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

                                    FORM 10-K

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

                   For the fiscal Year Ended December 31, 2003

  [  ]   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. [ ]

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

As of June 30, 2003,  approximately 40,288,800 shares of Common Stock, par value
$0.0001  per share  were  outstanding,  and the  aggregate  market  value of the
outstanding  shares of Common  Stock of the Company held by  non-affiliates  was
approximately $18,550,715.

As of March 25, 2004, approximately 64,082,254 shares of Common Stock, par value
$0.0001 per share were outstanding.

                      Documents incorporated by reference:

Certain  information  required  by Items  10,  11,  12, 13 and 14 of Part III is
incorporated  by reference from portions of the  registrant's  definitive  proxy
statement relating to its 2004 annual meeting of stockholders to be filed within
120 days after December 31, 2003.


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                                Table of Contents

                                     Part I

Item 1.  Description of Business...............................................2
              Business of Gasco................................................2
              History..........................................................3
              Acquisition, Exploration and Development Expenses................4
              Principal Products or Services and Markets.......................5
              Competitive Business Conditions, Competitive Position in the
                 Industry and Methods of Competition...........................6
              Governmental Regulations and Environmental Laws................. 4
              Number of Total Employees and Number of Full-Time Employees......5
              Risk Factors.....................................................5
              Cautionary Statement Regarding Forward-Looking Statements.......13

Item 2.  Description of Property..............................................13
              Petroleum and Natural Gas Properties............................13
              Company Reserve Estimates.......................................16
              Volumes, Prices and Operating Expenses..........................17
              Development, Exploration and Acquisition Capital Expenditures...18
              Productive Gas Wells............................................18
              Oil and Gas Acreage.............................................19
              Drilling Activity...............................................20
              Office Space....................................................21

Item 3.  Legal Proceedings....................................................21

Item 4.  Submission of Matters to a Vote of Security Holders..................21

                               Part II

Item 5.  Market for Common Equity and Related Stockholder Matters.............22
              Equity Compensation Plans.......................................23
              Securities Transactions.........................................23

Item 6.  Selected Financial Data..............................................25

Item 7.  Management's Discussion and Analysis.................................26
              Forward Looking Statements......................................26
              Overview........................................................26
              Liquidity and Capital Resources.................................28
              Capital Budget..................................................29
              Schedule of Contractual Obligations.............................30
              Critical Accounting Policies and Estimates......................30
              Results of Operations...........................................32
              Recent Accounting Pronouncements................................35


<PAGE>



                    Table of Contents (continued)

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk..........36

Item 8.   Financial Statements................................................37

Item 9.   Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure..............................................67

Item 9A.  Controls and Procedures.............................................67

                              Part III

Item 10.  Directors and Executive Officers of the Registrant..................67

Item 11.  Executive Compensation..............................................67

Item 12.  Security Ownership of Certain Beneficial Owners and Management......67

Item 13.  Certain Relationships and Related Transactions......................68

Item 14.  Principal Accountant Fees and Services..............................68

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.....68










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PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Business of Gasco

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

History

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

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

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

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

                                       2
<PAGE>

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

Acquisition, Exploration and Development Expenses

During the year ended  December  31,  2003,  the  Company  spent  $5,283,426  in
development and exploration activities. During the year ended December 31, 2002,
the Company spent  $32,962,855,  including  the issuance of 9,500,000  shares of
common stock valued at $18,525,000,  in the acquisition of additional leases and
in the development and  exploitation of the properties  subject to these leases.
During  the  year  ended  December  31,  2001,  the  Company  spent   $7,395,867
identifying and acquiring  petroleum and natural gas leases and prospect rights.
As of December 31, 2003,  the Company  held working  interests in 235,709  gross
acres  (112,051  net  acres)  located in Utah,  Wyoming  and  California.  As of
December 31, 2003,  the Company held an interest in 18 gross (9.5 net) producing
gas wells and 4 gross (4.0 net) shut-in gas wells  located on these  properties.
As of March 25, 2004 the Company  operates 18 wells,  of which 13 are  currently
producing. See "Item 2 - Description of Properties".

Principal Products or Services and Markets

Gasco  focuses its  exploitation  activities  on locating  natural gas and crude
petroleum.   The  principal  markets  for  these  commodities  are  natural  gas
transmission  pipeline  companies,  utilities,  refining  companies  and private
industry end-users. Historically, nearly all of the Company's sales have been to
a few customers.  However, Gasco is not confined to, nor dependent upon, any one
purchaser  or  small  group  of  purchasers.  Accordingly,  the loss of a single
purchaser would not materially  affect the Company's  business because there are
numerous other purchasers in the areas in which Gasco sells its production.  For
the years ended  December 31, 2003,  2002 and 2001,  purchases by the  following
companies exceeded 10% of the total oil and gas revenues of the Company.

                                          For the Year Ended December 31,
                                     ------------------------------------------
                                          2003          2002        2001
                                          ----          ----        ----

      ConocoPhillips Company              93%            98%        60%
      Wasatch Energy Corporation           -              -         37%


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

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

                                       3
<PAGE>

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

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

Governmental Regulations and Environmental Laws

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

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

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

                                       4
<PAGE>

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

It is not  anticipated  that the Company  will be required in the near future to
expend  material  amounts because of  environmental  laws and  regulations,  but
inasmuch as such laws and  regulations  are frequently  changed,  the Company is
unable to predict the ultimate future cost of compliance. It is anticipated that
before full field  development can occur the Company will be required to conduct
Environmental  Assessments  and/or  Environmental  Impact  Statements  which may
result in material  delays and/or  limitations  to developing all or part of the
Company's  leasehold.  The Company believes it is presently in compliance in all
material  respects 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 25, 2004, Gasco had eleven full-time employees.

Risk Factors

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

         Accumulated Losses

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

During  the  year  ended  December  31,  2003,  Gasco  incurred  a net  loss  of
$2,526,525, and has an accumulated deficit of $25,291,761 since inception.

                                       5
<PAGE>

         Uncertainty of Reserve Estimates


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

     -    the quality and quantity of available data;

     -    the interpretation of that data;

     -    the accuracy of various mandated economic assumptions; and

     -    the judgment of the persons preparing the estimate.

The proved reserve information included herein is based on estimates prepared by
Netherland,   Sewell  &  Associates,   Inc.,  independent  petroleum  engineers.
Estimates prepared by others could differ materially from these estimates.

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

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

It  should  not be  assumed  that the  present  value of future  net cash  flows
included  herein is the current market value of the Company's  estimated  proved
gas and oil reserves. In accordance with SEC requirements, the Company generally


                                       6
<PAGE>

bases the  estimated  discounted  future net cash flows from proved  reserves on
prices and costs on the date of the estimate. Actual future prices and costs may
be  materially  higher or lower  than the prices and costs as of the date of the
estimate.

         Potential Future Impairment

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

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

         Absence of a Mature Public Market

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

         Exploration and Production Risks

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

A productive well may become  uneconomic in the event water or other deleterious
substances are encountered, which impair or prevent the production of oil and/or
gas from the well. In addition,  production from any well may be unmarketable if
it is impregnated with water or other deleterious substances.

                                       7
<PAGE>

         Financing Risks

Gasco  has  relied  in the past  primarily  on the sale of  equity  capital  and
farm-out and other similar types of transactions to fund working capital and the
acquisition of its prospects and related leases.  Failure to generate  operating
cash flow or to obtain additional financing for the development of the Company's
properties could result in substantial  dilution of Gasco's property  interests,
or delay or cause indefinite postponement of further exploration and development
of its prospects with the possible loss of such properties.

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

         Strategy Risks

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,  the Company competes with
a number of other companies operating in our areas of interest,  including large
oil and gas companies and other  independent  operators  with greater  financial
resources.  The Company  does not believe that our  competitive  position in the
petroleum and natural gas industry will be significant.

The Company  anticipates  a competitive  market for obtaining  drilling rigs and
services,  and the  manpower  to run them.  The  current  high level of drilling
activity in our areas of  exploration  may have a significant  adverse impact on
the timing and  profitability  of the  Company's  operations.  In  addition,  as
discussed  below,  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.

         Uninsurable Risks

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

         No Assurance of Titles

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


                                       8
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Company's interest would be worthless.  In such an instance, the amount paid for
such petroleum and natural gas lease or leases would be lost.

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

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

         Natural Gas and Oil Prices

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

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

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

     -    Weather conditions;

     -    Domestic and foreign governmental regulations;

     -    Political conditions in natural gas or oil producing regions;

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

     -    The price and availability of alternative fuels;

     -    Acts of war, terrorism or vandalism;

                                       9
<PAGE>

     -    Market manipulation.


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

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

     -    Seasonal fluctuations in local demand for production;

     -    Local and national gas storage capacity;

     -    Interstate and intrastate pipeline capacity; and

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

In  addition,  because of Gasco's  size the  Company  does not own or lease firm
capacity on any interstate pipelines. As a result, the Company's  transportation
costs are particularly subject to short-term fluctuations in the availability of
transportation  facilities.  The  Company's  management  believes that the steep
discount  in the prices it  received  in the past may have been due to  pipeline
constraints  out of the region.  Recent  increases in capacity have lessened the
discount, however, there is no assurance that such pipeline constraints will not
exist in the future.  Even if the Company acquires additional pipeline capacity,
conditions may not improve due to other factors listed above.

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

         Marketing

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


                                       10
<PAGE>

alternative  transportation can be arranged which may take an extended period of
time.

         Environmental Regulations

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

         Governmental Regulations

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

          Competition

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


                                       11
<PAGE>

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 and Mr.  Decker  is an  executive  vice  president  and Chief
Operating  Officer of Gasco. The loss of their services may adversely affect the
business and prospects of Gasco.

         Conflicts of Interest

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

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

         Enforcement of Legal Process

Two of the  directors of Gasco reside  outside the United  States and maintain a
substantial  portion of their assets outside the United  States.  As a result it
may be difficult or  impossible to effect  service of process  within the United


                                       12
<PAGE>

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

                                       13
<PAGE>

         Riverbend Project

The Riverbend Project comprises  approximately  119,259 gross acres in the Uinta
Basin of  northeastern  Utah,  of which Gasco hold  interests  in  approximately
46,796 net acres as of December 31, 2003. The Company can also earn interests in
approximately  19,324  gross  acres  in  this  area  under  farm-out  and  other
agreements.  The Company's  engineering  and geologic focus is  concentrated  on
three  tight-sand  formations  in the Uinta basin:  the Wasatch,  Mesaverde  and
Blackhawk  formations.  In January  2002,  we  entered  into an  agreement  with
Halliburton  Energy  Services under which  Halliburton  had the option to earn a
participation interest proportionate to its investment by funding the completion
of wells  in the  Wasatch  and  Mesaverde  formations.  Halliburton  elected  to
participate  in two of the wells and declined to  participate  in the  remaining
three wells in this area. The agreement was terminated during October 2003.

During 2002 Gasco drilled three operated wells,  which are currently  producing.
Gasco's  share of the costs for each of the first two wells  were  approximately
$1,050,000 and $1,312,000 and the costs for the third well,  were  approximately
$2,340,000.  Recompletions  for two of these  wells took place  during  November
2003.  Gasco's  fourth  operated  well in this area  reached  total depth during
December  2002  and  was  completed  during  November  2003.  The  drilling  and
completion  costs for this well,  net to  Gasco's  interest  were  approximately
$2,700,000. Gasco's fifth operated well in this area was spudded in October 2002
with a small rig that was moved off the drill site.  A larger rig was moved onto
the site in March 2003 to complete the  drilling of this well,  and the well was
completed  during  November  2003. The total costs for this well, net to Gasco's
interest were approximately $2,200,000.

In addition to the Gasco-operated wells described above, the Company also owns a
14% to 20% working interest in five wells and an overriding  royalty interest in
one well that were drilled by  ConocoPhillips  in this area during late 2001 and
through the fourth  quarter of 2002. All of these wells are capable of producing
and selling gas. On March 9, 2004,  the Company  completed  the  acquisition  of
ConocoPhillips' interests in these producing wells, 13,062 net acres and certain
other assets  located in the Uinta Basin in Utah for  approximately  $3,175,000.
The Company also became the operator of these  properties  effective  January 1,
2004. Pursuant to an existing contract an unrelated third party has the right to
purchase 25% of the acquired  properties at the acquisition price within 30 days
following the acquisition date.

During October 2003, the Company  completed a transaction  whereby it settled an
outstanding  amount owed of $1,606,982 to an  oilservice  provider  arising from
drilling and completion expenditures on five Gasco-operated wells, by paying the
provider  $400,000  in cash and  conveying  to the  provider  a  portion  of its
interests in two Riverbend  wells.  Subsequent to the  transaction,  the Company
retained a 30% working  interest in the two subject  wells and the  ownership in
remaining three wells is unchanged.

During January 2003,  Gasco entered into a contract with the system  operator to
put a new compressor into place in the Riverbend  Project.  The  installation of
this compressor was completed  during February 2003. The additional  compression
capacity has allowed the Company to begin producing from wells that were shut-in


                                       14
<PAGE>

or flowing though constricted  orifices and should meet the Company's  projected
compression needs in this project through the first half of 2004.

On January 16, 2004 the Company entered into agreements with a group of industry
providers  (together,  the "Service  Parties") to accelerate the  development of
Gasco's oil and gas  properties by drilling up to 50 wells in Gasco's  Riverbend
Project in Utah's Uinta Basin. Two of the Company's wells that were completed in
November,  as discussed  above,  were made a part of this  agreement.  Gasco has
agreed that the Service Parties,  which includes Schlumberger Oilfield Services,
will have the exclusive  right to provide their  services in the  development of
the Riverbend acreage during the term of the agreement.  The agreement  provides
for the  group  to  initially  proceed  with the  first  10-well  bundle,  which
approximates  one year of  drilling  with a single  rig.  If the  group  agrees,
drilling may be accelerated  using additional rigs.  Gasco's 2004 capital budget
is  approximately  $13  million  for  the  drilling,   completion  and  pipeline
connection of wells in this area.  Gasco may elect to fund up to 20% of the cost
of the wells in the first three  bundles and up to 30% in the last two  bundles.
Gasco's interest in the production stream from a bundle, net of royalties, taxes
and lease  operating  expenses is estimated to equal the proportion of the total
well costs that it funds.

