not obtained "key man" insurance for any of its management.  Mr. Erickson is the
President  and CEO and Mr.  Decker  is an  executive  vice  president  and Chief
Operating  Officer of Gasco. The loss of their services may adversely affect the
business and prospects of Gasco.

         Conflicts of Interest

Certain of the officers  and  directors of Gasco will also serve as directors of
other companies or have significant  shareholdings  in other  companies.  To the
extent  that such other  companies  participate  in  ventures in which Gasco may
participate,  or compete for prospects or financial  resources with Gasco, these
officers and directors of Gasco will have a conflict of interest in  negotiating
and concluding terms relating to the extent of such participation.  In the event
that such a conflict of interest  arises at a meeting of the board of directors,
a director  who has such a conflict  must  disclose the nature and extent of his
interest to the board of  directors  and abstain  from voting for or against the
approval of such participation or such terms.

In accordance  with the laws of the State of Nevada,  the directors of Gasco are
required to act honestly and in good faith with a view to the best  interests of
Gasco.  In  determining  whether or not Gasco will  participate  in a particular
program  and the  interest  therein to be  acquired  by it, the  directors  will
primarily  consider  the degree of risk to which  Gasco may be  exposed  and its
financial position at that time.

         Enforcement of Legal Process

Two of the  directors of Gasco reside  outside the United  States and maintain a
substantial  portion of their assets outside the United  States.  As a result it
may be difficult or  impossible to effect  service of process  within the United
States upon such persons,  to bring suit in the United States or to enforce,  in
the U.S.  courts,  any judgment  obtained there against such persons  predicated
upon any civil liability provisions of the U.S. federal securities laws.

                                       12
<PAGE>

Foreign courts may not entertain  original actions against Gasco's  directors or
officers  predicated  solely upon U.S.  federal  securities  laws.  Furthermore,
judgments  predicated  upon any civil liability  provisions of the U.S.  federal
securities laws may not be directly enforceable in foreign countries.

Cautionary Statement Regarding Forward-Looking Statements

In the interest of providing the shareholders with certain information regarding
the Company's future plans and operations,  certain statements set forth in this
Form 10-K relate to management's  future plans and  objectives.  Such statements
are  forward-looking  statements  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  report,  including,  without  limitation,  statements
regarding the Company's future financial position,  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 Form 10-K or otherwise
expressed  by or on behalf  of the  Company  are,  to the  knowledge  and 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,
which may cause the  Company's  actual  performance,  and  financial  results in
future periods to differ materially from any projection,  estimate or forecasted
result.  Important  factors that could cause actual results to differ materially
from the Company expectations  ("Cautionary Statements") include those discussed
in this report under the caption "Risk Factors",  above. All subsequent  written
and oral  forward-looking  statements  attributable  to the Company,  or persons
acting  on  its  behalf,  are  expressly  qualified  in  their  entirety  by the
Cautionary  Statements.  The  Company  assumes  no duty to update or revise  its
forward-looking   statements   based  on  changes  in  internal   estimates   or
expectations or otherwise.

ITEM 2 - DESCRIPTION OF PROPERTY

Petroleum and Natural Gas Properties

Gasco is a  natural  gas and  petroleum  exploitation  and  development  company
engaged in locating and developing  hydrocarbon prospects primarily in the Rocky
Mountain Region.  Gasco's strategy is to enhance  stockholder value by using new
technologies to generate high-potential exploitation prospects in this area. The
Company's  principal  business is the  acquisition  of  leasehold  interests  in
petroleum  and natural  gas  rights,  either  directly  or  indirectly,  and the
exploitation and development of properties subject to these leases.

         Riverbend Project

The Riverbend  project is comprised of approximately  105,598 gross acres in the
Uinta Basin of  northeastern  Utah,  of which the  Company  holds an interest in
approximately 31,199 net acres as December 31, 2002. Additionally,  Gasco has an


                                       13
<PAGE>

opportunity to earn or acquire an interest in  approximately  40,135 gross acres
in  this  area  under  farm-out  and  other  agreements.  Gasco's  geologic  and
engineering  focus is concentrated on three tight-sand  formations in the basin:
the Wasatch,  Mesaverde and Blackhawk formations.  Significant  acquisitions and
agreements related to this area are discussed below.

In December 2000,  Gasco entered into an agreement with  ConocoPhillips  Company
("ConocoPhillips")  that defined a 60,000-acre  Area of Mutual Interest  ("AMI")
within the  Riverbend  project,  not all of which is currently  leased by either
Gasco or ConocoPhillips.  This agreement was subsequently  amended to reduce the
area  that it  covers  to  30,000  acres.  Under  the  terms of this  agreement,
ConocoPhillips  paid  $1,000,000 to Gasco upon execution of the  agreement,  and
later  expended  $8,000,000  in connection  with the drilling and  completion of
three producing  wells. As a result of  ConocoPhillips'  drilling,  Gasco earned
additional  acreage under certain  farm-out  agreements  during 2001.  Under the
agreement,  ConocoPhillips  also has the right to acquire an 80% interest in all
of Gasco's leases and farm-out  agreements  within the AMI by assigning to Gasco
leasehold interests in two leases within the AMI in which Gasco had no ownership
interest.  As of December 31, 2002, these assignments of interest were completed
and are reflected in the total acreage positions in this area described above.

During  January 2002,  Gasco entered into an agreement with  Halliburton  Energy
Services  ("Halliburton")  under  which  Halliburton  has the  option  to earn a
participation   interest   proportionate   to  its  investment  by  funding  the
completions of  Wasatch/Mesaverde  wells.  The Company and Halliburton will also
share technical information through the formation of a joint technical team.

Gasco began drilling the first well under this agreement  during  February 2002.
Approximately  $1,000,000 was spent on this well, which began selling gas in the
beginning of July 2002. In April 2002, the Company  drilled its second  operated
well in this immediate area for a total cost of approximately $1,300,000.  Sales
of production from this well began during the middle of August 2002.  Compressor
capacity  limitations on a third party gathering  system in this area caused one
of these wells to be shut-in and have  significantly  restricted  the production
rate of the other well  through  the end of 2002.  During  January  2003,  Gasco
entered  into a contract  with the system  operator to put a new  compressor  in
place.  The compressor began operating during the beginning of February 2003 and
is  expected  to meet the  Company's  projected  compression  needs for the next
twelve months.  During January 2003, the Company incurred  approximately $94,000
for  installation  and  operation  costs of the  compressor  for the next twelve
months.

Gasco began drilling its third operated well in this area during September 2002.
The well reached  total depth in October 2002,  was completed  during the fourth
quarter of 2002 and began selling gas during  February 2003. The Company's share
of the drilling costs for this well was approximately $1,200,000. Gasco's fourth
operated  well in this area  reached  total depth  during  December  2002 and is
currently  awaiting  completion.  The  total  drilling  costs  for this well are
expected to be  approximately  $1,200,000.  Gasco's fifth  operated well in this
area was  spudded in  October  2002 with a small rig that has been moved off the


                                       14
<PAGE>

drill site.  A larger rig was moved onto the site in March 2003 to complete  the
drilling of this well at a total estimated cost of approximately  $1,200,000. As
of March 27, 2003,  Halliburton  has exercised its option to  participate in the
first two wells and is evaluating the remaining three wells.

In addition to the Gasco-operated wells described above, the Company also owns a
14 to 20% working interest in five wells that were drilled by  ConocoPhillips in
this area during late 2001 and through the fourth quarter of 2002. Gasco did not
particpate  in a sixth well drilled by  ConocoPhillips.  Four of these wells are
currently selling gas, and one has been drilled and is awaiting completion.

         Greater Green River Basin Project

In Wyoming,  Gasco established an AMI with Burlington  Resources  ("Burlington")
covering  approximately  330,000 acres in Sublette  County,  Wyoming  within the
Greater Green River Basin.  As of December 31, 2002, the Company has a leasehold
interest in approximately 118,325 gross acres and 75,096 net acres in this area.
The  exploration  agreement  governing the AMI requires  Burlington to drill two
wells and to shoot 180 miles of high-resolution  2-D seismic. As of December 31,
2002,  Burlington  has  completed  shooting the 180 miles of 2-D seismic and has
drilled and completed  both of the wells,  both of which are  currently  selling
gas.  The Company  participated  in the  drilling  of a well in Sublette  County
Wyoming,  which was spudded during September 2002. Gasco has a 31.5% interest in
this well, which is operated by Burlington.  The well is currently  selling gas,
and the Company's  total cost for this well was  approximately  $700,000.  Gasco
also  participated  in  another  Burlington-operated  well in this  area  during
October 2002. The Company has a 31.5% interest in this well,  which was recently
completed.  The Company's share of the drilling and completion costs is expected
to be approximately $900,000.

During 2001,  three  shallow  wells were drilled in this area for the purpose of
holding  acreage and earning  expiring  leasehold.  All of these wells have been
cased  and are in  various  stages  of  completion,  however  none of these  are
currently producing.

During  February  2002,  the Company  purchased  at a Bureau of Land  Management
("BLM") sale a 45% interest in 21,614 acres (9,726 net acres) for  approximately
$1,428,000. After this sale, the Company was notified by the BLM in Wyoming that
several  environmental  groups filed a protest against the BLM offering numerous
parcels of land for oil and gas leasing.  All of the parcels (leases)  purchased
by the Company were placed in suspense  pending the  resolution of this protest.
If the protest is deemed to have merit, the lease purchases will be rejected and
the money paid for the leases will be returned to the Company. If the protest is
deemed to be without merit, the leases will be released from suspense and issued
to the  Company.  Effective  July 16,  2002,  the Company  assigned  25% of this
suspended  interest to Brek Energy  Corporation  ("Brek"),  as further discussed
below,  resulting in the Company's net acres in this  transaction  being reduced
from 9,726 to 7,295 net acres.  As of December  31,  2002,  the BLM has released
from suspension and issued leases covering 5,700 gross acres  representing 1,924
net acres to the Company.  These issued  leases are  reflected in the  Company's
total acreage  position stated above.  Currently,  15,914 gross acres (5,371 net
acres)  remain in suspense and are excluded from the acreage  totals above.  The
value  of the  remaining  suspended  leases  is  recorded  as  unproved  mineral
interests in the accompanying financial statements.

                                       15
<PAGE>

On February  19, 2002,  the Company  purchased  leasehold  interests in Sublette
County, Wyoming covering approximately 18,451 gross acres (16,421 net acres) for
a total  purchase  price of  $1,500,000.  Effective  July 16,  2002 the  Company
assigned 25% of its interest to Brek resulting in the Company's interest in this
property being reduced from 16,421 to 12,316 net acres.

During February 2002,  Gasco drilled a well in the Southwest Jonah field located
in the  Greater  Green River Basin in  Sublette  County,  Wyoming.  The well was
drilled to a total  depth of 11,000  feet.  The well  encountered  natural  gas,
however not of sufficient quantities to be deemed economic. The well was plugged
and abandoned  during March 2002. The net dry hole cost of the well was $541,125
and was recorded as impairment  expense during 2002 because the Company believed
that the total costs for this well  exceeded the present  value,  discounted  at
10%, of the future net revenues from its proved oil and gas reserves.

On May 1, 2002, the Company issued  9,500,000  shares of its common stock to the
Shama Zoe Limited Partnership ("Shama Zoe"), a private oil and gas company,  for
the  acquisition  of 53,095  gross  (47,786  net) acres  plus  other  assets and
consideration  in the Greater Green River Basin in Sublette County Wyoming.  The
acquisition  was valued at  $18,525,000  using a stock price of $1.95 per common
share,  which  represented  the closing price of the  Company's  common stock on
April 23, 2002;  the date the  agreement  was  executed.  The original  Property
Purchase Agreement governing this transaction prevented the Company from issuing
additional  shares of its common  stock at prices below $1.80 per share and from
granting  registration  rights in connection  with the issuance of shares of its
common  stock.  In  connection  with the August 14, 2002  issuance of  6,500,000
shares of common stock, as described under Item 5, below, the original  Property
Purchase  Agreement  was amended to allow for the  issuance of these shares at a
price of $1.00 per share  and  Shama  Zoe was  granted  an option to sell to the
Company  1,400,000  shares of the Gasco  common  stock that it  acquired  in the
transaction  at $1.00 per  share at any time  prior to  December  31,  2002.  On
December 31, 2002 Shama Zoe  exercised the option and sold  1,400,000  shares of
Gasco common stock back to the Company for $1.00 per share. The Company issued a
$1,400,000  promissory  note to Shama Zoe for the purchase of these shares.  The
promissory  note  beared  interest  at 12% and had a maturity  date of March 14,
2003. On February 20, 2003, the Company  repaid this note plus accrued  interest
in full.

In  connection  with this  transaction,  the Board of  Directors  of the Company
authorized the payment to an employee of the Company,  who was  instrumental  in
securing  the  Company's  agreement  with Shama Zoe, of $300,000 in cash and the
issuance  of options to  purchase  250,000  shares of Gasco  common  stock at an
exercise  price of $1.95 per  share,  which was equal to the fair  market of the
common  stock on April 23,  2002.  Prior to the end of 2002 the Company had paid
$150,000 of the total cash bonus to the employee;  therefore, the remaining cash
payment of $150,000 was accrued in the accompanying  financial  statements as of
December 31, 2002.

During May 2002,  the  Company  elected  to  participate  in a 3D seismic  shoot
covering 100 square miles in Sublette  County,  Wyoming.  The Company's share of
the  costs  for the  seismic  data,  which is  currently  being  processed,  was
$850,000.

                                       16
<PAGE>

         Southern California Project

The Company has a leasehold  interest in approximately  4,068 gross acres (3,032
net acres) on two oil prospects in Kern and San Luis Obispo Counties of Southern
California.  The Company has no drilling or  development  plans for this acreage
during 2003, but plans to continue  paying  leasehold  rentals and other minimum
geological  expenses  to  preserve  the  Company's  acreage  positions  on these
prospects. The Company may consider selling these positions in the future.

         Repurchase of Stock for Acreage

On July 16, 2002, Gasco executed and closed a purchase  agreement with Brek, and
certain other Gasco stockholders (the "Other  Stockholders"),  pursuant to which
Brek and the Other Stockholders purchased from Gasco an undivided 25% of Gasco's
working interests in all undeveloped acreage owned by Gasco, representing 35,169
net undeveloped  acres,  in exchange for 6,250,000  shares of Gasco common stock
and 500 shares of Gasco preferred stock held by Brek and the Other Stockholders.
The Other  Stockholders  assigned  their  right to receive  their  share of such
working  interests to Brek,  so that Brek  acquired  title to all of the working
interests  conveyed  by Gasco in the  transaction.  Brek also has the  option to
acquire an additional 5% undivided  interest in Gasco's  undeveloped  acreage by
paying a total of $10.5 million in two equal  installments  on or before January
1, 2004 and January 1, 2005,  respectively.  A 2.5% interest will be conveyed to
Brek upon  receipt of each  installment.  Brek must make  timely  payment of the
first installment in order to maintain the option to acquire the additional 2.5%
interest with the second installment.

The transaction  was recorded at $16,709,000  based on the average trading price
of  the  Company's  common  stock  when  the  transaction  was  consummated  The
transaction was recorded as a reduction to the Company's unproved properties and
a reduction to the Company's  additional  paid in capital,  preferred and common
stock.

Company Reserve Estimates by Region

The following table summarizes the Company's estimated reserve data by region as
of December 31, 2002,  as  estimated  by James R. Stell,  independent  petroleum
engineer.
<TABLE>
<CAPTION>

                Proved Reserve Quantities            Present Value of Future Net Cash Flows
                                                       Proved           Proved
                   Mcf of Gas      Bbls of Oil      Undeveloped       Developed          Total

<S>                <C>                <C>           <C>             <C>              <C>
   Utah            19,849,210         141,652       $ 5,391,953     $ 6,727,209      $ 12,119,162
   Wyoming            773,056               -                           192,840           192,840
                -------------   --------------  -----------------   --------------  --------------
        Total      20,622,266         141,652        $ 5,391,953    $ 6,920,049      $ 12,312,002
                  ===========        ========       ============    ============      ============
</TABLE>

                                       17
<PAGE>

Volumes, Prices and Operating Expenses

The following  table  presents  information  regarding the  production  volumes,
average sales prices received and average  production  costs associated with the
Company's  sales of natural  gas for the periods  indicated.  The Company had no
sales of gas production prior to October 2001.

                                             For the Years Ended December 31,
                                       -----------------------------------------
                                             2002                  2001
                                       ----------------    ---------------------

       Natural gas production (Mcf)             66,444                   17,545
       Average sales price per Mcf              $ 2.47                    $2.10
       Expenses per Mcf:
          Lease operating                       $ 1.80                   $ 0.72
          General and administrative           $ 76.46                 $ 246.57
          Depletion and impairment              $ 9.73                       --

Development, Exploration and Acquisition Capital Expenditures

During  the  year  ended  December  31,  2001,  the  Company  spent   $7,395,867
identifying and acquiring  petroleum and natural gas leases and prospect rights,
and during the year ended  December 31, 2002,  the Company  spent an  additional
$32,962,855 , including the issuance of 9,500,000  shares of common stock valued
at $18,525,000,  in the acquisition of additional  leases and in the development
and exploitation of the properties  subject to these leases.  As of December 31,
2002,  the Company held working  interests in 227,991  gross acres  (109,327 net
acres)  located in Utah,  Wyoming and  California.  As of December 31, 2002, the
Company held an interest in 13 gross (5.2 net)  producing  gas wells and 4 gross
(4.0 net) shut-in gas wells located on these properties. We currently operate 10
wells, of which 6 are currently producing.

The  following  table  presents  information  regarding  the Company's net costs
incurred in the purchase of proved and unproved  properties  and in  exploration
and development activities:

                                         For the Years Ended December 31,
                              -------------------------------------------------
                                 2002                  2001                2000
                            ---------------  -------------------  --------------

Property acquisition costs:
   Unproved                  $22,324,547          $ 7,161,450          $425,797
   Proved                             --                   --                --
Exploration costs (a)          3,319,124                   --           297,865
Development costs             7,319,1844                   --                --
                          ------------------  -------------------  ------------
     Total costs incurred      $ 32,962,855         $ 7,161,450        $723,652
                          ==================  ===================  ============

(a)  Includes  seismic  data  acquisitions  of  $850,000  during  the year ended
December 31, 2002.

                                       18
<PAGE>

Productive Gas Wells

The following  summarizes  the Company's  productive and shut-in gas wells as of
December 31, 2002.  Productive  wells are  producing  wells and wells capable of
production.  Shut-in  wells are wells  that are  capable of  production  but are
currently not producing.  Gross wells are the total number of wells in which the
Company  has an  interest.  Net  wells are the sum of the  Company's  fractional
interests owned in the gross wells.

                                          Productive Gas Wells
                                     Gross                       Net

       Producing gas wells             13                        5.2
       Shut-in gas wells                4                        4.0
                                       --                        ---
                                       17                        9.2
                                       ==                        ===

As of  March  26,  2003,  the  Company  was  in  the  process  of  drilling  one
developmental  well in the Riverbend  area of Utah;  however,  the Company's net
interest in this well has not been determined.

The Company  operates six of the producing  wells and all of the shut-in  wells.
Five of the remaining seven producing properties in the above table were drilled
by ConocoPhillips  within Gasco's and ConocoPhillip's Area of Mutual Interest in
the  Riverbend  Project and are operated by  ConocoPhillips.  The two  remaining
producing  wells are located in Sublette County Wyoming and were drilled and are
operated by Burlington.

Oil and Gas Acreage

The following table sets forth the undeveloped and developed  leasehold acreage,
by area,  held by the Company as of December  31,  2002.  Undeveloped  acres are
acres on which wells have not been  drilled or  completed  to a point that would
permit the  production  of commercial  quantities of oil and gas,  regardless of
whether or not such acreage contains proved reserves. Developed acres are acres,
which are spaced or assignable to  productive  wells.  Gross acres are the total
number of acres in which Gasco has a working interest.  Net acres are the sum of
Gasco's  fractional  interests  owned in the gross  acres.  The  table  does not
include  acreage that the Company has a contractual  right to acquire or to earn
through  drilling  projects,  or any other acreage for which the Company has not
yet received leasehold assignments.  These acquisitions or agreements, which are
significant  to  the  Company's  acreage  position,  are  summarized  below  the
following tables. In certain leases, the Company's ownership is not the same for
all depths;  therefore,  the net acres in these leases are calculated  using the
greatest  ownership  interest  at any depth.  Generally  this  greater  interest
represents Gasco's ownership in the primary objective formation.

