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

                                   FORM 10-K/A
                                 Amendment No. 2

      [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
                   For the fiscal Year Ended December 31, 2001

      [ ]   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)                      (Zip Code)

       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. [X]

The aggregate  market value of the common shares held by  non-affiliates  of the
registrant as of March 15, 2002 was approximately $ 40,185,376.

Number of shares outstanding of Common Stock, $0.0001 par value, as of March 15,
2002: 31,928,800 shares

                      Documents incorporated by reference:

                                      None.


<PAGE>








PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Business of Gasco

Gasco  Energy,  Inc.  ("Gasco"  or "the  Company")  is engaged in  locating  and
developing  hydrocarbon  prospects,  primarily  located  in the  Rocky  Mountain
region.  The Company's  mission is to create  shareholder  value by applying new
technologies to generate and develop high-potential exploitation prospects.

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 a
change in control  occurred in  conjunction  with closing under an Agreement and
Plan of  Reorganization  with San Joaquin Oil & Gas Ltd.,  a Nevada  corporation
("Oil & Gas"). Prior to closing under this Agreement and Plan of Reorganization,
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,  the  Company  entered  into an  Agreement  and  Plan of
Reorganization  (the "Pannonian  Agreement") whereby it issued 14,000,000 shares
of its common stock and warrants to the former stockholders of Pannonian Energy,
Inc.  ("Pannonian"),  a private  corporation  incorporated under the laws of the
State of Delaware,  in connection with the merger of Pannonian with a subsidiary
of the Company (the  "Pannonian  Merger").  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 and was also  considered  a
development  stage oil and gas  company  as defined by  Statement  of  Financial
Accounting Standards ("SFAS") No. 7.

Under the terms of the merger  agreement  between  the  Company  and  Pannonian,
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 Pannonian Merger.

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 fiscal year ended December 31, 2001, Gasco paid cash of $7,395,867 in
identifying and acquiring  petroleum and natural gas leases and prospect rights,
compared with $566,204 expended in 2000. At December 31, 2001, the Company owned
direct  interests in 173,228  gross acres  covered by petroleum  and natural gas
leases. See "Item 2 - Description of Properties".

Principal Products or Services and Markets

Gasco conducts exploration activities to locate 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.

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
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 tight 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  local
government 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 which 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
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.

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 15, 2002, Gasco has nine full-time employees.

The Company's officers and directors are involved with other companies,  some of
which now have, or may in the future have, a business plan involving the oil and
gas  business.  As a result,  potential  conflicts of interest may arise.  If an
officer or director  of the Company is  presented  with  business  opportunities
under  circumstances  where there may be a doubt as to whether  the  opportunity
should  belong to Gasco or another  company  with which he is  affiliated,  that
officer or director is under legal duty to disclose the  opportunity to all such
companies  simultaneously,  and that officer or director may not  participate in
the  decision  of any such  company  to pursue  or  attempt  to pursue  any such
opportunity.

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.

During the year ended  December 31, 2001,  Gasco  incurred a loss of $4,129,459,
and has an accumulated  deficit of $17,115,554  since  inception,  including the
Series  A  Convertible   Redeemable   Preferred  Stock  deemed  distribution  of
$11,400,000  as  further  described  in  Note  5 of the  accompanying  financial
statements.

         Absence of a Mature Public Market

The  Company's  common stock has only been trading in the public  markets  since
January 2001. The Company's common stock trades on the over-the-counter  market,
and such trading has been sporadic and erratic. A holder of Gasco's common stock
may not be able to liquidate his or her  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.

The Company has applied for listing on the American Stock Exchange ("AMEX"). The
listing application is complete and Gasco is awaiting a definitive response from
AMEX. Gasco's common stock may not be ultimately accepted for AMEX listing,  and
such a listing if granted may not result in an active trading market. Listing on
the AMEX is  discretionary  with the Exchange,  however,  the AMEX listing rules
provide  numerical  guidelines  which are  considered  in evaluating a company's
listing  application.  One of the  guidelines  requires a minimum stock price of
$3.00 per share prior to filing an  application,  which Gasco does not currently
meet;  however,  the rules  provide that AMEX may waive this  guideline if other
factors such as market size and distribution of shares warrant doing so.

         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
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 on the sale of its equity  capital to fund working  capital and
the acquisition of its prospects and related  leases.  Gasco will be required to
raise  additional  capital  in 2002 to fund  its  acquisition,  exploration  and
development  activities.  Failure to generate  operating  cash flow or to obtain
additional  financing 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  Phillips  Petroleum
("Phillips") to conduct drilling operations on approximately 60,000 acres within
theRiverbend  project.  Phillips 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 Phillips,  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  Phillips,  it will retain a 20% working
interest (which becomes a 15% working  interest after payout)in the well drilled
by Phillips 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
Phillips,  its interests will be reduced to a 0.375% overriding  interest in the
well and spacing  unit which will  convert to a 3% working  interest  after such
well reaches payout.

The Phillips  project and other projects will require  significant  new funding.
Gasco has not yet identified specific sources of adequate financing for its 2002
drilling  program 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 we have  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,  our  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.

         Environmental Regulations

In general, as noted above, the exploration and proposed  production  activities
of Gasco are subject to certain  federal,  state and local laws and  regulations
relating  to  environmental   quality  and  pollution  control.  Such  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.

         Governmental Regulations

Petroleum and natural gas exploration, development and production are subject to
various types of regulation by local,  state and federal  agencies.  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  affecting
drilling is the need to obtain drilling permits from local  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.

         Natural Gas and Oil Prices

A sharp  decline in the price of 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 has placed  pressures on prices and has resulted in dramatic  price
fluctuations even during relatively short periods of seasonal market demand.

         Marketing

Several  factors beyond the control of Gasco may adversely  affect the Company's
ability to market the oil and gas which 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 our invested capital.

         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.

         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 of Gasco.  The loss of his services may  adversely  affect the
business and prospects of Gasco.

         Dividend Risks

Gasco has not paid any dividends on its common shares and does not intend to pay
dividends  on its common  shares in the  immediate  future.  Any decision to pay
dividends  on its  common  shares  in the  future  will be made by the  board of
directors of Gasco on the basis of earnings,  financial  requirements  and other
such conditions that may exist at that time.

         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 a participation or such terms.

Two of the  Company's  directors  are  also  directors  of  Brek  Energy,  which
currently  owns 100% of  Gasco's  outstanding  Series A  Convertible  Redeemable
Preferred  Stock  ("Preferred  Stock"),  which is  entitled to 26% of the voting
power of the  Company's  stock  as long as 50% of the  Preferred  Stock  remains
outstanding.  Subject to the approval of Brek's shareholders, Brek has announced
its intention to acquire an additional  7,000,000 shares of the Company's Common
Stock from certain of its shareholders in exchange for 19,250,000 shares of Brek
common stock and to convert 50% of its Preferred Stock into 4,750,000  shares of
the Company's Common Stock, which would result in Brek having  approximately 53%
voting  control of Gasco with a 45% equity  interest.  The Brek directors on the
Company's Board have fiduciary duties to manage Brek,  including its investments
in  subsidiaries  such  as  Gasco,  in a  manner  beneficial  to  Brek  and  its
shareholders.  In some circumstances these duties may conflict with their duties
as directors of Gasco.

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

Three of the directors of Gasco reside outside the United States.  A substantial
portion of the assets of such persons is located 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.

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's  principal  business  is  the  acquisition  of  leasehold  interests  in
petroleum  and natural  gas  rights,  either  directly  or  indirectly,  and the
exploration  for and  development  of petroleum  and natural gas. All of Gasco's
properties are located in the continental United States.

         Riverbend Project

The Riverbend  project is comprised of  approximately  95,005 gross acres in the
Uinta Basin of  northeastern  Utah,  of which the  Company  holds an interest in
approximately  37,945 net acres as  December  31,  2001.  Gasco's  geologic  and
engineering  focus is concentrated on three tight-sand  formations in the basin:
the Wasatch, Mesaverde and Mancos formations.

In December  2000,  Gasco entered into an agreement with Phillips 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 Phillips. This agreement was
subsequently  amended to reduce the area that it covers to 30,000  acres.  Under
the terms of this agreement, Phillips 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 Phillips'  drilling,  Gasco
earned  additional  acreage under certain  farmout  agreements  during 2001. The
agreement  further afforded Phillips the right to acquire an 80% interest in all
of Gasco's  leases and farmout  agreements  within the AMI by assigning to Gasco
leasehold  interests in two leases within the AMI that Gasco  heretofore  had no
ownership.

There has been some  uncertainty  as to whether  Phillips  timely  exercised its
right to acquire the 80% interest in all of Gasco's leases and contracts  within
the AMI. Gasco has indicated its  willingness,  subject to the  satisfaction  of
certain  conditions,  to accept the  assignment of the two leases that has since
been  tendered by Phillips and to proceed with the  assignment  of the concerned
interests to Phillips.  Phillips has indicated that it will begin drilling a new
earning  well in the AMI on  April  17,  2002.  Gasco is  currently  considering
whether or not to participate in this well.