To secure its obligations under the agreement,  described above, the Company has
pledged its interests in each of the wells in each bundle.

         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, 2003, the Company has a leasehold
interest in approximately 112,582 gross acres and 62,614 net acres in this area.
During  2002,  the Company  participated  in the drilling of a two wells in this
AMI. Gasco has a 31.5% interest in each of these wells.

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

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


                                       15
<PAGE>

and sold  1,400,000  shares of Gasco  common stock back to the Company for $1.00
per share. The Company issued a $1,400,000  promissory note to Shama Zoe for the
purchase of these shares.  The promissory  note beared interest at 12% and had a
maturity  date of March 14,  2003.  The Company  repaid  this note plus  accrued
interest in full during February 2003.

During June 2003,  the Company  announced its plans to dispose of certain of its
Wyoming  properties  in the Greater  Green River  Basin  covering  approximately
62,500 acres,  net to its interest.  The Company is also  currently  considering
additional options for this area such as the farm-out of some of our acreage and
other similar type transactions.

 During 2003, the Company impaired certain of its unproved acreage in Wyoming by
reclassifying  $1,725,000  of costs  associated  with this acreage into the full
cost pool.  The  impairment  represents  the cost of  certain  of the  Company's
acreage  that the Company no longer  considers  prospective.  These costs became
subject to amortization during the fourth quarter of 2003.

         Southern California Project

The Company has a leasehold  interest in approximately  3,868 gross acres (2,641
net acres) in Kern and San Luis  Obispo  Counties of  Southern  California.  The
Company has no drilling or  development  plans for this acreage during 2004, but
plans to continue paying leasehold rentals and other minimum geological expenses
to preserve the Company's acreage positions on these prospects.  The Company may
consider selling these positions in the future.

         Repurchase of Stock for Acreage

On July 16,  2002,  Gasco  executed  and closed a purchase  agreement  with Brek
Energy  Corporation  ("Brek"),  and certain other Gasco stockholders (the "Other
Stockholders"), pursuant to which Brek and the Other Stockholders purchased from
Gasco an undivided 25% of Gasco's working  interests in all undeveloped  acreage
owned by Gasco,  representing  35,169 net  undeveloped  acres,  in exchange  for
6,250,000  shares of Gasco common stock and 500 shares of Gasco  preferred stock
held by Brek and the Other Stockholders.  The Other Stockholders  assigned their
right to receive  their share of such working  interests  to Brek,  so that Brek
acquired  title  to  all of the  working  interests  conveyed  by  Gasco  in the
transaction.  Brek also had the option to acquire additional undeveloped acreage
that it did not exercise.

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

Company Reserve Estimates

The  following  table  summarizes  the  Company's  estimated  reserve data as of
December  31,  2003,  as estimated by  Netherland,  Sewell &  Associates,  Inc.,
independent  petroleum engineers.  The present value of future net cash flows is


                                       16
<PAGE>

based on prices at December  31, 2003 of $5.89 per Mcf of gas and $29.69 per bbl
of oil. All of the Company's reserves are located within the state of Utah.
<TABLE>

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

<S>                <C>               <C>         <C>            <C>              <C>
   Total           13,601,003        100,987     $ 8,568,500    $ 7,626,600      $16,195,100
                   ===========       ========    ============    ============   ============
</TABLE>


Actual future prices and costs may be materially higher or lower than the prices
and costs as of the date of any  estimate.  A decrease in price of $0.10 per Mcf
for  natural  gas and $1.00 per barrel of oil would  result in a decrease in the
Company's  December  31,  2003  present  value  of  future  net  cash  flows  of
approximately $672,600.

On March 9, 2004 the Company  completed the  acquisition  of additional  working
interests  in six  of the  Company's  producing  wells,  13,062  net  acres  and
gathering  system  assets  located in the Uinta Basin in Utah for  approximately
$3,175,000.  The acquisition consists of approximately  7,637,000 Mcf and 62,000
Bbls of proved gas and oil reserves  with a present  value  discounted at 10% of
approximately  $8,064,000.  Pursuant to an existing contract, an unrelated third
party  has  the  right  to  purchase  25%  of  the  acquired  properties  at the
acquisition price within 30 days following the date of the acquisition.

No estimates of proved  reserves  comparable to those included  herein have been
included in reports to any federal agency other than the Securities and Exchange
Commission.

Volumes, Prices and Operating Expenses

The following  table  presents  information  regarding the  production  volumes,
average sales prices received and average  production  costs associated with the
Company's sales of natural gas for the periods indicated.

                                        For the Years Ended December 31,
                                   ------------------------------------------
                                      2003             2002         2001
                                   ------------    ----------- --------------

   Natural gas production (Mcf)        257,035         66,444         17,545
   Average sales price per Mcf           $4.69         $ 2.47          $2.10
   Oil production (Bbl)                  1,988              -              -
   Average sales price per Bbl          $28.52              -              -
   Expenses per Mcfe:
      Lease operating                    $1.25         $ 1.80         $ 0.72
      General and administrative        $10.48        $ 76.46       $ 246.57
      Depletion and impairment           $2.06         $ 9.73              -





                                       17
<PAGE>



Development, Exploration and Acquisition Capital Expenditures

During the year ended  December  31,  2003,  the  Company  spent  $5,283,426  in
development and exploration activities. During the year ended December 31, 2002,
the Company spent  $32,962,855,  including  the issuance of 9,500,000  shares of
common stock valued at $18,525,000,  in the acquisition of additional leases and
in the development and  exploitation of the properties  subject to these leases.
During  the  year  ended  December  31,  2001,  the  Company  spent   $7,395,867
identifying and acquiring  petroleum and natural gas leases and prospect rights.
As of December 31, 2003,  the Company  held working  interests in 235,709  gross
acres  (112,051  net  acres)  located in Utah,  Wyoming  and  California.  As of
December 31, 2003,  the Company held an interest in 14 gross (5.5 net) producing
gas wells and 4 gross (4.0 net) shut-in gas wells  located on these  properties.
During the first quarter of 2004,  the Company  drilled and cased one additional
successful well and acquired additional working interests in six producing wells
in the  Uinta  Basin of Utah.  Following  those  events,  the  Company  holds an
interest in 16 gross (6.1 net) producing gas wells and 4 gross (4.0 net) shut-in
gas wells on these properties,  and currently operates 18 wells, of which 13 are
producing.

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

                                                               For the Years Ended December 31,
                                                       ----------------------------------------------
                                                              2003            2002            2001
                                                       -------------     -----------     ------------
Property acquisition costs:
<S>                                                       <C>            <C>              <C>
   Unproved                                               $ 667,557      $22,324,547      $ 7,161,450
   Proved                                                       --               --                --
Exploration costs (a)                                       396,967        3,319,124               --
Development costs                                        4,218,9022       7,319,1844               --
                                                         ----------      ------------       ---------
     Total excluding asset retirement obligation          5,283,426       32,962,855        7,161,450
                                                         ==========      ===========        =========
     Total including asset retirement obligation        $ 5,398,678     $ 32,962,855      $ 7,161,450
                                                        ===========     ============      ===========
</TABLE>

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

Productive Gas Wells

The following  summarizes  the Company's  productive and shut-in gas wells as of
December 31, 2003.  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         14                 5.5
          Shut-in gas wells            4                 4.0
                                      --                 ---
                                      18                 9.5
                                      ==                 ===

                                       18
<PAGE>

The Company  operates seven of the above  producing wells and all of the shut-in
wells.  Five of the  remaining  seven  producing  wells in the above  table were
drilled by  ConocoPhillips  within  Gasco's and  ConocoPhillip's  Area of Mutual
Interest in the  Riverbend  Project and were operated by  ConocoPhillips.  Gasco
took over operations of these wells effective January 1, 2004. The two remaining
producing  wells are located in Sublette County Wyoming and were drilled and are
operated by Burlington.

On March 9, 2004 the Company  completed the  acquisition  of additional  working
interests  in six  of the  Company's  producing  wells,  13,062  net  acres  and
gathering  system  assets  located in the Uinta Basin in Utah for  approximately
$3,175,000.  Pursuant to an existing contract,  an unrelated third party has the
right to purchase 25% of the acquired properties at the acquisition price within
30 days following the date of the  acquisition.  Additionally,  during the first
quarter of 2004,  the Company  drilled and cased a successful  well in the Uinta
Basin of Utah.

Oil and Gas Acreage

The following table sets forth the undeveloped and developed  leasehold acreage,
by area,  held by the Company as of December  31,  2003.  Undeveloped  acres are
acres on which wells have not been  drilled or  completed  to a point that would
permit the  production  of commercial  quantities of oil and gas,  regardless of
whether or not such acreage contains proved reserves. Developed acres are acres,
which are spaced or assignable to  productive  wells.  Gross acres are the total
number of acres in which Gasco has a working interest.  Net acres are the sum of
Gasco's  fractional  interests  owned in the gross  acres.  The  table  does not
include  acreage that the Company has a contractual  right to acquire or to earn
through  drilling  projects,  or any other acreage for which the Company has not
yet received leasehold  assignments.  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.

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

     Utah                   118,659         46,618              600        178
     Wyoming                112,302         62,546              280         68
     California               3,868          2,641                -           -
                          ----------      ---------            -----       ----

         Total acres        234,829        111,805              880        246
                          ==========      =========            ====       =====




                                       19
<PAGE>



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

                  Expiring in 2004         Expiring in 2005            Expiring in 2006
                  Gross        Net         Gross      Net            Gross             Net

<S>               <C>          <C>          <C>         <C>            <C>           <C>
Utah              2,540        476          7,186       1,543          10,609        2,367
Wyoming          22,643     14,699         24,631      16,420           9,925        5,692
California            -                     1,073         545               -            -
                --------    ------         ------      ------          -------       ------
Total            25,183     15,175         32,890      18,508          20,534        8,059
                 ======     ======         ======      ======          ======        =====
</TABLE>

During 2003, the Company  impaired certain of its unproved acreage in Wyoming by
reclassifying  $1,725,000  of costs  associated  with this acreage into the full
cost pool.  The  impairment  represents  the cost of  certain  of the  Company's
acreage expiring in 2004 that the Company no longer considers prospective. These
costs became  subject to  amortization  during the fourth  quarter of 2003.  The
impaired  acreage  (approximately  9,136 net acres) is excluded  from the tables
above.

During  February  2002,  the Company  purchased  at a BLM sale a 45% interest in
21,614 gross acres  (9,726 net acres) for  approximately  $1,428,000.  Effective
July 16, 2002, the Company  assigned 25% of this interest to Brek,  resulting in
the Company's net acres being reduced from 9,726 acres to 7,295 acres. After the
sale, the Company was notified by the BLM in Wyoming that several  environmental
groups filed a protest against the BLM offering numerous parcels of land for oil
and gas  leasing.  All of the parcels  (leases)  purchased  by the Company  were
placed in  suspense  pending the  resolution  of this  protest.  The Company was
notified  in July 2003  that all of the  protested  leases  were  released  from
suspense. The value of these leases is recorded as unproved mineral interests in
the accompanying financial statements.

As of December  31, 2003,  approximately  79% of the acreage that Gasco holds is
located  on federal  lands and  approximately  19% of the  acreage is located on
state lands. It has been Gasco's  experience that the permitting process related
to the  development  of  acreage  on federal  lands is more time  consuming  and
expensive than the  permitting  process  related to acreage on state lands.  The
Company has generally  been able to obtain state permits  within 30 days,  while
obtaining  federal permits has taken several months or longer.  Accordingly,  if
the  development  of the Company's  acreage  located on federal lands is delayed
significantly  by the permitting  process,  the Company may have to operate at a
loss for an extended period of time.

Drilling Activity

The following table sets forth the Company's  drilling activity during the years
ended  December 31, 2003,  2002 and 2001.  In the table,  "gross"  refers to the
total wells in which we have a working interest, and "net" refers to gross wells
multiplied by the Company's working interest.




                                       20
<PAGE>


<TABLE>
<CAPTION>


                                                      For the Year Ended December 31,
                                 -----------------------------------------------------------------------------
                                     2003                      2002                          2001
                                 ----------------     ------------------------    ----------------------------
                                 Gross     Net          Gross         Net          Gross             Net
                                 -----     ---          -----         ---          -----             ---
       Exploratory Wells:
<S>                               <C>     <C>           <C>           <C>            <C>            <C>
         Productive                 -       -            2             0.7            3              3.0
         Dry                        -       -            1             1.0            -                -
                                   ---     ---          ---            ---           ---             ---
           Total wells              -       -            3             1.7            3              3.0
                                   ===     ===          ===            ===           ===             ===

       Development Wells:
         Productive                  -       -            6            3.3             3              0.6
         Dry                         -       -            -              -             -                -
                                   ---     ---          ---            ---           ---              ---
           Total wells               -       -            6            3.3             3              0.6
                                   ===     ===          ===            ===           ===              ===
</TABLE>

During the first  quarter of 2004,  the Company  drilled and cased a  successful
well and is currently in the process of drilling another well, both of which are
located in the Unita Basin of Utah.

Office Space

The Company leases approximately 3,255 square feet of office space in Englewood,
Colorado  for  approximately  $46,000 per year under two  leases,  both of which
terminate  on August 30,  2004.  The Company  intends to renew  these  leases at
current or lower rates when the current leases expire in August 2004.

ITEM 3 - LEGAL PROCEEDINGS

See Note 16 of the accompanying  financial statements,  which is incorporated by
reference into this Item 3.

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

None.



                                       21
<PAGE>



PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company  trades  under the symbol  "GASE",  and as of March 25,  2004,  the
Company had 111 registered shareholders of its common stock. During the last two
fiscal  years,  no cash  dividends  were declared on Gasco's  common stock.  The
Company's  management  does not  anticipate  that  dividends will be paid on its
common stock in the near future.