                                       19
<PAGE>

                             Undeveloped Acres            Developed Acres
                      ---------------------------  -----------------------------
                      --------------   ------------ ------------- -----------
                          Gross            Net            Gross          Net

     Utah                   105,038         30,919           560         280
     Wyoming                118,085         74,909           240         187
     California               4,068          3,032            --          --
                      --------------   ------------ ------------- -----------

         Total acres        227,191        108,860           800         467
                      ==============   ============ ============= ===========

The following table summarizes the gross and net undeveloped  acres by area that
will expire in each of the next three years.

               Expiring in 2003      Expiring in 2004      Expiring in 2005
               Gross        Net      Gross      Net        Gross          Net

Utah           1,746        277       6,381       2,254     8,506       1,462
Wyoming       12,204      6,214      18,194      12,485     6,074       4,100
California       200        391          --          --     1,072         545
             -------      -----      ------      ------     -----       -----

Total         14,150      6,882      24,575      14,739    15,652       6,107
              ======      =====      ======      ======    ======       =====

During  February  2002,  the Company  purchased  at a BLM sale a 45% interest in
21,614 gross acres  (9,726 net acres) for  approximately  $1,428,000.  After the
sale, the Company was notified by the BLM in Wyoming that several  environmental
groups filed a protest against the BLM offering numerous parcels of land for oil
and gas  leasing.  All of the parcels  (leases)  purchased  by the Company  were
placed in suspense  pending the  resolution of this  protest.  If the protest is
deemed to have merit,  the lease  purchases  will be rejected and the money paid
for the leases will be returned to the  Company.  If the protest is deemed to be
without  merit,  the leases will be  released  from  suspense  and issued to the
Company.  Effective  July 16, 2002,  the Company  assigned 25% of this suspended
interest to Brek  resulting in the  Company's net acres being reduced from 9,726
to  7,295  net  acres.  As of  December  31,  2002,  the BLM has  released  from
suspension and issued leases covering 5,700 gross acres  representing  1,924 net
acres to the Company.  These issued leases are reflected in the Company's  total
acreage position stated above.  Currently,  15,914 gross acres (5,371 net acres)
remain in suspense  and this  acreage is not  included in the above  table.  The
value  of the  remaining  suspended  leases  is  recorded  as  unproved  mineral
interests in the accompanying financial statements.

As of December 31, 2002, the Company has purchased or earned 26,496 gross (7,003
net) acres in the Uinta  Basin in Utah and in Sublette  County,  Wyoming but has
not yet received  leasehold  assignments.  The Company also has the  contractual
right to earn or acquire  40,135 gross (21,849 net) acres within the Uinta Basin
and 3,042  gross (770 net) acres in  Sublette  County  through  future  drilling
projects  that must be completed at various  dates  through the end of May 2006.
All of this acreage is excluded from the table above.

                                       20
<PAGE>

As of December  31, 2002,  approximately  79% of the acreage that Gasco holds is
located  on federal  lands and  approximately  19% of the  acreage is located on
state lands. It has been Gasco's  experience that the permitting process related
to the  development  of  acreage  on federal  lands is more time  consuming  and
expensive than the  permitting  process  related to acreage on state lands.  The
Company has generally  been able to obtain state permits  within 30 days,  while
obtaining  federal permits has taken several months or longer.  Accordingly,  if
the  development  of the Company's  acreage  located on federal lands is delayed
significantly  by the permitting  process,  the Company may have to operate at a
loss for an extended period of time.

Drilling Activity

The following table sets forth the Company's  drilling activity during the years
ended  December 31, 2002 and 2001. The Company had no drilling  activity  during
the year ended December 31, 2000.
                                      For the Year Ended December 31,
                                      2002                        2001
                               --------------------     ------------------------
                                Gross         Net         Gross          Net
       Exploratory Wells:
         Productive                2          0.7           3            3.0
         Dry                       1          1.0           -             --
                                  --          ---           -             --
           Total wells             3          6.7           3            3.0
                                  ==          ===           =            ===

       Development Wells:
         Productive                6          3.3           3            0.6
         Dry                       -          --            -              -
                                  --          ---          --            ---
           Total wells             6          3.3           3            0.6
                                  ==          ===          ==            ===

Office Space

The Company leases approximately 3,255 square feet of office space in Englewood,
Colorado  for  approximately  $46,000 per year under two  leases,  both of which
terminate on August 30, 2004. The Company's  management believes that this space
will be adequate for its operations during the next year.

ITEM 3 - LEGAL PROCEEDINGS

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                       21
<PAGE>

PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company's  common  stock was  initially  admitted  for  trading  on the OTC
Bulletin  Board on August 25, 2000 under the trading  symbol  "SJQR" and trading
did not commence until January 2001. On March 30, 2001, SJRI changed its name to
Gasco and began  trading  under the symbol  "GASE".  As of March 26,  2003,  the
Company had 73 registered  shareholders of its common stock. During the last two
fiscal  years,  no cash  dividends  were declared on Gasco's  common stock.  The
Company's  management  does not  anticipate  that  dividends will be paid on its
common stock in the near future.

The  following  table sets forth,  for the periods  indicated,  the high and low
sales  prices per share of the  Company's  common  stock as  reported on the OTC
bulletin board for the periods indicated.

                                            High          Low
2001
         First Quarter                    $4.06          $0.03
         Second Quarter                    4.00           2.05
         Third Quarter                     3.20           1.00
         Fourth Quarter                    2.85           1.15

2002
         First Quarter                     2.24           1.55
         Second Quarter                    2.55           1.57
         Third Quarter                     1.75           0.68
            Fourth Quarter                 1.15           0.53

Equity Compensation Plans

The  table  below  provides   information   relating  to  the  Company's  equity
compensation plans as of December 31, 2002:
<TABLE>
<CAPTION>

                                                                                  Number of securities
                                                                                  remaining available
                                   Number of securities      Weighted-average     for future issuance
                                       to be issued          exercise price of     under compensation
                                     upon exercise of           outsanding          plans (excluding
                                   outstanding options,          options,         securities reflected
Plan Category                       warrants and rights     warrants and rights     in first column)
-------------                       -------------------     -------------------     ----------------
Equity compensation plans
<S>                                        <C>                <C>                        <C>
approved by security holders               258,000            $      1.66                918,900

Equity compensation plans
not approved by security holders          6,097,250                   2.19                    (a)
                                          ---------                ---------             --------

Total                                     6,355,250            $      2.17                918,900
                                         =========                   ====                =======
</TABLE>

                                       22
<PAGE>

(a)      These options have been issued in individual option agreements,  rather
         than  under  a  specific  option  plan,  therefore,  there  is  not  an
         established  number of options available for future issuance.  See Item
         11.  Executive  Compensation - Employment  Agreements  for  information
         regarding the material terms of these options.

Equity Transactions

The Company's  equity  transactions  during the year ended December 31, 2002 are
described as follows:

During 2002,  the Company  issued  options to purchase  500,000 shares of common
stock to employees and directors of the Company, at exercise prices ranging from
$1.58 to $1.95 per share.  The options vest quarterly over a two-year period and
expire within ten years from the grant date.

On May 1, 2002, the Company issued  9,500,000  shares of its common stock to the
Shama Zoe Limited Partnership ("Shama Zoe"), a private oil and gas company,  for
the  acquisition  of 53,095  gross  (47,786  net) acres  plus  other  assets and
consideration  in the Greater Green River Basin in Sublette County Wyoming.  The
acquisition  was valued at  $18,525,000  using a stock price of $1.95 per common
share,  which  represented  the closing price of the  Company's  common stock on
April 23, 2002;  the date the  agreement  was  executed.  The original  Property
Purchase Agreement governing this transaction prevented the Company from issuing
additional  shares of its common  stock at prices below $1.80 per share and from
granting  registration  rights in connection  with the issuance of shares of its
common  stock.  In  connection  with the August 14, 2002  issuance of  6,500,000
shares of common  stock,  as described  below,  the original  Property  Purchase
Agreement  was amended to allow for the  issuance of these  shares at a price of
$1.00  per share and  Shama  Zoe was  granted  an option to sell to the  Company
1,400,000  shares of the Gasco common stock that it acquired in the  transaction
at $1.00 per share at any time prior to December 31, 2002.  On December 31, 2002
Shama Zoe exercised the option and sold  1,400,000  shares of Gasco common stock
back to the  Company  for $1.00  per  share.  The  Company  issued a  $1,400,000
promissory  note to Shama Zoe for the purchase of these shares.  The  promissory
note bears  interest  at 12% and has a maturity  date of March 14,  2003.  As of
February  20, 2003,  the Company has repaid this note plus  accrued  interest in
full.

On July 16, 2002, Gasco executed and closed a purchase  agreement with Brek, and
certain other Gasco stockholders (the "Other  Stockholders"),  pursuant to which
Brek and the Other Stockholders purchased from Gasco an undivided 25% of Gasco's
working interests in all undeveloped acreage owned by Gasco, representing 35,169
net undeveloped  acres,  in exchange for 6,250,000  shares of Gasco common stock
and 500 shares of Gasco preferred stock held by Brek and the Other Stockholders.
The Other  Stockholders  assigned  their  right to receive  their  share of such
working  interests to Brek,  so that Brek  acquired  title to all of the working
interests  conveyed  by Gasco in the  transaction.  Brek also has the  option to
acquire an additional 5% undivided  interest in Gasco's  undeveloped  acreage by
paying a total of $10.5 million in two equal  installments  on or before January
1, 2004 and January 1, 2005,  respectively.  A 2.5% interest will be conveyed to
Brek upon  receipt of each  installment.  Brek must make  timely  payment of the


                                       23
<PAGE>

first installment in order to maintain the option to acquire the additional 2.5%
interest with the second installment.

The Brek  transaction  was recorded at $16,709,000  based on the average trading
price of the Company's  common stock when the  transaction was  consummated.  In
accordance with Securities and Exchange Commission Regulation S-X rule 4.10, the
transaction was recorded as a reduction to the Company's unproved properties and
a reduction to the Company's  additional  paid in capital,  preferred and common
stock.

On August 14, 2002, the Company issued 6,500,000 shares of common stock for cash
at $1.00 per  share,  pursuant  to  private  placements  for gross  proceeds  of
$6,500,000.  The cost of this offering was $526,020,  $350,000 of which was paid
to Energy  Capital  Solutions  and $65,000 of which was paid to Enercom  Inc. as
financial advisory fees. These shares were subsequently registered for resale on
a Form S-1 Registration Statement filed on August 27, 2002.

Unless  otherwise  noted,  each of the above sales of  securities by the Company
were exempt  from  registration  under the  Securities  Act of 1933  pursuant to
Section  4(2)  thereof,  inasmuch as each such sale was  conducted  as a private
placement to a limited number of sophisticated buyers.

The  aggregate  net  proceeds  from  the  equity   offering   during  2002  were
approximately $5,974,000. These proceeds were used to fund the Company's capital
budget during the third and fourth quarters of 2002, which included the drilling
of two Gasco operated wells and participating the drilling of two ConocoPhillips
operated  wells in the  Riverbend  area of Utah and the drilling of two wells in
Sublette County Wyoming.

ITEM 6 - SELECTED FINANCIAL DATA

The  following  table sets  forth  selected  financial  data,  derived  from the
consolidated  financial  statements,  regarding Gasco's  financial  position and
results of operations as the dates indicated.  All information for periods prior
to March 30, 2001  represents  the historical  information of Pannonian  because
Pannonian was considered the acquiring entity for accounting purposes.
<TABLE>
<CAPTION>

                                                                   As of and for the Year Ended December 31,
                                                                   -----------------------------------------
                                                     2002                 2001             2000           1999           1998
                                                     ----                 ----             ----           ----           ----
Summary of Operations
<S>                                                 <C>                   <C>
      Revenue                                          $ 164,508             $ 36,850             -               -             -
      General & administrative expense                 5,080,287            4,326,065      $951,734        $738,153        $6,000
      Net loss                                       (5,649,682)          (4,129,459)     (843,261)       (736,834)       (6,000)
      Net loss per share                                  (0.16)               (0.63)        (0.06)           (.06)             -


                                                                   As of and for the Year Ended December 31,
                                                                   -----------------------------------------
                                                    2002                2001           2000              1999            1998
                                                    ----                ----           ----              ----            ----
Balance Sheet
      Working capital (deficit)                  $ (2,857,539)       $11,860,584      $ (420,370)         $(65,798)      $(6,000)
      Cash and cash equivalents                      2,089,062        12,296,585          881,041           163,490             -
      Oil and gas properties, net                   24,760,149         9,152,740        1,991,290         2,484,919             -
      Total assets                                  27,505,501        21,658,525        3,007,259         2,688,826             -
      Stockholders' equity (deficit)                22,014,265        21,065,425        1,578,905         2,422,166       (6,000)
</TABLE>

                                       24
<PAGE>

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS

Critical Accounting Policies

Gasco is an  independent  natural  gas and oil company  engaged in locating  and
developing hydrocarbon prospects, primarily located in the Rocky Mountain region
of the United  States.  The Company  follows the full cost method of  accounting
whereby all costs  related to the  acquisition  and  development  of oil and gas
properties are capitalized  into a single cost center referred to as a full cost
pool.  Such costs include lease  acquisition  costs,  geological and geophysical
expenses,  overhead  directly related to exploration and development  activities
and costs of drilling both productive and  non-productive  wells.  Proceeds from
property sales are generally credited to the full cost pool without gain or loss
recognition  unless  such a sale  would  significantly  alter  the  relationship
between capitalized costs and the proved reserves attributable to these costs. A
significant  alteration  would  typically  involve  a sale of 25% or more of the
proved reserves related to a single full cost pool.

Depletion of exploration  and development  costs and  depreciation of production
equipment is computed using the units of production  method based upon estimated
proved oil and gas reserves.  The costs of unproved properties are withheld from
the  depletion  base until such time as they are either  developed or abandoned.
The properties are reviewed  periodically  for impairment.  Total well costs are
transferred  to the depletable  pool even when multiple  targeted zones have not
been fully evaluated. For depletion and depreciation purposes,  relative volumes
of oil and gas  production  and reserves are converted at the energy  equivalent
rate of six  thousand  cubic  feet of  natural  gas to one  barrel of crude oil.
Gasco's wells began  producing in late October of 2001;  therefore,  the Company
did not  have  sufficient  production  information  by which  reserves  could be
estimated  as of  December  31,  2001.  Because of this,  and  because the costs
associated  with the Company's oil and gas properties  related to projects which
had not yet been  associated  with proved  reserves,  the Company did not record
depletion expense during the year ended December 31, 2001.

Under the full cost method of accounting, capitalized oil and gas property costs
less  accumulated  depletion and net of deferred  income taxes may not exceed an
amount equal to the present  value,  discounted at 10%, of estimated  future net
revenues  from proved oil and gas  reserves  plus the cost,  or  estimated  fair
value, if lower of unproved  properties.  Should  capitalized  costs exceed this
ceiling, an impairment is recognized.  The present value of estimated future net
revenues  is computed by  applying  current  prices of oil and gas to  estimated
future  production  of  proved  oil  and gas  reserves  as of  period-end,  less
estimated  future  expenditures  to be incurred in developing  and producing the
proved reserves assuming the continuation of existing economic conditions.

Recent Accounting Pronouncements

In June 2001 the FASB  issued  SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,  " which  requires  that the fair value of a liability for an asset
retirement  obligation  be recognized in the period in which it is incurred if a
reasonable  estimate of fair value can be made. The associated  asset retirement
costs are  capitalized as part of the carrying  amount of the long-lived  asset.


                                       25
<PAGE>

The asset retirement liability will be allocated to operating expense by using a
systematic  and  rational  method.  The  statement is effective as of January 1,
2003.  The Company  has not yet  determined  the impact of the  adoption of this
statement.

In April 2002 the FASB issued SFAS No. 145,  "Rescission of FASB  Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
FASB No. 4  required  all  gains or  losses  from  extinguishment  of debt to be
classified as  extraordinary  items net of income  taxes.  SFAS No. 145 requires
that  gains  and  losses  from  extinguishment  of debt be  evaluated  under the
provisions of Accounting  Principles  Board Opinion No. 30, and be classified as
ordinary  items  unless  they are  unusual or  infrequent  or meet the  specific
criteria for treatment as an  extraordinary  item.  This  statement is effective
January 1, 2003.  The  Company  does not  anticipate  that the  adoption of this
statement  will have a material  effect on its financial  position or results of
operations.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities" This Statement addresses financial accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies  EITF Issue No.  94-3,  "Liability  Recognition  for Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)".  This Statement  requires  recognition of a
liability  for a cost  associated  with an exit or  disposal  activity  when the
liability  is  incurred,  as opposed to when the entity  commits to an exit plan
under EITF No.  94-3.  SFAS No. 146 is to be  applied  prospectively  to exit or
disposal  activities  initiated after December 31, 2002. The Company has not yet
determined the impact of the adoption of this statement.

In December 2002, the FASB approved Statement of Financial  Accounting Standards
No. 148, "Accounting for Stock-Based  Compensation - Transition and Disclosure -
an amendment  of FASB  Statement  No. 123" (SFAS No.  148).  SFAS No. 148 amends
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  (SFAS No. 123) to provide alternative methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.   In  addition,  SFAS  No.  148  amends  the  disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee  compensation  and the effect of the method used on  reported  results.
SFAS No. 148 is effective for financial statements for fiscal years ending after
December  15,  2002.  The  Company  will  continue  to account  for stock  based
compensation  using  the  methods  detailed  in  the  stock-based   compensation
accounting policy.

Forward Looking Statements

Please refer to the section entitled  "Cautionary  Statement  Regarding  Forward
Looking Statements" under Item 1. For a discussion of factors which could affect
the outcome of forward looking statements used by the Company.

Results of Operations

All  information  for periods prior to March 30, 2001  represents the historical
information of Pannonian  because  Pannonian was considered the acquiring entity
for accounting purposes.

                                       26
<PAGE>

2002 Compared to 2001

During the year ended December 31, 2002, the Company owned interests in fourteen
producing  wells,  two of which began  producing in late October of 2001 and the
remainder  of which began  producing  during  2002.  The oil and gas revenue and
lease  operating  expense  during 2002 relate to these wells and is comprised of
66,444 mcf of gas at an average  price of $2.47 per mcf,  compared to 17,545 mcf
of gas at an average  price of $2.10 per mcf during the year ended  December 31,
2001.  Lease  operating  expense  increased from $12,679 during 2001 to $119,809
during 2002 due to the increase in the number of producing wells during 2002.

Interest  income  during 2002 and 2001  represents  the  interest  earned on the
Company's  combined cash and cash  equivalents  and  restricted  cash  balances.
Interest income  decreased from $193,352 during 2001 to $76,410 during 2002. The
decrease is primarily  the result of a higher  average  cash balance  during the
2001  primarily  due to the sale of preferred and common stock during the second
half of 2001.

General and administrative  expense increased by $754,222 from $4,326,065 during
2001 to $5,080,287 during 2002. The increase during 2002 is primarily  comprised
of a $550,000  increase in compensation  expense due to an increase in full-time
staff and consultants  associated with the increase in the Company's operational
activity,  a one-time expense of $110,266 in consulting fees paid on behalf of a
company of which two of Gasco's directors have a combined 66.67% ownership,  and
numerous  other  miscellaneous  fluctuations,  none of  which  was  individually
significant.

Depletion,  depreciation  and  amortization  expense during 2002 is comprised of
$105,321  of  depletion  expense  related  to the  Company's  proved oil and gas
properties  and  $43,788 of  depreciation  related to the  Company's  furniture,
fixtures and other assets,  respectively.  The corresponding expense during 2001
consists  of  the  depreciation  expense  related  to the  Company's  furniture,
fixtures and other assets.

The impairment  expense  during the year ended December 31, 2002  represents the
costs associated with a well drilled in the Southwest Jonah field located in the
Greater Green River Basin in Sublette  County,  Wyoming during the first quarter
of  2002.  The  natural  gas  encountered  in this  well  was not of  sufficient
quantities to be deemed economic; therefore, the costs associated with this well
were  charged to  impairment  expense  during the year ended  December  31, 2002
because the Company  believed  that the total costs for this well  exceeded  the
present value, discounted at 10%, of the future net revenues from its proved oil
and gas reserves.

The interest  expense  during the year ended  December 31, 2001  represents  the
interest incurred on the Company's outstanding notes payable,  which were repaid
during 2001.