During  January 2002,  Gasco entered into an agreement with  Halliburton  Energy
Services  ("Halliburton") under which Halliburton has the option to earn up to a
50%  participation  interest  proportionate  to their  investment by funding the
completions of Wasatch  wells.  The Company,  at its option,  may elect to limit
Halliburton's  funding,  and the  resulting  participation  interest to 25%. The
Company  and  Halliburton  will also share  technical  information  through  the
formation of a joint technical team.  Gasco began drilling the first well during
February 2002. The Company  anticipates  drilling three gross (1.5 net) wells in
this area during 2002 and has set its capital  budget at  $3,000,000.  After the
wells drilled under this agreement  have reached a payout status,  as defined in
the agreement,  Halliburton will retain an interest equal to 5% of Gasco's total
interest  prior to payout.  The Company is considering  several  options for its
2002  drilling  program.  One of these  options  is to create a  drilling  joint
venture to spread the risk and the drilling  expenses among the investors in the
joint venture.

         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  leased
approximately  35,015  gross  acres  and  27,825  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.  During  2001,  three
shallow  wells were drilled in this area for the purpose of holding  acreage and
earning  expiring  leasehold.  Two of the wells  tested  only the Fort Union and
Upper Lance  formations and the third well tested all zones.  All of these wells
have been cased and are in various stages of  completion.  They did not evaluate
the deeper,  high-potential  Middle and Lower Lance formations that are prolific
producers  in the nearby  Jonah Field and  Pinedale  Anticline  area.  Gasco and
Burlington are targeting these deeper  formations with their ongoing seismic and
exploration activities.

In 2001,  Burlington drilled two wells and shot 80 miles of seismic. As of March
15, 2002, one of the wells drilled is in the  completion  stage and the other is
waiting on  completion.  During  2002,  Burlington  plans to complete the second
well,  complete the seismic program and drill additional wells. The Company also
anticipates participating in the drilling of one gross well in this area and has
set its 2002 capital budget in this area at $750,000.

During  February 2002, the Company  purchased a 50% interest in 21,614 acres for
approximately  $1,428,000  and a 20%  interest in 4,098 acres for  approximately
$107,000 in Sublette  County,  Wyoming.  The Company also  purchased  additional
leasehold interests in Sublette County,  Wyoming covering  approximately  16,606
acres  for a total  purchase  price of  $1,500,000  on  February  19,  2002.  In
connection with this  transaction,  the Company  received an exclusive option to
purchase an additional  72,583 acres in this area.  Monthly payments of $300,000
are required during 2002 in order to maintain this option. The Company may elect
to exercise its option to complete the transaction at any time.

During  February 2002, the Company was notified by the Bureau of Land Management
("BLM") in Wyoming that several  environmental  agencies filed a protest against
the BLM offering numerous parcels of land for oil and gas leasing. Approximately
9,726 net acres valued at  approximately  $1,428,000 which were purchased by the
Company are being held 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. The value
of the  suspended  leases is  recorded  as  unproved  mineral  interests  in the
accompanying financial statements.

On February 26, 2002,  Gasco began drilling a well in the Southwest  Jonah field
located in the Greater Green River Basin in Sublette County,  Wyoming.  This was
the  first  well  drilled  within a newly  created  AMI with  Cabot Oil and Gas,
consisting of nine sections (5,760 gross acres,  1,440 net acres).  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 Company still
has an option to drill additional wells within the AMI if the new interpretation
of the well's data in  integration  with the seismic data warrants such testing.
The net dry hole cost of the well is estimated at $500,000.

         Southern California Project

The Company currently leases  approximately  4,068 net acres in the Kern and San
Luis  Obispo  Counties of  southern  California.  The Company has no drilling or
development  plans for this acreage  during 2002,  but plans to continue  paying
leasehold  rentals  and  other  minimum  geological  expenses  to  preserve  the
Company's  acreage  positions  on these  three oil  prospects.  The  Company may
consider selling these positions in the future.

Productive Gas Wells

The following  summarizes  the Company's  productive and shut-in gas wells as of
December 31, 2001.  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               4                         1.5
       Shut-in gas wells                 4                         3.2
                                         -                         ---
                                         8                         4.7
                                         =                         ===

Gasco  does  not  operate  any of  these  wells.  Three  of the  four  producing
properties in the above table were drilled by Phillips  Petroleum Company within
Gasco's and Phillip's Area of Mutual  Interest in the Riverbend  Project and are
operated by  Phillips.  The fourth well is located in Uintah  county Utah in the
Riverbend  Project.  Gasco has contracted the operations of that well to Wasatch
Energy Corp, which is not affiliated with Gasco.

Oil and Gas Acreage

The following table sets forth the undeveloped  leasehold acreage, by area, held
by the Company as of December  31,  2001.  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. 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,  which is summarized  more  completely  below the table.  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.
                                      Gross                 Net

       Utah                           95,005               37,945
       Wyoming                        35,015               27,825
       California                      4,068                4,043
                                   ------------         ------------
       Total acres                   134,088               69,813
                                   ============         ============

Subsequent to December 31, 2001, the Company acquired approximately 40,065 gross
(26,147 net) undeveloped acres in Sublette County, Wyoming. Approximately 21,614
gross acres and 9,726 net acres that were  acquired in February  2002 in a lease
sale held by the Wyoming  Bureau of Land  Management are subject to a protest by
several environmental  agencies and therefore these leases will not be issued to
the Company  unless the protest is resolved in our favor.  On March 1, 2002, the
Company  completed  a strategic  exchange  of acreage  within the Uinta Basin in
northeastern  Utah,  with El Paso  Corporation  whereby it received  2,413 gross
acres (1,939 net) from El Paso in exchange for 320 gross acres (160 net) and the
contractual right to earn Wasatch rights on approximately  2,463 net Uinta Basin
acres.  The  Company  also has the  contractual  right to acquire  approximately
22,429 acres in the Uinta basin.  This  acquisition  is subject to the Company's
approval of title, which may effect the number of actual acres acquired.

The  Company has a right to purchase  an  additional  53,095  gross acres in the
Greater Green River Basin by paying monthly option fees of $300,000 during 2002.
The Company can also earn a 37.5%  interest in an additional  21,760 gross acres
in Sublette County, Wyoming if it participates in the drilling of one well prior
to October 1, 2002.  The  Company  also has the right to earn a 20%  interest in
approximately  22,000 gross acres within the Uinta Basin by participating in the
drilling of four wells prior to February 2004.

Approximately  79% of the acreage  that Gasco holds is located on federal  lands
and approximately 19% of the acreage that Gasco holds 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.  Gasco has
generally  been able to obtain state  permits  within 30 days,  while  obtaining
federal  permits  has  taken  several  months  or  longer.  Accordingly,  if the
Company's  development  of its  acreage  located  on  federal  lands is  delayed
significantly by the permitting process, it may have to operate at a loss for an
extended period of time.

Drilling Activity

The following  table sets for the Company's  drilling  activity  during the year
ended December 31, 2001. The Company had no drilling  activity  during the years
ended December 31, 2000 and 1999.

                                           Gross                     Net
       Exploratory Wells:
         Productive                          4                       1.6
         Dry                                 2                       2.0
                                         ---------                 -------
       Total wells                           6                       3.6
                                         =========                 =======

Office Space

The Company leases approximately 2,400 square feet of office space in Englewood,
Colorado for  approximately  $34,500 per year under a lease that  terminates  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.

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 15,  2002,  the
Company had 84 registered  shareholders of its common stock. During the last two
fiscal  years,  no cash  dividends  were  declared on Gasco's  common  stock and
management does not anticipate that dividends will be paid in the near future.

The  following  table sets forth,  for the periods  indicated,  the high and low
closing bid quotations for the Company's common stock as reported by NASDAQ.com.

                                                   High              Low

          First Quarter 2001                   $   4.00         $    0.03
          Second Quarter 2001                      3.95              2.20
          Third Quarter 2001                       3.20              1.10
          Fourth Quarter 2001                      2.80              1.30

Equity Transactions

The Company's equity transactions during 2001 are described as follows:

In January  2001,  the Company  issued an option to Mark  Erickson,  who was the
President  of  Pannonian  at the  time,  to  purchase  1,000,000  shares  of the
Company's  common stock at $1.00 per share.  The option was issued in connection
with the  Company's  acquisition  of  Pannonian.  The option is fully vested and
expires on  February  2, 2011.  The  $269,000  fair  market  value of the option
determined  using the Black  Scholes  Pricing  model,  was charged to operations
during the year ended December 31, 2001.

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 of these shares were residents of
foreign countries.

In March  2001,  the Company  issued  14,000,000  shares of common  stock to the
shareholders  of Pannonian  pursuant to the Pannonian  Agreement.  In connection
with the Pannonian  Merger,  the  shareholders of SJRI returned for cancellation
2,438,930  shares of common stock for no  consideration.  See Item 1.  Business;
History.