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

                                         High            Low
2003
         First Quarter                  $0.75          $0.46
         Second Quarter                  0.90           0.42
         Third Quarter                   0.90           0.51
         Fourth Quarter                  1.32           0.54

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





                                       22
<PAGE>



Equity Compensation Plans

The  table  below  provides   information   relating  to  the  Company's  equity
compensation plans as of December 31, 2003:
<TABLE>
                                                                                                   Number
                                                                                               of securities
                                                                                            remaining available
                                            Number of securities     Weighted-average       for future issuance
                                                to be issued         exercise price of       under compensation
                                              upon exercise of          outstanding           plans (excluding
                                            outstanding options,         options,           securities reflected
Plan Category                                warrants and rights    warrants and rights       in first column)
-------------                                -------------------    -------------------       ----------------
Equity compensation plans
   approved by security holders
<S>                                                     <C>                  <C>                        <C>
     Stock option plan                                  1,799,336            $      1.09                2,229,544
     Restricted stock plan                                425,000                   N/A  (a)                    -
Equity compensation plans
   not approved by security holders                     3,817,250                   2.18                       (b)
                                                        ---------                                       ----------
Total                                                   6,041,586            $      1.83 (c)            2,229,544
                                                        =========                   ====                =========
</TABLE>
(a)  The restricted shares vest 20% on the first anniversary,  20% on the second
     anniversary  and 60% on the third  anniversary of the awards,  provided the
     holder remains employed by the Company.

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

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

          <S>                  <C>                  <C>     <C>          <C>    <C>           <C>    <C>
           Employees            3,394,750            $1.00 - $3.15        2001 - 2003          2006 - 2008
           Consultants            272,500            $3.00 - $3.70        2001 - 2003          2006 - 2008
           Directors              150,000            $3.00 - $3.15        2001 - 2003          2006 - 2008
                                  -------
    Total Issued                3,817,250
                                =========
</TABLE>

(c)  Weighted average exercise price of options to purchase a total of 5,616,586
     shares of common stock.

Securities Transactions

The Company's  securities  transactions  during the year ended December 31, 2003
that were not  registered  under the  Securities  Act of 1933 are  described  as
follows:

                                       23
<PAGE>

On October 23, 2003 the Company  completed the sale through a private  placement
of  4,788,436  shares  of its  common  stock to a group of  accredited  previous
investors.  The selling price of $0.58 per common share was determined by taking
97 percent of the 20-day average closing price of the Company's common stock for
the  period  ending  October  17,  2003,  and  resulted  in  total  proceeds  of
approximately  $2,780,000.  The expenses  associated with this  transaction were
approximately $15,000.

On October 15, 2003 the Company issued  $2,500,000 of 8% Convertible  Debentures
("Debentures")  in a private  placement.  The Debentures bear interest at 8% per
annum,  which is payable  monthly,  and are convertible into 4,166,667 shares of
the Company's  common stock, at the holder's  option,  at a conversion  price of
$0.60 per common  share.  Monthly  principal  payments  of $37,500  begin in the
fourth  quarter of 2005 and the maturity  date of the  Debentures is October 15,
2008.  Financing fees of $72,500  associated with this  transaction were paid to
RENN  Capital  Group,  Inc.,  and a finder's  fee of  $37,500  was paid to Bruce
Lazier.  The  Debentures  are  secured  by the  producing  wellbores  that Gasco
develops using this financing.  Additionally,  the Debenture  holders  exercised
their right to designate a single  nominee to the  Company's  Board of Directors
during October 2003.

The  Debenture  conversion  price of $0.60 per  common  share was lower than the
trading  value of the  Company's  common stock on the date the  Debentures  were
issued. This resulted in a beneficial conversion feature of $166,667, which will
be amortized over the life of the Debentures. During the year ended December 31,
2003,  the  Company  recorded  $6,945  of  interest  expense   representing  the
amortization of the beneficial conversion feature.

During  February and April 2003,  the Company sold through a private  placement,
11,052 shares of Series B Convertible  Preferred Stock ("Preferred  Stock") to a
group of accredited  investors,  including  members of Gasco's  management.  The
Preferred  Stock  was sold  for $440 per  share  resulting  in net  proceeds  of
approximately  $4,797,000.  The cost of this  offering  was  $65,431  of which a
$10,000  financial  advisory  fee was  paid to  Energy  Capital  Solutions  LLC.
Dividends  on the  Preferred  Stock  accrue at the rate of 7% per annum  payable
semi-annually in cash,  additional shares of Preferred Stock or shares of common
stock at the Company's  option.  The conversion  price of the Preferred Stock is
$0.70 per common share,  which was greater than the market price on the issuance
date,  making each share of Preferred Stock  convertible into  approximately 629
shares of Gasco common stock. Shares of the Preferred Stock are convertible into
Gasco  common  shares at any time at the  holder's  election.  Gasco may  redeem
shares of the  Preferred  Stock at a price of 105% of the purchase  price at any
time after  February 10, 2006.  The  Preferred  Stock votes as a class on issues
that  affect the  Preferred  Stockholder's  interests  and votes with  shares of
common stock on all other issues on an  as-converted  basis.  Additionally,  the
holders of the  Preferred  Stock  exercised  their  right to elect one member to
Gasco's board of directors during March 2003.

During the year ended  December  31,  2003,  the Company  paid  dividends to the
holders of its Preferred  Stock  consisting of 682 shares of Preferred Stock and
$4,092 in cash.

During the first quarter and fourth quarter of 2003, the Company granted options
to purchase  1,608,000  shares of common stock to employees and directors of the
Company,  at an exercise  price of $1.00 per share.  The options vest 16 2/3% at


                                       24
<PAGE>

the end of each  four-month  period after the issuance date.  Additionally,  the
Company  cancelled  options to purchase  2,260,000 shares of common stock during
the first quarter of 2003.  The exercise  price of the cancelled  options ranged
from $1.95 to $3.15 per share.  None of the 1,258,000 options granted during the
first  quarter  of 2003  were  issued  to the  individuals  whose  options  were
cancelled.

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

The  aggregate  net  proceeds  from the  securities  offerings  during 2003 were
approximately $9,876,000.  During February 2003, $1,400,000 of the proceeds were
used to repay all of the Company's  outstanding  obligations  under a short term
promissory  note.  The  remaining  proceeds  were used for the  development  and
exploitation  of the  Company's  Riverbend  Project  and for  general  corporate
purposes.


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>

                                                               As of and for the Year Ended December 31,
                                                  2003             2002                2001          2000               1999
                                                  ----             ----                ----          ----               ----
Summary of Operations
<S>                                               <C>             <C>                 <C>              <C>              <C>
      Oil and gas revenue                         $1,263,443      $ 164,508           $ 36,850         $    -           $    -
      General & administrative expense             2,819,675      5,080,287          4,326,065        951,734          738,153
      Net loss                                   (2,526,525)    (5,649,682)        (4,129,459)      (843,261)        (736,834)
      Net loss per share                              (0.07)         (0.16)             (0.63)         (0.06)            (.06)


</TABLE>
<TABLE>
<CAPTION>

                                                                 As of and for the Year Ended December 31,
                                                  2003              2002                2001         2000               1999
                                                  ----              ----                ----         ----               ----
Balance Sheet
<S>                                               <C>            <C>                 <C>            <C>              <C>
      Working capital (deficit)                   $1,192,249     $ (2,857,539)       $11,860,584    $ (420,370)      $(65,798)
      Cash and cash equivalents                    3,081,109         2,089,062        12,296,585        881,041        163,490
      Oil and gas properties, net                 28,470,917        24,760,149         9,152,740      1,991,290      2,484,919
      Total assets                                33,059,179        27,505,501        21,658,525      3,007,259      2,688,826
      Long-term obligations                        2,483,084                 -                 -              -              -
      Stockholders' equity                        27,382,083        22,014,265        21,065,425      1,578,905      2,422,166



</TABLE>

                                       25
<PAGE>




ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS

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.

Overview

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

The  Company's  corporate  strategy is to grow through  drilling  projects.  The
Company has been focusing its drilling efforts in the Riverbend  Project located
in the Uinta Basin of  northeastern  Utah.  The higher oil and gas prices during
2003 and into early 2004 due to factors  such as reduced  levels of gas storage,
colder  temperatures in the  northeastern  part of the country and decreased gas
imports from Canada,  have increased the profitability of the Company's drilling
projects in this area.  The wells in this area tend to have multiple  productive
zones of production.

Although  the Company did not drill any new wells in this area during  2003,  it
completed  two  wells  that  were  drilled  during  2002,   performed   numerous
recompletions  on  producing  wells and  entered  into a contract  with a system
operator to install a new compressor in the Riverbend  Project.  The addition of
the compressor created additional  compression capacity that allowed the Company
to begin  producing  from  wells  that  were  shut-in  or were  flowing  through
constricted orifices at reduced production rates.

In March 2004, the Company completed the acquisition of additional  interests in
six producing  wells,  13,062 net acres and certain other assets  located in the
Uinta Basin in Utah for approximately $3,175,000.

During  2003,  the  Company  announced  its plans to  dispose  of certain of its
Wyoming  properties  in the Greater  Green River  Basin  covering  approximately
62,500 net acres.  The Company is also considering  additional  options for this
area  such as the  farm-out  of some  of its  acreage  and  other  similar  type
transactions.




                                       26
<PAGE>



The following  table presents the Company's  reserve and production  information
during the three years ended December 31, 2003. The Mcfe  calculations  assume a
conversion of 6 Mcfs for each Bbl of oil.

                                               For the Years Ended December 31,
                                      ------------------------------------------
                                          2003             2002         2001
                                      --------------- --------------- ----------

       Natural gas production (Mcf)          257,035          66,444      17,545
       Average sales price per Mcf             $4.69          $ 2.47       $2.10
       Proved gas reserves (Mcf)          13,601,003      20,622,266           -

       Oil production (Bbl)                    1,988               -           -
       Average sales price per Bbl            $28.52               -           -
       Proved oil reserves (Bbl)             100,987         141,652           -

       Production (Mcfe)                     268,963          66,444      17,545
       Proved reserves (Mcfe)             14,206,925      21,472,178           -


During 2003, the Company oil and gas production  increased by approximately 300%
primarily due to the completions,  recompletions and the compressor installation
discussed  above.  During  2003,  on a combined  basis,  the oil and gas reserve
quantities  have declined by  approximately  34% primarily due to normal decline
curves of approximately  30%,  property sales of 7%, annual production of 1% and
revisions  of previous  estimates  of 18%  partially  offset by  extensions  and
discoveries of 22%.

During 2004  Gasco's 2004 capital  budget is  approximately  $13 million for the
drilling,  completion and pipeline connection of wells in the Riverbend Project.
The overall  increase in drilling  activity has made it more  difficult  for the
Company to obtain the drilling  rigs and will  influence the number of wells the
Company  is able to drill  during  2004.  The  Company  anticipates  an  overall
increase  in its salary  expense  because it will have to hire three  additional
employees to manage the workload  associated with its operational plan for 2004.
Management  believes it has sufficient capital for its 2004 operational  budget,
but will need to raise  additional  capital for its capital  budget in 2005. The
Company  will  consider  several  options for raising  additional  funds such as
entering into a revolving line of credit, selling securities,  selling assets or
farm-outs or similar type arrangements.  Any financing obtained through the sale
of Gasco  equity will likely  result in  substantial  dilution to the  Company's
stockholders.




                                       27
<PAGE>



Liquidity and Capital Resources

The following table  summarizes the Company's  sources and uses of cash for each
of the three years ended December 31, 2003, 2002 and 2001.
<TABLE>
<CAPTION>

                                                         For the Year Ended December 31,
                                             -------------------------------------------------------
                                                  2003                2002                    2001
                                                  ----                ----                    ----
<S>                                             <C>                  <C>                <C>
Net cash used in operations                     $ (2,191,914)        $ (1,390,306)      $ (3,740,654)
Net cash used in investing activities             (5,286,690)         (14,541,197)        (7,180,714)
Net cash provided by financing activities          8,470,651             5,723,980         22,336,912
Net cash flow (deficit)                              992,047           (10,207,523)        11,415,544
</TABLE>

Cash used in  operations  during 2001 was  primarily  comprised of the Company's
general and  administrative  expenses  partially  offset by gas revenue from two
wells,  which  began  producing  in late  2001.  The  decrease  in cash  used in
operations  during 2002 was primarily  due to the increase in revenue  resulting
from a 278% increase in production due to the Company's drilling activity during
2002,  partially offset by higher general and administrative  expenses primarily
related  to  increased  employees  and  consultants  needed  for  the  Company's
operational activity.  Oil and gas production increased another 300% during 2003
as the Company  continued their drilling  activity.  General and  administrative
expenses  decreased  as well during 2003 due  primarily  to the  Company's  cost
cutting measures. See further discussion under Results of Operations.

The Company's investing activities during 2003, 2002, and 2001 related primarily
to the Company's  development  and exploration  activities.  The majority of the
Company's property related  expenditures  during 2001 related to the acquisition
of acreage in Utah and  Wyoming.  During 2002 the Company  acquired  acreage for
approximately  $22,000,000 in cash and stock and the remaining  $11,000,000  was
used  to  fund  the  Company's   drilling   projects.   The  Company's  unproved
acquisitions  during  2003  decreased  to  approximately  $700,000  and  related
primarily to delay rentals and other leasehold  costs. The remaining $ 4,600,000
in property costs was spent on the Company's  drilling projects in the Riverbend
Project.

Historically, the Company has relied on the sale of equity capital and farm-outs
and other similar types of transactions to fund working capital, the acquisition
of its  prospects  and its drilling and  development  activities.  The financing
activities in each of the years  presented is comprised of the net proceeds from
the sale of equity in the Company, as further described in Item 8, Notes 6 and 8
of the accompanying financial statements.

In addition to the above  equity  transactions,  On October 15, 2003 the Company
closed the sale of $2,500,000 of 8% Convertible  Debentures  ("Debentures") in a
private placement offering.  The Debentures bear interest at 8% per annum, which
is payable  monthly,  and are convertible into 4,166,667 shares of the Company's
common stock, at the holder's option,  at a conversion price of $0.60 per common
share. Monthly principal payments of $37,500 begin in the fourth quarter of 2005
and the maturity date of the  Debentures is October 15, 2008. The Debentures are
secured by the producing  wellbores that Gasco  develops  using this  financing.