2001 Compared to 2000

During 2001,  the Company owned  interests in two wells that began  producing in
late October.  The oil and gas revenue and lease  operating  expense during 2001
related to these wells and were comprised of approximately  17,545 mcf of gas at


                                       27
<PAGE>

an average  price of $2.10 per mcf.  The Company had no  producing  wells during
2000 and 1999.  Interest  income during 2001  represented the interest earned on
the Company's cash balance, which increased from $881,041 in 2000 to $12,296,585
primarily due to the sale of preferred and common stock during 2001. General and
administrative  expense  increased  from $951,734 in 2000 to $4,326,065 in 2001,
primarily due to the increase in staff and professional fees associated with the
commencement  of its own operations.  The interest  expense during 2001 and 2000
represented  the amounts  incurred on the  Company's  outstanding  notes payable
which were paid off during 2001. Other income during 2000 consisted primarily of
a  $200,000  gain on the  sale of a  drilling  permit  offset  by  miscellaneous
expenses.  Other  income  during 2001 was  comprised  of numerous  miscellaneous
items, none of which was individually significant.

Schedule of Contractual Obligations

The following table summarizes the Company's obligations and commitments to make
future payments under its note payable,  operating leases,  employment contracts
and consulting agreement for the periods specified as of December 31, 2002.
<TABLE>
<CAPTION>

                                                                  Payments due by Period
                                        ----------------------------------------------------------------------------
Contractual Obligations                        Total               1 year         2-3 years   4-5 years  After 5 years
-----------------------                        -----               ------         ---------   ---------  -------------

<S>                                      <C>                 <C>                   <C>          <C>       <C>
Note payable                             $        1,400,000  $         1,400,000
Operating Lease - office space                       79,698               47,503 $    32,195
Employment Contracts                              1,449,167              470,000     470,000 $   470,000 $  39,167
Consulting Agreement                                370,000              120,000     120,000     120,000    10,000
                                          ---       -------   --         -------     -------     -------    ------
Total Contractual Cash Obligations      $         3,298,865 $          2,037,503  $  622,195 $   590,000 $  13,167
                                                  =========            =========     =======     =======    ======
</TABLE>

Financial Condition and Plan of Operations

At December 31, 2002,  the Company had cash and cash  equivalents  of $2,089,062
compared to  $12,296,585  at December  31,  2001.  The decrease in cash and cash
equivalents  is  primarily  attributable  to  the  following  significant  items
combined  with the cash used in  operations  of  $1,390,306,  which is partially
offset by the net proceeds of  approximately  $6,000,000 from the sale of common
stock during August 2002.

     -    During  February  2002,  the  Company  acquired  leasehold   interests
          covering  approximately  18,451 gross acres  (16,421 net acres) in the
          Greater  Green  River  Basin  located  in  west-central   Wyoming  for
          $1,500,000.

     -    The Company acquired a 45% interest in 21,614 acres in Sublette County
          Wyoming for approximately  $1,428,000 during February 2002.  Effective
          July 16, 2002, the Company assigned 25% of its interest to Brek.

                                       28
<PAGE>

     -    In connection with its drilling  projects,  the Company entered into a
          $2,000,000   letter  of  credit  during   February  2002,   which  was
          subsequently  amended  during  May 2002,  to  $250,000.  The letter is
          collateralized  with cash,  which is classified as restricted  cash in
          the accompanying financial statements, and terminates in August 2004.

     -    The Company drilled five  productive  operated wells in Uintah County,
          Utah for  approximately  $6,000,000 and one well, which was a dry hole
          in Sublette County, Wyoming for $541,125.

     -    The Company  participated in the drilling of five productive  wells in
          Uintah County, Utah and two wells in Sublette County,  Wyoming, all of
          which are operated by other companies, for approximately $2,900,000.

     -    During the year ended December 31, 2002, the Company incurred unproved
          property costs comprised of delay rentals and the purchase of numerous
          acreage positions in Wyoming and Utah of $1,300,000.

     -    During May 2002,  the  Company  elected to  participate  in 3D seismic
          shoot  covering  100 square  miles in  Sublette  County,  Wyoming  for
          $850,000.

During  February  2003,  the Company  sold through a private  placement,  11,052
shares  of  convertible  preferred  stock  ("Convertible  Stock")  to a group of
accredited  investors,  including  members  of  Gasco's  management,  as further
described in Note 18 of the accompanying  financial statements.  The Convertible
Stock was sold for $440 per share  resulting  in net  proceeds of  approximately
$4,800,000.  Dividends  on the  Convertible  Stock  accrue at the rate of 7% per
annum payable  semi-annually in cash,  additional shares of Convertible Stock or
shares of common stock at the  Company's  option.  The  conversion  price of the
Convertible  Stock is $0.70 per common  share  making each share of  Convertible
Stock convertible into approximately 629 shares of Gasco common stock. Shares of
the Convertible  Stock are  convertible  into Gasco common shares at any time at
the holder's  election.  During  February 2003,  $1,400,000 of the proceeds from
this sale were used to repay the note that was issued to Shama Zoe in connection
with the Company's  repurchase of 1,400,000  shares of common stock at $1.00 per
share as further described in Note 7 of the accompanying  financial  statements.
The  remaining  proceeds  from this sale  will be used for the  development  and
exploitation of the Company's  Riverbend  Project in the Uinta Basin in Utah and
to fund the general corporate purposes of the Company. As of March 25, 2003, the
Company's balance in cash and cash equivalents is $3,539,900.

Working  capital  decreased  from  $11,860,584 at December 31, 2001 to a working
capital  deficit of  $2,857,539  at  December  31,  2002,  primarily  due to the
decrease  in cash  and the  increase  in  accounts  payable  resulting  from the
Company's  operational and drilling  activities during 2002 and the current note
payable issued for the purchase of 1,400,000 shares of common stock at $1.00 per
share, as further described in Note 7 of the accompanying financial statements.

In  management's  view,  given the  nature of the  Company's  operations,  which
consist of the acquisition,  exploration and evaluation of petroleum and natural
gas properties and participation in drilling activities on these properties, the
most  meaningful  information  relates to current  liquidity and  solvency.  The


                                       29
<PAGE>

Company's financial success will be dependent upon the extent to which Gasco can
discover sufficient economic reserves and successfully  develop and produce from
the properties  containing  those reserves.  Such  development may take years to
complete and the amount of resulting  income,  if any, is difficult to determine
with any  certainty.  The sales  value of any  petroleum  or natural gas that is
discovered is largely dependent upon other factors beyond the Company's control.

During the next twelve months, the operational plans for Gasco entail conducting
the following:

     a.   Drill and complete one gross well in the Riverbend Project.

     b.   Perform  two or three  recompletions  in the  Riverbend  Project in an
          attempt to increase the zones of production on the Company's producing
          wells.

     c.   Continue the permitting  process for several future drilling locations
          within the Riverbend Project.

     d.   Continue paying  leasehold  rentals and other expenses to preserve the
          Company's acreage positions.

To date,  the Company's  capital needs have been met  primarily  through  equity
financings.  In order to earn interests in additional  acreage and depths in the
Riverbend  Project,  the  Company  will  need to expend  significant  additional
capital  to drill  and  complete  wells.  The  Company  will  use  approximately
$3,400,000 of the proceeds from its February 2003 Convertible  Stock offering to
fund a portion of its 2003 capital  budget,  however,  it will be necessary  for
Gasco to acquire additional  financing in order to complete its operational plan
for 2003.  The Company is  considering  several  options for raising  additional
capital to fund its 2003  operational  budget  such as equity  offerings,  asset
sales,  the  farm-out of some of the  Company's  acreage and other  similar type
transactions.  There is no  assurance  that  financing  will be available to the
Company on favorable terms or at all. Any financing obtained through the sale of
Gasco  equity  will  likely  result in  substantial  dilution  to the  Company's
stockholders.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's  primary market risk relates to changes in the pricing  applicable
to the sales of gas production in the Uinta Basin of  northeastern  Utah and the
Greater  Green River Basin of west central  Wyoming.  This risk will become more
significant  to the  Company as more wells are drilled  and begin  producing  in
these  areas.  Although  the  Company is not using  derivatives  at this time to
mitigate the risk of adverse changes in commodity  prices, it may consider using
them in the future.





                                       30
<PAGE>



ITEM 8 - FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Reports                                            32-33

Consolidated Balance Sheets at December 31, 2002 and 2001                  34

Consolidated Statements of Operations for the Years Ended
    December 31, 2002, 2001 and 2000                                       35

Consolidated Statements of Stockholders' Equity for the Years
    Ended December 31, 2002, 2001 and 2000                                 36

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2002, 2001 and 2000                                       37

Notes to Consolidated Financial Statements                               38-58




                                       31
<PAGE>



INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of Gasco Energy, Inc.:

We have audited the  consolidated  balance sheets of Gasco Energy,  Inc. and its
subsidiaries  as of  December  31, 2002 and 2001,  and the related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
two years in the period ended December 31, 2002. These financial  statements are
the  responsibility of the Corporations'  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial position of the companies at December 31, 2002
and 2001,  and the results of their  operations and their cash flows for each of
the two  years in the  period  ended  December  31,  2002,  in  conformity  with
accounting principles generally accepted in the United States of America.




/s/ DELOITTE & TOUCHE LLP
Denver, Colorado
March 27, 2003




                                       32
<PAGE>





                          INDEPENDENT AUDITOR'S REPORT


To The Board of Directors and Stockholders GASCO ENERGY, INC.

We have audited the consolidated statements of operations,  stockholders' equity
and  cash  flows of Gasco  Energy,  Inc.  and  subsidiaries  (formerly  known as
Pannonian  Energy Inc.) for the year ended  December 31, 2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
Gasco  Energy,  Inc. and  subsidiaries  for the year ended  December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.


                                            Wheeler Wasoff, P.C.

Denver, Colorado
September 20, 2001



                                       33
<PAGE>


<TABLE>
<CAPTION>


                                                         GASCO ENERGY, INC.
                                                    CONSOLIDATED BALANCE SHEETS

                                                                                        December 31,
                                                                                  2002                2001
ASSETS

CURRENT ASSETS
<S>                                                                           <C>                    <C>
  Cash and cash equivalents                                                   $2,089,062             $ 12,296,585
  Restricted cash                                                                250,000                        -
  Accounts receivable and prepaid expenses                                       294,635                  157,099
                                                                               ---------               ----------
          Total                                                                2,633,697               12,453,684
                                                                               ---------               ----------

PROPERTY, PLANT AND EQUIPMENT, at cost
  Oil and gas properties (full cost method)
    Well in progress                                                           1,138,571                        -
    Proved mineral interests                                                  10,283,488                        -
    Unproved mineral interests                                                13,984,536                9,152,740
  Furniture, fixtures and other                                                  162,787                   59,445
                                                                              -- -------                -- ------
           Total                                                              25,569,382                9,212,185
                                                                              ----------                ---------
  Less accumulated depreciation, depletion,
     amortization and property impairment                                      (697,578)                  (7,344)
                                                                              -                        ----------
           Total                                                              24,871,804                9,204,841
                                                                              ----------               ----------
TOTAL ASSETS                                                                $ 27,505,501             $ 21,658,525
                                                                            ============             ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                           $ 1,910,974                $ 548,853
  Accrued expenses                                                             2,180,262                   44,247
  Note payable                                                                 1,400,000                        -
                                                                               ---------                 --------

           Total                                                               5,491,236                 5 93,100
                                                                               ---------                 --------

STOCKHOLDERS' EQUITY
  Series A Convertible  Redeemable Preferred stock - $.001 par value;
  5,000,000shares authorized; 1,000 shares issued and
    outstanding in 2001                                                                -                        1
  Common stock - $.0001 par value; 100,000,000 shares authorized;
      40,362,500 shares issued and 40,288,800 shares outstanding in
      2002; and 27,252,500 shares issued and 27,178,800 shares
      outstanding in 2001                                                          4,036                    2,725
  Additional paid in capital                                                  44,958,593               38,569,923
  Deferred compensation                                                         (52,833)                (261,375)
  Accumulated deficit                                                       (22,765,236)             (17,115,554)
  Less cost of treasury stock of 73,700 common shares                          (130,295)                (130,295)
                                                                              ----------              -----------
           Total                                                              22,014,265               21,065,425
                                                                              ----------              -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $ 27,505,501             $ 21,658,525
                                                                            ============             ============

               The accompanying notes are an integral part of the
                       consolidated financial statements.

</TABLE>



                                       34
<PAGE>



<TABLE>
<CAPTION>

                                                       GASCO ENERGY, INC.
                                             CONSOLIDATED STATEMENTS OF OPERATIONS




                                                            For the Year Ended December 31,
                                                        2002            2001           2000

REVENUES
<S>                                                <C>               <C>                <C>
     Oil and gas                                   $ 164,508         $  36,850          $    -
     Gain on sale of permit                                 -                -         200,000
     Interest                                         76,140           193,352              -
                                                     --------         --------        --------
                                                     240,648           230,202         200,000
                                                    ---------        ---------        --------

OPERATING EXPENSES
    General and administrative                      5,080,287        4,326,065         951,734
    Lease operating                                   119,809           12,679               -
    Depletion, depreciation and amortization          149,109            5,760               -
    Impairment                                        541,125                -               -
     Interest                                                           67,363          61,776
                                                    ---------        ---------        --------

                                                    5,649,682         4,411,867       1,013,510
                                                   ----------        ---------        ---------

OTHER INCOME (EXPENSES)                                                 52,206        (29,751)
                                                   ----------        ---------       ---------

NET LOSS                                          (5,649,682)      (4,129,459)       (843,261)
                                                  -----------      -----------       ---------
Series A Convertible Redeemable
   Preferred Stock deemed distribution                     -       (11,400,000)             -
                                                -------------      -----------       ---------

NET LOSS ATTRIBUTABLE TO
    COMMON SHAREHOLDERS                         $ (5,649,682)   $ (15,529,459)      $(843,261)
                                                =============   ==============      ==========
NET LOSS PER COMMON SHARE
    BASIC AND DILUTED                              $   (0.16)         $   (0.63)        $ (0.06)
                                                   ==========         ==========        ========

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - BASIC AND DILUTED              36,439,074          24,835,144      13,800,595
                                                  ===========         ==========      ==========







         The accompanying notes are an integral part of the consolidated
                             financial statements.
</TABLE>




                                       35
<PAGE>


<TABLE>
<CAPTION>


                                                                       GASCO ENERGY, INC.
                                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                                                                   Additional
                             Preferred Stock      Common Stock       Paid in       Deferred     Accumulated     Treasury
                            Shares     Value   Shares      Value     Capital    Compensation    Deficit         Stock        Total

<S>                        <C>       <C>     <C>         <C>       <C>            <C>         <C>             <C>      <C>
Balance, December 31, 1999                    13,800,595  $ 1,380   $3,163,620     $           $ (742,834)     $        $ 2,422,166
 Net loss                                                                                        (843,261)                 (843,261)
                            ------    -----  -----------  --------  -----------  -----------    ----------     ---------  ----------

Balance, December 31, 2000                    13,800,595    1,380    3,163,620                 (1,586,095)                1,578,905
 Distribution of assets                                             (2,023,568)                                          (2,023,568)
 Issuance of common shares in
  connection with reverse
  acquisition of San Joaquin
  Resources, Inc.                              9,549,405        955    571,389                                               572,344
 Issuance of 1,000 convertible
  redeemable preferred Shares 1,000    $ 1                          17,430,366                                            17,430,367
 Issuance of common shares                     3,902,500        390  7,343,147                                             7,343,537
 Options issued for services                                           684,969     (684,969)
 Amortization of deferred
   compensation expense                                                             423,594                                  423,594
 Deemed distribution                                                11,400,000                 (11,400,000)
 Repurchase of common stock                                                                                   (130,295)    (130,295)
 Net loss                                                                                       (4,129,459)              (4,129,459)
                           ---------   ---      ---------   ------- ----------   ------------   ----------    ---------   ----------

Balance, December 31, 2001   1,000      1     27,252,500      2,725  38,569,923     (261,375)  (17,115,554)   (130,295)  21,065,425
 Conversion of preferred shares
   to common shares                            4,760,000        476       (476)
 Issuance of common shares
   for acreage                                 9,500,000        950   18,524,050                                         18,525,000
 Amortization of deferred
   compensation expense                                                              208,542                                208,542
 Redemption of preferred and
   common stock for acreage (1,000)    (1)    (6,250,000)      (625) (16,708,374)                                       (16,709,000)
 Issuance of common stock                      6,500,000        650    5,973,330                                           5,973,980
 Repurchase of common stock                   (1,400,000)      (140)   1,399,860)                                        (1,400,000)
 Net loss                                                                                      (5,649,682)               (5,649,682)
                          --------     ---    ----------     ------  ----------      ------    -----------   --------   ------------

Balance, December 31, 2002    -     $  -      40,362,500     $4,036  $44,958,593 $ (52,833) $ (22,765,236) $(130,295)   $22,014,265
                         ========     ====    ==========    =======  =========== ==========  ============= ==========   ===========


         The accompanying notes are an integral part of the consolidated
                             financial statements.
</TABLE>



                                       36
<PAGE>



<PAGE>
<TABLE>
<CAPTION>


                                                            GASCO ENERGY, INC.
                                                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                               For the Years Ended December 31,
                                                                             2002             2001             2000

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                       <C>               <C>              <C>
     Net loss                                                             $ (5,649,682)     $ (4,129,459)    $ (843,261)
     Adjustments to reconcile net loss to net cash used by operating
      activities
         Depreciation, depletion and impairment expense                        690,234              5,760         16,347
         Amortization of deferred compensation                                 208,542            423,594              -
         Non-cash charges for legal and interest expense                             -                 -        213,831
         Gain on sale of permit                                                      -                 -      (200,000)
     Changes in assets and liabilities provided (used) cash
        Accounts receivable and prepaid expenses                              (137,536)            11,323         23,449
        Accounts payable                                                      1,362,121          (51,872)        609,249
        Accrued expenses                                                      2,136,015               -                -
                                                                              ---------       -----------     ----------
     Net cash used in operating activities                                  (1,390,306)       (3,740,654)      (180,385)
                                                                            -----------       -----------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES
     Cash paid for furniture, fixtures and other                              (103,342)          (49,876)
     Cash paid for oil and gas properties                                  (14,437,855)       (7,395,867)     (566,204)
     Cash received upon recapitalization and merger                                   -           265,029             -
     Proceeds from sale of oil and gas interests                                                             1,394,797
                                                                            ------------       ------------  ----------

     Net cash provided by (used in) investing activities                   (14,541,197)       (7,180,714)       828,593
                                                                           ------------       -----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES
    Cash designated as restricted                                             (250,000)                 -              -
     Proceeds from sale of common stock                                       6,500,000         6,826,218
     Proceeds from sale of preferred stock                                            -        19,000,000
                                                                                                                       -
     Repurchase of common shares                                                      -         (130,295)              -
     Cash paid for offering costs                                             (526,020)       (2,144,468)
     Proceeds from short-term borrowings                                              -           500,000         252,871
     Repayments of short-term borrowings                                              -         (714,543)        (183,528)
     Distribution to Rubicon Oil and Gas, Inc.                                                (1,000,000)
                                                                             -----------      -----------        ---------
     Net cash provided by financing activities                               5,723,980         22,336,912          69,343
                                                                             -----------     ------------        ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (10,207,523)       11,415,544          717,551

    BEGINNING OF PERIOD                                                      12,296,585           881,041          163,490
                                                                            -----------      -------------       ---------
    END OF PERIOD                                                           $2,089,062       $ 12,296,585         $881,041
                                                                            ===========      ============         ========








               The accompanying notes are an integral part of the
                       consolidated financial statements.
</TABLE>


                                       37
<PAGE>

                                GASCO ENERGY INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

NOTE 1 - ORGANIZATION

Gasco Energy,  Inc. ("Gasco" or the "Company") is an independent  energy company
engaged in the exploration, development and acquisition of crude oil and natural
gas reserves in the western United States. Prior to January 1, 2002, the Company
was  considered  a  development  stage  enterprise  as defined by  Statement  of
Financial Accounting Standards No. 7.

On February 1, 2001, San Joaquin Resources, Inc. ("SJRI"), a Nevada corporation,
and Pannonian Energy, Inc. ("Pannonian"),  a Delaware corporation,  entered into
an Agreement and Plan of Reorganization  (the "Pannonian  Agreement")  whereby a
subsidiary of SJRI merged into  Pannonian and SJRI issued  14,000,000  shares of
its common stock to the former  shareholders of Pannonian in exchange for all of
the outstanding shares and warrants of Pannonian.  Certain  shareholders of SJRI
surrendered for cancellation 2,438,930 common shares of the Company's capital in
connection with the  transaction,  and as a result the existing  shareholders of
Pannonian  acquired  control of the combined  company.  For financial  reporting
purposes this  business  combination  is accounted for as a reverse  acquisition
with Pannonian as the accounting acquirer.