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
unrelated  entity for $700,000 cash and 300,000  shares of the Company's  common
stock, valued at $846,000 ($2.82 per share).

In July 2001, Brek Energy Corporation  (formerly known as First Ecom.com,  Inc.)
("Brek")   purchased   1,000  shares  of  the  Company's   Preferred  Stock  for
$19,000,000. Brek agreed not to transfer the Preferred Stock or the common stock
issuable upon  conversion  thereof for three years (the "lock up period") except
under  certain  circumstances  and except for 10% of such common stock per year.
During the lock up period, Brek has given the Company the right of first refusal
on all of the  Company  securities  it  holds.  Marc  Bruner  and Mark  Erickson
(directors of the Company) also gave Brek a similar right of first refusal for a
five-year period.  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.

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.

During  the year  ended  December  31,  2001,  the  Company  granted  options to
employees,  directors and consultants to purchase an aggregate  6,519,000 shares
of the Company's common stock at exercise prices ranging from $1.00 to $3.15 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 of $423,594 was charged to operations during the year ended December
31, 2001.

During the first  quarter of 2002,  the  Company  issued an  additional  250,000
options to purchase  shares of common  stock to employees  and  directors of the
Company,  at exercise prices ranging from $1.68 to $1.75 per share.  The options
vest quarterly over a two-year period and expire within ten years from the grant
date.

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  these  equity  offerings  during  2001 were
approximately  $20,400,500.  $4,332,000  of  these  proceeds  were  used to fund
general and administrative  expenses,  including salaries and rent on our office
space.  $7,446,000 of these proceeds were used to fund capital  expenditures for
the drilling of three wells in Wyoming,  the  acquisition of acreage in Utah and
Wyoming and the purchase of equipment.  $130,000 of these  proceeds were used to
repurchase  shares of our common  stock  which are  currently  held as  treasury
shares. The Company anticipates using the remaining proceeds for the acquisition
of additional acreage, primarily in Wyoming, capital expenditures related to the
development of three wells in our Riverbend  project and one well in the Greater
Green River Basin and to fund operating expenses.


<PAGE>



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,
                                                                      -----------------------------------------
                                                               2001              2000              1999             1998
                                                               ----              ----              ----             ----
Summary of Operations
<S>                                                              <C>              <C>               <C>              <C>
      Revenue                                                    $ 36,850                 -                 -                -
      General & administrative expense                          4,331,825          $951,734          $738,153           $6,000
      Net loss                                                (4,129,459)         (843,261)         (736,834)          (6,000)
      Net loss per share                                           (0.63)            (0.06)             (.06)                -


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


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS

The  following  discussion  of the results of operations of Gasco for the period
ended  December  31, 2001 should be read in  conjunction  with the  consolidated
financial statements of Gasco and related notes included therein.

Business Combination

On February 1, 2001, the Company entered into the Pannonian Agreement whereby it
issued  14,000,000  shares of its common stock in connection  with the Pannonian
Merger.  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. Pannonian is an exploration stage oil and gas company.

Under the terms of the Pannonian  Agreement,  Pannonian  was required,  prior to
closing of the merger  transaction  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 net book value of PIL  (which  owned the  non-Riverbend  assets
located  outside  the  United  States)  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.

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.

Overview

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.  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  does not have  sufficient  production
information by which reserves can be estimated. Because of this, and because the
costs  associated  with the Company's oil and gas properties  relate to projects
which have not yet been  associated  with proved  reserves,  the Company has not
recorded 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. Under
the full cost  method of  accounting  the Company is not  currently  required to
perform a ceiling  test, as described  above,  because the Company's oil and gas
property  costs  relate to  unevaluated  or  unproved  properties  which are not
associated with proved reserves.

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.

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
relate to these wells and is comprised of approximately  17,545 mcf of gas at an
average  price of $2.10 per mcf. The Company had no producing  wells during 2000
and 1999.  Interest  income during 2001  represents  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 $4,331,825 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
represents 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 is comprised of numerous  miscellaneous  items, none of
which is individually significant.

2000 Compared to 1999

General and administrative  expenses increased from $738,153 in 1999 to $951,734
in 2000 primarily due to increased  consulting  expenses  during 2000.  Interest
expense  during 2000 and 1999 was  comprised  of the  interest on the  Company's
notes payable  balances.  The increase was due to a higher average notes payable
balance  during 2000 as compared to 1999.  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 1999 was  comprised  of numerous
miscellaneous items, none of which were individually significant.

Financial Condition and Plan of Operations

At December 31, 2001,  the Company had cash and cash  equivalents of $12,296,585
compared  to  $881,041  at  December  31,  2000.  The  increase in cash and cash
equivalents is primarily  attributable  to the proceeds of $25,825,000  from the
sale of  preferred  and  common  stock  partially  offset  by the  cash  used in
operating  activities  during the year ended  December  31,  2001,  and payments
related to acquisitions  of oil and gas properties  during the year. As of March
15, 2002, the Company's  balance in cash and cash  equivalents  had decreased to
approximately  $8,400,000,  primarily  because of the Company's  acquisition  of
acreage in  Wyoming  for  approximately  $2,900,000,  the  payment of a $300,000
option payment for the right to purchase additional acreage in the Greater Green
River Basin of Wyoming and ongoing  expenditures for general and  administrative
expenses.

Working  capital  increased  from a deficit of $420,370 at December  31, 2000 to
$11,860,584 at December 31, 2001, primarily due to the proceeds from the sale of
preferred and common stock discussed above.

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
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.

To date,  the Company's  capital needs have been met  primarily  through  equity
financings.

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

     a. Drill and complete three gross wells in the Riverbend Project.

     b. Drill one gross well in the Greater Green River Basin Project.

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

     d. Continue paying monthly option fee of $300,000 to preserve the Company's
     right to acquire  approximately  53,095  acres in the  Greater  Green River
     Basin as discussed above.

In order to earn  interests in additional  acreage and depths in Riverbend,  the
Company will need to expend significant additional capital to drill and complete
wells.  The Company is considering  several  options for  implementing  its 2002
drilling program. It will be necessary for Gasco to acquire additional financing
in order to complete its operational  plan for 2002.  There is no assurance that
financing  will be available  to the Company on  favorable  terms or at all. Any
financing by Gasco will likely  result in  substantial  dilution  the  Company's
stockholders.


<PAGE>



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.


<PAGE>


ITEM 8 - FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Reports                                              25-27

Consolidated Balance Sheets at December 31, 2001 and 2000                     28

Consolidated Statements of Operations for the Years Ended
    December 31, 2001, 2000 and 1999                                          29

Consolidated Statements of Stockholders' Equity for the Years
    Ended December 31, 2001, 2000 and 1999                                    30

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2001, 2000 and 1999                                          31

Notes to Consolidated Financial Statements                                 32-44



<PAGE>


                          INDEPENDENT AUDITORS' REPORT


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

We have audited the  accompanying  consolidated  balance  sheet of Gasco Energy,
Inc. and subsidiaries (the "Company"),  a development  stage company,  (formerly
known as San Joaquin  Resources,  Inc.) as of December 31, 2001, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
the  year  then  ended,   and  for  the  period  from  May  21,  1998  (date  of
incorporation)  to  December  31,  2001.  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.  The  Company's
financial statements as of December 31, 2000 and for the year then ended and for
the period May 21, 1998 (date of  incorporation)  through  December 31, 2000 and
the financial statements for the year ended December 31, 1999 and for the period
May 21, 1998 (date of  incorporation)  through December 31, 1999 were audited by
other  auditors whose  reports,  dated  September 20, 2001 and December 4, 2000,
expressed unqualified opinions on those statements, and both reports included an
explanatory paragraph describing conditions which raised substantial doubt about
the Company's ability to continue as a going concern.  The financial  statements
for the period May 21, 1998 (date of  incorporation)  through  December 31, 2000
reflect total revenues and net loss of $200,000 and $1,586,095, respectively, of
the related totals.  The other auditors'  reports have been furnished to us, and
our  opinion,  insofar  as it  relates to the  amounts  included  for such prior
periods, is based solely on the reports of such other auditors.

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 and the reports of
other auditors provide a reasonable basis for our opinion.

In our  opinion,  based on our audit and the  reports  of other  auditors,  such
consolidated  financial statements present fairly, in all material respects, the
financial  position of the Company as of December 31,  2001,  and the results of
its  operations  and its cash flows for the year then ended,  and for the period
from May 21, 1998 (date of  incorporation)  to December 31, 2001,  in conformity
with accounting principles generally accepted in the United States of America.


Deloitte & Touche, LLP


Denver, Colorado
March 15, 2002



<PAGE>





                          INDEPENDENT AUDITOR'S REPORT


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

We have audited the accompanying  balance sheet of Gasco Energy,  Inc. (formerly
known as Pannonian Energy Inc.) and  subsidiaries (a development  stage company)
as of December 31, 2000,  the related  consolidated  statements  of  operations,
stockholders'  equity and cash  flows for the year then  ended,  and  cumulative
amounts from inception to 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.  The  consolidated
financial  statements  of the  Company  as of  December  31,  1998 and 1999 were
audited by other  auditors  whose  report  dated  December  4, 2000  included an
explanatory  paragraph describing conditions which raise substantial doubt about
the Company's ability to continue as a going concern.