                                       28
<PAGE>

Additionally,  the Debenture holders exercised their right to designate a single
nominee to the Company's Board of Directors during October 2003.

The  Debenture  conversion  price of $0.60 per  common  share was lower than the
trading  value of the  Company's  common stock on the date the  Debentures  were
issued. This resulted in a beneficial conversion feature of $166,667, which will
be amortized over the life of the Debentures. During the year ended December 31,
2003,  the  Company  recorded  $6,945  of  interest  expense   representing  the
amortization of the beneficial conversion feature.

Capital Budget

On January 16, 2004 the Company entered into agreements with a group of industry
providers  (together,  the "Service  Parties") to accelerate the  development of
Gasco's oil and gas  properties by drilling up to 50 wells in Gasco's  Riverbend
Project in Utah's  Uinta Basin.  Gasco has agreed that the Service  Parties will
have the exclusive  right to provide their  services in the  development  of the
Riverbend  acreage.  The agreement  provides for the group to initially  proceed
with the first 10-well bundle,  which  approximates  one year of drilling with a
single rig. If the group agrees,  drilling may be accelerated  using  additional
rigs. Gasco's 2004 capital budget is approximately $13 million for the drilling,
completion  and pipeline  connection  of wells in this area.  Gasco may elect to
fund up to 20% of the cost of the wells in the first three bundles and up to 30%
of the cost in the last two bundles.  Gasco's interest in the production  stream
from a bundle, net of royalties, taxes and lease operating expenses is estimated
to equal the proportion of the total well costs that it funds.

To secure its obligations  under the agreement  described above, the Company has
pledged its interests in each of the wells in each bundle.

On February 11, 2004 the Company  completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share.  Proceeds to the  Company,  net of fees and  estimated
expenses  were  approximately  $20,072,000.  The proceeds from this sale will be
used for general corporate  purposes  including the development and exploitation
of Gasco's Riverbend Project in the Uinta Basin in Uintah County, Utah.

The Company intends to use the funds from this  transaction and its cash on hand
to fund the following projects:

     -    On March 9, 2004 the Company  completed the  acquisition of additional
          interests in six producing  wells,  13,062 net acres and certain other
          assets located in the Uinta Basin in Utah for approximately $3,175,000
          (subject  to the  option  of a third  party  to  purchase  25% of such
          interests at the acquisition cost within 30 days following the date of
          the acquisition).

     -    The Company plans to spend approximately $12,425,000 for the drilling,
          completion and pipeline connection of wells in this area.

     -    The Company is also considering investing approximately  $2,400,000 in
          a gathering system within the Riverbend Area.

Management  believes it has sufficient capital for its 2004 operational  budget,


                                       29
<PAGE>

but will need to raise  additional  capital for its capital  budget in 2005. The
Company  will  consider  several  options for raising  additional  funds such as
entering into a revolving line of credit, selling securities,  selling assets or
farm-outs or similar type arrangements.  Any financing obtained through the sale
of Gasco  equity will likely  result in  substantial  dilution to the  Company's
stockholders.

Schedule of Contractual Obligations

The following table summarizes the Company's obligations and commitments to make
future payments under its note payable,  operating leases,  employment contracts
and consulting agreement for the periods specified as of December 31, 2003.
<TABLE>
<CAPTION>

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

<S>                                  <C>               <C>         <C>            <C>               <C>
Convertible Debentures               $2,500,000        $    -      $ 525,000      $ 1,975,000       $     -
Operating Lease - office space           32,195        32,195              -                -             -
Employment Contracts                    979,167       470,000        470,000           39,167             -
Consulting Agreement                    250,000       120,000        120,000           10,000             -
                                     ----------     ---------     ----------     ------------        -------
Total Contractual Cash
  Obligations                        $3,761,362     $ 622,195     $1,115,000      $ 2,024,167        $    -
                                     ==========     =========     ==========      ===========        ======
</TABLE>

The table above assumes that the Debentures will be outstanding  until maturity,
however if they are converted prior to maturity,  the future obligations will be
eliminated and the Company's outstanding common stock will increase by 4,166,667
shares.

The Company's office leases expire in August 2004. The Company intends to extend
these leases at current or lower rates.  The table above does not include future
obligations that will exist once the Company enters into a new lease.

The Company has also not included asset  retirement  obligations as discussed in
Note 2 of the accompanying financial statements, as the Company cannot determine
with accuracy the timing of such payments.

Critical Accounting Policies and Estimates

The preparation of the Company's consolidated financial statements in conformity
with  generally  accepted  accounting  principles in the United States  requires
management to make assumptions and estimates that affect the reported amounts of
assets,  liabilities,  revenues  and  expenses  as  well  as the  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.  The
following  is a summary  of the  significant  accounting  policies  and  related
estimates that affect the Company's financial disclosures.

         Oil and Gas Reserves

Gasco  follows the full cost method of  accounting  whereby all costs related to
the acquisition and development of oil and gas properties are capitalized into a
single cost center referred to as a full cost pool. Depletion of exploration and
development costs and depreciation of production equipment is computed using the


                                       30
<PAGE>

units of  production  method based upon  estimated  proved oil and gas reserves.
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.

Estimated reserve quantities and future net cash flows have the most significant
impact on the Company  because these  reserve  estimates are used in providing a
measure of the Company's  overall  value.  These  estimates are also used in the
quarterly  calculations  of  depletion,   depreciation  and  impairment  of  the
Company's proved properties.

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

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

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

                                       31
<PAGE>

         Impairment of Long-lived Assets

The cost of the  Company's  unproved  properties  is withheld from the depletion
base  as  described  above,  until  such a time  as the  properties  are  either
developed or abandoned.  These properties are reviewed periodically for possible
impairment.  The Company's  management  reviewed the unproved  property  located
within the state of Wyoming and determined  that it would not be developing some
of the acres  that  were not  considered  to be  prospective.  As a result,  the
Company  estimated  the value of these  acres for the purpose of  recording  the
related impairment. The impairment was estimated by calculating a per acre value
from the total unproved costs  incurred for the Wyoming  acreage  divided by the
total net acres owned by the Company.  This per acre estimate was applied to the
acres that the Company does not plan to develop to calculate the  impairment.  A
change in the estimated value of the acreage could have a material impact on the
total of the impairment recorded by the Company.

         Revenue Recognition

The Company's  revenue is derived from the sale of oil and gas  production  from
its producing wells. This revenue is recognized as income when the production is
produced and sold.  The Company  typically  receives its payment for  production
sold one to three months  subsequent to the month the  production  is sold.  For
this reason,  the Company must estimate the revenue that has been earned but not
yet received by the Company as of the  reporting  date.  The Company uses actual
production  reports  to  estimate  the  quantities  sold and the  Questar  Rocky
Mountain spot price less  marketing and  transportation  adjustments to estimate
the price of the  production.  Variances  between our  estimates  and the actual
amounts received are recorded in the month the payment is received.

         Stock Based Compensation

The Company accounts for its stock-based  compensation using the intrinsic value
recognition and measurement principles detailed in Accounting Principles Board's
Opinion No. 25 ("APB No.  25").  No  stock-based  compensation  expense has been
reflected in the Company's  financial  statements for the options granted to its
employees  as these  options  had  exercise  prices  equal to or higher than the
market value of the  underlying  common stock on the date of grant.  The Company
uses  the  Black-Scholes  option  valuation  model  to  calculate  the  required
disclosures  under SFAS 123. This model  requires the Company to estimate a risk
free interest rate and the volatility of the Company's  common stock price.  The
use of a  difference  estimate  for any one of  these  components  could  have a
material impact on the amount of calculated compensation expense.

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.

                                       32
<PAGE>

The following  table  presents  information  regarding the  production  volumes,
average sales prices received and average  production  costs associated with the
Company's sales of natural gas for the periods indicated.

                                           For the Year Ended December 31,
                                       -----------------------------------------
                                        2003             2002              2001
                                        ----             ----              ----

    Natural gas production (Mcf)        257,035         66,444           17,545
    Average sales price per Mcf          $ 4.69          $2.47            $2.10
    Oil production (Bbl)                  1,988              -                -
    Average sales price per Bbl          $28.52              -                -


2003 Compared to 2002

Oil and gas revenue  increased  $1,098,935 during 2003 compared with 2002 due to
an increase in gas production  from 66,444 Mcf during 2002 to 257,035 Mcf during
2003  combined  with an increase in the average gas price from $2.47 during 2002
to $4.69 per Mcf during 2003.  During 2003, the Company also produced 1,988 bbls
of oil at an average  price of $28.52 per bbl.  The  increase in  production  is
primarily due to the Company's completion and recompletion  activity during 2003
as well as the compressor  installation  discussed  above which occurred  during
February 2003.

Interest  income  decreased  by 84%  from  2002 to 2003  primarily  due to lower
average cash and cash equivalent balances during 2003.

General and  administrative  expense  decreased  from  $5,080,287  to $2,819,675
during 2003 as compared with 2002,  primarily  due to the  Company's  efforts to
decrease its overhead  expenses.  The  $2,260,612  decrease in these expenses is
comprised  of   approximately   $775,000  in  salary   reductions   due  to  the
implementation,  during  January  2003,  of a 36% annual  reduction  in the cash
component of the Company's senior management compensation,  a $300,000 reduction
in compensation expense due to the one time payment of a bonus to an employee of
the Company who was instrumental in securing the Company's  agreement with Shama
Zoe, as  described  above,  a $565,000  reduction  in legal fees and $246,000 in
accounting fees as a result of fewer transaction  related fees during 2003 and a
$400,000  decrease in consulting  fees that were incurred in connection with the
2002 property  transactions  discussed above. The remaining  decrease in general
and  administrative  expenses  is due  to  the  fluctuation  in  numerous  other
expenses, none of which are individually significant.

Lease  operating  expense  increased  $217,469  during 2003 as compared with the
2002.  The  increase  is due a greater  number of  producing  wells  during 2003
resulting from the Company's drilling activity during 2002 and 2003.

Depletion,  depreciation  and  amortization  expense during 2003 is comprised of
$480,000  of  depletion  expense  related  to the  Company's  proved oil and gas
properties,  $54,128 of depreciation expense related to the Company's furniture,
fixtures and other assets and $11,795 of accretion expense related the Company's
asset retirement  obligation.  The corresponding expense during 2002 consists of


                                       33
<PAGE>

$105,321 of depletion expense and $43,788 of depreciation  expense. The increase
in depletion  expense  during 2003 as compared with 2002 is due primarily to the
increase in production discussed above.

Impairment  expense during 2003  represents the value of the acreage and related
unproved costs that the Company does not plan to develop prior to its expiration
during 2004.  Impairment  expense during 2002 represents costs associated with a
well drilled in the  Southwest  Jonah field  located in the Greater  Green River
Basin in Sublette  County,  Wyoming.  The well was plugged and abandoned  during
March of 2002. The Company recognized  impairment expense of $541,125 associated
with this well during 2002 because the Company  believed that the costs incurred
for this well exceeded the present  value,  discounted at 10%, of the future net
revenues from its proved oil and gas reserves.

Interest  expense  during 2003  represents the interest  expense  related to the
Company's outstanding Debentures.

The cumulative  effect of change in accounting  principle during 2003 represents
the Company's  recognition of an asset retirement  obligation in connection with
the adoption of SFAS 143 on January 1, 2003.

2002 Compared to 2001

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

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

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

Depletion,  depreciation  and  amortization  expense during 2002 is comprised of
$105,321  of  depletion  expense  related  to the  Company's  proved oil and gas


                                       34
<PAGE>

properties  and  $43,788 of  depreciation  related to the  Company's  furniture,
fixtures and other assets,  respectively.  The corresponding expense during 2001
consists  of  the  depreciation  expense  related  to the  Company's  furniture,
fixtures and other assets.

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

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

Recent Accounting Pronouncements

Statement of Financial  Accounting  Standards No. 141,  "Business  Combinations"
(SFAS 141) and Statement of Financial  Accounting  Standards No. 142,  "Goodwill
and  Intangible  Assets"  (SFAS 142),  were issued by the  Financial  Accounting
Standards Board (FASB) in June 2001 and became effective for the Company on July
1, 2001 and January 1, 2002, respectively. The FASB, the Securities and Exchange
Commission (SEC) and others are engaged in deliberations on the issue of whether
SFAS 141 and 142 require  interests  held under oil,  gas and mineral  leases or
other  contractual  arrangements to be classified as intangible  assets. If such
interests were deemed to be intangible  assets,  mineral interest use rights for
both undeveloped and developed  leaseholds would be classified separate from oil
and gas  properties as intangible  assets on the Company's  balance sheets only,
but these costs would continue to be aggregated  with other costs of oil and gas
properties in the notes to the financial statements in accordance with Statement
of  Financial  Accounting  Standards  No.  69,  "Disclosures  about  Oil and Gas
Producing Activities" (SFAS 69). Additional disclosures required by SFAS 141 and
142 would also be included in the notes to financial  statements.  Historically,
and to the  Company's  knowledge,  we and all other oil and gas  companies  have
continued to include  these oil and gas  leasehold  interests as part of oil and
gas properties  after SFAS 141 and 142 became  effective.  The Company  believes
that few oil and natural gas  companies  have  adopted  this  interpretation  or
changed their balance sheet  presentation  for oil and gas leaseholds  since the
implementation of SFAS 141 and 142.

As applied to companies  like Gasco that have adopted full cost  accounting  for
oil and gas activities, the Company understands that this interpretation of SFAS
141 and 142 would only affect its balance sheet classification of proved oil and
gas  leaseholds  acquired  after  June  30,  2001 and its  unproved  oil and gas
leaseholds.  The Company's  results of operations  would not be affected,  since
these  leasehold  costs would  continue to be amortized in accordance  with full
cost  accounting  rules.  At  December  31,  2003  and  2002,  the  Company  had
undeveloped   leaseholds   of   approximately   $13,212,039   and   $13,984,536,
respectively,  that would be  classified  on the  balance  sheet as  "intangible
undeveloped leasehold" if the Company applied the interpretation currently being
deliberated.   This  classification  would  require  the  Company  to  make  the
disclosures set forth under SFAS 142 related to these  interests.  The Company's
current disclosures are those required by SFAS 69.