The reverse acquisition was valued at $572,344 and was allocated as follows:

   Oil and gas properties                      $     265,836
   Receivables, prepaid and other, net                41,479
   Cash                                              265,029
                                               -------------
   Net assets acquired                         $     572,344
                                               ==============

Under the terms of the Pannonian  Agreement,  Pannonian  was required,  prior to
closing  of the  merger on March 30,  2001,  to divest  itself of all assets not
associated with its "Riverbend" area of interest (the non-Riverbend assets). The
"spin-offs"  were accounted for at the recorded  amounts.  The net book value of
the  non-Riverbend  assets in the United States  transferred,  including cash of
$1,000,000  and  liabilities  of $555,185,  was  approximately  $1,850,000.  The
non-Riverbend  assets  located  outside the United States were held by Pannonian
International  Ltd.  ("PIL"),  the  shares  of  which  were  distributed  to the
Pannonian stockholders. The book value of PIL as of the date of distribution was
approximately $174,000.

                                       38
<PAGE>

The following unaudited pro forma information presents the financial information
of the Company as if the consolidation of Gasco and Pannonian had taken place on
January 1 of each year  presented.  The pro forma results are not  indicative of
future results.

<TABLE>
<CAPTION>

                                                                   For the Year Ended December 31,
                                                                   -------------------------------
                                                            2001                                   2000
                                             ------------------------------------    ----------------------------------
                                                    As Reported        Pro Forma         As Reported         Pro Forma

<S>                                                  <C>                <C>                   <C>               <C>
  Revenue                                            $  36,850          $ 36,850              $    -            $    -

  Net loss                                        (15,529,459)      (15,572,061)           (843,261)       (1,047,888)

  Net loss per share attributable to
  common shareholders basic and diluted
                                                     $  (0.63)         $  (0.63)           $  (0.06)          $ (0.09)
                                                     =========         =========           =========          ========
</TABLE>

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  consolidated financial statements include Gasco and its wholly
owned  subsidiaries,  Pannonian and San Joaquin Oil and Gas, Ltd. as of December
31, 2002 and 2001. The consolidated  financial statements as of and for the year
ended  December  31, 2000  include  Pannonian  and its wholly  owned  subsidiary
Pannonian International, Inc. ("PIL"). All significant intercompany transactions
have been eliminated upon consolidation.

All share and per share amounts included in these financial statements have been
restated to show the  retroactive  effect of the conversion of Pannonian  shares
into Gasco shares.

The Company has incurred net losses from  continuing  operations of  $5,649,682,
$4,129,459  and $843,261 for the years ended  December 31, 2002,  2001 and 2000.
Additionally,  the Company has a negative  working  capital of $2,857,539 and is
involved in a capital-intensive business. The Company's management believes that
it has adequate resources to meet its obligations during the next year. However,
the Company is considering  various options for obtaining  additional  financing
during 2003 such as the sale of equity,  indebtedness or the sale of some of its
assets.

Cash and Cash Equivalents

All highly liquid investments purchased with an initial maturity of three months
or less are considered to be cash equivalents.

Restricted Cash

In connection with its drilling projects,  the Company entered into a $2,000,000
letter of credit during February 2002,  which was amended to $250,000 during May
2002. The letter of credit is collateralized  with cash and terminates in August


                                       39
<PAGE>

2003.  The  portion of the  Company's  cash that  collateralizes  this letter of
credit  is  classified  as  restricted  cash  in  the   accompanying   financial
statements.

Property, Plant and Equipment

The Company follows the full cost method of accounting whereby all costs related
to the  acquisition  and  development of oil and gas properties are  capitalized
into a  single  cost  center  ("full  cost  pool").  Such  costs  include  lease
acquisition  costs,  geological  and  geophysical  expenses,  overhead  directly
related to  exploration  and  development  activities and costs of drilling both
productive and non-productive  wells. Proceeds from property sales are generally
credited to the full cost pool  without gain or loss  recognition  unless such a
sale would  significantly  alter the relationship  between capitalized costs and
the proved reserves attributable to these costs. A significant  alteration would
typically  involve a sale of 25% or more of the  proved  reserves  related  to a
single full cost pool.

Depletion of exploration  and development  costs and  depreciation of production
equipment is computed using the units of production  method based upon estimated
proved oil and gas reserves.  The costs of unproved properties are withheld from
the  depletion  base until such time as they are either  developed or abandoned.
The properties are reviewed  periodically  for impairment.  Total well costs are
transferred  to the depletable  pool even when multiple  targeted zones have not
been fully evaluated. For depletion and depreciation purposes,  relative volumes
of oil and gas  production  and reserves are converted at the energy  equivalent
rate of six  thousand  cubic  feet of  natural  gas to one  barrel of crude oil.
Gasco's wells began  producing in late October of 2001;  therefore,  the Company
did not have sufficient  production  information by which reserves could have be
estimated  as of  December  31,  2001.  Because of this,  and  because the costs
associated  with the Company's oil and gas properties  related to projects which
have not yet been  associated with proved  reserves,  the Company did not record
depletion expense during the year ended December 31, 2001.

Under the full cost method of accounting, capitalized oil and gas property costs
less  accumulated  depletion and net of deferred  income taxes may not exceed an
amount equal to the present  value,  discounted at 10%, of estimated  future net
revenues  from proved oil and gas  reserves  plus the cost,  or  estimated  fair
value, if lower of unproved  properties.  Should  capitalized  costs exceed this
ceiling, an impairment is recognized.  The present value of estimated future net
revenues  is computed by  applying  current  prices of oil and gas to  estimated
future  production  of  proved  oil  and gas  reserves  as of  period-end,  less
estimated  future  expenditures  to be incurred in developing  and producing the
proved reserves assuming the continuation of existing economic conditions.

Well in Progress

Well in progress at December 31, 2002  represents the costs  associated with the
drilling of a well in the Riverbend area of Utah. Since the well has not reached
total depth,  it is  classified  as a well in progress and is withheld  from the
depletion  calculation  until  it has  been  completed.  Once  the well has been
completed,  it will be classified as proved  property and will become subject to
depletion and the impairment calculation as described above.

                                       40
<PAGE>

Impairment of Long-lived Assets

The Company's unproved properties are evaluated periodically for the possibility
of potential impairment.  Other than oil and gas properties,  the Company has no
other long-lived assets and to date has not recognized any impairment losses.

Revenue Recognition

Oil and gas revenue is  recognized as income when the oil or gas is produced and
sold.

Computation of Net Income (Loss) Per Share

Basic net income  (loss) per share is  computed by  dividing  net income  (loss)
attributable to the common shareholders by the weighted average number of common
shares  outstanding  during the reporting period.  Diluted net income per common
share  includes the  potential  dilution  that could occur upon  exercise of the
options to acquire  common stock  computed using the treasury stock method which
assumes  that the  increase  in the number of shares is reduced by the number of
shares which could have been  repurchased  by the Company with the proceeds from
the exercise of the options (which were assumed to have been made at the average
market price of the common  shares  during the  reporting  period).  The options
described in Note 11 have not been included in the computation of diluted income
(loss) per share  during all periods  because  their  inclusion  would have been
anti-dilutive.

Significant Customers

Although the Company sells the majority of its  production to a few  purchasers,
there  are  numerous  other  purchasers  in the  areas in which  Gasco  sells it
production; therefore, the loss of its significant customers would not adversely
affect the Company's operations. For the years ended December 31, 2002 and 2001,
purchases  by the  following  companies  exceeded  10% of the  total oil and gas
revenues of the  Company.  Gasco had no oil and gas sales  during the year ended
December 31, 2000.

                                     For the Year Ended December 31,
                                  -----------------------------------------
                                        2002                  2001
                                       ----                  ----

      ConocoPhillips Company           98%                    60%
      Wasatch Energy Corporation       --                     37%

Use of Estimates

The  preparation of the financial  statements for the Company in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from these estimates.

                                       41
<PAGE>

Other Comprehensive Income

The Company does not have any items of other comprehensive  income for the years
ended December 31, 2002, 2001 and 2000.  Therefore,  total comprehensive  income
(loss) is the same as net income (loss) for these periods.

Income Taxes

The Company uses the liability method of accounting for income taxes under which
deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences of temporary  differences  between the accounting bases and the tax
bases of the  Company's  assets and  liabilities.  The  deferred  tax assets and
liabilities are computed using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.

Stock Based Compensation

The  Company  accounts  for  its  stock-based   compensation   using  Accounting
Principles  Board's  Opinion No. 25 ("APB No. 25").  Under APB 25,  compensation
expense is recognized for stock options with an exercise price that is less than
the  market  price on the  grant  date of the  option.  For stock  options  with
exercise prices at or above the market value of the stock on the grant date, the
Company  adopted  the  disclosure-only  provisions  of  Statement  of  Financial
Accounting  Standards No. 123 "Accounting for Stock-Based  Compensation"  ("SFAS
123").  The Company has adopted the  disclosure-only  provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation
("SFAS 123") for the stock options granted to the employees and directors of the
Company.  Accordingly,  no  compensation  cost has  been  recognized  for  these
options.  Had compensation expense for the options granted been determined based
on the  fair  value  at the  grant  date for the  options,  consistent  with the
provisions  of SFAS 123, the  Company's  net loss and net loss per share for the
years  ended  December  31, 2001 and 2002 would have been  increased  to the pro
forma amounts indicated below:

                                                 For the Year Ended December 31,
                                                     2002               2001
                                                     ----               ----

        Net loss attributable to
        common shareholders:    As reported       $ (5,649,682)    $(15,529,459)
                                Pro forma           (7,358,908)     (21,211,727)

        Net loss per share:     As reported           $ (0.16)          $(0.63)
                                Pro forma               (0.20)           (0.85)

                                       42
<PAGE>

The fair value of the common stock  options  granted  during 2001 and 2002,  for
disclosure  purposes was  estimated  on the grant dates using the Black  Scholes
Pricing Model and the following assumptions.

                                         For the Year Ended December 31,
                                            2002                 2001
                                            ----                 ----

       Expected dividend yield                --                   --
       Expected price volatility             90%                  89%
       Risk-free interest rate       3.5% - 4.1%          3.8% - 4.9%
       Expected life of options          5 years              5 years

Concentration of Credit Risk

The Company's cash equivalents are exposed to concentrations of credit risk. The
Company  manages and controls  this risk by  investing  these funds with a major
financial institution.

Recent Accounting Pronouncements

In June 2001 the FASB  issued  SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,  " which  requires  that the fair value of a liability for an asset
retirement  obligation  be recognized in the period in which it is incurred if a
reasonable  estimate of fair value can be made. The associated  asset retirement
costs are  capitalized as part of the carrying  amount of the long-lived  asset.
The asset retirement liability will be allocated to operating expense by using a
systematic  and  rational  method.  The  statement is effective as of January 1,
2003.  The Company  has not yet  determined  the impact of the  adoption of this
statement.

In April 2002 the FASB issued SFAS No. 145,  "Rescission of FASB  Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
FASB No. 4  required  all  gains or  losses  from  extinguishment  of debt to be
classified as  extraordinary  items net of income  taxes.  SFAS No. 145 requires
that  gains  and  losses  from  extinguishment  of debt be  evaluated  under the
provisions of Accounting  Principles  Board Opinion No. 30, and be classified as
ordinary  items  unless  they are  unusual or  infrequent  or meet the  specific
criteria for treatment as an  extraordinary  item.  This  statement is effective
January 1, 2003.  The  Company  does not  anticipate  that the  adoption of this
statement  will have a material  effect on its financial  position or results of
operations.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities" This Statement addresses financial accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies  EITF Issue No.  94-3,  "Liability  Recognition  for Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)".  This Statement  requires  recognition of a
liability  for a cost  associated  with an exit or  disposal  activity  when the
liability  is  incurred,  as opposed to when the entity  commits to an exit plan
under EITF No.  94-3.  SFAS No. 146 is to be  applied  prospectively  to exit or
disposal  activities  initiated after December 31, 2002. The Company has not yet
determined the impact of the adoption of this statement.

                                       43
<PAGE>

In December 2002, the FASB approved Statement of Financial  Accounting Standards
No. 148, "Accounting for Stock-Based  Compensation - Transition and Disclosure -
an amendment  of FASB  Statement  No. 123" (SFAS No.  148).  SFAS No. 148 amends
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  (SFAS No. 123) to provide alternative methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.   In  addition,  SFAS  No.  148  amends  the  disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee  compensation  and the effect of the method used on  reported  results.
SFAS No. 148 is effective for financial statements for fiscal years ending after
December  15,  2002.  The  Company  will  continue  to account  for stock  based
compensation  using  the  methods  detailed  in  the  stock-based   compensation
accounting policy.

Reclassifications

Certain  reclassifications  have been made to prior years' amounts to conform to
the classifications used in the current year.

NOTE 3 - OIL AND GAS PROPERTY

The  following  table  presents  information  regarding  the Company's net costs
incurred in the purchase of proved and unproved  properties  and in  exploration
and development activities:

                                     For the Years Ended December 31,
                          ------------------------------------------------------
                               2002                  2001                2000
                          ------------           ----------             -------

Property acquisition costs:
   Unproved                 $22,324,547          $ 7,161,450            $425,797
   Proved                            --                   --                  --
Exploration costs (a)         3,319,124                   --            297,865
Development costs             7,319,184                   --                  --
                             ----------           -----------           --------
     Total costs incurred  $ 32,962,855          $ 7,161,450            $723,652
                            ===========           ===========          =========

(a) Includes  seismic data  acquisitions  of $850,000 during twelve months ended
December 31, 2002.

Depletion and impairment expense related to proved properties per equivalent mcf
of  production  for the year ended  December  31,  2002 was $9.73.  There was no
depletion or  impairment  expense  during the years ended  December 31, 2001 and
2000.

                                       44
<PAGE>

At December 31, the Company's unproved  properties consist of leasehold costs in
the following areas:

                                     2002                 2001
                                     ----                 ----

        Utah                      $2,163,524           $3,843,270
        Wyoming                   11,681,875            5,034,930
        California                   139,137              274,540
                                 -----------           ----------
                                 $13,984,536           $9,152,740
                                 ===========           ==========

NOTE 4 - SALE OF COMMON STOCK

On August 14, 2002, the Company issued  6,500,000 shares of common stock for net
proceeds of approximately $6.0 million in a private offering.  These shares were
subsequently registered for resale on a Form S-1 Registration Statement filed on
August 27, 2002.  The Company used the net proceeds  from this  offering to fund
its remaining 2002 capital budget.

NOTE 5 - REPURCHASE OF COMMON AND PREFERRED STOCK

On July 16,  2002,  Gasco  executed  and closed a purchase  agreement  with Brek
Energy  Corporation  ("Brek"),  and certain other Gasco stockholders (the "Other
Stockholders"), pursuant to which Brek and the Other Stockholders purchased from
Gasco an undivided 25% of Gasco's working  interests in all undeveloped  acreage
owned by Gasco in exchange  for  6,250,000  shares of Gasco common stock and 500
shares of Gasco  preferred  stock held by Brek and the Other  Stockholders.  The
Other  Stockholders  assigned their right to receive their share of such working
interests to Brek, so that Brek acquired  title to all of the working  interests
conveyed  by Gasco in the  transaction.  Brek also has the  option to acquire an
additional  5%  undivided  interest in Gasco's  undeveloped  acreage by paying a
total of $10.5 million in two equal  installments  on or before  January 1, 2004
and January 1, 2005, respectively. A 2.5% interest will be conveyed to Brek upon
receipt  of each  installment.  Brek  must  make  timely  payment  of the  first
installment  in order to  maintain  the option to acquire  the  additional  2.5%
interest with the second installment.

The transaction  was recorded at $16,709,000  based on the average trading price
of  the  Company's  common  stock  when  the  transaction  was  consummated.  In
accordance with Securities and Exchange Commission Regulation S-X rule 4.10, the
transaction was recorded as a reduction to the Company's unproved properties and
a reduction to the Company's  additional  paid in capital,  preferred  stock and
common stock.

The  transaction,  previously  announced  as a letter of intent on May 24, 2002,
simplifies the Company's  capital  structure by eliminating  all preferred stock
(which  was  convertible  into  4,750,000  common  shares)  and  the  associated
preferential voting rights.

NOTE 6 - PROPERTY ACQUISITION

On May 1, 2002, the Company issued  9,500,000  shares of its common stock to the
Shama Zoe Limited Partnership ("Shama Zoe"), a private oil and gas company,  for
the  acquisition  of 53,095  gross  (47,786  net) acres  plus  other  assets and


                                       45
<PAGE>

consideration  in the Greater Green River Basin in Sublette County Wyoming.  The
acquisition  was valued at  $18,525,000  using a stock price of $1.95 per common
share,  which  represented  the closing price of the  Company's  common stock on
April 23, 2002;  the date the  agreement  was  executed.  The original  Property
Purchase Agreement governing this transaction prevented the Company from issuing
additional  shares of its common  stock at prices below $1.80 per share and from
granting  registration  rights in connection  with the issuance of shares of its
common  stock.  In  connection  with the August 14, 2002  issuance of  6,500,000
shares of common stock, as described in Note 4, the original  Property  Purchase
Agreement  was amended to allow for the  issuance of these  shares at a price of
$1.00  per share and  Shama  Zoe was  granted  an option to sell to the  Company
1,400,000  shares of the Gasco common stock that it acquired in the  transaction
at $1.00 per share at any time prior to December 31, 2002.  On December 31, 2002
Shama Zoe sold  1,400,000  shares of Gasco  common stock back to the Company for
$1.00 per share.  The Company issued a $1,400,000  promissory  note to Shama Zoe
for the purchase of these shares.  The promissory  note is further  described in
Note 7.

In  connection  with this  transaction,  the Board of  Directors  of the Company
authorized the payment to an employee of the Company,  who was  instrumental  in
securing  the  Company's  agreement  with Shama Zoe, of $300,000 in cash and the
issuance  of options to  purchase  250,000  shares of Gasco  common  stock at an
exercise  price of $1.95  per  share,  which is equal to the fair  market of the
common  stock on April 23,  2002.  Prior to the end of 2002 the Company had paid
$150,000 of the total cash bonus to the employee,  therefore, the remaining cash
payment of  $150,000  was  included  in  accrued  expenses  in the  accompanying
financial statements as of December 31, 2002.

NOTE 7 - NOTE PAYABLE

The original  Property  Purchase  Agreement  governing the Shama Zoe transaction
described in Note 6 prevented the Company from issuing  additional shares of its
common  stock at prices  below  $1.80 per share and from  granting  registration
rights  in  connection  with the  issuance  of shares of its  common  stock.  In
connection  with the August 14,  2002  issuance  of  6,500,000  shares of common
stock,  as described in Note 4, the original  Property  Purchase  Agreement  was
amended to allow for the  issuance of these shares at a price of $1.00 per share
and Shama Zoe was granted an option to sell to the Company  1,400,000  shares of
the Gasco common stock that it acquired in the transaction at $1.00 per share at
any time prior to December 31, 2002.  The value of this option,  using the Black
Scholes  model,  of $250,000 has been  recorded as additional  noncash  offering
costs associated with the Company's sale of common stock as described in Note 4.

On December 31, 2002 the Company  repurchased and cancelled  1,400,000 shares of
Gasco  common  stock from Shama Zoe for $1.00 per share.  The  Company  issued a
$1,400,000  promissory  note to Shama Zoe for the purchase of these shares.  The
promissory  note beared  interest at 12%, had a maturity  date of March 14, 2003
and was recorded as a  short-term  note  payable in the  accompanying  financial
statements  as of December 31, 2002.  On February 20, 2003,  the Company  repaid
this note plus accrued interest in full.

                                       46
<PAGE>

NOTE 8 - SUSPENDED LEASES

During  February  2002,  the Company  purchased  at a Bureau of Land  Management
("BLM")  sale a 45%  interest in 21,614 gross acres (9,726 net acres) in Wyoming
for  approximately  $1,428,000.  After the sale, the Company was notified by the
BLM in Wyoming that several  environmental  agencies filed a protest against the
BLM  offering  numerous  parcels  of land  for oil and gas  leasing.  All of the
parcels  (leases)  purchased by the Company were placed in suspense  pending the
resolution  of this protest.  If the protest is deemed to have merit,  the lease
purchases will be rejected and the money paid for the leases will be returned to
the Company.  If the protest is deemed to be without  merit,  the leases will be
released from suspense and issued to the Company.  Effective  July 16, 2002, the
Company assigned 25% of its interest in these suspended leases to Brek resulting
in the Company's total net acres being reduced from 9,726 to 7,295 net acres. As
of December 31, 2002,  the BLM has released  from  suspension  and issued leases
covering  5,700 gross acres  representing  1,924 net acres to the  Company.  The
value  of the  remaining  suspended  leases  is  recorded  as  unproved  mineral
interests in the accompanying financial statements.