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 consolidated  financial position of Gasco
Energy,  Inc. and its  subsidiaries  as of December 31, 2000, and the results of
their  operations  and their cash  flows for the year then ended and  cumulative
amounts  from  inception  to December  31, 2000 in  conformity  with  accounting
principals generally accepted in the United States of America.


Wheeler Wasoff, P.C.

Denver, Colorado
September 20, 2001







<PAGE>





Report of Independent Accountants

To the Board of Directors and Shareholders of Gasco Energy, Inc.
(formerly Pannonian Energy, Inc.)

In  our  opinion,  the  accompanying   statements  of  operations,   changes  in
stockholders  equity and cash  flows  from  inception  on May 21,  1998  through
December  31, 1999 present  fairly,  in all  material  respects,  the results of
operations  and cash flows of Gasco Energy,  Inc,  (formerly  Pannonian  Energy,
Inc.) from  inception  on May 21, 1998 through  December 31, 1999 in  conformity
with accounting  principles  generally accepted in the United States of America.
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 of these  statements  in  accordance  wit
auditing  standards  generally  accepted in the United States of America,  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

The  accompanying  financial  statements  from inception on May 21, 1998 through
December 31, 1999 have been prepared  assuming that the Company will continue as
a going  concern.  As discussed  in Note 2 to the  December  31, 1999  financial
statements (not presented  separately herein) the Company has suffered recurring
losses from  operations and net operating  cash outflows that raise  substantial
doubt about its ability to continue as a going  concern.  Management's  plans in
regard to these  matters are also  described  in Note 2 to the December 31, 1999
financial  statements.  The financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
December 4, 2000

Removed:  dual dating in signature line (,except as to last two  paragraphs  in
note 8 as to which the date is January
31, 2001)
<TABLE>

                                                        GASCO ENERGY, INC.
                                                   (A Development Stage Company)
                                                    CONSOLIDATED BALANCE SHEETS

                                                                                                          December 31,
                                                                                                   2001                 2000
ASSETS

CURRENT ASSETS
<S>                                                                                               <C>                   <C>
     Cash and cash equivalents                                                                    $ 12,296,585          $   881,041
     Accounts receivable and prepaid expenses                                                          157,099               13,923
     Due from joint interest partners                                                                       -               113,020
                                                                                                    -----------             -------
        Total Current Assets                                                                        12,453,684            1,007,984

OIL AND GAS PROPERTIES, at cost, accounted for using
      the full cost method of accounting                                                              9,152,740            1,991,290

PROPERTY AND EQUIPMENT, net                                                                              52,101                7,985
                                                                                                         -------               -----

                                                                                                 $ 21,658,525         $  3,007,259
                                                                                                 =============        ============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable and accrued expenses                                                          $  593,100          $   221,972
     Accrued bonus payable                                                                                                  423,000
     Notes payable-related                                                                                                  544,280
     Notes payable-other                                                                                                    239,102
                                                                                                      ---------             -------
        Total Current Liabilities                                                                      593,100            1,428,354
                                                                                                      --------            ---------

COMMITMENTS (see Note 9)

STOCKHOLDERS' EQUITY
   Series A Convertible Redeemable preferred stock-$.001 par value; 5,000,000
        shares authorized; 1,000 shares issued and outstanding in 2001, none in
        2000                                                                                                 1                    -
   Common stock-$.0001 par value; 100,000,000 shares authorized; 27,252,500
       shares issued and 27,178,800 shares outstanding in 2001; 13,800,595
       shares issued and outstanding in 2000                                                             2,725                1,380
   Additional paid in capital                                                                       38,569,923            3,163,620
   Deferred compensation                                                                             (261,375)
   Deficit accumulated during the development stage                                               (17,115,554)          (1,586,095)
   Less cost of treasury stock of 73,700 common shares in 2001                                       (130,295)                   -
                                                                                                     ---------           ----------
                                                                                                   21,065,425             1,578,905
                                                                                                                         ---------

                                                                                                 $ 21,658,525         $  3,007,259
                                                                                                 =============        ============

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

                                                       GASCO ENERGY, INC.
                                                 (A Development Stage Company)
                                             CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                                               Cumulative
                                                                      For the Year Ended                     from Inception
                                                                         December 31,                       to December 31,
                                                               2001             2000          1999                2001

REVENUES
<S>                                                              <C>            <C>           <C>                <C>
     Oil and gas                                             $  36,850              -             -              $    36,850
     Gain on sale of permit                                          -        $ 200,000           -                  200,000
     Interest                                                  193,352                                               193,352
                                                              --------       ----------     ---------                -------

                                                               230,202        200,000        $    -                  430,202
                                                               ---------     ---------     -------- -               ---------

OPERATING EXPENSES
     General and administrative                                  4,331,825        951,734       738,153                6,027,175
     Lease operating                                               12,679              -             -                   12,679
     Interest                                                      67,363         61,776        13,347                  142,486
                                                              ------------    -----------     ---------                 -------
                                                                4,411,867      1,013,510       751,500                6,182,340
                                                              ------------     ----------     --------                ---------

OTHER INCOME (EXPENSES)                                             52,206       (29,751)        14,666                   36,584
                                                              ------------     ----------     ---------               ----------

NET LOSS                                                       (4,129,459)      (843,261)     (736,834)              (5,715,554)
                                                               -----------      ---------     ---------              -----------

Series A Convertible Redeemable
   Preferred Stock deemed distribution                        (11,400,000)                                          (11,400,000)
                                                              ------------     ----------     -----------           ------------


NET LOSS ATTRIBUTABLE TO
    COMMON SHAREHOLDERS                                     $ (15,529,459)     $(843,261)    $(736,834)           $ (17,115,554)
                                                            ==============     ==========    ==========           ==============

NET LOSS PER COMMON SHARE
    BASIC AND DILUTED                                           $   (0.63)       $ (0.06)      $ (0.06)             $     (1.01)
                                                                ==========       ========      ========             ============

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - BASIC AND DILUTED                           24,835,144     13,800,595    11,923,093               16,998,353
                                                               ===========    =========== =============              ==========











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

<TABLE>
<CAPTION>

                                                                    GASCO ENERGY, INC.
                                                              (A Development Stage Company)
                                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                        Convertible Redeemable
                           Preferred Stock    Common Stock      Additional     Deferred   Accumulated  Treasury       Total
                          Shares    Amount  Shares   Amount  Paid in Capital Compensation   Deficit      Stock
<S>                      <C>       <C>    <C>       <C>       <C>           <C>           <C>           <C>         <C>
Balance, at Inception
 (May 21, 1998)
 Net loss                                                                                  $  (6,000)                $  (6,000)
                           -------   ------ ------- -------     ------------   ---------   ---------     -------     ----------
Balance, December 31, 1998                                                                    (6,000)                   (6,000)
 Issuance of common shares                13,800,595  $1,380    $ 3,163,620                                          3,163,620
 Net loss                                                                                   (736,834)                 (736,834)
                           -------   -----  ---------  -----    ------------   ---------   ----------    -------     -----------
Balance, December 31, 1999                 13,800,595  1,380      3,163,620                 (742,834)                 (742,834)
 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                                         686,148  $ (686,148)
 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     $ 38,571,102 $ (262,554) $ (17,115,554)  $(130,295) $ 21,065,425
                          ======    ===== ===========  =====     ============ ============ ============ ============  ============

<FN>

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


<PAGE>

<TABLE>
<CAPTION>

                                                       GASCO ENERGY, INC.
                                                  (A Development Stage Company)
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                                   Cumulative
                                                                               For the Years Ended               from Inception
                                                                                  December 31,                  to December 31,
                                                                        2001           2000          1999             2001