                                       35
<PAGE>

The Company will continue to classify its oil and gas leaseholds as tangible oil
and gas  properties  until  further  guidance is provided.  Although most of the
Company's oil and gas property  interests are held under oil and gas leases,  it
is not  expected  that this  interpretation,  if adopted,  would have a material
impact on the Company's financial condition or results of operations.

In May 2003  FASB  issued  SFAS  No.  150,  "Accounting  for  Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity and
requires that such financial  instruments be classified as a liability (or as an
asset in certain circumstances).  SFAS No. 150 is effective for all freestanding
instruments  entered into or modified after May 31, 2003.  Otherwise,  it became
effective for Gasco as of July 1, 2003. The Company has no financial instruments
that fall within the scope of this statement.

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.




                                       36
<PAGE>



ITEM 8 - FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report                                                  38

Consolidated Balance Sheets at December 31, 2003 and 2002                     39

Consolidated Statements of Operations for the Years Ended
    December 31, 2003, 2002 and 2001                                          40

Consolidated Statements of Stockholders' Equity for the Years
    Ended December 31, 2003, 2002 and 2001                                    41

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2003, 2002 and 2001                                          42

Notes to Consolidated Financial Statements                                 43-66




                                       37
<PAGE>



INDEPENDENT AUDITORS' REPORT


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

We have audited the  consolidated  balance  sheets of Gasco  Energy,  Inc.  (the
"Company")  and its  subsidiaries  as of  December  31,  2003 and 2002,  and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for each of the three years in the period ended  December 31, 2003.  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 audits.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of the Company at December 31, 2003
and 2002,  and the results of their  operations and their cash flows for each of
the three years in the period  ended  December  31,  2003,  in  conformity  with
accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the  consolidated  financial  statements,  in 2003 the
Company adopted Statement of Financial Accounting Standards No. 143, "Accounting
for Asset Retirement Obligations."



/s/ DELOITTE & TOUCHE LLP
Denver, Colorado
March 25, 2004







                                       38
<PAGE>

<TABLE>
<CAPTION>


                                                           GASCO ENERGY, INC.
                                                       CONSOLIDATED BALANCE SHEETS
                                                                                                   December 31,
                                                                                       ----------------------------------
                                                                                            2003                 2002
ASSETS

CURRENT ASSETS
<S>                                                                                       <C>                 <C>
  Cash and cash equivalents                                                               $3,081,109          $2,089,062
  Restricted cash                                                                            250,000             250,000
  Prepaid expenses and other assets                                                          555,786             198,491
  Accounts receivable                                                                        499,363              96,144
                                                                                           ---------           ---------
          Total                                                                            4,386,258           2,633,697
                                                                                           ---------           ---------
PROPERTY, PLANT AND EQUIPMENT, at cost
  Oil and gas properties (full cost method)
    Proved mineral interests                                                              16,386,252          10,283,488
    Well in progress                                                                               -           1,138,571
    Unproved mineral interests                                                            13,212,039          13,984,536
  Furniture, fixtures and other                                                              166,051             162,787
                                                                                          ----------          ----------
           Total                                                                          29,764,342          25,569,382
  Less accumulated depreciation, depletion, amortization and property impairment         (1,232,634)           (697,578)
                                                                                         -----------          ----------
           Total                                                                          28,531,708          24,871,804
                                                                                         -----------          ----------
OTHER ASSET
   Deferred financing costs                                                                  141,213                   -
                                                                                         -----------          ----------

TOTAL ASSETS                                                                            $ 33,059,179        $ 27,505,501
                                                                                        ============        ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                                       $ 2,260,492         $ 1,910,974
  Accrued expenses                                                                           933,520           2,180,262
  Note payable                                                                                     -           1,400,000
                                                                                           ---------           ---------
           Total                                                                           3,194,012           5,491,236
                                                                                           ---------           ---------

NONCURRENT LIABILITIES
   8% Convertible Debentures, net of unamortized discount $159,722                         2,340,278                   -
    Asset retirement obligation                                                              142,806                   -
                                                                                           ---------            --------
        Total                                                                              2,483,084                   -
                                                                                           ---------            --------

STOCKHOLDERS' EQUITY
  Series B Convertible Preferred stock - $.001 par value; 20,000 shares authorized;
    11,734 shares issued and outstanding in 2003, liquidation preference of $5,162,960            12                   -
  Common stock - $.0001 par value; 100,000,000 shares authorized;
    45,675,936 shares issued and 45,602,236 shares outstanding in 2003; and
    40,362,500 shares issued and 40,288,800 shares outstanding in 2002                         4,568               4,036
  Additional paid in capital                                                              52,979,325          44,958,593
  Deferred compensation                                                                     (179,766)            (52,833)
  Accumulated deficit                                                                    (25,291,761)        (22,765,236)
  Less cost of treasury stock of 73,700 common shares                                       (130,295)           (130,295)
                                                                                         -----------          ----------
           Total                                                                          27,382,083          22,014,265
                                                                                         -----------         -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                              $ 33,059,179        $ 27,505,501
                                                                                        ============        ============
</TABLE>

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




                                       39
<PAGE>


<TABLE>
<CAPTION>


                                                         GASCO ENERGY, INC.
                                               CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                              For the Year Ended December 31,
                                                                      --------------------------------------------------
                                                                                 2003             2002              2001

REVENUES
<S>                                                                     <C>                  <C>              <C>
  Gas                                                                   $  1,206,741         $ 164,508        $  36,850
  Oil                                                                         56,702                 -                -
  Interest income                                                             11,987            76,140          193,352
                                                                           ---------           -------          -------
          Total                                                            1,275,430           240,648          230,202
                                                                           ---------           -------          -------
OPERATING EXPENSES
  General and administrative                                               2,819,675         5,080,287        4,326,065
  Lease operating                                                            337,278           119,809           12,679
  Depletion, depreciation, amortization and asset retirement
    liability accretion                                                      552,923           149,109            5,760
  Impairment                                                                                   541,125
  Interest expense                                                            82,392                             67,363
                                                                           ---------        -----------       ---------
           Total                                                           3,792,268         5,890,330        4,411,867
                                                                           ---------        ----------        ---------
OTHER INCOME                                                                       -                 -           52,206
                                                                           ----------       -----------       ---------

LOSS BEFORE CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING PRINCIPLE                                           (2,516,838)       (5,649,682)      (4,129,459)

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE                                                                  (9,687)                  -                -
                                                                            --------         -----------       -----------

NET LOSS                                                                   (2,526,525)       (5,649,682)       (4,129,459)

Preferred stock dividends                                                    (304,172)                -                 -
Preferred stock deemed distribution                                                 -                 -        11,400,000
                                                                         -------------      ------------       ----------

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS                              $ (2,830,697)      $(5,649,682)    $ (15,529,459)
                                                                          =============      =============   ==============

PER COMMON SHARE DATA - BASIC AND DILUTED:
Loss before cumulative effect of change in accounting principle            $  (0.07)         $  (0.16)          $  (0.63)
Cumulative effect of change in accounting principle                               -                 -                -
                                                                            --------             -----            ------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED                              $  (0.07)         $  (0.16)          $  (0.63)
                                                                           =========         =========          =========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - BASIC AND DILUTED                                         41,262,778        36,439,074         24,835,144
                                                                          ==========        ==========         ==========







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



                                       40
<PAGE>

<TABLE>
<CAPTION>


                                                                        GASCO ENERGY, INC.
                                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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

<S>                              <C>      <C>   <C>         <C>    <C>        <C>         <C>           <C>         <C>
Balance, January 1, 2001             -      -    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 preferred stock       1,000    $ 1                    17,430,366                                       17,430,367
 Issuance of common shares                        3,902,500    390  7,343,147                                        7,343,537
 Options issued for services                                          684,969 (684,969)
 Amortization of deferred compensation
  expense                                                                      423,594                                 423,594
 Deemed distribution                                               11,400,000             (11,400,000)
 Repurchase of common stock                                                                           (130,295)       (130,295)
 Net loss                               -     -          -       -          -       -      (4,129,459)              (4,129,459)
                                     ----  ----  ---------  ------- ----------  -------   ------------ ---------  -------------

Balance, December 31, 2001          1,000     1 27,252,500   2,725  38,569,923 (261,375)  (17,115,554) (130,295)    21,065,425
 Conversion of preferred shares to common
  shares                                         4,760,000     476       (476)                                               -
 Issuance of common shares for acreage           9,500,000     950  18,524,050                                      18,525,000
 Amortization of deferred compensation
  expense                                                                       208,542                                 208,542
 Redemption of preferred and common
  stock                             (1,000)  (1) (6,250,000)  (625) (16,708,374)                                   (16,709,000)
 Issuance of common stock                         6,500,000    650    5,973,330                                       5,973,980
 Repurchase of common stock                      (1,400,000)  (140)  (1,399,860)                                     (1,400,000)
 Net loss                                -    -           -      -            -      -    (5,649,682)        -       (5,649,682)
                                   -------- ----  ----------  ------ ----------- ------  ------------   ---------   ------------
Balance, December 31, 2002               -    -   40,362,500   4,036 44,958,593 (52,833)  (22,765,236)  (130,295)      22,014,265
Issuance of preferred stock          11,052    11                     4,797,398                                         4,797,409
Issuance of common stock                           4,888,436     490  2,808,719                                         2,809,209
Issuance of restricted stock                         425,000      42    250,708 (221,250)                                  29,500
Amortization of deferred compensation                                             94,317                                   94,317
Beneficial conversion feature                                           166,667                                           166,667
Dividends paid                          682     1                        (4,092)                                           (4,091)
Net loss                                                                                   (2,526,525)                 (2,526,525)
Other                                           -        -         -      1,332        -        -               -           1,332
                                      ------  ---- ----------   ----- --------- ---------  -----------     --------    -----------

Balance December 31, 2003             11,734  $ 12  45,675,936 $4,568 $52,979,325 $(179,766)$(25,291,761) $(130,295)  $ 27,382,083
                                      ======  ====  ========== ======  ========== ========== ===========  ==========  ============
</TABLE>

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





                                       41
<PAGE>


<TABLE>
<CAPTION>

                                                            GASCO ENERGY, INC.
                                                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                   For the Years Ended December 31,
                                                          --------------------------------------------------------
                                                                 2003                2002                 2001
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                   $(2,526,525)       $(5,649,682)        $ (4,129,459)
  Adjustment to reconcile net loss to net cash used
   in operating activities
<S>                                                               <C>                <C>                    <C>
     Depreciation, depletion and impairment expense               541,128            690,234                5,760
     Accretion of asset retirement obligation                      11,795                  -                    -
     Amortization of deferred compensation                         94,317            208,542              423,594
     Amortization of beneficial conversion feature                  6,945
     Amortization of offering costs                                 7,758
     Cumulative effect of change in accounting principle            9,687                  -                    -
     Changes in operating assets and liabilities:
         Prepaid expenses                                       (320,059)           (74,139)            (121,171)
      Accounts receivable                                       (403,219)           (63,397)              132,494
         Accounts payable                                         349,518          1,362,121             (51,872)
         Accrued expenses                                          36,741         2,136,015                     -
                                                               ----------       ------------           ----------
                  Net cash used in operating activities       (2,191,914)        (1,390,306)          (3,740,654)
                                                              -----------        -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for furniture, fixtures and other                     (3,264)          (103,342)             (49,876)
  Cash paid for development and exploration                   (5,283,426)       (14,437,855)          (7,395,867)
  Cash received upon recapitalization and merger                                                          265,029
                                                               ----------       ------------          -----------
                 Net cash used in investing activities        (5,286,690)       (14,541,197)          (7,180,714)
                                                              -----------       ------------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Cash designated as restricted                                 (250,000)          (250,000)                    -
  Cash undesignated as restricted                                 250,000                  -                    -
  Preferred dividends                                             (4,092)                  -                    -
  Proceeds from sale of preferred stock                         4,862,840                  -           19,000,000
  Proceeds from sale of common stock                            2,777,292          6,500,000            6,826,218
  Proceeds from sale of convertible debentures                  2,500,000                  -                    -
  Cash paid for offering costs                                  (266,721)          (526,020)          (2,144,468)
  Proceeds from short-term borrowings                                   -                  -              500,000
  Repayment of short-term borrowings                                    -                  -            (714,543)
  Repayment of note payable                                   (1,400,000)                  -                    -
  Repurchase of common stock                                            -                  -            (130,295)
  Distribution to Rubicon Oil and Gas, Inc.                                                           (1,000,000)
  Other                                                            1,332                   -                    -
                                                              -----------       ------------           -----------
                Net cash provided by financing activities       8,470,651          5,723,980           22,336,912
                                                              -----------       -------------          ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              992,047       (10,207,523)           11,415,544

CASH AND CASH EQUIVALENTS:
    BEGINNING OF PERIOD                                         2,089,062         12,296,585              881,041
                                                                ---------         ----------          -----------
    END OF PERIOD                                             $ 3,081,109        $ 2,089,062         $ 12,296,585
                                                              ===========        ===========         ============
</TABLE>

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

                                       42
<PAGE>

                                GASCO ENERGY INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

NOTE 1 - ORGANIZATION

Gasco Energy,  Inc. ("Gasco" or the "Company") is an independent  energy company
engaged in the exploration, development, and acquisition and production of crude
oil and natural gas in the western United States.

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

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

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

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




                                       43
<PAGE>



The following unaudited pro forma information presents the financial information
of the Company as if the consolidation of Gasco and Pannonian had taken place on
January 1, 2001.

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

    Revenue                                        $  36,850           $ 36,850

    Net loss                                    (15,529,459)       (15,572,061)

    Net loss per share attributable to common
    shareholders basic and diluted                 $  (0.63)          $  (0.63)
                                                   =========          =========

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The  consolidated  financial  statements  include  Gasco  and its  wholly  owned
subsidiaries,  Pannonian  and San  Joaquin  Oil and Gas,  Ltd.  All  significant
intercompany transactions have been eliminated.