NOTE 9 - PROPERTY IMPAIRMENT

During the first  quarter of 2002,  the Company  drilled a well in the Southwest
Jonah  field  located in the  Greater  Green  River  Basin in  Sublette  County,
Wyoming.  The  well  was  drilled  to a total  depth of  11,000  feet.  The well
encountered  natural  gas,  however not of  sufficient  quantities  to be deemed
economic.  The well was plugged and  abandoned  during March of 2002.  The costs
associated with this well of $541,125, were charged to impairment expense during
the year ended  December  31, 2002 because the Company  believed  that the total
costs for this well exceeded the present value, discounted at 10%, of the future
net  revenues  from its  proved  oil and gas  reserves  at the time the well was
plugged and abandoned.

NOTE 10 - PROPERTY DISPOSITIONS

On March 30, 2001, the Company divested itself of all assets not associated with
its "Riverbend" area of interest (the non-Riverbend  assets), as required by the
Pannonian Agreement described in Note 1. The divestiture is summarized below.

                Oil and gas properties               $       1,405,242
                Cash                                         1,000,000
                Liabilities transferred                      (555,185)
                                                             ---------
                                                           $ 1,850,057

The oil and gas  properties,  cash and liabilities  were  transferred to a newly
formed entity Rubicon Oil and Gas, Inc. ("Rubicon").  The Pannonian stockholders
were  allocated  shares in Rubicon  on a one for one basis with their  Pannonian
shares.

The Company held,  through PIL,  non-United  States oil and gas  properties.  In
accordance with the Agreement,  the Company distributed,  as a dividend in kind,


                                       47
<PAGE>

all of the outstanding shares of PIL to the shareholders of the Company on a one
to one basis with their Pannonian shares. The book value of the PIL shares as of
the date of distribution was approximately $174,000.

NOTE 11 - STOCKHOLDERS' EQUITY

The  Company's  capital  stock as of  December  31,  2002 and 2001  consists  of
100,000,000  shares of common stock,  par value $0.0001 per share, and 5,000,000
shares of preferred stock, par value $0.001 per share.

Series A Convertible Redeemable Preferred Stock - As of December 31, 2001, Gasco
had 1,000 shares of Series A Convertible  Redeemable Preferred Stock ("Preferred
Stock")  issued  and  outstanding.  The  Preferred  Stock was  convertible  into
9,500,000  shares of Gasco  Common  Stock,  had no fixed  dividend  rate and was
entitled to a $1.00 per share  liquidation  preference.  The Preferred Stock was
entitled to vote along with the Gasco  common stock and, for so long as at least
half of the Preferred Stock remained  outstanding and was entitled to 26% of the
combined voting power of all the common stock and preferred stock. The Preferred
Stock was also entitled to vote as a class on certain matters.

In July 2001, Brek purchased  1,000 shares of the Company's  Preferred Stock for
$19,000,000.  Costs of the sale,  including  1,025,000  shares  of common  stock
valued at $3,280,000 ($3.20 per share), were $4,849,633.  The total costs of the
sale  included  $1,500,000  and the  issuance of 125,000  shares of common stock
valued at $400,000  paid to  Canaccord  International  Ltd.  and the issuance of
900,000 shares of common stock valued at $2,880,000 paid to Wet Coast Management
Corp. as brokerage commissions.

The Company  recognized  $11,400,000 as a deemed  distribution to the holders of
the Preferred  Stock upon issuance due to a beneficial  conversion  feature into
the  Company's  common  stock in  accordance  with  Emerging  Issues  Task Force
("EITF") 98-5, "Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently  Adjustable  Conversion  Ratios to Certain  Convertible
Instruments"  and EITF  00-27  "Application  of EITF  Issue  98-5".  The  deemed
distribution was the difference between the market price on the date of issuance
($3.20) and the conversion rate.

On July 16, 2002,  as further  described in Note 5, Gasco  executed and closed a
purchase agreement with Brek, and Other Stockholders, pursuant to which Brek and
the Other Stockholders  purchased from Gasco an undivided 25% of Gasco's working
interests in all  undeveloped  acreage  owned by Gasco in exchange for 6,250,000
shares of Gasco  common  stock and 500 shares of Gasco  preferred  stock held by
Brek and the Other Stockholders. As a result of this transaction,  there were no
outstanding shares of Preferred Stock outstanding as of December 31, 2002.

Common Stock - Gasco has 40,362,500 shares of Common Stock issued and 40,288,800
shares outstanding as of December 31, 2002. The common shareholders are entitled
to one  vote  per  share on all  matters  to be  voted  on by the  shareholders;
however, there are no cumulative voting rights. Additionally,  as long as 50% of
the  Preferred  Stock was  outstanding,  the  holders  of  Preferred  Stock were


                                       48
<PAGE>

entitled to vote as a class  equal to 26%;  therefore,  the common  shareholders
were  effectively  entitled  to 0.74 votes per share  when 50% of the  Preferred
Stock was  outstanding.  The common  shareholders  are entitled to dividends and
other  distributions  as may  be  declared  by  the  board  of  directors.  Upon
liquidation or dissolution,  the common  shareholders  will be entitled to share
ratably in the distribution of all assets  remaining  available for distribution
after satisfaction of all liabilities and payment of the liquidation  preference
of any outstanding preferred stock.

The  Company's  common  stock  equity  transactions  during  2002  and  2001 are
described as follows:

On May 1, 2002, the Company issued 9,500,000 shares of its common stock to Shama
Zoe, a private oil and gas company,  for the acquisition of 53,095 gross (47,786
net) acres plus other assets and  consideration in the Greater Green River Basin
in Sublette  County Wyoming.  The acquisition was valued at $18,525,000  using a
stock price of $1.95 per common share,  which  represented  the closing price of
the  Company's  common  stock on April  23,  2002;  the date the  agreement  was
executed.  The original Property Purchase  Agreement  governing this transaction
prevented  the Company  from  issuing  additional  shares of its common stock at
prices below $1.80 per share and from granting registration rights in connection
with the issuance of shares of its common stock.  In connection  with the August
14, 2002 issuance of 6,500,000  shares of common stock, as described  below, the
original  Property  Purchase  Agreement was amended to allow for the issuance of
these  shares at a price of $1.00 per share and Shama Zoe was  granted an option
to sell to the  Company  1,400,000  shares of the  Gasco  common  stock  that it
acquired in the transaction at $1.00 per share at any time prior to December 31,
2002. On December 31, 2002 Shama Zoe sold 1,400,000 shares of Gasco common stock
back to the  Company  for $1.00  per  share.  The  Company  issued a  $1,400,000
promissory note to Shama Zoe for the purchase of these shares.

On July 16, 2002,  Gasco executed and closed a purchase  agreement with Brek and
the  Other  Stockholders,  pursuant  to which  Brek and the  Other  Stockholders
purchased  from Gasco an  undivided  25% of  Gasco's  working  interests  in all
undeveloped  acreage owned by Gasco,  representing 35,169 net undeveloped acres,
in exchange for  6,250,000  shares of Gasco common stock and 500 shares of Gasco
preferred stock held by Brek and the Other Stockholders.

The transaction  was recorded at $16,709,000  based on the average trading price
of the Company's common stock when the transaction was executed.

On August 14, 2002, the Company issued 6,500,000 shares of common stock for cash
at $1.00 per  share,  pursuant  to  private  placements  for gross  proceeds  of
$6,500,000.  The cost of this offering was $526,020,  $350,000 of which was paid
to Energy  Capital  Solutions  and $65,000 of which was paid to Enercom  Inc. as
financial advisory fees. These shares were subsequently registered for resale on
a Form S-1 Registration Statement filed on August 27, 2002.

In  connection  with the  Pannonian/SJRI  merger,  SJRI  issued  an  option to a
Pannonian officer, to purchase 1,000,000 shares of the Company's common stock at
$1.00 per share.  The $269,000 fair market value of the option  determined using
the Black  Scholes  Pricing  model,  was charged to  operations  of the combined
company during the year ended December 31, 2001.

                                       49
<PAGE>

During January and May 2001, the Company issued 2,275,000 shares of common stock
for cash at $3.00 per share,  pursuant to private  placements for gross proceeds
of $6,825,000. The costs of these offerings were $574,835, $191,250 of which was
paid to  Canaccord  International  Ltd.  and  $150,000  of which was paid to DMD
Investments  as broker  commissions.  In September  2001,  the Company issued an
additional 227,500 shares of common stock for no additional consideration to the
holders of the original shares in accordance with the terms of the offering. The
offering was conducted in accordance  with the  provisions of Regulation S under
the  Securities  Act of 1933,  and all  purchasers  were  residents  of  foreign
countries.

In April 2001, the Company paid cash of $200,808 and issued 75,000 shares of its
common  stock,  valued at $247,500  ($3.30 per share),  for unproved oil and gas
properties from an unrelated entity.

In July 2001,  the Company  acquired  unproved  oil and gas  properties  from an
entity for  $700,000  cash and 300,000  shares of the  Company's  common  stock,
valued at $846,000  ($2.82 per share).  See related party  discussion in Note 14
for further discussion.

During December 2001, the Company  repurchased 73,700 shares of its own stock on
the open market at prices ranging from $1.12 to $2.46 per share.

Stock  Options - As of December  31, 2002 the Company had options to purchase an
aggregate  6,355,250  shares of the Company's  common stock  outstanding.  These
options were granted during 2001 and 2002 to the Company's employees,  directors
and  consultants at exercise  prices ranging from $1.58 to $3.70 per share.  The
options  vest at varying  schedules  within  three years of their grant date and
expire within ten years from the grant date.  The aggregate fair market value of
options,   determined  using  the  Black  Scholes  Pricing  Model,   granted  to
consultants,  including the Pannonian  officer  issuance  above, of $208,542 and
$423,594 was charged to operations  during the years ended December 31, 2002 and
2001, respectively.

During the first quarter of 2003,  the Company  granted an additional  1,258,000
options to purchase  shares of common  stock to employees  and  directors of the
Company,  at an exercise  price of $1.00 per share.  The options vest 16 2/3% at
the end of each four month  period after the issuance  date.  Additionally,  the
Company  cancelled  2,760,000  options to purchase shares of common stock during
the first quarter of 2003.  The exercise  price of the cancelled  options ranged
from $1.95 to $3.15 per share.  None of the 1,258,000 options granted during the
first  quarter  of 2003  were  issued  to the  individuals  whose  options  were
cancelled.

                                       50
<PAGE>

A summary  of the  options  granted to  purchase  common  stock and the  changes
therein  during the years ended  December 31, 2002 and 2001 is presented  below.
There were no options issued during the years ended December 31, 2000.
<TABLE>
<CAPTION>

                                                          2002                                      2001
                                              ------------------------------            ------------------------------
                                              -------------- ---------------            ---------------- -------------
                                                                Weighted                                   Weighted
                                                                Average                                    Average
                                                Number of    Exercise Price                Number of       Exercise
                                                 Options                                    Options         Price

<S>                                               <C>                <C>                                         <C>
Outstanding at beginning of year                  6,392,750          $ 2.23                          --          $ --
Granted                                             500,000            1.80                   6,519,000          2.25
Cancelled                                         (537,500)            2.56                   (126,250)          3.03
                                                  ---------          ------                   ---------          ----
Outstanding at end of year                        6,355,250          $ 2.17                   6,392,750        $ 2.23
                                                  =========          ======                   =========        ======

Exercisable at December 31,                       6,027,085          $ 2.06                   5,137,250        $ 2.01
                                                  ---------          ------                   ---------        ------

Weighted average fair value of options granted                       $ 1.28                                    $ 1.37
                                                                     ======                                    ======
Weighted average remaining contractual life of
options outstanding as of December 31, 2002           7.7 years
                                                      =========
</TABLE>

NOTE 12 - STATEMENT OF CASH FLOWS

The  following  transactions  represent  the non-cash  investing  and  financing
activities of the Company during the years ended December 31, 2002.

     Conversion of 500 shares of Preferred Stock into 4,750,000 shares of common
     stock.

     Issuance of 9,500,000  shares of common  stock,  valued at  $18,525,000  in
     exchange for oil and gas properties.

     Repurchase of 500 shares of preferred stock and 6,250,000  shares of common
     stock in exchange for an undivided  25% working  interest in the  Company's
     undeveloped acreage valued at $16,709,000.

     Repurchase of 1,400,000 shares of common stock in exchange for a promissory
     note as described in Note 7.

     Noncash  stock  offering  costs of  $250,000  incurred in  connection  with
     redeemable common stock as described in Note 7.

The  following  transactions  represent  the non-cash  investing  and  financing
activities of the Company during the years ended December 31, 2001.

                                       51
<PAGE>

     The  Company  issued  375,000  shares  of  common  stock  for  oil  and gas
     properties, valued at $1,093,500 ($2.82 to $3.30 per share).

     The Company issued 1,025,000 shares of common stock in conjunction with the
     sale of preferred stock, valued at $3,280,000 ($3.20 per share).

The  following  transactions  represent  the non-cash  investing  and  financing
activities of the Company during the year ended December 31, 2000.

     Certain individuals paid legal fees on behalf of the Company for which they
     were issued promissory notes in the aggregate amount of $198,193.

     The  Company  entered  into  notes  for  the  acquisition  of oil  and  gas
     properties  in the  aggregate  amount of $781,917.  The Company  assumed an
     18.75% interest in the notes, which was $143,609. The notes and the related
     properties were spun off as part of the Pannonian Agreement as described in
     Notes 1 and 10.

Cash paid for interest was $67,363 and $11,072 for the years ended  December 31,
2001 and 2000, respectively. There was no cash paid for interest during the year
ended December 31, 2002.

NOTE 13 - INCOME TAXES

A provision (benefit) for income taxes for the years ended December 31, 2002 and
2001 consists of the following:

Current taxes:                                       2002              2001
                                                -------------     -------------
  Federal                                       $        -       $          -
  State                                                  -                  -
Deferred taxes:
  Federal                                          (74,128)     (1,333,826)
  State                                            (68,422)       (191,435)
  Less: valuation allowance                        142,550       1,525,261
                                                   -------       ---------
Net income tax provision (benefit)                $       -      $       -
                                                  =========      ==========

There is no current or  deferred  tax expense  for the year ended  December  31,
2000. The Company,  in 2000, utilized net operating loss carryforwards to offset
taxable income.

A  reconciliation  of the provision  (benefit) for income taxes  computed at the
statutory  rate to the provision for income taxes as shown in the  statements of
operations for the years ended December 31, 2002 and 2001 is summarized below:

                                       52
<PAGE>
<TABLE>
<CAPTION>

                                                                2002                         2001
                                                            ------------                -----------
<S>                                                         <C>                         <C>
Tax provision (benefit) at federal statutory rate           ($1,920,892)                ($1,404,016)
State taxes, net of federal tax effects                         (45,159)                   (126,347)
Valuation adjustment on assets distributed in
  stock redemption                                            1,798,941
Other Permanent items                                            24,560
5,102
Valuation allowance                                             142,550                   1,525,261
                                                             -----------                  ---------
Net income tax provision (benefit)                           $       -                  $         -
                                                             ============                 =========
</TABLE>

The  components  of the deferred tax assets and  liabilities  as of December 31,
2002 and 2001 are as follows:
<TABLE>
<CAPTION>

Deferred tax assets:                                          2002                  2001
                                                         -------------         --------------

<S>                                                        <C>                    <C>
  Federal and state net operating loss carryovers          $1,529,644             $3,452,095
  Other property, plant & equipment                            -                      41,019
  Oil and gas property                                        869,272                     -
  Deferred compensation                                       335,534                165,202
                                                           -----------          ------------
    Total deferred tax assets                                2,734,450             3,658,316
    Less: valuation allowance                               (2,564,963)           (2,422,413)
                                                            -----------          -----------
                                                               169,487             1,235,903
Deferred tax liabilities:
  Other property, plant & equipment                             97,169                     -
  Oil and gas property                                               -             1,152,344
  Other                                                         72,318                83,559
                                                           -----------           -----------
     Total deferred tax liabilities                            169,487             1,235,903
                                                             ----------            ---------
Net deferred tax asset                                    $          -         $           -
                                                          ===============      =============
</TABLE>


The Company has a $3,885,681  and  $9,152,671  net operating  loss carryover for
federal  income tax purposes and a $4,549,237  and $7,182,732 net operating loss
carryover  for state  income tax  purposes  as of  December  31,  2002 and 2001,
respectively. The net operating losses may offset against taxable income through
the year ended  December 31, 2021.  The company  provided a valuation  allowance
against its deferred tax asset of $2,564,963  and  $2,422,413 as of December 31,
2002 and 2001,  respectively,  since it believes that it is more likely than not
that it may not be able to fully utilize it on its future tax returns.

NOTE 14 - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2002, the Company paid $110,266 in consulting
fees to an unrelated  third party.  The obligation to pay these fees was a joint
and several  liability of Gasco and a Company of which two of Gasco's  directors
have a combined 66.67% ownership.

A director of the Company earned consulting fees of $16,000, $52,000 and $50,000
from the  Company  during the years  ended  December  31,  2002,  2001 and 2000,


                                       53
<PAGE>

respectively.  During both of the years ended  December  31, 2002 and 2001,  the
Company paid  $240,000 in  consulting  fees to a company  owned by a director of
Gasco.  During  January  2003,  the future  annual fees that will be paid to the
director's  company were reduced to $120,000 per year and are committed  through
January 31, 2006.

During 2001, an officer of the Company earned a $28,000 fee and 12,500 shares of
Gasco's  common stock for  consulting  services  provided in  connection  with a
property acquisition described in Note 11. This same officer was paid $22,879 in
consulting fees prior to his appointment.

An officer of the Company,  who retired  effectively  December 31, 2002,  was an
employee  of and owned a less than 1%  interest  in an entity  from which  Gasco
purchased  acreage in Utah and Wyoming during 2001 and 2002.  Additionally,  the
Company  recorded a payable to this  officer of $213,000 as of December 31, 2002
representing  a bonus of $150,000  and  severance  payments  of  $63,000.  These
amounts will be paid to this officer on or before June 30, 2003.

One of the Company's  directors  earned a combined total of $9,000 in consulting
fees from Rubicon and PIL during 2001.

During  2000,  the Company  incurred  debt to related  parties in the  aggregate
amount of $366,657  for cash loans,  expenses  paid on behalf of the Company and
conversion of interest to debt. Repayments made during 2000 aggregated $63,000.

At December 31, 2000 the Company had four  outstanding  notes totaling  $529,280
payable to  directors or officers of the Company and one note payable of $15,000
to an entity  owned by a director  of the Company  with  similar  terms  bearing
interest at rates ranging from 5% to 10%. These notes were repaid during 2001.

The Board of Directors approved the payment of bonuses and directors fees to the
officers and  directors of the Company in the aggregate  amount of $455,000,  of
which $32,000 was paid as of December 31, 2000.  The remaining  balance was paid
during 2001.

During 2000,  the Company paid  consulting  and  professional  fees to officers,
directors and related parties of $96,000.

Certain of the Company's  directors and officers have working and/or  overriding
royalty  interests  in oil  and gas  properties  in  which  the  Company  has an
interest.  It is expected that the directors and officers may  participate  with
the Company in future projects. All participation by directors and officers will
continue to be approved by the  disinterested  members of the Company's Board of
Directors.

The Company's  management believes that the above transactions and services were
provided in the normal course of business with terms that could be obtained from
non-related sources.

                                       54
<PAGE>

NOTE 15 - COMMITMENTS

The Company leases office  facilities in Englewood,  Colorado for  approximately
$46,000  per year under two leases  that  expire on August 30,  2004.  Remaining
commitments under these leases mature as follows:

          Year Ending December 31,                Annual Rentals

                    2003                               $47,503
                    2004                                32,195
                                                        ------
                                                       $79,698

Rent expense for the years ending  December 31, 2002, 2001 and 2000 was $42,055,
$46,476 and $52,573, respectively.

As is  customary  in the oil and gas  industry,  the  Company  may at times have
commitments in place to reserve or earn certain  acreage  positions or wells. If
the Company does not pay such commitments, the acreage positions or wells may be
lost.