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                  <C>             <C>           <C>             <C>
     Net loss                                                        $ (4,129,459)   $ (843,261)   $ (736,834)     $  (5,715,554)
     Adjustments to reconcile net loss to net cash used by
         operating activities
         Depreciation and abandonment expense                               5,760        16,347           537             22,644
         Stock option compensation                                        423,594                      50,000            473,594
         Non-cash charges for legal and interest expense                                213,831                          213,831
         Gain on sale of permit                                                        (200,000)                       (200,000)
         Changes in assets and liabilities provided (used)
           cash net of noncash activity
            Accounts receivable and prepaids                              11,323         23,449        (37,372)         (157,099)
            Accounts payable and accruals                                (51,872)       609,249         20,082            593,100
                                                                         --------      --------         -------           -------
     Net cash used by operating activities                             (3,740,654)     (180,385)       (703,587)       (4,769,484)
                                                                        ----------     ---------        --------        ---------
CASH FLOWS FROM INVESTING ACTIVITIES
     Cash paid for equipment                                              (49,876)             -       (3,582)           (53,458)
     Cash paid for oil and gas properties                              (7,395,867)     (566,204)     (884,919)        (8,702,132)
     Cash received upon recapitalization and merger                       265,029             -             -             265,029
     Proceeds from sale of oil and gas interests                                      1,394,797                         1,394,797
                                                                        ---------     ---------      -----------       ----------
     Net cash provided by (used in) investing activities               (7,180,714)      828,593      (888,501)        (7,095,764)
                                                                        ---------     ---------      -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from sale of common stock                                 6,826,218                    1,515,000          8,341,218
     Proceeds from sale of preferred stock                             19,000,000                                      19,000,000
     Repurchase of common shares                                         (130,295)                                      (130,295)
     Cash paid for offering costs                                      (2,144,468)                                    (2,144,468)
     Proceeds from short-term borrowings                                   500,000       252,871       316,991          1,069,862
     Repayments of short-term borrowings                                 (714,543)      (183,528)      (76,413)          (974,484)
     Distribution to Rubicon Oil and Gas, Inc.                         (1,000,000)                                     (1,000,000)
                                                                       -----------     ----------     ----------      ------------
     Net cash provided by financing activities                         22,336,912        69,343       1,755,578         24,161,833
                                                                       ----------      ---------      ----------      ------------
NET INCREASE IN CASH                                                   11,415,544       717,551         163,490         12,296,585
881,041
CASH, BEGINNING OF PERIODS                                                881,041       163,490
                                                                        ---------      --------      -----------      ------------
CASH, END OF PERIODS                                                 $ 12,296,585      $881,041      $163,490      $  12,296,585
                                                                     =============    ==========     ==========      =============






<FN>

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

                                GASCO ENERGY INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

NOTE 1 - ORGANIZATION

Gasco Energy,  Inc.  ("Gasco" or the "Company")  (formerly  known as San Joaquin
Resources  Inc.  ("SJRI"))  is an  independent  energy  company  engaged  in the
exploration,  development  and acquisition of crude oil and natural gas reserves
in the western United States.

On February 1, 2001,  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
                                                       ==================

The Company is considered a development  stage  company,  as were both Pannonian
and SJRI, as defined by Statement of Accounting Standards No. 7.

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.

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.


<PAGE>


<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                                       (4,129,459)     (4,172,061)             (843,261)       (1,047,888)

  Net loss per share 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, 2001.  The  consolidated  financial  statements as of and for the year ended
December 31, 2000 include  Pannonian  and its wholly owned  subsidiary  PIL. The
statements  for the year ended  December 31, 1999 include  only  Pannonian.  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 SJRI/Gasco shares.

Cash and Cash Equivalents

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

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.  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  does not have  sufficient  production
information by which reserves can be estimated. Because of this, and because the
costs  associated  with the Company's oil and gas properties  relate to projects
which have not yet been  associated  with proved  reserves,  the Company has not
recorded 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. Under
the full cost  method of  accounting  the Company is not  currently  required to
perform a ceiling  test, as described  above,  because the Company's oil and gas
property  costs  relate to  unevaluated  or  unproved  properties  which are not
associated with proved reserves.

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 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
3 have not been included in the  computation  of diluted income (loss) per share
during all periods because their inclusion would have been anti-dilutive.


<PAGE>



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.

Other Comprehensive Income

The Company does not have any items of other comprehensive  income for the years
ended December 31, 2001, 2000 and 1999.  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"). Under SFAS 123, the Company provides pro forma information  regarding net
income  (loss) as if  compensation  expense  for the  options  granted  had been
determined in accordance with the fair value method of SFAS 123.

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, SFAS No. 141, "Business Combinations" was issued by the FASB. SFAS
No. 141 requires that the purchase method of accounting be used for all business
combinations  initiated  after June 30,  2001.  The  Company has  evaluated  the
provisions of this  statement  and has  determined it will have no impact on its
financial position or results of operations.

In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was issued by
the FASB.  SFAS No. 142 changes the accounting for goodwill from an amortization
method to an  impairment-only  approach.  Amortization  of  goodwill,  including
goodwill  recorded in past  business  combinations,  will cease upon adoption of
this  statement.  Goodwill  and  certain  intangible  assets  will remain on the
balance sheet and not be amortized. On an annual basis, and when there is reason
to suspect that their values have been diminished or impaired, these assets must
be tested for  impairment,  and  write-downs  may be  necessary.  The Company is
required to implement SFAS No. 142 on January 1, 2002 and has determined it will
have no impact on its financial position or results of operations.

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  for fiscal years
beginning  June 15,  2002.  The  Company  has not yet  determined  the impact of
adoption of this statement.

In August 2001,  the FASB issued SFAS No. 144,  "Accounting  for  Impairment  or
Disposal of Long-Lived  Assets." SFAS No. 144 requires that long-lived assets be
measured  at the lower of  carrying  amount or fair  value  less  costs to sell,
whether  reported  in  continuing  operations  or  in  discontinued  operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value or include amounts for operating  losses that have not yet occurred.  SFAS
No. 144 is effective for financial  statements issued for fiscal years beginning
after  December  15,  2001 and  generally  is to be applied  prospectively.  The
Company has evaluated the  provisions of these  statements and has determined it
will have no impact on its financial position or results of operations.

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

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

                                           2001                 2000
                                           ----                 ----

        Utah                              $3,843,270            $ 473,546
        Wyoming                            5,034,930                   --
        California                           274,540                   --
        Non-Riverbend assets                                    1,405,242
        Foreign concessions                                       112,502
                                      ----------------     -----  -------
                                                  --
                                          $9,152,740           $1,991,290
                                          ==========           ==========

NOTE 4 - 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 shareholders
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,
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 5 - STOCKHOLDERS' EQUITY

The Company's capital stock 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 - Gasco has 1,000  shares of
Series A Convertible  Redeemable  Preferred Stock ("Preferred Stock") issued and
outstanding.  The Preferred Stock is convertible  into 9,500,000 shares of Gasco
Common  Stock,  has no fixed  dividend rate and is entitled to a $1.00 per share
liquidation  preference.  The Preferred Stock is entitled to vote along with the
Gasco  common  stock and,  for so long as at least half of the  Preferred  Stock
remains outstanding,  is entitled to 26% of the combined voting power of all the
common stock and preferred  stock.  The Preferred Stock is also entitled to vote
as a class  on  certain  matters.  The  Company  may at its  option  redeem  the
outstanding  portion of the  Preferred  Stock for  $19,000 per share on or after
August 31,  2006 if the last sale price for the  Company's  common  stock was at
least $2.00 per share (adjusted for any splits) for the previous 20 day period.

In July 2001, Brek Energy Corporation  (formerly known as First Ecom.com,  Inc.)
("Brek")   purchased   1,000  shares  of  the  Company's   Preferred  Stock  for
$19,000,000. Brek agreed not to transfer the Preferred Stock or the common stock
issuable upon  conversion  thereof for three years (the "lock up period") except
under  certain  circumstances  and except for 10% of such common stock per year.
During the lock up period, Brek has given the Company the right of first refusal
on all of the Company securities it holds. Certain principal stockholders of the
Company also gave Brek a similar right of first refusal for a five-year  period.
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 is the difference  between the market price on the date of issuance
($3.20) and the conversion rate.

Common Stock - Gasco has 27,252,000 shares of Common Stock issued and 27,178,300
shares outstanding as of December 31, 2001. 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 is outstanding,  the Preferred Stock holders are entitled to
vote as a class equal to 26%, therefore, the common shareholders are effectively
entitled  to 0.74  votes per share.  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 2001 are  described as
follows:

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.

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 8 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 Option Plan - During the year ended December 31, 2001, the Company granted
options to  employees,  directors  and  consultants  to  purchase  an  aggregate
6,519,000  shares of the Company's  common stock at exercise prices ranging from
$1.89 to $3.15 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 $423,594 was charged to operations  during the year ended December 31,
2001.

During the first  quarter of 2002,  the  Company  issued an  additional  250,000
options to purchase  shares of common  stock to employees  and  directors of the
Company,  at exercise prices ranging from $1.68 to $1.75 per share.  The options
vest quarterly over a two-year period and expire within ten years from the grant
date.

A summary  of the  options  granted to  purchase  common  stock and the  changes
therein during the year ended December 31, 2001 is presented  below.  There were
no options issued during the years ended December 31, 2000 or 1999.

<TABLE>
<CAPTION>
                                                                                Weighted Average
                                                                                 Exercise Price
                                                      Number of Options

<S>                                                         <C>                         <C>
    Outstanding as of December 31, 2000                              -                   $ --
    Granted                                                  6,519,000                   2.25
    Cancelled                                                (126,250)                   3.03
                                                             --------                    ----
    Outstanding as of December 31, 2001                      6,392,750                  $2.23
                                                             =========                  =====

    Exercisable as of December 31, 2001                      5,137,250                  $2.01
                                                             =========                  =====

    Weighted average fair value of options granted                                      $1.37
                                                                                        =====
</TABLE>

    Weighted average remaining contractual life of options
      outstanding                                           8.91 years
                                                            ==========

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
year ended  December 31, 2001 would have been increased to the pro forma amounts
indicated below:

              Net loss:                   As reported               $(4,129,459)
                                          Pro forma                  (9,811,728)

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

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

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

NOTE 6 - STATEMENT OF CASH FLOWS

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

          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 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 4.