During 2003, the Company issued  $2,500,000 in 8% Convertible  Debentures,  sold
4,788,436 shares of common stock through a private  placement for  approximately
$2,780,000 and settled  approximately  $1,600,000 of its accounts  payable to an
oilservice  provider by making a cash  payment of $400,000 to the  provider  and
conveying  to the provider a portion of the  interests  in two of its wells,  as
further  described in Note 5.  Subsequent to December 31, 2003, the Company sold
an additional  14,333,334 shares of common stock through a private placement for
net  proceeds  of  approximately  $20,072,000.  Management  believes  that these
transactions provide the Company with adequate resources to meet its obligations
and  operational  goals  through  mid 2005.  After this time the  Company may be
required to raise  additional  funds by selling  securities,  selling  assets or
farm-outs or similar type arrangements.  Any financing obtained through the sale
of Gasco  equity will likely  result in  substantial  dilution to the  Company's
stockholders.

Cash and Cash Equivalents

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

Restricted Cash

The  restricted  cash  balance at December 31, 2002  collateralized  a letter of
credit that the Company  established in connection  with its drilling  projects.
The letter of credit was terminated  during August 2003.  During September 2003,
the Company entered into a $250,000  escrow  agreement in connection with one of
its  drilling  projects.  The funds held in escrow are  expected  to be released


                                       44
<PAGE>

during the first part of May 2004  pending the  completion  of certain  drilling
obligations.

Property, Plant and Equipment

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

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

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

Well in Progress

Well in progress at December 31, 2002  represents the costs  associated with the
drilling of a well in the Riverbend area of Utah. Since the well had not reached
total depth,  it was  classified as a well in progress and was withheld from the
depletion  calculation  until the first  quarter  of 2003 when the well  reached
total depth and was cased.  The costs  associated with this well were classified
as  proved   property  and  became  subject  to  depletion  and  the  impairment
calculation, during the first quarter of 2003, as described above.

                                       45
<PAGE>

Impairment of Long-lived Assets

The Company's unproved properties are evaluated periodically for the possibility
of potential impairment.  During 2003, the Company recorded an impairment of its
Wyoming acreage of $1,725,000.  The impairment represents the cost of certain of
the  Company's  acreage  expiring  in  2004  that  it does  not  consider  to be
prospective.  Other  than  oil and gas  properties,  the  Company  has no  other
long-lived assets and to date has not recognized any impairment losses.

Deferred Financing Costs

Deferred  financing  costs at December 31, 2003  represents  the offering  costs
associated  with  the  Company's   issuance  of  $2,500,000  in  8%  Convertible
Debentures  ("Debentures"),  further  described in Note 6. These costs are being
amortized  over the  five-year  life of the  Debentures.  The  Company  recorded
amortization  expense  of $7,758  related to these  costs  during the year ended
December 31, 2003.

Asset Retirement Obligation

In June 2001 the Financial  Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No. 143,  "Accounting  for Asset
Retirement Obligations,  " which required that the fair value of a liability for
an asset  retirement  obligation  be  recognized  in the  period in which it was
incurred if a reasonable  estimate of fair value could 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 Company  adopted this
statement as of January 1, 2003 and recorded a net asset of $139,247,  a related
liability of $148,934  (using a 9% discount rate and a 2% inflation  rate) and a
cumulative  effect of change in  accounting  principle on prior years of $9,687.
For the year ended December 31, 2003, the Company  recognized  accretion expense
of $11,795  related to the asset  retirement  obligation,  which was recorded as
additional  depletion expense. The information below reconciles the value of the
asset retirement obligation from the date the liability was recorded.

                                                        Asset
                                                     Retirement
                                                     Obligation

        Balance 1/1/03                                 $148,934
          Liabilities incurred                                -
          Liabilities settled                          (17,923)
          Revisions in estimated cash flows                   -
          Accretion expense                              11,795
                                                      ---------
        Balance 12/31/03                              $ 142,806
                                                      =========

                                       46
<PAGE>


The following  schedules  present,  on a pro forma basis,  the asset  retirement
obligation,  the net loss,  net loss per share  amounts as if the  provisions of
SFAS No. 143 had been applied during all the periods presented.
                                                     As of December 31,
                                 -----------------------------------------------
                                        2002                         2001
                                        ----                         ----

Asset Retirement Obligation          $ 148,934                     $ 70,401


                                        For the Year Ended December 31,
                              -------------------------------------------------
                               2003                2002              2001
                               ----                ----              ----
Net Loss
    As reported             $ (2,526,525)      $ (5,649,682)     $ (4,129,459)
    Pro forma                 (2,516,838)        (5,652,438)       (4,136,390)
Net Loss per Common Share
    As reported                   $(0.07)            $(0.16)           $(0.63)
    Pro forma                      (0.07)             (0.16)            (0.63)

Revenue Recognition

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

Computation of Net Loss Per Share

Basic net loss per share is computed by dividing  net loss  attributable  to the
common  shareholders by the weighted average number of common shares outstanding
during the reporting  period.  Diluted net income per common share  includes the
potential  dilution  that could  occur upon  exercise  of the options to acquire
common stock  computed  using the treasury  stock method which  assumes that the
increase in the number of shares is reduced by the number of shares  which could
have been  repurchased by the Company with the proceeds from the exercise of the
options (which were assumed to have been made at the average market price of the
common shares during the reporting period).  The Series B Convertible  Preferred
Stock ("Preferred  Stock") described in Note 8, the options described in Note 9,
and the  restricted  stock  described  in Note 8 have not been  included  in the
computation  of diluted  net loss per share  during all  periods  because  their
inclusion would have been anti-dilutive.

Significant Customers

Although the Company sells the majority of its  production to a few  purchasers,
there  are  numerous  other  purchasers  in the  areas in which  Gasco  sells it
production; therefore, the loss of its significant customers would not adversely
affect the Company's operations. For the years ended December 31, 2003, 2002 and
2001, purchases by the following companies exceeded 10% of the total oil and gas
revenues of the Company.


                                       47
<PAGE>


                                           For the Year Ended December 31,
                                       -----------------------------------------
                                          2003            2002             2001
                                          ----            ----             ----

      ConocoPhillips Company              93%              98%             60%
      Wasatch Energy Corporation           --              --              37%

Use of Estimates

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

Other Comprehensive Income

The Company does not have any items of other comprehensive  income for the years
ended December 31, 2003, 2002 and 2001.  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") and related  interpretations.
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. 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 pro forma net loss and net loss per share
for the years ended  December 31, 2003,  2002 and 2001 would have been increased
to the pro forma amounts indicated below:


                                       48
<PAGE>



<TABLE>
<CAPTION>

                                                            For the Year Ended December 31,
                                                      2003               2002               2001
                                                      ----               ----               ----

Net loss attributable to common shareholders:
<S>                                                 <C>               <C>                 <C>
    As reported                                     $ (2,830,697)     $ (5,649,682)       $(15,529,459)
    Add: Stock-base employee compensation
       included in net loss (a)                            41,484                 -                   -
    Less: Stock based employee compensation
      determined under the fair value based
      method                                              742,211         1,709,226           5,682,268
                                                       ----------       -----------        ------------
    Pro forma                                         $(3,531424)      $(7,358,908)       $(21,211,727)
                                                      ===========      ============       =============


Net loss per common share:
    As reported                                          $ (0.07)          $ (0.16)             $(0.63)
                                                         ========          ========             =======

    Pro forma                                            $ (0.09)          $ (0.20)            $ (0.85)
                                                         ========          ========            ========
</TABLE>

(a)      Represents  the  compensation  expense  associated  with the  Company's
         restricted stock awards, further described in Note 8.

The fair value of the common stock options  granted during 2003,  2002 and 2001,
for disclosure purposes was estimated on the grant dates using the Black Scholes
Pricing Model and the following assumptions.

                                         For the Year Ended December 31,
                                ---------------------------------------------
                                    2003             2002               2001
                                    ----             ----               ----

     Expected dividend yield          --               --                 --
     Expected price volatility       82%              90%                89%
     Risk-free interest rate        2.9%      3.5% - 4.1%        3.8% - 4.9%
     Expected life of options    5 years          5 years            5 years

Concentration of Credit Risk

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

The Company's  receivables are comprised of oil and gas revenue  receivables and
joint interest billings receivable. The amounts are due from a limited number of
entities.  Therefore,  the collectability is dependent upon the general economic
conditions of the few purchasers and joint interest owners.  The receivables are
not collateralized. However, to date the Company has had minimal bad debts.


                                       49
<PAGE>



Fair Value

The  Company's  financial  instruments  including  cash  and  cash  equivalents,
restricted cash,  accounts  receivable and accounts payable are carried at cost,
which  approximates  fair  value  due  to  the  short-term   maturity  of  these
instruments.  The Company's 8% Convertible  Debentures are recorded at cost, and
the fair value is disclosed in Note 6. Since  considerable  judgment is required
to develop  estimates of fair value, the estimates  provided are not necessarily
indicative  of the  amounts  the  Company  could  realize  upon the  purchase or
refinancing of such instruments.

Recent Accounting Pronouncements

Statement of Financial  Accounting  Standards No. 141,  "Business  Combinations"
(SFAS 141) and Statement of Financial  Accounting  Standards No. 142,  "Goodwill
and  Intangible  Assets"  (SFAS 142),  were issued by the  Financial  Accounting
Standards Board (FASB) in June 2001 and became effective for the Company on July
1, 2001 and January 1, 2002, respectively. The FASB, the Securities and Exchange
Commission (SEC) and others are engaged in deliberations on the issue of whether
SFAS 141 and 142 require  interests  held under oil,  gas and mineral  leases or
other  contractual  arrangements to be classified as intangible  assets. If such
interests were deemed to be intangible  assets,  mineral interest use rights for
both undeveloped and developed  leaseholds would be classified separate from oil
and gas  properties as intangible  assets on the Company's  balance sheets only,
but these costs would continue to be aggregated  with other costs of oil and gas
properties in the notes to the financial statements in accordance with Statement
of  Financial  Accounting  Standards  No.  69,  "Disclosures  about  Oil and Gas
Producing Activities" (SFAS 69). Additional disclosures required by SFAS 141 and
142 would also be included in the notes to financial  statements.  Historically,
and to the  Company's  knowledge,  we and all other oil and gas  companies  have
continued to include  these oil and gas  leasehold  interests as part of oil and
gas properties  after SFAS 141 and 142 became  effective.  The Company  believes
that few oil and natural gas  companies  have  adopted  this  interpretation  or
changed their balance sheet  presentation  for oil and gas leaseholds  since the
implementation of SFAS 141 and 142.

As applied to companies  like Gasco that have adopted full cost  accounting  for
oil and gas activities, the Company understands that this interpretation of SFAS
141 and 142 would only affect its balance sheet classification of proved oil and
gas  leaseholds  acquired  after  June  30,  2001 and its  unproved  oil and gas
leaseholds.  The Company's  results of operations  would not be affected,  since
these  leasehold  costs would  continue to be amortized in accordance  with full
cost  accounting  rules.  At  December  31,  2003  and  2002,  the  Company  had
undeveloped   leaseholds   of   approximately   $13,212,039   and   $13,984,536,
respectively,  that would be  classified  on the  balance  sheet as  "intangible
undeveloped leasehold" if the Company applied the interpretation currently being
deliberated.   This  classification  would  require  the  Company  to  make  the
disclosures set forth under SFAS 142 related to these  interests.  The Company's
current disclosures are those required by SFAS 69.

The Company will continue to classify its oil and gas leaseholds as tangible oil
and gas  properties  until  further  guidance is provided.  Although most of the
Company's oil and gas property  interests are held under oil and gas leases,  it


                                       50
<PAGE>

is not  expected  that this  interpretation,  if adopted,  would have a material
impact on the Company's financial condition or results of operations.

In May 2003  FASB  issued  SFAS  No.  150,  "Accounting  for  Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity and
requires that such financial  instruments be classified as a liability (or as an
asset in certain circumstances).  SFAS No. 150 is effective for all freestanding
instruments  entered into or modified after May 31, 2003.  Otherwise,  it became
effective for Gasco as of July 1, 2003. The Company has no financial instruments
that fall within the scope of this statement.

Reclassifications

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

NOTE 3 - OIL AND GAS PROPERTY

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

                                                        For the Years Ended December 31,
                                               ------------------------------------------------------
                                                   2003              2002                2001
                                               ---------------------------------- -------------------
Property acquisition costs:
<S>                                                   <C>            <C>                 <C>
   Unproved                                           $667,557       $22,324,547         $ 7,161,450
   Proved                                                    -                 -                   -
Exploration costs (a)                                  396,967         3,319,124                   -
Development costs                                    4,218,902         7,319,184                   -
                                                   -----------        ----------           ---------
   Total excluding asset retirement obligation       5,283,426        32,962,855           7,161,450
                                                    ==========       ===========          ==========
   Total including asset retirement obligation     $ 5,398,678      $ 32,962,855         $ 7,161,450
                                                   ===========      ============         ===========
</TABLE>

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

Depletion and impairment expense related to proved properties per equivalent Mcf
of  production  for the years  ended  December  31,  2003 and 2002 was $2.06 and
$9.73,  respectively.  There was no depletion or impairment  expense  during the
year ended December 31, 2001.

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

                                       51
<PAGE>

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

                                       2003                2002
                                       ----                ----

        Utah                         $ 963,530            $ 297,371
        Wyoming                     12,089,104           13,536,872
        California                     159,405              150,293
                                    ----------           ----------
                                   $13,212,039          $13,984,536
                                   ===========          ===========

During 2003, the Company  impaired certain of its unproved acreage in Wyoming by
reclassifying  $1,725,000  of costs  associated  with this acreage into the full
cost pool.  The  impairment  represents  the cost of  certain  of the  Company's
acreage  that the Company no longer  considers  prospective.  These costs became
subject to amortization during the fourth quarter of 2003.