The Company has entered  into  employment  agreements  with certain key officers
through January 31, 2006. These agreements were revised during the first quarter
of 2003 to  reduce  the  total  compensation  for the  officers  covered  by the
employment  agreements  from  $560,000  per annum to  $470,000  per  annum.  The
agreements  contain  clauses  regarding  termination and demotion of the officer
that  would  require  payment  of  an  amount  ranging  from  one  times  annual
compensation to up to approximately  five times annual  compensation plus a cash
payment from $250,00 to $500,000.  Included in the  employment  agreements  is a
bonus  calculation for each of the covered officers totaling 2.125% of a defined
cash flow figure based on net after tax earnings adjusted for certain expenses.

NOTE 16 - EMPLOYEE BENEFIT PLANS

The Company  adopted a 401(k) profit  sharing plan (the "Plan") in October 2001,
available to employees who meet the Plan's eligibility requirements. The Plan is
a defined contribution plan. The Company may make discretionary contributions to
the  Plan and is  required  to  contribute  3% of the  participating  employee's
compensation to the Plan. The contributions  made by the Company totaled $41,726
and $6,270 during the years ended December 31, 2002 and 2001, respectively.

                                       55
<PAGE>

NOTE 17 - SELECTED QUARTERLY INFORMATION (Unaudited)

The following represents selected quarterly financial  information for the years
ended December 31, 2002 and 2001.
<TABLE>
<CAPTION>

            2002                                        For the Quarter Ended
           -----          ----------------------------------------------------------------
                                March 31,        June 30,    September 30,      December 31,
                               ---------        --------    -------------      ------------

<S>                                <C>            <C>               <C>                <C>
Gross revenue                      $28,506        $23,426           $  43,611          $68,965
Net revenue from oil and
gas operations                       3,440          5,177              10,869           25,213
Net income (loss)               (1,639,009)    (1,477,075)         (1,482,467)      (1,051,131)  a
Net loss per share
  basic and diluted                 (0.06)         (0.04)              (0.04)           (0.02)
</TABLE>

a - During the fourth quarter,  depletion  expense was calculated for the entire
year using the December 31, 2002 reserve report.
<TABLE>
<CAPTION>

             2001                                      For the Quarter Ended
                            ----------------------------------------------------------------
                               March 31,      June 30,      September 30,      December 31,
                               ---------      --------      -------------      ------------

<S>                              <C>            <C>               <C>              <C>
Gross revenue                    $   --         $   --            $    --          $36,850  b
Net revenue from oil
  and gas operations                 --             --                 --           24,171  b
Net loss                       (653,369)      (875,624)          (744,516)      (1,855,950) c
Net loss per share
  basic and diluted              (0.03)         (0.04)             (0.45)  d        (0.07)
</TABLE>

b - The increase in gross  revenue and net revenue  from oil and gas  operations
during the fourth  quarter is due to the  revenue and lease  operating  expenses
from two wells that were drilled during the third and fourth quarters.

c - The increase in the net loss during the fourth  quarter of 2001 is primarily
due  to  increased  general  and  administrative  expenses  resulting  from  the
increased level of operating  activity  associated with the  commencement of the
Company's own operations.

d - The increase in the net loss per share  during the third  quarter of 2001 is
due to the recognition of $11,400,000 in a deemed distribution to the holders of
the Preferred Stock as further described in Note 11.

NOTE 18 - SUBSEQUENT EVENTS

During  February  2003,  the Company  sold through a private  placement,  11,052
shares  of  convertible  preferred  stock  ("Convertible  Stock")  to a group of
accredited investors,  including members of Gasco's management.  The Convertible
Stock was sold for $440 per share  resulting  in net  proceeds of  approximately
$4,800,000.  Dividends  on the  Convertible  Stock  accrue at the rate of 7% per


                                       56
<PAGE>

annum payable  semi-annually in cash,  additional shares of Convertible Stock or
shares of common stock at the  Company's  option.  The  conversion  price of the
Convertible  Stock is $0.70 per common  share  making each share of  Convertible
Stock convertible into approximately 629 shares of Gasco common stock. Shares of
the Convertible  Stock are  convertible  into Gasco common shares at any time at
the holder's  election.  Gasco may redeem shares of the  Convertible  Stock at a
price of 105% of the purchase  price at any time after  February  10, 2006.  The
Convertible  Stock  votes as a class  on  issues  that  affect  the  Convertible
Stockholder's  interests  and votes  with  shares  of common  stock on all other
issues on an as-converted  basis.  Additionally,  the holders of the Convertible
Stock  exercised  their right to elect one member to Gasco's  board of directors
during March 2003.

During  February  2003,  $1,400,000  of the proceeds from this sale were used to
repay the note that was  issued to Shama Zoe in  connection  with the  Company's
repurchase  of  1,400,000  shares of common  stock at $1.00 per share as further
described in Note 7. The remaining  proceeds from this sale will be used for the
development  and  exploitation of the Company's  Riverbend  Project in the Uinta
Basin in Utah and to fund the general corporate purposes of the Company.

During the first quarter of 2003,  the Company  issued an  additional  1,258,000
options to purchase  shares of common  stock to employees  and  directors of the
Company,  at an exercise  price of $1.00 per share.  The options vest  quarterly
over a  two-year  period  and  expire  within  ten years  from the  grant  date.
Additionally,  the Company  cancelled  2,760,000  options to purchase  shares of
common  stock  during  the first  quarter  of 2003.  The  exercise  price of the
cancelled  options  ranged from $1.95 to $3.15 per share.  None of the 1,258,000
options  granted during the first quarter of 2003 were issued to the individuals
whose options were cancelled.

NOTE 19 - SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited)

The  following  reserve  quantity and future net cash flow  information  for the
Company  represents  proved reserves located in the United States.  The reserves
have been  estimated  by James R. Stell,  independent  petroleum  engineer.  The
determination  of oil and gas reserves is based on  estimates,  which are highly
complex and  interpretive.  The estimates  are subject to  continuing  change as
additional information becomes available.

The standardized  measure of discounted  future net cash flows is prepared under
the guidelines set forth by the  Securities and Exchange  Commission  (SEC) that
require the calculation to be performed  using year-end oil and gas prices.  The
oil and gas prices used as of  December  31, 2002 were $29.60 per bbl of oil and
$3.39 per mcf of gas.  Future  production  costs are based on year-end costs and
include  severance taxes. The present value of future cash inflows is based on a
10% discount rate.

                                       57
<PAGE>

Reserve Quantities
                                               Gas          Oil
                                               Mcf         Bbls
Proved Reserves:
      Balance, December 31, 2001                 --             --
      Extensions and discoveries         20,688,710        141,652
      Revisions of previous estimates            --             --
      Sales of reserves in place                 --             --
      Purchases of reserves in place             --             --
      Production                           (66,444)             --
                                           --------        -------

      Balance, December 31, 2002         20,622,266        141,652
                                         ==========        =======

Proved Developed Reserves
      Balance, December 31, 2002          5,889,981         34,493
                                          =========         ======

Standardized Measure of Discounted Future Net Cash Flows

Future cash flows                                            $ 73,763,406
Future production and development costs                      (38,958,416)
Future net cash flows before discount                          34,804,990
10% discount to present value                                (22,492,988)
                                                             ------------
Standardized measure of discounted future
  net cash flows as of December 31, 2002                     $ 12,312,002
                                                             ============

Changes in the Standardized Measure of Discounted Future Net Cash Flows

Standardized measure of discounted future net cash flows
  at beginning of year                                             $       -
Sales of oil and gas produced, net of production costs              (44,699)
Net changes in prices and production costs                                 -
Extensions and discoveries, net of future production and
  development costs                                               21,007,459
Development costs incurred                                         7,319,184
Changes in estimated future development costs                   (31,717,307)
Revisions of previous quantity estimates                                   -
Purchases of reserves in place                                             -
Sales of reserves in place                                                 -
Accretion of discount                                                      -
Changes in production rates and other                             15,747,365
                                                                  ----------
Standardized measure of discounted future net cash
  flows at December 31, 2002                                    $ 12,312,002
                                                                ============






                                       58
<PAGE>




ITEM 9 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

Not applicable.

PART III


ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
                                                                                                 Age as
                                                                                                   of
                                                                                                3/26/03
    Name                                Principal Occupation and Directorships

<S>                              <C>                                                              <C>
 Marc Bruner.....................Director of Gasco since 2001; Chairman of the Board of            53
                                 Directors and Strategic Consultant for the Company
 Mark A. Erickson................Director of Gasco since 2001; Chief Executive Officer and         43
                                 President
 Michael K. Decker...............Director of Gasco since 2001; Executive Vice President and        48
                                 Chief Operating Officer
 W. King Grant...................Chief Financial Officer; Director of Gasco from 2001 through      39
                                 2003
 Carmen Lotito...................Director of Gasco since 2001; Treasurer, Chief Financial          58
                                 Officer and Director ofGalaxy Investments, Inc. Corporation;
                                 Member of Equistar Capital LLC
 Carl Stadelhofer................Director of Gasco since 2001; Partner of the law firm of          49
                                 Rinderknecht Klein & Stadelhofer
 Charles B. Crowell..............Director of Gasco since 2002                                      60
 Richard S. Langdon..............Director of Gasco since 2003                                      52
</TABLE>

Our Board of Directors has seven members who are elected annually. The following
sets forth certain  biographical  information  concerning  each of the Company's
directors and executive officers.

Marc Bruner.  Mr. Bruner has served as the Chairman of the Board of Directors of
Gasco and as a member of Gasco's  Executive  Committee since February 2001. From
January 1996 to January 1999,  Mr. Bruner was founding  Chairman of the Board of
Ultra  Petroleum,  a Toronto Stock Exchange and American  Stock Exchange  listed
natural gas company.  Ultra's  business is focused on tight sand  development in
the Green River Basin of Wyoming.  In late 1997, Mr. Bruner  co-founded  Pennaco
Energy,  Inc., a coal bed methane  company.  In 1996, Mr. Bruner  co-founded RIS
Resources  International,  a natural gas company, and served as a Director until
late 1997.

Mark A. Erickson. Mr. Erickson has served as a Director, Chief Executive Officer
and President of Gasco since February 2001. Mr.  Erickson served as President of
Pannonian  Energy Inc. from mid-1999 until our merger with  Pannonian  Energy in
February 2001. In late 1997, Mr. Erickson  co-founded  Pennaco Energy,  Inc., an


                                       59
<PAGE>

AMEX listed oil and gas company  with  properties  in the Powder  River basin of
Wyoming.  He served as an officer  and  Director of Pennaco  from its  inception
until  mid-1999.  Mr.  Erickson  served as President of RIS Resources  (USA),  a
natural  gas  company  from  late  1997 to the end of 1998.  Mr.  Erickson  is a
Registered   Petroleum   Engineer  with  18  years  of  experience  in  business
development,  finance,  strategic  planning,  marketing,  project management and
petroleum  engineering.  He holds a MS in Mineral  Economics  from the  Colorado
School of Mines.

Michael K. Decker.  Mr. Decker has served as Director,  Executive Vice President
and Chief  Operating  Officer of Gasco  since July 2001.  From August 1999 until
July 2001,  Mr.  Decker  founded and served as the  President  of Black  Diamond
Energy, LLC. From 1990 to August 1999 Mr. Decker served as the Vice President of
Exploitation of Prima Energy  Corporation,  a Nasdaq traded oil and gas company.
Prima was  recognized  by the Denver  Business  Journal  as the "top  performing
Colorado based company of the 1990's," with a market return of 1857%.  From 1988
to 1990,  Mr. Decker was employed by Bonneville  Fuels  Corporation  as a Senior
Geologist. From 1977 to 1988, Mr. Decker was employed by Tenneco Exploration and
Production  Company as a Senior  Project  Geological  Engineer.  Mr.  Decker has
twenty-six years of oil and gas prospecting, development, operations and mergers
and acquisitions experience. He holds a BS degree in Geological Engineering from
the Colorado School of Mines and is the Chairman of the Potential Gas Committee,
an independent natural gas resource assessment organization.

W. King Grant.  Mr. Grant has served as Chief  Financial  Officer of Gasco since
July 2001 and as Director from July 2001 until March 2003. From November 1999 to
May 2001,  Mr. Grant  served as Executive  Vice  President  and Chief  Financial
Officer  for  KEH.com,  a  catalog/internet  retailer  of new  and  used  camera
equipment.  From  February  1997 to March  1999,  Mr.  Grant  was a Senior  Vice
President  in the  Natural  Resources  Group  of ING  Baring,  LLC  where he was
responsible for providing financing and advisory services to mid-cap and smaller
energy  companies.  For the  previous  eleven  years,  Mr.  Grant  held  several
positions at Chase  Manhattan Bank and its  affiliates,  most recently as a Vice
President in the Oil & Gas group. Mr. Grant holds a BSE in Chemical  Engineering
from  Princeton  University and an MBA from the Wharton School at the University
of Pennsylvania.

Carmen (Tony) Lotito. Mr. Lotito became the Chief Financial  Officer,  Treasurer
and a director of Galaxy  Investments,  Inc., a publicly  traded gas and coalbed
methane  exploration  and  development  company upon its  acquisition of Dolphin
Energy  Corporation  in  November  2002.  Mr.  Lotito  has  served  as the Chief
Financial Officer,  Treasurer and a Director of Dolphin Energy Corporation since
September 2002. Mr. Lotito has served as a Director of Gasco and as the Chairman
of Gasco's Audit and  Compensation  Committee  since April 2001.  Mr. Lotito has
served as Vice  President,  Chief  Financial  Officer  and a Director  of Coriko
Corporation,  a private business  development  company from November 2000 to May
2002.  Mr.  Lotito has been a member of  Equistar  Capital  LLC,  an  investment
banking firm since  December  1999.  From March 2000 to the present,  Mr. Lotito
serves as a Director for Impact Web  Development.  Prior to joining  Coriko from
Utah  Clay  Technology,  Inc.,  Mr.  Lotito  was self  employed  as a  financial
consultant. In 1988, Mr. Lotito joined ConAgra, Inc., in San Antonio, Texas as a
brand manager.  In 1966, Mr. Lotito joined the firm of Pannell,  Kerr Forester &
Co. as a senior  accountant in management  and audit  services for the company's


                                       60
<PAGE>

Los Angeles and San Diego,  California offices.  Mr. Lotito holds a BS degree in
Accounting from the University of Southern California.

Carl Stadelhofer.  Mr.  Stadelhofer has served as a Director since February 2001
and a member of the Audit  Committee  and the  Compensation  Committee  of Gasco
since April 2001. Mr. Stadelhofer is a partner with the law firm of Rinderknecht
Klein & Stadelhofer in Zurich, Switzerland,  where he has practiced law for over
twenty years.  He was admitted to the practice of law in Switzerland in 1982. He
took his law degree in 1979 in Switzerland  and studied law in the United States
at Harvard Law School and at  Georgetown  University  Law School.  His  practice
specializes in banking and financing, mergers and acquisitions, investment funds
and international securities transactions.


Charles B.  Crowell.  Mr.  Crowell has served as a director  and a member of the
audit,  compensation  and executive  committees of Gasco since July 2002.  Since
1993, Mr. Crowell has been a practicing attorney and a consultant to oil and gas
companies,  and was a senior member of Crowell & Bishop,  PLLC,  Attorneys  from
November  1995  through June 1998.  From  September,  1996 until June 2000,  Mr.
Crowell held the  position of Manager at Enigma  Engineering  Company,  LLC. Mr.
Crowell also worked at Triton Energy  Corporation where he held the positions of
Executive Vice President,  Administration from November 1991 to May 1993, Senior
Vice  President  and General  Counsel  from August 1989 to October 1991 and Vice
President and General Counsel from November 1981 to July 1989. From June 1999 to
February 2001, Mr. Crowell served as a director of Comanche Energy,  Inc. He has
also held public  directorships  at Arakis Energy  Corporation from June 1997 to
October  1998, at Aero  Services  International,  Inc. from December 1989 to May
1993 (where he was Chairman of the Board from August 1990 to December  1992) and
at Triton  Europe,  plc. from October 1989 to May 1993.  Mr.  Crowell holds a BA
degree from John Hopkins and a JD from  University of Arkansas.  He was admitted
to the practice of law in Texas in 1974.

Richard S. Langdon.  Mr.  Langdon became a Director of Gasco and a member of the
audit committee in March 2003. From 1997 until December 2002, Mr. Langdon served
as Executive Vice President and Chief Financial  Officer of EEX  Corporation,  a
NYSE-listed  exploration  and  production  company that was acquired by Newfield
Exploration in late 2002. Before joining EEX Corporation, Mr. Langdon was an oil
and gas  consultant  from  August  1996 to March  1997.  Prior to that,  he held
various positions with the Pennzoil  Companies since 1991,  including  Executive
Vice  President--International  Marketing--Pennzoil  Products Company, from June
1996 to  August  1996;  Senior  Vice  President--Business  Development  & Shared
Services--Pennzoil  Company  from  January  1996 to June 1996;  and Senior  Vice
President--Commercial & Control--Pennzoil  Exploration & Production Company from
December  1991  to  December  1995.  Mr.  Langdon  holds  a B.S.  in  Mechanical
Engineering and a Masters of Business  Administration,  both from the University
of Texas at Austin.

Committees of the Board of Directors

The Board of Directors of Gasco has formed an Executive  Committee  and an Audit
Committee  and a  Compensation  Committee.  The  Executive  Committee  currently
consists of Messrs.  Bruner Erickson and Crowell.  The Audit Committee currently
consists of Messrs. Lotito,  Stadelhofer,  Langdon and Crowell. The Compensation


                                       61
<PAGE>

Committee  currently consists of Messrs.  Lotito,  Stadelhofer and Crowell.  The
report of the Compensation  Committee with regard to compensation matters is set
forth under Item 11.

Section 16 (A) Beneficial Ownership Reporting Requirements

Section 16 (a) of the  Securities  Exchange Act of 1934  requires the  officers,
directors and persons who own more than ten percent of the Company's  stock,  to
file reports of ownership and changes in ownership with the Securities  Exchange
Commission ("SEC"). Officers,  directors and greater than ten percent owners are
required by SEC regulations to furnish the Company with copies of all Section 16
(a) forms they file.

Based  solely on its  review of the  copies of such  forms  received  by it, the
Company  believes  that each of its  officers,  directors  and greater  than ten
percent owners complied with all Section 16 (a) filing  requirements  applicable
to them during the year ended December 31, 2002, except for the following:

Carmen(Tony)Lotito Form 4, dated 9/9/02  filed late
Marc Bruner        Form 4, dated 12/2001 filed late
Mark Erickson      Form 4, dated 2/2002  filed late
Charles Crowell    Form 4, dated 7/16/02 filed late


                                       62
<PAGE>


ITEM 11 - EXECUTIVE COMPENSATION

The following table sets forth the compensation  paid to our President and Chief
Executive Officer and each of our next highly compensated executive officers and
other officer for services  rendered  during the years ended  December 31, 2002,
2001 and 2000.
<TABLE>
<CAPTION>

                                                                                 Long Term
                                                  Annual Compensation          Compensation
                                                                                Securities
                                                                                Underlying
                                                                                 Options/           All Other
Name & Principal Position           Year       Salary           Bonus            SARs (#)        Compensation (1)
-------------------------           ----       ------           -----            ---------       ------------

<S>              <C>                <C>        <C>            <C>                  <C>                   <C>
Mark A. Erickson (2)                2002       $ 240,000                                                   $ 7,335
President                           2001         220,000                             2,160,000               1,080
Chief Executive Officer             2000                       $125,000 (2)

W. King Grant                       2002       $ 262,002                                                   $ 7,011
Executive Vice President                         155,780                               437,000               2,220
                                    2001
Chief Financial Officer

Michael K. Decker                   2002       $ 200,000                                                   $ 6,135
Executive Vice President            2001          72,000                               414,000               1,080
Chief Operations Officer

Howard O. Sharpe                    2002       $ 116,178          $ 150,000            250,000             $ 3,437
Vice President (3)                  2001          96,000                               750,000                 720
                                    2000                            100,000
</TABLE>
----------------------

     (1)  Amount represents the employer  contribution to the 401(k) plan of the
          individual.

     (2)  Includes   amounts  paid  to  the   individual  by  Pannonian   Energy
          Corporation  prior to the merger of  Pannonian  into a  subsidiary  of
          Gasco.

     (3)  Mr. Sharpe, who is not an executive officer,  retired from the Company
          effective  December 31, 2002,  at which time;  all of his  outstanding
          options were cancelled.