Cash paid for  interest  was  $67,363,  $11,072  and $23,292 for the years ended
December 31, 2001, 2000 and 1999, respectively.

NOTE 7 - NOTES PAYABLE

Notes  payable - related at  December  31,  2000  consists  four 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%.

Notes  payable - other at  December  31,  2000  consists  of two notes  totaling
$239,102 payable to unrelated entities bearing interest at 6% and 12%.

All of these notes were settled during 2001.

NOTE 8 - INCOME TAXES

The Company has generated net operating  losses of  $4,200,000,  $1,300,000  and
$740,000.  The Company  did not  recognize  income tax expense  during the years
ended  December  31, 2001,  2000,  or 1999  because of the  Company's  operating
losses.  The net operating  losses may be offset against  taxable income through
2021.

During the years ended  December 31, 2001 and 2000,  the tax benefits of the net
operating  losses  of  approximately  $1,600,000  and  $192,000  were  offset by
valuation  allowances of the same amounts.  The increase in valuation  allowance
reduces  the net tax  rate to zero.  The  Company  has  fully  reserved  the tax
benefits of these net operating losses because the likelihood of realizing these
tax benefits cannot be determined at this time.

The  temporary  differences  between the timing of reporting  certain  items for
financial and tax reporting  purposes,  consist  primarily of exploration  costs
related to oil and gas properties.

NOTE 9 - RELATED PARTY TRANSACTIONS

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

A director of the Company earned consulting fees of $52,000 and $50,000 from the
Company during the years ended December 31, 2001 and 2000, respectively.  During
2001,  the Company  paid  $240,000 in  consulting  fees to a company  owned by a
director of Gasco. The fees paid to the director's company are committed through
January 31, 2006.

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  4.  This  same  officer  was  paid  $22,879  in
consulting  fees prior to his  appointment.  As part of this officer's  offer of
employment, the Company has committed to purchase the consulting business of the
officer for 250,000  shares of common stock.  The  transaction is expected to be
completed within the next year.

An officer of the Company was an employee of and owns a less than 1% interest in
an entity from which Gasco purchased acreage in Utah and Wyoming during 2001 and
2002.

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.

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.

NOTE 10 - COMMITMENTS

The Company leases office facilities in Denver, Colorado for approximately
$34,500 per year under a lease that expires on August 30, 2004. Remaining
commitments under this lease mature as follows:

     Year Ending December 31,                              Annual Rentals

               2002                                             $34,775
               2003                                              35,960
               2004                                              24,500
                                                                 ------
                                                                $95,235

Rent expense for the years ending  December 31, 2001, 2000 and 1999 was $46,476,
$52,573 and $45,216, 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.  Total  compensation  for the  officers  covered is
$560,000 per annum.  The agreements  contain clauses  regarding  termination and
demotion of the officer that would require payment of an amount ranging from one
times  compensation to up to approximately  ten times the defined  compensation.
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.  The agreements also contain
anti-dilution  provisions that contain the  requirements to grant options to the
officers  and one  director  for  them to  remain  at  their  current  ownership
percentages.


<PAGE>



NOTE 11 - 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 $6,270
during the year ended December 31, 2001.

NOTE 12 - SELECTED QUARTERLY INFORMATION (Unaudited)

The following represents selected quarterly financial information for the years
ended December 31, 2001 and 2000.
<TABLE>
<CAPTION>

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

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

a - 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.

b - 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.

c - 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 3.
<TABLE>
<CAPTION>

             2000                                                  For the Quarter Ended
                                          March 31,           June 30,          September 30,        December 31,
                                          ---------           --------          -------------        ------------

<S>                                         <C>                 <C>                   <C>                 <C>
Gross revenue                               $   --              $   --                $    --             $   --
Net revenue from oil
  and gas operations                            --                  --                     --                 --
Net income (loss)                         (58,459)            (98,423)              (162,692)          (523,687)
Net loss per share
  basic and diluted                             --              (0.01)                 (0.01)             (0.04)
</TABLE>

NOTE 13 - SUBSEQUENT EVENTS

The Company  acquired a 50% interest in 21,613 acres in Sublette  County Wyoming
for approximately $1,428,000 on February 13, 2002.

On  February  19,  2002,  the  Company  acquired  leasehold  interests  covering
approximately  16,606  acres  in  the  Greater  Green  River  Basin  located  in
west-central  Wyoming for $1,500,000.  In connection with this transaction,  the
Company received an exclusive  option to purchase an additional  72,583 acres in
this  area by  making  monthly  payments  of  $300,000  during  2002 in order to
maintain  this option.  The Company may elect to exercise its option to complete
the transaction at any time.

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

On March 7, 2002, the Company  completed a strategic  exchange of certain of its
properties in the Uinta Basin located in northeastern Utah. The Company received
approximately  2,474 net acres located in its Uinta Basin  Riverbend  Project in
exchange for 160 net acres and the  contractual  right to earn Wasatch rights on
approximately 2,463 net Uinta Basin acres. The acreage that the Company receives
contains four well bores,  two of which are  producing,  and three of which have
recompletion opportunities.

During March 2002, Brek entered into agreements with individual  shareholders of
Gasco to  acquire  7,000,000  shares of Gasco's  common  stock in  exchange  for
19,250,000 shares of Brek. Additionally, Brek has exercised its right to convert
50% of its Preferred  Stock into 4,750,000  common shares,  which will result in
Brek  having  approximately  53%  voting  control  of  Gasco  with a 45%  equity
interest. The share exchange is subject to the approval of Brek shareholders.


<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
                                                                                                 3/30/02
              Name                                Principal Occupation and Directorships

<S>                              <C>                                                              <C>
 Marc Bruner.....................Director of Gasco since 2001; Chairman of the Board of            52
                                 Directors and Strategic Consultant for the Company
 Mark A. Erickson................Director of Gasco since 2001; Chief Executive Officer and         42
                                 President
 Michael K. Decker...............Director of Gasco since 2001; Executive Vice President and        47
                                 Chief Operating Officer
 W. King Grant...................Director of Gasco since 2001; Chief Financial Officer             38
 Gregory Pek.....................Director of Gasco since 2001; President and Chief Executive       46
                                 Officer of Brek Energy Corporation
 Carmen Lotito...................Director of Gasco since 2001; Vice President, Chief Financial     58
                                 Officer and Director of Coriko Corporation; Member of Equistar
                                 Capital LLC
 Carl Stadelhofer................Director of Gasco since 2001; Partner of the law firm of          48
                                 Rinderknecht Klein & Stadelhofer
 Howard O. Sharpe................Vice President and Secretary                                      58
</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 Exchage  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 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-five  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 Director and Chief Financial  Officer of
Gasco since July 2001.  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.

Gregory  Pek - Mr.  Pek has  served  as a  Director  of Gasco and as a member of
Gasco's Executive Committee since July 2001. Mr. Pek was nominated as a director
by Brek Energy  Corporation  pursuant to the terms of Stock  Purchase  Agreement
Between Gasco Energy,  Inc. and First Ecom.  com, Inc. Mr. Pek  co-founded  Brek
Energy  Corporation  and has served on Brek  Energy's  Board of Directors  since
March 1999. He was appointed  Chairman of the Board of Brek Energy in June 2000,
relinquishing the role of CEO and President, which positions he held since March
1999. He resumed the position of President and CEO in October 2000, and resigned
as Chairman in November  2000.  From March 1994 to February 1999, Mr. Pek was an
Executive Director of David Resources Company Limited and Kong Tai International
Holdings  Company  Limited,  and from 1998 to February 1999 he was a director of
Singapore Hong Kong Properties Investment Limited.  Prior to taking residence in
Hong Kong, Mr. Pek was a director and officer of a number of public companies in
Canada.  Mr. Pek has broad  business  experience  in  manufacturing,  marketing,
finance,  regulatory  issues  (in the United  States,  Canada and Hong Kong) and
acquisitions.

Carmen  (Tony)  Lotito - 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 since November 2000.
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,
where he developed product lines, which grossed $50 million over a period of two
years. 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 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.

Howard O. Sharpe - Mr.  Sharpe has served as Vice  President  and  Secretary  of
Gasco  since  February  2001.  From  January  1993 to February  2001,  served as
Executive  Vice  President of Alpine Gas Company in Denver,  Colorado,  where he
gained  hands-on  experience  in the  development  of tight  natural  gas sands,
basin-centered natural gas exploration and production in Wyoming. Mr. Sharpe has
significant  management  experience  in oil and gas  development  in the  United
States. Mr. Sharpe served as a fighter pilot in the U.S. Air Force,  retiring as
a full Colonel, where he developed extensive logistic and organizational skills.
Mr. Sharpe holds a MBA from Central Michigan University.