During  February  2002,  the Company  purchased  at a Bureau of Land  Management
("BLM")  sale a 45%  interest in 21,614 gross acres (9,726 net acres) in Wyoming
for approximately  $1,428,000.  Effective July 16, 2002, the Compay assigned 25%
of this  interest to Brek,  resulting in the  Company's  net acres being reduced
from 9,726 acres to 7,295 acres. After the sale, the Company was notified by the
BLM in Wyoming that several  environmental  agencies filed a protest against the
BLM  offering  numerous  parcels  of land  for oil and gas  leasing.  All of the
parcels  (leases)  purchased by the Company were placed in suspense  pending the
resolution  of this  protest.  The Company was notified in July 2003 that all of
the protested  leases were released from suspense.  The value of these leases is
recorded as unproved mineral interests in the accompanying financial statements.

NOTE 4 - PROPERTY ACQUISITION

On May 1, 2002, the Company issued  9,500,000  shares of its common stock to the
Shama Zoe Limited Partnership ("Shama Zoe"), a private oil and gas company,  for
the  acquisition  of 53,095  gross  (47,786  net) acres  plus  other  assets and
consideration  in the Greater Green River Basin in Sublette County Wyoming.  The
acquisition  was valued at  $18,525,000  using a stock price of $1.95 per common
share,  which  represented  the closing price of the  Company's  common stock on
April 23, 2002;  the date the  agreement  was  executed.  The original  Property
Purchase Agreement governing this transaction prevented the Company from issuing
additional  shares of its common  stock at prices below $1.80 per share and from
granting  registration  rights in connection  with the issuance of shares of its
common  stock.  In  connection  with the August 14, 2002  issuance of  6,500,000
shares of common stock, as described in Note 4, the original  Property  Purchase
Agreement  was amended to allow for the  issuance of these  shares at a price of
$1.00  per share and  Shama  Zoe was  granted  an option to sell to the  Company
1,400,000  shares of the Gasco common stock that it acquired in the  transaction
at $1.00 per share at any time prior to December 31, 2002.  On December 31, 2002
Shama Zoe sold  1,400,000  shares of Gasco  common stock back to the Company for
$1.00 per share.  The Company issued a $1,400,000  promissory  note to Shama Zoe
for the purchase of these shares.  The promissory  note is further  described in
Note 7.

                                       52
<PAGE>

In  connection  with this  transaction,  the Board of  Directors  of the Company
authorized the payment to an employee of the Company,  who was  instrumental  in
securing  the  Company's  agreement  with Shama Zoe, of $300,000 in cash and the
issuance  of options to  purchase  250,000  shares of Gasco  common  stock at an
exercise  price of $1.95  per  share,  which is equal to the fair  market of the
common  stock on April 23,  2002.  Prior to the end of 2002 the Company had paid
$150,000 of the total cash bonus to the employee,  therefore, the remaining cash
payment of  $150,000  was  included  in  accrued  expenses  in the  accompanying
financial statements as of December 31, 2002 and was paid during 2003.

NOTE 5 - PROPERTY DIVESTITURES

During October 2003, the Company  completed a transaction  whereby it settled an
outstanding  amount owed of $1,606,982 to an  oilservice  provider  arising from
drilling and completion expenditures on five Gasco-operated wells, by paying the
provider  $400,000  in cash and  conveying  to the  provider  a  portion  of its
interests in two Riverbend  wells.  Subsequent to the  transaction,  the Company
retained a 30% working  interest in the two subject  wells and  ownership in the
remaining three wells is unchanged.

On July 16,  2002,  Gasco  executed  and closed a purchase  agreement  with Brek
Energy  Corporation  ("Brek"),  and certain other Gasco stockholders (the "Other
Stockholders"), pursuant to which Brek and the Other Stockholders purchased from
Gasco an undivided 25% of Gasco's working  interests in all undeveloped  acreage
owned by Gasco in exchange  for  6,250,000  shares of Gasco common stock and 500
shares  of  Gasco  Series  A  Preferred   stock  held  by  Brek  and  the  Other
Stockholders. The Other Stockholders assigned their right to receive their share
of such working  interests to Brek,  so that Brek  acquired  title to all of the
working interests conveyed by Gasco in the transaction.  Brek also had an option
to acquire additional acreage that it did not exercise.

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

NOTE 6 - CONVERTIBLE DEBENTURES

On October  15,  2003  Gasco  issued  $2,500,000  of 8%  Convertible  Debentures
("Debentures") in a private placement offering.  The Debentures bear interest at
8% per annum,  which is payable  monthly,  and are  convertible  into  4,166,667
shares of the Company's  common stock, at the holder's  option,  at a conversion
price of $0.60 per common share.  Monthly principal payments of $37,500 begin in
the fourth  quarter of 2005 and the maturity  date of the  Debentures is October
15, 2008.  The  Debentures  are secured by the  producing  wellbores  that Gasco
develops using this financing.  Additionally,  the Debenture  holders  exercised
their right to designate a single  nominee to the  Company's  Board of Directors
during October 2003.

                                       53
<PAGE>

The Company  has the option to redeem the  Debentures  at 101% of the  principal
amount plus accrued and unpaid  interest,  on any interest  payment date,  after
notice to the holders, if all of the following conditions are satisfied: (i) the
average closing bid price of the Company's  common stock exceeds $2.00 per share
for the twenty  consecutive  trading  days prior to the  notice  date,  (ii) the
average trading volume for the same twenty  consecutive  trading days is greater
than  100,000  shares,  (iii) the market  price of the  Company's  common  stock
reflects a  price-to-book  value  ratio of no greater  than three based upon the
Company's most recent quarterly  financial  statements that have been filed with
the SEC, and (iv) the shares of common stock  issuable  upon  conversion  of the
Debentures have been fully registered under the applicable securities laws.

The  Debenture  conversion  price of $0.60 per  common  share was lower than the
trading  value of the  Company's  common stock on the date the  Debentures  were
issued. This resulted in a beneficial conversion feature of $166,667, which will
be amortized over the life of the Debentures. During the year ended December 31,
2003,  the  Company  recorded  $6,945  of  interest  expense   representing  the
amortization of the beneficial conversion feature.

Based on the market price of the Company's common stock as of December 31, 2003,
the fair value of the Debentures is $5,333,334.

The Debenture balance as of December 31, 2003 consists of the following:

     8% Convertible Debentures                      $ 2,500,000
     Unamortized beneficial conversion feature        (159,722)
                                                      ---------
     Balance, December 31, 2003                     $ 2,340,278
                                                    ===========

As of December 31, 2003, the Company's debt maturity schedule is as follows:

          Year Ended December 31,                  Maturity
          -----------------------                  --------
                     2004                                --
                     2005                          $ 75,000
                     2006                           450,000
                     2007                           450,000
                     2008                         1,525,000
                                                  ---------
                         Total                  $ 2,500,000
                                                ===========

NOTE 7 - NOTE PAYABLE

The original  Property  Purchase  Agreement  governing the Shama Zoe transaction
described in Note 4 prevented the Company from issuing  additional shares of its
common  stock at prices  below  $1.80 per share and from  granting  registration
rights  in  connection  with the  issuance  of shares of its  common  stock.  In
connection  with the August 14,  2002  issuance  of  6,500,000  shares of common
stock,  as described in Note 8, the original  Property  Purchase  Agreement  was
amended to allow for the  issuance of these shares at a price of $1.00 per share
and Shama Zoe was granted an option to sell to the Company  1,400,000  shares of
the Gasco common stock that it acquired in the transaction at $1.00 per share at
any time prior to December 31, 2002.  The value of this option,  using the Black


                                       54
<PAGE>

Scholes  model,  of $250,000 has been  recorded as additional  noncash  offering
costs associated with the Company's sale of common stock as described in Note 8.

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

NOTE 8 - STOCKHOLDERS' EQUITY

The  Company's  capital  stock as of  December  31,  2003 and 2002  consists  of
100,000,000  authorized shares of common stock, par value $0.0001 per share, and
20,000  authorized  shares of Series B Convertible  Preferred  stock,  par value
$0.001 per share.

Series B Convertible Preferred Stock - As of December 31, 2003, Gasco had 11,734
shares of Series B Preferred Stock  ("Preferred  Stock") issued and outstanding.
The Preferred Stock is entitled to receive dividends at the rate of 7% per annum
payable semi-annually in cash, additional shares of Preferred Stock or shares of
common stock at the  Company's  option.  The  conversion  price of the Preferred
Stock is $0.70 per common share,  which was greater than the market price on the
issuance  date,   making  each  share  of  Preferred  Stock   convertible   into
approximately  629 shares of Gasco common stock.  Shares of the Preferred  Stock
are convertible  into Gasco common shares at any time at the holder's  election.
Gasco  may  redeem  shares  of the  Preferred  Stock  at a price  of 105% of the
purchase price at any time after February 10, 2006. The Preferred Stock votes as
a class on issues that affect the  Preferred  Stockholder's  interests and votes
with  shares of  common  stock on all other  issues  on an  as-converted  basis.
Additionally,  the holders of the Preferred Stock exercised their right to elect
one member to Gasco's board of directors during March 2003.

During the year ended  December  31,  2003,  the Company  paid  dividends to the
holders of its Preferred  Stock  consisting of 682 shares of Preferred Stock and
$4,092 in cash.

Common Stock - Gasco has 46,675,936 shares of Common Stock issued and 45,602,236
shares outstanding as of December 31, 2003. 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, the holders of the
Preferred  Stock  are  entitled  to vote  with  shares  of  common  stock  on an
as-converted  basis. 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  2003  and  2002 are
described as follows:

                                       55
<PAGE>

On October 23, 2003 the Company  completed the sale through a private  placement
of  4,788,436  shares  of its  common  stock to a group of  accredited  previous
investors.  The selling price of $0.58 per common share was determined by taking
97 percent of the 20-day average closing price of the Company's common stock for
the  period  ending  October  17,  2003,  and  resulted  in  total  proceeds  of
approximately  $2,780,000.  The expenses  associated with this  transaction were
approximately  $15,000.  The  Company  plans  to  use  the  proceeds  from  this
transaction to develop and exploit its core-area  Riverbend Project in the Uinta
Basin in Utah and for its ongoing operations.

On August 12, 2003,  the Company's  Board of Directors  approved the issuance of
425,000  shares of common stock,  under the Gasco Energy,  Inc. 2003  Restricted
Stock Plan ("Restricted  Stock Plan"), to certain of the Company's  officers and
directors.  The restricted shares vest 20% on the first anniversary,  20% on the
second  anniversary and 60% on the third  anniversary of the awards.  The shares
fully vest upon  certain  events,  such as a change in  control of the  Company,
expiration  of the  individual's  employment  agreement and  termination  by the
Company of the  individual's  employment  without cause. Any unvested shares are
forfeited upon termination of employment for any other reason.

The  compensation  expense  related  to the  restricted  stock was  measured  on
September  18,  2003,  the date the  Restricted  Stock Plan was  approved by the
Company's  stockholders and is amortized over the three-year vesting period. The
shares of restricted stock are considered  issued and outstanding at the date of
grant and are  included in shares  outstanding  for the  purposes  of  computing
diluted  earnings  per  share.  The  Company  had  425,000  unvested  shares  of
restricted  stock  outstanding  as of  December  31,  2003 and the  compensation
expense  related to these  shares  during the year ended  December  31, 2003 was
$41,484.  There were no  outstanding  shares of restricted  stock during 2002 or
2001.

On August 14, 2002, the Company issued  6,500,000 shares of common stock for net
proceeds of approximately $6,000,000 in a private placement.

On July 16, 2002,  as further  described in Note 5, Gasco  executed and closed a
purchase  agreement  with  certain of its  stockholders,  pursuant  to which the
stockholders  purchased from Gasco an undivided 25% of Gasco's working interests
in all undeveloped  acreage owned by Gasco,  representing 35,169 net undeveloped
acres, in exchange for 6,250,000  shares of Gasco common stock and 500 shares of
Gasco's   previously   outstanding   Series  A  Preferred   stock  held  by  the
Stockholders.

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

On May 1, 2002,  as further  described in Note 4, the Company  issued  9,500,000
shares of its common stock to Shama Zoe, a private oil and gas company,  for the
acquisition   of  53,095  gross   (47,786  net)  acres  plus  other  assets  and
consideration  in the Greater Green River Basin in Sublette County Wyoming.  The
acquisition  was valued at  $18,525,000  using a stock price of $1.95 per common
share,  which  represented  the closing price of the  Company's  common stock on
April 23, 2002; the date the agreement was executed.

                                       56
<PAGE>

NOTE 9 - STOCK OPTIONS

During 2003,  the Company  granted an additional  1,608,000  options to purchase
shares of common stock to employees and directors of the Company, at an exercise
price of $1.00 per share. The options vest 16 2/3% at the end of each four-month
period after the issuance date.  Additionally,  the Company cancelled  2,260,000
options to purchase shares of common stock during the first quarter of 2003. The
exercise  price of the cancelled  options  ranged from $1.95 to $3.15 per share.
None of the 1,608,000 options granted during 2003 were issued to the individuals
whose options were cancelled.

As of December 31, 2003 options to purchase an aggregate 5,616,586 shares of the
Company's common stock were outstanding. These options were granted during 2003,
2002 and 2001 to the Company's employees,  directors and consultants at exercise
prices  ranging  from  $1.00 to $3.70 per  share.  The  options  vest at varying
schedules  within two 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 and an officer of Pannonian,
of $52,833,  $208,542 and $423,594  was charged to  operations  during the years
ended December 31, 2003, 2002 and 2001, respectively.

A summary  of the  options  granted to  purchase  common  stock and the  changes
therein  during the years ended  December 31,  2003,  2002 and 2001 is presented
below.