                                       63
<PAGE>

The  following  table sets forth  information  with respect to all stock options
granted during the year ended December 31, 2002 to the named Executive  Officers
and other officer.
<TABLE>
<CAPTION>

                      Option/SAR Grants in Last Fiscal Year
                                                                                            Potential Realized
                                                                                             Value at Assumed
                                                                                          Annual Rates of Stock
                                                                                            Price Appreciation
                                                Individual Grants                          for Option Term (1)
                                                -----------------                              ------------
                             Number of         % of Total
                             Securities       Options/SARs      Exercise
                             Underlying        Granted to       or Base
                            Options/SARs      Employees in        Price      Expiration         5%             10%
          Name                Granted          Fiscal Year      ($/Share)     Date (2)     Share Price    Share Price
          ----                --------         -----------      ---------     ----         -----------    -----------

<S>                                <C>             <C>            <C>         <C>               <C>            <C>
Howard O. Sharpe                   250,000         50             1.95        12/31/02           $20,000        $40,000

</TABLE>



     (1)  Securities  and  Exchange  Commission  Rules  require  calculation  of
          potential  realizable  value  assuming  that the  market  price of the
          Common Stock  appreciates in value at 5% and 10% annualized rates from
          the date of grant to the expiration date of the option.  No gain to an
          executive  officer is possible without an appreciation in Common Stock
          value,  which will  benefit  all holders of Common  Stock.  The actual
          value an executive  officer may receive  depends on market  prices for
          the  Common  Stock,  and there can be no  assurance  that the  amounts
          reflected will actually be realized.

     (2)  The options granted to Mr. Sharpe during 2002 were cancelled effective
          December 31, 2002, in connection with his retirement.

No options were  exercised by executive  officers or other officer during either
of the years ended December 31, 2002 or 2001. The following table sets forth the
value of options held by the executive officers at December 31, 2002. All of the
options  granted to Mr. Sharpe during the years ended December 31, 2002 and 2001
were cancelled effective December 31, 2002.
<TABLE>
<CAPTION>

                    Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values


                                 Number of Securities Underlying           Value of Unexercised
                                   Unexercised Options/SARs at         In-the-Money Options/SARs at
                                            FY-End (#)                          FY-End ($)
Name                                Exercisable/Unexercisable          Exercisable/Unexercisable (1)
----                                --------------------------         ----------------------------

<S>                                      <C>                                       <C>
Mark A. Erickson                         2,097,500/62,500                           0/0
W. King Grant                              387,000/50,000                           0/0
Michael K. Decker                          339,000/75,000                           0/0
</TABLE>


     (1)  The value of in-the-money options is equal to the fair market value of
          a share of  Common  Stock on  December  31,  2002 of  $0.69,  less the
          exercise price.

                                       64
<PAGE>

Compensation of Directors

During 2002,  each director of the Company who was not a full-time  employee was
paid a  monthly  director's  fee of  $2,500.  In  addition,  each  director  was
reimbursed  for  reasonable  travel  expenses  incurred in connection  with such
director's  attendance at Board of Directors and Committee  meetings.  For 2003,
each  director of the Company who is not a  full-time  employee  will  receive a
monthly director's fee of $2,500.

Employment Agreements

     Michael  K.  Decker  Employment  Agreement.  Mr.  Decker's  2002  and  2001
compensation  was  determined  under  the  terms  of  an  employment  agreement,
effective  July 1, 2001,  between  Gasco and Mr. Decker that expired on June 30,
2004.  Mr.  Decker's  employment  agreement  was amended and restated  effective
January 2, 2003 and is effective  until  January 31, 2006.  Mr. Decker serves as
Chief  Operating  Officer and Executive  Vice President of Gasco.  Mr.  Decker's
previous  employment  agreement  entitled  him to an annual  salary of $200,000,
subject to increase at the  discretion of the Board of Directors,  and an annual
bonus equal to 0.75% of Gasco's cash flow from wells  drilled by or on behalf of
the Company.  The original  employment  agreement  provided for the award to Mr.
Decker of options to  purchase  300,000  shares of common  stock of the  Company
pursuant to the terms of the Company's Stock and Option and Incentive Award Plan
at an  exercise  price of $3.15 per share.  Options to purchase  100,000  shares
vested upon the execution of the  agreement  and the  remaining  options vest in
equal amounts over the following eight fiscal quarters. Mr. Decker's amended and
restated employment agreement reduced his annual salary to $175,000 and provided
for the award of options to purchase 350,000 shares of common stock at $1.00 per
share.  The options  vest 16 2/3% at the end of each four month period after the
issuance  date,  February 14, 2003,  until they are fully vested on February 14,
2005.  Mr.  Decker is also  entitled to receive 10% of all option grants made by
the Company each  calendar year during the term of the  agreement.  In addition,
the  employment  agreement  provides  that each year Mr.  Decker and the Company
shall  mutually  agree on a  performance-based  bonus  plan  for Mr.  Decker.The
employment  agreement also contains  non-compete  provisions in the event of Mr.
Decker's termination of employment.

Mr. Decker's employment agreement also includes provisions governing the payment
of severance benefits if his employment is terminated for any other reason other
than his voluntary resignation, death, disability or discharge for cause. In the
event that Mr. Decker's employment is terminated by the Company without cause or
due to certain  change of control  events,  Mr. Decker is entitled to receive an
amount  equal to his  salary  for the  remaining  term of the  agreementplus  an
additional cash payment of $250,000.  If the termination  occurs at anytime when
the average closing price for the Company's common stock for the 30 trading days
prior to  termination  is equal to between  $1.50 per share and $1.99 per share,
the  additional  cash  payment will  increase to $500,000.  This payment will be
further  increased as such average closing price  increases,  up to a maximum of
$1,750,000 if such average closing price is greater than $3.50 per share. If the
termination  is because of a change of control of the  Company,  the  additional
cash payment will be based on the  consideration per share paid to the Company's
shareholders  in  connection  with the change of  control  instead of the market
price of the Company's common stock.

                                       65
<PAGE>

     Mark A.  Erickson  Employment  Agreement.  Mr.  Erickson's  2002  and  2001
compensation  was  determined  under  the  terms  of  an  employment  agreement,
effective  February 1, 2001,  between  Gasco and Mr.  Erickson  that  expired on
January 31, 2006. Mr. Erickson's  employment  agreement was amended and restated
effective  January 2, 2003 and is effective until January 31, 2006. Mr. Erickson
serves  as Chief  Executive  Officer  and  President  of Gasco.  Mr.  Erickson's
employment  agreement  entitled him to an annual salary of $240,000,  subject to
increase at the discretion of the Board of Directors,  and an annual bonus equal
to  0.875%  of  Gasco's  cash flow  from  wells  drilled  by or on behalf of the
Company.  The  original  employment  agreement  provided  for the  award  to Mr.
Erickson of options to purchase  1,000,000 shares of common stock of the Company
pursuant to the terms of the Company's Stock and Option and Incentive Award Plan
at an exercise  price of $1.00 per share and options to purchase  250,000 shares
of common  stock of the Company  pursuant  to such plan at an exercise  price of
$2.50 per share.  Options  to  purchase  1,000,000  shares  have  vested and the
remaining options vest in equal amounts over the eight fiscal quarters following
the  effective  date of the  agreement.  Mr.  Erickson's  amended  and  restated
employment  agreement reduced his annual salary to $120,000 and provides for the
issuance  of  187,500  shares of common  stock from a  restricted  stock plan in
exchange for the surrender by Mr. Erickson of vested options to purchase 250,000
shares of common stock at $3.00 per share and 875,000  shares of common stock at
$2.00 per share.  Mr.  Erickson  also has the right to receive 25% of all option
grants made by the Company each calendar year during the term of the  agreement.
In addition,  the employment  agreement provides that each year Mr. Erickson and
the  Company  shall  mutually  agree on a  performance-based  bonus plan for Mr.
Erickson..  The employment agreement also contains non-compete provisions in the
event of Mr. Erickson's termination of employment.

Mr.  Erickson's  employment  agreement  also includes  provisions  governing the
payment of severance  benefits if his  employment  is  terminated  for any other
reason other than his voluntary resignation,  death, disability or discharge for
cause. In the event that Mr. Erickson's  employment is terminated by the Company
without  cause or due to  certain  change of control  events,  Mr.  Erickson  is
entitled to receive an amount equal to his salary for the remaining  term of the
agreement plus an additional cash payment of $500,000. If the termination occurs
at anytime when the average closing price for the Company's common stock for the
30 trading  days prior to  termination  is equal to between  $1.50 per share and
$1.99 per share,  the additional cash payment will increase to $1,000,000.  This
payment will be further increased as such average closing price increases, up to
a maximum of $3,500,000 if such average  closing price is greater than $3.50 per
share. If the termination is because of a change of control of the Company,  the
additional cash payment will be based on the consideration per share paid to the
Company's  shareholders  in connection with the change of control instead of the
market price of the Company's common stock.

     W.  King  Grant  III  Employment  Agreement.  Mr.  Grant's  2002  and  2001
compensation  was  determined  under  the  terms  of  an  employment  agreement,
effective  June 1, 2001,  between  Gasco and Mr.  Grant that  expired on May 31,
2004.  Mr.  Grant's  employment  agreement  was amended and  restated  effective
January 2, 2003 and is effective  until  January 31,  2006.  Mr. Grant serves as
Chief  Financial  Officer and Executive  Vice  President of Gasco.  Mr.  Grant's
employment  agreement  entitled him to an annual salary of $120,000,  subject to
increase at the discretion of the Board of Directors,  and an annual bonus equal


                                       66
<PAGE>

to 0.5% of Gasco's cash flow from wells  drilled by or on behalf of the Company.
The  employment  agreement  provides  for the award to Mr.  Grant of  options to
purchase  200,000 shares of common stock of the Company pursuant to the terms of
the Company's  Stock and Option and Incentive Award Plan at an exercise price of
$3.00 per share and options to purchase  100,000  shares of common  stock of the
Company pursuant to such plan at an exercise price of $3.15. Options to purchase
100,000 shares at an exercise price of $3.00 per share vested upon the execution
of the  agreement  and the  remaining  options  vest in equal  amounts  over the
following eight fiscal  quarters.  Mr. Grant's  amended and restated  employment
agreement  reduced his annual  salary to $175,000  and provided for the award of
options to  purchase  200,000  shares of common  stock at $1.00 per  share.  The
options  vest 16 2/3% at the end of each four month  period  after the  issuance
date,  February 14, 2003,  until they are fully vested on February 14, 2005. Mr.
Grant is also  entitled to receive 10% of all option  grants made by the Company
each calendar year during the term of the agreement. In addition, the employment
agreement provides that each year Mr. Grant and the Company shall mutually agree
on a performance-based  bonus plan for Mr. Grant.The  employment  agreement also
contains  non-compete  provisions  in the event of Mr.  Grant's  termination  of
employment.


Mr. Grant's employment  agreement also includes provisions governing the payment
of severance benefits if his employment is terminated for any other reason other
than his voluntary resignation, death, disability or discharge for cause. In the
event that Mr. Grant's  employment is terminated by the Company without cause or
due to certain  change of control  events,  Mr.  Grant is entitled to receive an
amount  equal to his  salary for the  remaining  term of the  agreement  plus an
additional cash payment of $250,000.  If the termination  occurs at anytime when
the average closing price for the Company's common stock for the 30 trading days
prior to  termination  is equal to between  $1.50 per share and $1.99 per share,
the  additional  cash  payment will  increase to $500,000.  This payment will be
further  increased as such average closing price  increases,  up to a maximum of
$1,750,000 if such average closing price is greater than $3.50 per share. If the
termination  is because of a change of control of the  Company,  the  additional
cash payment will be based on the  consideration per share paid to the Company's
shareholders  in  connection  with the change of  control  instead of the market
price of the Company's common stock.

Anti-Dilution Provisions of Employment Agreements and Consulting Agreement

Each of the above original Employment  Agreements for Messrs.  Decker,  Erickson
and Grant and the Strategic  Consulting Agreement for Mr. Bruner described under
"Item  13 -  Certain  Relationships  and  Related  Transactions"  contained  the
following  described  anti-dilution  provision  during the year  2002.  Upon the
completion of any subsequent  transaction involving the issuance of common stock
of the Company,  or the issuance of any security  which is  convertible,  by its
terms into common stock of the Company (a "Financing"),  the Company shall grant
the person  additional  options to purchase shares of the Company's common stock
at the same per share  price as that  involved in the  Financing.  The number of
options  granted to the person shall be  sufficient  to maintain  his  ownership
interest  in the  Company  (the  ratio  of (a)  the  sum  of the  number  of his
unexercised  options (both vested and unvested)  plus the number of shares owned
by him as result of  exercising  options to (b) the total number of  outstanding
shares of the Company's  common stock plus the number of shares  represented  by
all  unexercised  options) at the level that existed  immediately  prior to such
Financing.  Messrs. Decker, Erickson, Grant and Bruner waived their rights under


                                       67
<PAGE>

this anti-dilution  provision with respect to (1) the issuance by the Company of
9,500,000  shares  of  common  stock to Shama  Zoe on May 1,  2002,  and (2) the
issuance  by the  Company  of  6,500,000  shares of  common  stock for cash in a
private  placement  on August 14,  2002.  The  amended and  restated  employment
agreements  that became  effective  January 2, 2003 as described  above,  do not
contain any anti-dilution provisions.

Compensation Committee Interlocks and Insider Participation

During 2002,  the  Compensation  Committee  of the Board was  comprised of three
directors, Mr. Lotito, Mr. Crowell and Mr. Stadelhofer.  None of these directors
is or was an officer of the Company or any of its  subsidiaries  at any time now
or in the past.

Report of the Compensation Committee of the Company

The  Compensation   Committee   ("Committee")  of  the  Board  of  Directors  is
responsible  for setting and  administering  the policies that govern the annual
compensation  and  the  long-term   compensation  for  the  Company's  executive
officers. The Committee is currently composed of Mr. Lotito, Mr. Crowell and Mr.
Stadelhofer,  neither  of  whom  is  employed  by  the  Company  or  any  of its
subsidiaries.  The Committee makes all decisions  concerning the compensation of
executive  officers  who  receive  annual  compensation  in excess of  $100,000,
determines the total amount of bonuses, if any, to be paid and grants all awards
of stock  options.  The  Committee's  compensation  practices  are  designed  to
attract,   motivate  and  retain  key   personnel  by   recognizing   individual
contributions, as well as the overall performance of the Company.

The current executive compensation consists of base salary, potential cash bonus
awards  and  long-term  incentive  opportunities  in the form of stock  options.
Although the Committee  has not adopted a formal  compensation  plan,  executive
compensation  is reviewed by the Committee and is set for  individual  executive
officers based on subjective evaluations of each individual's  performance,  the
Company's  performance,  and a comparison to salary ranges for similar positions
in other companies within the oil and gas industry. The goal of the Committee is
to ensure that the Company  retains  qualified  executives  and whose  financial
interests are aligned with those of the shareholders.

Base Salaries: The base salary for each executive officer is determined based on
the individual's performance, industry experience and the compensation levels of
industry  competitors.  The Committee reviews various surveys and publicly filed
documents to determine comparable salary levels within the industry.

Potential Cash Bonus Awards: The Committee does not currently have a formal cash
bonus plan. Cash bonuses may be awarded from time to time for exceptional effort
and  performance.  The Committee  considers the  achievements  of the Company to
determine  the level of the cash bonus,  if any, to be  awarded.  The  Committee
focuses the earnings of the Company,  the return on  stockholders'  equity,  the
growth in proved oil and gas reserves and the successful  completion of specific
projects of the Company to determine the level of bonus awards, if any.

                                       68
<PAGE>

Stock  Options:  The  Committee  utilizes  stock  option  awards  as a method of
aligning the executives'  interests with those of the stockholders by giving the
key employees a direct stake in the  performance  of the Company.  The Committee
uses the same  criteria  described  above to determine the level of stock option
awards.  During  2001,  3,011,000  common  stock  options  were  granted  to the
Company's executive officers.  There were no common stock options granted to the
executive officers during the year ended December 31, 2002.

Compensation of the Chief Executive Officer:  During the year ended December 31,
2002,  Mark  Erickson,  President and Chief  Executive  Officer  received  total
compensation  of $247,335  which is comprised  of an annual  salary of $240,000,
which Mr. Erickson is entitled to under his employment  agreement,  and deferred
compensation  pursuant to the  Company's  401(k) plan of $7,335.  The  Committee
considered the factors  described above to determine that the compensation  paid
to Mr. Erickson during 2002 was appropriate.

The  foregoing  report is made by the  Compensation  Committee of the  Company's
Board of Directors.  The members of the Committee  during 2002 were Mr.  Lotito,
Mr. Crowell and Mr. Stadelhofer.

CARMEN LOTITO
CHARLES B. CROWELL
CARL STADELHOFER

Performance Chart

The following  chart shows the changes in the value of $100,  over the period of
January, 2001, when the Company began trading, until December 31, 2002, invested
in: (1) Gasco Energy,  Inc.;  (2) the NASDAQ Market Index;  and (3) a peer group
consisting  of all the  publicly-held  companies  within  SIC code  1311,  Crude
Petroleum  and Natural Gas,  consisting  of  approximately  190  companies.  The
year-end  value of each  investment  is based on share  price  appreciation  and
assumes  that $100 was invested on January 1, 2000 and that all  dividends  were
reinvested.  Calculations  exclude trading commissions and taxes. The comparison
of past  performance  in the graph is required by the SEC and is not intended to
forecast or be indicative of possible future performance of the Company's Common
Stock.

                                January 1,       December 31,      December 31,
                                   2001              2001                2002
                                   ----              ----                ----
       Gasco Energy, Inc.        $100.00            $46.30             $ 18.25
       Peer Group Index           100.00            104.72              104.72
       NASDAQ Market Index        100.00             73.86               73.86

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                       MANAGEMENT

The following table shows  information with respect to the beneficial  ownership
of the  Company's  common  stock  as of  March  15,  2003  by:  any  individual,
partnership or corporation that is known to the Company, solely by reason of its
examination  of  Schedule  13D and 13G  filings  made  with the  SEC,  to be the
beneficial  owner of more than 5% of each class of shares issued and outstanding


                                       69
<PAGE>

and each executive officer, director and all executives,  officers and directors
as a group.  As of March 15, 2003, the Company had  40,288,800  shares of common
stock issued and outstanding and 11,052 shares of Series B Convertible Preferred
stock  issued and  outstanding.  If a person or entity  listed in the  following
table is the beneficial  owner of less than one percent of the Company's  common
stock  outstanding,  this fact is indicated by an asterisk in the table.  Unless
otherwise noted,  each person listed has sole voting and dispositive  power over
the shares  indicated,  and the address of each  stockholder  is the same as the
Company's address.  The number of shares beneficially owned by a person includes
the common shares that are issuable upon  conversion of the Series B Convertible
Preferred  Stock.  These  shares  are  deemed  outstanding  for the  purpose  of
computing their percentage ownership but are not outstanding for the purposes of
computing the  percentage  ownership of any other  person.  The number of shares
beneficially  owned by a person also  includes  shares that are subject to stock
options or warrants that are exercisable within 60 days of March 15, 2003. These
shares are also deemed outstanding for the purpose of computing their percentage
ownership.  These shares are not  outstanding  for the purpose of computing  the
percentage ownership of any other person.
<TABLE>
<CAPTION>

                                                              Number of Shares
            Name                                             Beneficially Owned              Percent of Class
5% or Greater Holders

<S>                                                     <C>                                     <C>
Shama Zoe Limited Partnership                           Common   8,100,000                        20.1%
7128 South Poplar Lane
Englewood, Colorado 80112

Richard C. McKenzie, Jr. (2) (6)                        Common   9,504,636                        21.3%
114 John Street                                         Preferred    6,818                        61.7%
Greenwich, Connecticut 06831

Wellington Management Company, LLP (1)                  Common   3,000,000                         7.5%
75 State Street
Boston, Massachusetts 02109


Directors and Executive Officers

Marc Bruner  (3) (4)                                    Common   4,072,834                         9.9%

Mark A. Erickson (3) (5) (6)                            Common   3,427,908                         8.3%
                                                        Preferred      200                         1.8%
Michael K. Decker (3) (6)                               Common      488,900                        1.2%
                                                        Preferred       100                           *
W. King Grant (3) (6)                                   Common      704,900                        1.7%
                                                        Preferred       100                           *
Carmen (Tony) Lotito (3)                                Common      394,250                        1.0%

Carl Stadelhofer (3)                                    Common       50,000                           *

                                       70
<PAGE>

Charles B. Crowell (6)                                  Common      125,800                           *
                                                        Preferred       200                        1.8%
Richard S. Langdon (6)                                  Common       62,900                           *
                                                        Preferred       100                           *

All Directors and Executive Officers as a Group (8      Common    9,327,492                       21.3%
persons) (3) (4) (5) (6)                                Preferred       700                        6.3%
</TABLE>

---------------
         (1)  Wellington  Management Company,  LLP act as advisor to and has the
              power to vote share owned by J. Caird Partners,  L.P.,  which owns
              1,800,000  shares of the  Company's  common  stock,  and J.  Caird
              Investors  (Bermuda)  L.P.,  which  owns  1,200,000  shares of the
              Company's  common  stock.  Wellington  Management  is considered a
              beneficial  owner of the shares  set forth in the table  solely by
              reason of its voting power.