Committees

The Board of Directors of Gasco has formed an Executive  Committee  and an Audit
and  Compensation  Committee.  The  Executive  Committee  currently  consists of
Messrs. Bruner, Erickson and Pek. The Audit and Compensation Committee currently
consists  of  Messrs.  Lotito  and  Stadelhofer.  The  report  of the  Audit and
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, 2001.

ITEM 11 - EXECUTIVE COMPENSATION

The following  table sets for the  compensation  paid to our President and Chief
Executive Officer and each of our next highly compensated  officers for services
rendered during the years ended December 31, 2001 and 2000. The compensation for
our other  officers  are not  included as their  salary and bonus for the fiscal
year 2001 did not exceed $100,000.

<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>
Mark A. Erickson (2)                2001        $220,000                          2,160,000        $1,080
President                           2000                       $125,000 (2)
Chief Executive Officer

W. King Grant                       2001        $155,780                             437,000        $2,220
Executive Vice President
Chief Financial Officer

----------------------
<FN>

(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.
</FN>
</TABLE>

The following table sets forth information with respect to all stock options
granted during the year ended December 31, 2001 to the named Executive Officers.
<TABLE>
<CAPTION>

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

<S>                            <C>               <C>           <C>          <C>              <C>           <C>             <C>
Mark A. Erickson               1,000,000         28            1.00         1/2/11           $630,000      $1,590,000      $ 269,094
                                 910,000         25            2.00        12/31/11         1,146,000       2,902,900
                                 250,000         7             3.00         8/8/11-           533,750       1,395,000
                                                                          2/8/13 (3)

W. King Grant                    200,000         6             3.00      6/22/06-6/22/07(4)   175,500        390,000
                                 137,000         4             2.00        12/31/11           172,620        437,030
                                 100,000         3             3.15      9/22/07-6/22/08(5)   107,500        257,500

</TABLE>

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.

As of the date of grant, the exercise price for these options was below the fair
market value of our Common Stock. The fair market value of the options as of the
date of  grant  was  determined  using  the  Black-Scholes  pricing  model.  The
assumptions used in this calculation were as follows:

          Expected dividend yield                --
          Expected price volatility              50%
          Risk-free interest rate                5.5%
          Expected life of options               10 years

Mr.  Erickson's  options  expire at the rate of 62,500  options  each six months
during the period from August 8, 2011 until February 8, 2013.

One hundred  thousand  of Mr.  Grant's  options  expire on June 22, 2006 and the
remaining  100,000  options  expire at the rate of 25,000  options  each quarter
during the period from September 22, 2006 until June 22, 2007.

Mr. Grant's options expire at the rate of 62,500 options each quarter during the
period from September 22, 2007 until June 22, 2008.

No options were exercised by executive officers during 2001. The following table
sets forth the value of options held by the executive officers at December 31,
2001.
<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>                            <C>     <C>
Mark A. Erickson                        1,972,500/187,500                        750,000/0
W. King Grant                             287,000/150,000                            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, 2001 of $1.75, less the exercise price.

Compensation of Directors

During 2001,  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 2002,
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 2001 compensation was
determined under the terms of an employment  agreement,  effective July 1, 2001,
between Gasco and Mr. Decker that expires on June 30, 2004. Mr. Decker serves as
Chief  Operating  Officer and Executive  Vice President of Gasco.  Mr.  Decker's
employment  agreement  entitles 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  undrilled  properties  of the  Company.  The
employment agreement provides 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.  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 three times the value of his annual salary, bonus, royalty trust
payments  and  benefits,  if  terminated  prior  to  the  first  anniversary  of
employment,  or an amount  equal to five times the value of his  annual  salary,
bonus,  royalty  trust  payments and  benefits,  if  terminated  after the first
anniversary of employment.

     Mark A. Erickson Employment  Agreement Mr. Erickson's 2001 compensation was
determined  under the terms of an employment  agreement,  effective  February 1,
2001,  between  Gasco and Mr.  Erickson  that expires on January 31,  2006.  Mr.
Erickson  serves  as  Chief  Executive  Officer  and  President  of  Gasco.  Mr.
Erickson's  employment  agreement  entitles 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  undrilled  properties  of the
Company.  The  employment  agreement  provides 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.  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 a cash payment of  $1,000,000,  if  terminated  prior to the
first anniversary of employment,  or a cash payment of $2,500,000, if terminated
after the first anniversary of employment.

     W. King Grant III Employment  Agreement Mr. Grant's 2001  compensation  was
determined under the terms of an employment  agreement,  effective June 1, 2001,
between  Gasco and Mr. Grant that  expires on May 31, 2004.  Mr. Grant serves as
Chief  Financial  Officer and Executive  Vice  President of Gasco.  Mr.  Grant's
employment  agreement  entitles him to an annual salary of $120,000,  subject to
increase at the discretion of the Board of Directors,  and an annual bonus equal
to 0.5% of Gasco's  cash flow from  undrilled  properties  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.   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 the greater of one year of annual  salary and his annual  salary
for the period from the termination of the agreement  through the remaining term
of the agreement.


Anti-Dilution Provisions of Employment Agreements and Consulting Agreement

Each of the above 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" contains the following described
anti-dilution  provision.  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.


Compensation Committee Interlocks and Insider Participation

During  2001,  the  Compensation  Committee  of the Board was  comprised  of two
directors, Mr. Lotito and Mr. Stadelhofer.  Neither 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 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.

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.

Compensation of the Chief Executive Officer:  During the year ended December 31,
2001,  Mark  Erickson,  President and Chief  Executive  Officer  received  total
compensation  of $221,080  which is comprised  of an annual  salary of $220,000,
which Mr. Erickson is entitled to under his employment  agreement,  and deferred
compensation  pursuant to the  Company's  401(k)  plan of $1,080.  Additionally,
2,160,000  common stock options were granted to Mr.  Erickson  during 2001.  The
Committee   considered  the  factors  described  above  to  determine  that  the
compensation paid and the stock options awarded to Mr. Erickson during 2001 were
appropriate.

The  foregoing  report is made by the  Compensation  Committee of the  Company's
Board of Directors. The members of the Committee during 2001 were Mr. Lotito and
Mr. Stadelhofer.

Performance Chart

The following  graph shows the changes in the value of $100,  over the period of
January, 2001, when the Company began trading, until December 31, 2001, 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.

                                                     As of January 1,
                                                ----------------------------
                                                ------------- --------------
                                                       2001            2002
                                                       ----            ----
       Gasco Energy, Inc.                            $100.00         $50.00
       Peer Group Index                               100.00          91.75
       NASDAQ Market Index                            100.00          80.00



ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                       MANAGEMENT

The  following  table  show  information,  as  of  April  15,  2002,  about  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 and each executive  officer,  director and all executives,  officers
and directors as a group. If a person or entity listed in the following table is
the  beneficial  owner of less  than one  percent  of the  Company's  common  or
preferred 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  shareholder is the same as
our address.
<TABLE>
<CAPTION>

                                                        Title of         Number of Shares
               Name                                      Class          Beneficially Owned          Percent of Class
                                                        -------         ------------------          ----------------

   5% or Greater Holders

<S>                                                                       <C>                           <C>
   Brek Energy Corporation (1)
   19/F, 80 Glouster Road                                Common             16,500,000                   45.0%
   Wan Chai, Hong Kong                                 Preferred                500                       100%


           Directors and Executive Officers

   Marc Bruner  (2) (3)                                  Common              5,104,084                   15.0%

   Mark A. Erickson (2) (4)                              Common              4,337,108                   12.8%

   Michael K. Decker (2)                                 Common               301,000                      *

   W. King Grant (2)                                     Common               512,000                     1.6%

   Gregory Pek (2)                                       Common             16,550,000                   45.1%

   Carmen (Tony) Lotito (2)                              Common               618,750                     1.9%

   Carl Stadelhofer (2)                                  Common               50,000                       *
                                                                                                           *
   Howard O. Sharpe (2)                                  Common               299,140                      *

   All Directors and Executive Officers as a Group       Common             27,772,082                   66.7%
   (8 persons) (2) (3) (4)
</TABLE>
---------------

(1)  The  Company's  preferred  stock is  entitled to vote along with the common
     stock and,  for so long as at least  half of the  preferred  stock  remains
     outstanding,  is entitled to 26% of the combined voting power of all of the
     common and  preferred  stock.  Brek  Energy  Corporation  has stated in its
     Schedule  13D  filing  that it has the right to  acquire  4,750,000  common
     shares upon the conversion of its 500 preferred shares and 7,000,000 common
     shares from  certain  other  stockholders  of the  Company in exchange  for
     shares of Brek Energy Corporation, which shares are included in the table.