         (2)  Includes 15,000 shares of the Company's common stock directly held
              by Mr. McKenzie's wife, Margaret Byrne McKenzie, 440,500 shares of
              the Company's common stock directly held by Mr. and Mrs.  McKenzie
              as trustees for the  Charitable  Lead Annuity Trust 2000,  159,100
              shares of the Company's common stock directly held by Mr. and Mrs.
              McKenzie as trustees for the  Charitable  Lead Annuity  Trust 2001
              and 10,000 shares of the Company's  common stock  directly held by
              Seven  Bridges  Foundation,  a charitable  foundation of which Mr.
              McKenzie is the controlling member.

         (3)  The following  number of shares of common stock  issuable upon the
              exercise of options that are  exercisable  within 60 days of March
              15, 2003 are included in the amounts shown: Mr. Bruner,  1,025,000
              shares;  Mr.  Erickson,  1,025,000  shares;  Mr.  Decker,  389,000
              shares; Mr. Grant, 412,000 shares; Mr. Lotito,  93,700 shares; and
              Mr.  Stadelhofer,  50,000  shares.  Mr.  Lotito  shares voting and
              investment  power with  respect  to  130,000 of the common  shares
              listed as held by him with Equistar Capital, a company in which he
              is a member.

          (4)  The common  stock held by Mr.  Bruner  includes  8,707  shares of
               common stock that is held by Resource Venture  Management,  which
               is a company owned by Mr. Bruner.

          (5)  The common stock held by Mr.  Erickson  includes 56,084 shares of
               common stock owned by his wife as custodian for their children.

          (6)  The following  number of shares of common stock issuable upon the
               conversion  of the  Series  B  Convertible  Preferred  stock  are
               included in the amounts shown:  Mr. McKenzie,  4,288,636  shares;
               Mr.  Erickson,  125,800 shares;  Mr. Decker,  62,900 shares;  Mr.
               Grant,  62,900  shares;  Mr.  Crowell,  125,800  shares  and  Mr.
               Langdon, 62,900 shares.

                                       71
<PAGE>

Equity Compensation Plans

The  table  below  provides   information   relating  to  the  Company's  equity
compensation plans as of December 31, 2002:
<TABLE>
<CAPTION>

                                                                                  Number of securities
                                                                                  remaining available
                                   Number of securities      Weighted-average     for future issuance
                                       to be issued          exercise price of     under compensation
                                     upon exercise of           outsanding          plans (excluding
                                   outstanding options,          options,         securities reflected
Plan Category                       warrants and rights     warrants and rights     in first column)
-------------                       -------------------     -------------------     ----------------
Equity compensation plans
<S>                                        <C>                <C>                        <C>
approved by security holders               258,000            $      1.66                918,900

Equity compensation plans
not approved by security holders          6,097,250                   2.19                    (a)
                                          ---------                ---------             --------

Total                                     6,355,250            $      2.17                918,900
                                         =========                   ====                 =======
</TABLE>
(a)  The equity  compensation  plan not approved by shareholders is comprised of
     individual common stock option agreements issued to directors,  consultants
     and employees of the Company, as summarized below. The common stock options
     vest between zero and two years of the date of issue and expire  within ten
     years of the vesting date. The exercise  prices of these options range from
     $1.00 per share to $3.70 per  share.  Since  these  options  are  issued in
     individual compensation arrangements,  there are no options available under
     any plan for future  issuance.  The material  terms of these options are as
     follows:
<TABLE>
<CAPTION>

Options Issued to:     Number of Options    Exercise Price      Vesting Dates       Expiration Dates

<S>                        <C>               <C>                 <C>                   <C>
     Employees             5,674,750         $1.00 - $3.15        2001 - 2003           2006 - 2008
     Consultants             272,500         $3.00 - $3.70        2001 - 2003           2006 - 2008
     Directors               150,000         $3.00 - $3.15        2001 - 2003           2006 - 2008
                           ---------
Total Issued              6,097 250
                          =========
</TABLE>

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Marc A. Bruner  Strategic  Consulting  Agreement  The Company has entered into a
Strategic Consulting Agreement with Mr. Bruner,  effective January 2, 2003, that
expires on January 31, 2006. The  Consulting  Agreement was amended and restated
effective  January 2, 2003.  The amended and  restated  agreement  entitles  Mr.
Bruner to an annual fee of $120,000 and an annual bonus  payment equal to 0.875%
of Gasco's  cash flow from wells  drilled  by or on behalf of the  Company.  The
agreement provides for the award to Mr. Bruner of 187,500 shares of common stock
of the Company from a restricted stock plan in exchange for the surrender by Mr.
Bruner of vested options to purchase 150,000 shares of common stock at $3.15 per


                                       72
<PAGE>

share,  50,000  shares of common stock at $3.00 per share and 925,000  shares of
common stock at $2.00 per share. Mr. Bruner also has the right to receive 25% of
all option  grants made by the Company each calendar year during the term of the
agreement.  In addition,  the employment  agreement  provides that each year Mr.
Bruner and the Company shall  mutually agree on a  performance-based  bonus plan
for Mr. Bruner. The employment agreement also contains non-compete provisions in
the event of the termination of the agreement.

Mr. Bruner's  agreement also provides for certain payments in the event that the
agreement is  terminated  for any reason other than his  voluntary  termination,
death,  disability  or  termination  for cause.  In the event that Mr.  Bruner's
agreement is terminated by the Company without cause or due to certain change of
control events,  Mr. Bruner is entitled to receive an amount equal to his annual
fee for the remaining term of the agreement  plus an additional  cash payment of
$500,000.  If the  termination  occurs at anytime when the average closing price
for the Company's  common stock for the 30 trading days prior to  termination is
equal to  between  $1.50 per share and $1.99  per  share,  the  additional  cash
payment will increase to $1,000,000.  This payment will be further  increased as
such average  closing  price  increases,  up to a maximum of  $3,500,000 if such
average  closing price is greater than $3.50 per share.  If the  termination  is
because of a change of control of the Company,  the additional cash payment will
be based on the  consideration  per share paid to the Company's  shareholders in
connection  with the  change  of  control  instead  of the  market  price of the
Company's common stock.

Other Transactions

Mr.  Lotito  earned  consulting  fees of $16,000,  $52,000 and $50,000  from the
Company during the years ended December 31, 2002,  2001 and 2000,  respectively.
During both of the years ended December 2002 and 2001, the Company paid $240,000
in consulting  fees to a company  owned by Mr. Bruner  pursuant to the Strategic
Consulting  Agreement  described  above.  During January 2003, the future annual
fees that will be paid to Mr. Bruner's company were reduced to $120,000 per year
and are committed through January 31, 2006.

Mr. Decker  earned a $28,000 fee and 12,500  shares of Gasco's  common stock for
consulting services provided in connection with a property  acquisition in 2001.
Mr.  Decker  was  also  paid  $22,879  in  other  consulting  fees  prior to his
appointment as an officer of the Company.

The Company's  management believes that the above transactions and services were
provided in the normal course of business with terms that could be obtained from
non-related sources.

During the year ended December 31, 2002, the Company paid $110,266 in consulting
fees to an unrelated  third party.  The obligation to pay these fees was a joint
and several  liability of Gasco and a Company of which Mr. Lotito and Mr. Bruner
have a combined 66.67% ownership.

ITEM 14 - CONTROLS AND PROCEDURES

Within the 90 days prior to the filing date of this report,  the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management,  including the Company's Chief Executive Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the


                                       73
<PAGE>

Company's  disclosure  controls  and  procedures  pursuant to Exchange  Act Rule
13a-15.  Based upon that evaluation,  the Company's Chief Executive  Officer and
Chief Financial  Officer  concluded that the Company's  disclosure  controls and
procedures  are effective.  Disclosure  controls and procedures are controls and
procedures that are designed to ensure that information required to be disclosed
in Company  reports  filed or  submitted  under the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange Commission's rules and forms.

There have been no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date this evaluation was conducted.

ITEM 15 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

                                INDEX TO EXHIBITS


2.1  Agreement  and Plan of  Reorganization  dated  January  31,  2001 among San
     Joaquin Resources Inc., Nampa Oil & Gas, Ltd., and Pannonian  Energy,  Inc.
     (incorporated  by reference to Exhibit 2.1 to the Company's  Form 8-K dated
     January 31, 2001, filed on February 2, 2001).

2.2  Agreement and Plan of Reorganization dated December 15, 1999 by and between
     LEK  International,  Inc. and San Joaquin Oil & Gas Ltd.  (incorporated  by
     reference to Exhibit 2.1 to the Company's Form 8-K dated December 31, 1999,
     filed on January 21, 2000).

2.3  Property Purchase Agreement dated as of April 23, 2002, between the Company
     and Shama Zoe Limited Partnership (incorporated by reference to Exhibit 2.1
     to the Company's Form 8-K dated May 1, 2002, filed on May 9, 2002).

2.4  Purchase Agreement dated as of July 16, 2002, among Gasco, Pannonian Energy
     Inc., San Joaquin Oil & Gas Ltd., Brek, Brek Petroleum Inc., Brek Petroleum
     (California),  Inc. and certain  stockholders  of Gasco.  (incorporated  by
     reference  to Exhibit 2.1 to the  Company's  Form 8-K dated July 16,  2002,
     filed on July 31, 2002).

3.1  Amended and Restated  Articles of Incorporation  (incorporated by reference
     to Exhibit 3.1 to the Company's Form 8-K dated December 31, 1999,  filed on
     January 21, 2000).

3.2  Certificate  of Amendment  to Articles of  Incorporation  (incorporated  by
     reference  to Exhibit 3.1 to the  Company's  Form 8-K/A  dated  January 31,
     2001, filed on February 16, 2001).

3.3  Certificate of Designation  for Series A Preferred Stock  (incorporated  by
     reference to Exhibit3.5  to the  Company's  Form 10-Q for the quarter ended
     September 30, 2001, filed on November 14, 2001).

3.4  Amended and Restated  Bylaws  (incorporated  by reference to Exhibit 3.4 to
     the Company's Form 10-Q for the quarter ended March 31, 2002,  filed on May
     15, 2002).

4.1  Stock Purchase Agreement dated July 5, 2001 between Gasco Energy,  Inc. and
     First  Ecom.com,  Inc.  (incorporated  by  reference to Exhibit 10.7 to the
     Company's  Form 10-QSB for the quarter ended  September 30, 2001,  filed on
     November 14, 2001).

#4.2 1999 Stock  Option Plan  (incorporated  by  reference to Exhibit 4.1 to the
     Company's Form 10-KSB for the fiscal year ended December 31, 1999, filed on
     April 14, 2000).

10.1 Financing  Agreement  dated  January 12,  2001  between the Company and Wet
     Coast  Management  Corp.  (incorporated by reference to Exhibit 10.5 to the
     Company's Form 10-KSB for the fiscal year ended December 31, 2000, filed on
     March 29, 2001).

                                       74
<PAGE>

10.2 Consulting  Agreement  dated  January 12, 2001  between the Company and Wet
     Coast  Management  Corp.  (incorporated by reference to Exhibit 10.6 to the
     Company's Form 10-KSB for the fiscal year ended December 31, 2000, filed on
     March 29, 2001).

10.3 Acquisition  Agreement dated December 18, 2000 between  Phillips  Petroleum
     Company and Pannonian  Energy,  Inc.  (incorporated by reference to Exhibit
     10.7 to the  Company's  Form 10-KSB for the fiscal year ended  December 31,
     2000, filed on March 29, 2001).

10.4 Financing  Agreement dated March 15, 2001 between the Company and Canaccord
     International  Ltd.  (incorporated  by  reference  to  Exhibit  10.8 to the
     Company's Form 10-KSB for the fiscal year ended December 31, 2000, filed on
     March 29, 2001).

10.5 Financial  Services  Agreement dated March 15, 2001 between the Company and
     Canaccord  International Ltd. (incorporated by reference to Exhibit 10.9 to
     the  Company's  Form 10-KSB for the fiscal year ended  December  31,  2000,
     filed on March 29, 2001).

10.6 Private  Placement  Agency Agreement dated as of March 22, 2001 between the
     Company and  Canaccord  International  Ltd.  (incorporated  by reference to
     Exhibit 10.6 to the  Company's  Form 10-QSB for the quarter  ended June 30,
     2001, filed on August 20, 2001).

#10.7Form of Stock  Option  Agreement  under  the 1999  Stock  Option  Plan
     (incorporated  by reference to Exhibit 10.8 to the Company's  Form 10-K for
     the fiscal year ended December 31, 2001, filed on March 29, 2002).

#10.8Stock Option  Agreement  dated  January 2, 2001  between  Gasco and Mark A.
     Erickson  (Filed as Exhibit 10.9 to the Company's  Form 10-K for the fiscal
     year ended December 31, 2001, filed on March 29, 2002).

#10.9Form of Stock Option  Agreement  dated  February 8, 2001 between  Gasco and
     each of Mark A. Erickson,  Marc Bruner,  J. Timothy Bowes, Carl Stadelhofer
     and Howard O. Sharpe (Filed as Exhibit 10.10 to the Company's Form 10-K for
     the fiscal year ended December 31, 2001, filed on March 29, 2002).

*#10.10 W. King Grant Amended and Restated  Employment  Contract  dated February
     14, 2003

*#10.11 Michael Decker Amended and Restated  Employment  Contract dated February
     14, 2003

*#10.12 Mark A. Erickson Amended and Restated Employment Contract dated February
     14, 2003

*#10.13 Amended and  Restated  Consulting  Agreement  dated  February  14, 2003,
     between Gasco and Marc Bruner

10.14Muddy Creek  Exploration  Agreement  dated August 15, 2001,  between Gasco,
     Shama Zoe Limited  Partnership and Burlington Oil and Gas Company (Filed as
     Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended December
     31, 2001, filed on March 29, 2002).

10.15CD Exploration  Agreement dated August 15, 2001,  between Gasco,  Shama Zoe
     Limited  Partnership  and  Burlington Oil and Gas Company (Filed as Exhibit
     10.16 to the  Company's  Form 10-K for the fiscal year ended  December  31,
     2001, filed on March 29, 2002).

10.16Gamma Ray  Exploration  Agreement  dated  August 15, 2001,  between  Gasco,
     Shama Zoe Limited  Partnership and Burlington Oil and Gas Company (Filed as
     Exhibit 10.17 to the Company's Form 10-K for the fiscal year ended December
     31, 2001, filed on March 29, 2002).

10.17Sublette  County,  WY AMI  Agreement  dated August 22, 2001 between  Gasco,
     Alpine Gas Company  and  Burlington  Oil and Gas Company  (Filed as Exhibit
     10.18 to the  Company's  Form 10-K for the fiscal year ended  December  31,
     2001, filed on March 29, 2002).

                                       75
<PAGE>

10.18Lead  Contractor  Agreement  dated  January  24,  2002,  between  Gasco and
     Halliburton Energy Services,  Inc. (Filed as Exhibit 10.19 to the Company's
     Form 10-K for the fiscal year ended  December 31, 2001,  filed on March 29,
     2002).

10.19Property  Purchase  Agreement,  dated as of April  23,  2002,  between  the
     Company  and Shama Zoe  Limited  Partnership  (Filed as Exhibit  2.1 to the
     Company's Form 8-K dated May 1, 2002, filed on May 9, 2002).

10.20Purchase  Agreement,  dated  as  of  July  16,  2002,  among  the  Company,
     Pannonian Energy Inc., San Joaquin Oil & Gas Ltd., Brek Energy Corporation,
     Brek  Petroleum  Inc.,  Brek  Petroleum  (California),   Inc.  and  certain
     stockholders (Filed as Exhibit 2.1 to the Company's Form 8-K dated July 16,
     2002, filed on July 31, 2002).

10.21Form of Subscription and Registration Rights Agreement,  dated as of August
     14, 2002 between the Company and certain investors. (Filed as Exhibit 10.21
     to the Company's  Form S-1 dated  November 15, 2002,  filed on November 15,
     2002)

10.22Amendment No. 1 to Property  Purchase  Agreement dated as of August 9, 2002
     between the Company  and Shama Zoe Limited  Partnership.  (Filed as Exhibit
     10.21 to the Company's Form S-1 dated November 15, 2002,  filed on November
     15, 2002)

10.23Financial  Advisory Services  Agreement dated August 22, 2002,  between the
     Company and Energy Capital  Solutions  LLC.  (Filed as Exhibit 10.21 to the
     Company's Form S-1 dated November 15, 2002, filed on November 15, 2002)

*99.1Certification of Chief Executive Officer of Gasco Energy,  Inc. Pursuant to
     18 U.S.C.ss.1350

*99.2Certification of Chief Financial Officer of Gasco Energy,  Inc. Pursuant to
     18 U.S.C.ss.1350

*  Filed herewith.

# Identifies management contracts and compensatory plans or arrangements.

       (b)  Reports on Form 8-K:  No  reports on Form 8-K were filed  during the
last quarter during the period covered by this report.




                                       76
<PAGE>



SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

GASCO ENERGY, INC.                                       Dated:  March 27, 2003



By /s/ Mark Erickson
  ---------------------------
 Mark Erickson, President and CEO

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


SIGNATURE                               TITLE                           DATE


/s/ Mark Erickson               Director and President            March 27, 2003
--------------------           Chief Executive Officer
Mark Erickson

/s/ Marc Bruner                         Director                  March 27, 2003
--------------------
Marc Bruner

/s/ Carl Stadelhofer                    Director                  March 27, 2003
--------------------
Carl Stadelhofer

/s/ Carmen Lotito                       Director                  March 27, 2003
--------------------
Carmen Lotito

/s/ Michael Decker       Director and Executive Vice President    March 27, 2003
--------------------           Chief Operating Officer
Michael Decker

/s/ W. King Grant               Executive Vice President          March 27, 2003
--------------------   Principal Financial and Accounting Officer
W. King Grant

/s/ Charles Crowell                     Director                  March 27, 2003
--------------------
Charles Crowell

/s/ Richard Langdon                     Director                  March 27, 2003
--------------------
Richard Langdon


                                       77
<PAGE>

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Mark A. Erickson,  Chief  Executive  Officer of Gasco Energy,  Inc.,  certify
that:

     1.   I have reviewed this annual report on Form 10-K of Gasco Energy, Inc.;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this annual report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;  (b) evaluated the effectiveness
               of the  registrant's  disclosure  controls and procedures as of a
               date  within  90 days  prior to the  filing  date of this  annual
               report (the  Evaluation  Date);  and (c) presented in this annual
               report our conclusions  about the effectiveness of the disclosure
               controls  and  procedures  based  on  our  evaluation  as of  the
               Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal  controls;  and (b) any fraud,  whether or
               not  material,  that involves  management or other  employees who
               have a significant  role in the registrant's  internal  controls;
               and

     6.   The registrants other certifying officers and I have indicated in this
          annual  report  whether  or not  there  were  significant  changes  in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: March 27, 2003                             /s/  Mark A. Erickson
      --------------                             ---------------------
                                                 Mark A. Erickson, President and
                                                    Chief Executive Officer

                                       78
<PAGE>


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, W. King Grant, Chief Financial Officer of Gasco Energy, Inc., certify that:

     1.   I have reviewed this annual report on Form 10-K of Gasco Energy, Inc.;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this annual report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;  (b) evaluated the effectiveness
               of the  registrant's  disclosure  controls and procedures as of a
               date  within  90 days  prior to the  filing  date of this  annual
               report (the  Evaluation  Date);  and (c) presented in this annual
               report our conclusions  about the effectiveness of the disclosure
               controls  and  procedures  based  on  our  evaluation  as of  the
               Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal  controls;  and (b) any fraud,  whether or
               not  material,  that involves  management or other  employees who
               have a significant  role in the registrant's  internal  controls;
               and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this annual report  whether or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: March 27, 2003                  /s/  W. King Grant
      --------------                  ------------------
                                      W. King Grant, ExecutiveVice President and
                                             Chief Financial Officer


                                       79
<PAGE>