(2)  The following  number of shares of common stock  issuable upon the exercise
     of currently  exercisable  options are included in the amounts  shown:  Mr.
     Bruner,  2,056,250  shares;  Mr. Erickson,  2,035,000  shares;  Mr. Decker,
     289,000  shares;  Mr. Grant,  312,000 shares;  Mr. Pek, 50,000 shares;  Mr.
     Lotito,  68,750 shares;  Mr.  Stadelhofer,  50,000 shares;  and Mr. Sharpe,
     125,000 shares.  Mr. Pek's total includes  16,500,000  shares  beneficially
     owned  by  Brek  Energy  Corporation,  over  which  he  shares  voting  and
     investment  power.  Mr.  Lotito  shares  voting and  investment  power with
     respect to 250,000 of the common shares listed as held by him with Equistar
     Capital, a company in which he is a member.

(3)  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.

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


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 February 1, 2001, that
expires on January 31, 2006. The agreement  entitles Mr. Bruner to an annual fee
of $240,000,  subject to increase at the  discretion  of the Board of Directors,
and an annual bonus payment equal to 0.875% of Gasco's cash flow from  undrilled
properties of the Company. The agreement provides for the award to Mr. Bruner 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 $2.50 per share. Options to purchase 50,000 shares vested upon
the execution of the  agreement and the remaining  options vest in equal amounts
over the following eight fiscal quarters. 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 a cash payment of $1,000,000,
if terminated  prior to the first  anniversary of the effective  date, or a cash
payment  of  $2,500,000,  if  terminated  after  the  first  anniversary  of the
effective date. See "Item 11 - Executive Compensation - anti-Dilution Provisions
of Employment Agreements and Consulting Agreement" for additional information on
Mr. Bruner's Strategic Consulting Agreement.

Other Transactions

Mr. Lotito earned consulting fees of $52,000 and $50,000 from the Company during
the years ended  December  31, 2001 and 2000,  respectively.  During  2001,  the
Company paid $240,000 in consulting  fees to a company owned by Mr. Bruner.  The
fees paid to Mr. Bruner's company are committed  through January 31, 2006, under
the consulting agreement described above.

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.  As part of Mr.  Decker's  offer of
employment, the Company has committed to purchase a consulting business owned by
Mr. Decker for 250,000 shares of common stock. The transaction is expected to be
completed within the next year.

Recent Developments.

Gasco intends to pay a bonus to Howard O. Sharpe in connection with Mr. Sharpe's
contributions  in  securing  the  Company's  agreement  with  Shama Zoe  Limited
Partnership,  dated  April  24,  2002,  to  acquire  interests  in oil  and  gas
properties  in Wyoming in exchange for  9,500,000  shares of Gasco common stock.
Subject to the approval of Gasco's Board of Directors, Mr. Sharpe will receive a
cash payment of $250,000 and options to purchase  250,000 shares of Gasco common
stock at an exercise price equal to the fair market value of our common stock on
the date of grant.

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.



ITEM 14 - EXHIBITS AND REPORTS ON FORM 8-K

              (a)    Exhibits:


    Exhibit
    Number                           Exhibit

     2.1  Agreement and Plan of Reorganization  dated January 31, 2001 among San
          Joaquin  Resources  Inc.,  Pannonian  Acquisition   Corporation,   and
          Pannonian Energy (1)

     3.1  Amended and Restated Articles of Incorporation (2)

     3.2  Certificate of Amendment to Articles of  Incorporation  of San Joaquin
          Resources (1)

     3.3  Bylaws (3)

     3.4  Amendment to Article II, Section 6 of the Bylaws (4)

     10.1 1999 Stock Option Plan (5)

     10.2 Financing Agreement with Wet Coast Management Corp. (6)

     10.3 Consulting Agreement with Wet Coast Management Corp. (6)

     10.4 Acquisition  Agreement with Phillips  Petroleum  Company and Pannonian
          Energy, Inc. dated December 18, 2000 (6)

     10.5 Financing Agreement with Canaccord  International Ltd. dated March 15,
          2001 (6)

     10.6 Financial Services  Agreement with Canaccord  International Ltd. dated
          March 15, 2001 (6)

     10.7 Private Placement Agency Agreement with Canaccord  International  Ltd.
          dated as of March 22, 2001 (7)


     10.8 Form of Stock  Option  Agreement  under the 1999 Stock Option Plan (9)
          10.9 Stock Option  Agreement  dated  January 2, 2001 between Gasco and
          Mark A. Erickson (9)

     10.10 Form 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 (9)

     10.11 W. King Grant Employment Contract dated June 22, 2001 (9)

     10.12 Michael Decker Employment Contract dated June 29, 2001 (8)

     10.13 Mark A. Erickson Employment Contract dated July 11, 2001 (9)

     10.14Consulting  Agreement  dated  July 11,  2001,  between  Gasco and Marc
          Bruner (9)

     10.15Muddy Creek  Exploration  Agreement  dated  August 15,  2001,  between
          Gasco,  Shama  Zoe  Limited  Partnership  and  Burlington  Oil and Gas
          Company (9)

     10.16CD Exploration  Agreement dated August 15, 2001,  between Gasco, Shama
          Zoe Limited Partnership and Burlington Oil and Gas Company (9)

     10.17Gamma Ray Exploration  Agreement dated August 15, 2001, between Gasco,
          Shama Zoe Limited Partnership and Burlington Oil and Gas Company (9)

     10.18Sublette  County WY AMI Agreement dated August 22, 2001 between Gasco,
          Alpine Gas Company and Burlington Oil and Gas Company (9)

     10.19Lead Contractor  Agreement  dated January 24, 2002,  between Gasco and
          Halliburton Energy Services, Inc. (9)


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

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


        (1)   Incorporated by reference to the exhibits filed with
              the Company's Form 8-K dated January 31, 2001.
        (2)   Incorporated by reference to the exhibits filed with
              the Company's Form 8-K dated December 31, 1999.
        (3)   Incorporated  by reference to the exhibits filed with
              the Company's Form 10-SB dated July 23, 1999.
        (4)   Incorporated by reference to the exhibits filed with
              the Company's Form 10-QSB for the quarter ended
              September 30, 2000.
        (5)   Incorporated by reference to the exhibits filed with
              the Company's Form 10-KSB for the fiscal year ended
               December 31, 1999.
        (6)   Incorporated by reference to the exhibits filed
              with the Company's Form 10-KSB for the fiscal year
              ended December 31, 2000.
        (7)   Incorporated by reference to the exhibits filed
              with the Company's Form 10-QSB for the quarter
              ended June 30, 2001.
              Incorporated by reference to the exhibit filed with the
               Company's Form 8-K filed on April 12, 2002.
        (9)   Filed as an exhibit to the Company's Form 10-K filed on
              March 29, 2002.


       (b) Reports on Form 8-K: The following reports on Form 8-K were filed
during the last quarter during the period covered by this report:

Form 8-K dated October 3, 2001 filed     Slide Presentation datedOctober 4, 2001
 October 3, 2001                         Executive Summary dated October 4, 2001
                                          (Items 7 and 9)

Form 8-K dated October 10, 2001 filed    Press Release dated October 4, 2001
 October 10, 2001                         (Items 7 and 9)

Form 8-K dated October 11, 2001 filed    Press Release dated October 11, 2001
 October 11, 2001                         (Items 7 and 9)

Form 8-K/A dated October 22, 2001        Amendment to Form 8-K dated filed
 filed October 22, 2001                    January 31, 2001  (Item 7)

Form 8-K dated October 26, 2001 filed   Press Release dated October 26, 2001
 October 26, 2001                         (Items 7 and 9)

Form 8-K dated October 26, 2001 filed   Slide Presentation dated October 17,2001
 October 26, 2001                         (Items 7 and 9)

Form 8-K dated November 2, 2001         Change in Certifying Accountant
 filed November 2, 2001                   (Items 4 and 7)

Form 8-K dated December 3, 2001 filed   Press Release dated December 3, 2001
 December 3, 2001                         (Items 7 and 9)

Form 8-K dated December 13, 2001 filed  Press Release dated December 13, 2001
 December 13, 2001                        (Items 7 and 9)

Form 8-K/A dated December 18, 2001      Change in Certifying Accountant
 filed December 18, 2001                  (Items 4 and 7)


<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:  August 2, 2002



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.

<TABLE>
<CAPTION>

SIGNATURE                                            TITLE                      DATE



<S>                                           <C>                               <C>
/s/ Mark Erickson                             Director and President            August 2, 2002
-------------------------------------        Chief Executive Officer
Mark Erickson


/s/ Marc Bruner                                       Director                  August 2, 2002
-------------------------------------
Marc Bruner


/s/ Carl Stadelhofer                                  Director                  August 2, 2002
-------------------------------------
Carl Stadelhofer


/s/ Carmen Lotito                                     Director                  August 2, 2002
--------------------------------------
Carmen Lotito


/s/ Michael Decker                     Director and Executive Vice President    August 2, 2002
-----------------------------------         Chief Operating Officer
Michael Decker


/s/ W. King Grant                       Director and Executive Vice President   August 2, 2002
-----------------------------------   Principal Financial and Accounting Officer
W. King Grant
</TABLE>