<TABLE>
<CAPTION>
                                                     2003                         2002                            2001
                                                     ----                        -----                            ----
                                                          Weighted                     Weighted                         Weighted
                                                           Average                      Average                         Average
                                           Number of      Exercise       Number of     Exercise         Number of       Exercise
                                            Options         Price         Options        Price           Options         Price
                                            -------         -----         -------        -----           -------         -----

<S>                                          <C>               <C>         <C>             <C>                               <C>
Outstanding at beginning of year             6,355,250         $ 2.17      6,392,750       $ 2.23                 -          $   -
Granted                                      1,608,000           1.00        500,000         1.80          6,519,000          2.25
Cancelled                                  (2,346,664)           2.18      (537,500)         2.56          (126,250)          3.03
                                           -----------         ------      ---------       ------          ---------          ----
Outstanding at end of year                   5,616,586         $ 1.83      6,355,250       $ 2.17          6,392,750        $ 2.23
                                           ===========         ======      =========       ======          =========        ======

Exercisable at December 31,                  4,476,586         $ 2.07      6,027,085       $ 2.06          5,137,250        $ 2.01
                                            ==========         ======      =========      =======          =========        ======

Weighted average fair value of options granted                 $ 0.45                      $ 1.28                           $ 1.37
                                                               ======                      ======                           ======
</TABLE>

Weighted average remaining contractual life of options
    outstanding as of December 31, 2003                              7.4 years
                                                                     =========




                                       57
<PAGE>



The  following  table  presents  additional  information  related to the options
outstanding as of December 31, 2003.

      Exercise                             Number of           Weighted Average
      Price per    Number of Shares         Shares         Remaining Contractual
        Share        Outstanding         Exercisable            Life (years)
        -----        -----------           -------          -----------------


           $1.00           2,541,336       1,401,336           9.1
            1.58             150,000         150,000           4.3
            1.73             100,000         100,000           4.2
            1.80              50,000          50,000           7.7
            2.00           1,301,000       1,301,000           8.0
            2.20               8,000           8,000           3.9
            3.00             650,000         650,000           6.0
            3.15             613,750         613,750           2.6
            3.70             202,500         202,500           3.1
                           ---------       ---------
        Total              5,616,586       4,476,586           7.4
                           =========       =========           ===

NOTE 10 - STATEMENT OF CASH FLOWS

The  following  transactions  represent  the non-cash  investing  and  financing
activities of the Company during the year ended December 31, 2003.

     Recognition  of  an  asset  retirement  obligation  for  the  plugging  and
     abandonment costs related to the Company's oil and gas properties valued at
     $148,934.

     Issuance  of 682 shares of  Preferred  Stock in payment of the June 30, and
     December 31, 2003 Preferred Stock dividends.

     Issuance of 425,000  shares of  restricted  common  stock to certain of the
     Company's  officers and  directors  and the  issuance of 100,000  shares of
     common stock as compensation to a former employee.

     Assignment  of property  interests in two wells in settlement of $1,206,982
     in accounts payable and $17,923 in the asset retirement obligation.

During the year ended  December 31, 2002, the Company's  non-cash  investing and
financing activities consisted of the following transactions:

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

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

                                       58
<PAGE>

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

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

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

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

     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).

Cash paid for interest was $82,392, and $67,363 for the years ended December 31,
2003 and 2001, respectively. There was no cash paid for interest during the year
ended December 31, 2002.

NOTE 11 - INCOME TAXES

A provision  (benefit)  for income taxes for the years ended  December 31, 2003,
2002 and 2001 consists of the following:

                                        2003             2002            2001
                                        ----             ----            ----
Current taxes:
  Federal                           $      -          $    -         $        -
  State                                    -               -                  -
Deferred taxes:
  Federal                           (2,556,837)         (74,128)     (1,333,826)
  State                               (285,004)         (68,422)       (191,435)
  Less: valuation allowance           2,841,841         142,550       1,525,261
                                      ---------         -------       ---------
Net income tax provision (benefit)  $     -          $    -         $        -
                                       ========         =======        =======




                                       59
<PAGE>

A  reconciliation  of the provision  (benefit) for income taxes  computed at the
statutory  rate to the  provision  for  income  taxes as shown in the  financial
statements  of  operations  for the years  ended  December  31, 2003 and 2002 is
summarized below:
<TABLE>
<CAPTION>
                                                           2003             2002           2001
                                                           ----             ----           ----

<S>                                                     <C>           <C>             <C>
Tax provision (benefit) at federal statutory rate       $ (859,019)   $ (1,920,892)   $ (1,404,016)
State taxes, net of federal tax effects                   (188,102)        (45,159)       (126,347)
Valuation adjustment on assets distributed in
  stock redemption                                                -       1,798,941               -
Prior year tax return permanent true-up                 (1,798,941)               -               -
Other Permanent items                                         4,221          24,560           5,102
Valuation allowance                                       2,841,841         142,550       1,525,261
                                                          ---------     -------  --       ---------
Net income tax provision (benefit)                      $       -      $         -     $          -
                                                          =========     ===========     ===========
</TABLE>

The  components  of the deferred tax assets and  liabilities  as of December 31,
2003 and 2002 are as follows:
                                                    2003               2002
                                                    ----               ----
Deferred tax assets:
Federal and state net operating loss carryovers   $4,576,075        $ 1,529,644
Oil and gas property                               1,272,043            869,272
Deferred compensation                                284,805            335,534
                                                 -----------         ----------
    Total deferred tax assets                      6,132,923          2,734,450
  Less: valuation allowance                      (5,406,804)        (2,564,963)
                                                 -----------        -----------
                                                     726,119            169,487
Deferred tax liabilities:
Other property, plant & equipment                    318,777             97,169
Other                                                407,342             72,318
                                                     -------        ------------
     Total deferred tax liabilities                  726,119            169,487
                                                     -------        -----------

Net deferred tax asset                               $     -       $          -
                                                     =======        ===========


The Company has a $12,138,173  net operating  loss  carryover for federal income
tax purposes and a $9,416,094  net operating loss carryover for state income tax
purposes as of December 31, 2003.  The net operating  losses may offset  against
taxable  income  through the year ended  December 31, 2023. A portion of the net
operating  loss  carryovers  begins  expiring in 2019.  The  Company  provided a
valuation  allowance against its deferred tax asset of $5,406,804 and $2,564,963
as of December  31, 2003 and 2002,  respectively,  since it believes  that it is
more likely  than not that it may not be able to fully  utilize it on its future
tax returns.

NOTE 12 - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2003 a clerical error was made in the payroll
process,  which caused the president and chief executive officer of the Company,
Mark  Erickson,  to be overpaid by $55,000  during 2003,  and $9,196  during the
first quarter of 2004.  The error was discovered  during  February 2004, and Mr.
Erickson made  restitution as soon as possible  thereafter.  Since the repayment
was made as soon as possible,  no interest was charged and Mr.  Erickson owes no


                                       60
<PAGE>

further  amounts to the Company.  The  overpayment of $55,000 is included in the
accounts receivable balance of the accompanying financial statements.

During the year ended  December  31,  2003 and  during  both of the years  ended
December 31, 2002 and 2001, the Company paid $120,000 and $240,000, respectively
in  consulting  fees to a company  owned by a director of Gasco.  The Company is
committed to pay $120,000 per year in  consulting  fees to this company  through
January 31, 2006.  Another  director of the Company  earned  consulting  fees of
$16,000 and $52,000  from the Company  during the years ended  December 31, 2002
and 2001, respectively.

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

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

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

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.

NOTE 13 - COMMITMENTS

The Company leases office  facilities in Englewood,  Colorado for  approximately
$46,000 per year under two leases that  expire on August 30,  2004.  The Company
intends to renew these leases at current or lower rates when the current  leases
expire in August  2004.  Remaining  commitments  under  these  leases  mature as
follows:

     Year Ending December 31,                              Annual Rentals

             2004                                             $32,195
                                                              =======

Rent expense for the years ending  December 31, 2003, 2002 and 2002 was $56,970,
$42,055 and $46,476, respectively.

                                       61
<PAGE>

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

NOTE 14 - 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 $32,708,
$41,726 and $6,270  during the years ended  December  31,  2003,  2002 and 2001,
respectively.

NOTE 15 - SELECTED QUARTERLY INFORMATION (Unaudited)

The following represents selected quarterly financial  information for the years
ended December 31, 2003 and 2002.
<TABLE>
<CAPTION>


             2003                                     For the Quarter Ended
                         ---------------------------------------------------------------------------------
                             March 31,           June 30,         September 30,          December 31,

<S>                          <C>               <C>             <C>                          <C>
Gross revenue                $158,850          $499,527        $     277,101                $327,965
Net revenue from oil
  and gas operations           92,402             389,091               173,017              271,655
Net loss                 (747,465)              (508,492)             (634,209)            (636,359)
Net loss per share
  basic and diluted            (0.02)              (0.02)                (0.02)               (0.01)

</TABLE>




                                       62
<PAGE>


<TABLE>
<CAPTION>


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

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

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

NOTE 16 - LITIGATION

On June 9, 2003,  Pannonian  was named as a defendant in a lawsuit  filed in the
United States District Court of Midland County,  Texas. On July 15, 2003,  Gasco
was also named as  defendant in the same  lawsuit.  The  plaintiffs,  Burlington
Resources  Oil & Gas  Company  LP by BROG  GP  Inc.  its  sole  General  Partner
("Burlington  Resources") claim that Pannonian and Gasco owe them  $1,007,894.14
in unpaid  invoices.  The  Company  has accrued  these  amounts  owed within the
accompanying financial statements and fully intends to pay these amounts owed to
Burlington Resources.

NOTE 17 - SUBSEQUENT EVENTS

On January 20, 2004 the Company entered into agreements with a group of industry
providers  (together,  the "Service  Parties") to accelerate the  development of
Gasco's oil and gas  properties by drilling up to 50 wells in Gasco's  Riverbend
Project in Utah's Uinta Basin.

Gasco has agreed that the Service Parties,  which includes Schlumberger Oilfield
Services  , will have the  exclusive  right to  provide  their  services  in the
development of the Riverbend  acreage.  The agreement  provides for the group to
initially proceed with the first 10-well bundle,  which approximates one year of
drilling  with a single rig. If the group  agrees,  drilling may be  accelerated
using additional rigs.  Gasco's 2004 capital budget is approximately $13 million
for the drilling, completion and pipeline connection of wells in this area.

General Terms of the Agreement:

     -    Contract  Area  consists  of  Gasco  Energy's  leasehold  position  in
          portions of Carbon, Duschesne and Uintah Counties, Utah.

     -    Gasco can  continue to  independently  develop its acreage  subject to
          certain limitations and provisions of this agreement.

     -    Decisions   will  be  made  by  a   committee   chaired   by  a  Gasco
          representative.

     -    Schlumberger   will  coordinate   certain   activities  under  Gasco's
          direction as operator of record.  o Gasco will elect to fund up to 20%
          of each of the  first  three  bundles  and up to 30% of the  last  two
          bundles.  Gasco's interest in the production stream from a bundle, net
          of  royalties,  taxes and lease  operating  expenses,  is estimated to
          equal the proportion of the total well costs that it funds.

                                       63
<PAGE>

     -    The Service Parties include certain  investors that have undertaken to
          provide,  on a best  efforts  basis,  up to 35% of the  costs  of each
          project bundle.

To secure its obligations under the agreement,  described above, the Company has
pledged its interests in each of the wells in each bundle.

On February 11, 2004 the Company  completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share.  Proceeds to the  company,  net of fees and  estimated
expenses  were  approximately  $20,072,000.  The proceeds from this sale will be
used for general corporate  purposes  including the development and exploitation
of Gasco's Riverbend Project in the Uinta Basin in Uintah County, Utah.

On March 9, 2004 the Company  completed the  acquisition  of additional  working
interests in six producing  wells,  13,062 net acres and gathering system assets
located in the Uinta Basin in Utah for approximately $3,175,000.  Pursuant to an
existing contract, an unrelated third party has the right to purchase 25% of the
acquired  properties  at the  acquisition  price  within 30 days  following  the
acquisition date.

NOTE 18 - SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited)

The  following  reserve  quantity and future net cash flow  information  for the
Company represents proved reserves located in the United States. The reserves as
of December 31, 2003 have been estimated by Netherland,  Sewell and  Associates,
Inc., independent petroleum engineers. The reserves as of December 31, 2002 were
estimated by James R. Stell,  independent petroleum engineer.  The determination
of oil and gas  reserves  is based on  estimates,  which are highly  complex and
interpretive.  The  estimates  are subject to  continuing  change as  additional
information becomes available.

The standardized  measure of discounted  future net cash flows is prepared under
the guidelines set forth by the  Securities and Exchange  Commission  (SEC) that
require the calculation to be performed  using year-end oil and gas prices.  The
oil and gas prices used as of December  31, 2003 and 2002 were $29.69 per bbl of
oil and $5.89 per Mcf of gas and $29.60 per bbl of oil and $3.39 per Mcf of gas,
respectively.  Future  production  costs are based on year-end costs and include
severance  taxes.  Each property that is operated by the Company is also charged
with  field-level  overhead in the  reserve  calculation.  The present  value of
future cash inflows is based on a 10% discount rate.

On March 9, 2004 the Company  completed the  acquisition  of additional  working
interests  in six  of the  Company's  producing  wells,  13,062  net  acres  and
gathering  system  assets  located in the Uinta Basin in Utah for  approximately
$3,175,000.  The acquisition consists of approximately  7,637,000 Mcf and 62,000
Bbls of proved gas and oil reserves  with a present  value  discounted at 10% of


                                       64
<PAGE>

approximately  $8,064,000.  Pursuant to an existing contract, an unrelated third
party  has  the  right  to  purchase  25%  of  the  acquired  properties  at the
acquisition price within 30 days following the date of the acquisition.

Reserve Quantities
                                                   Gas                   Oil
                                                   Mcf                   Bbls
Proved Reserves:
      Balance, December 31, 2002                20,622,266            141,652
       Extensions and discoveries                4,446,547             36,288
       Revisions of previous estimates (a)      (9,752,505)           (66,455)
       Sales of reserves in place               (1,458,270)            (8,500)
       Purchases of reserves in place                   --                 --
       Production                                 (257,035)            (1,998)
                                                -----------        -----------
      Balance, December 31, 2003                13,601,003            100,987
                                                ==========          =========

Proved Developed Reserves
      Balance, December 31, 2003                 2,937,388             24,818
                                               ===========         ==========
      Balance, December 31, 2002                 5,889,981             34,493
                                               ===========         ==========

(a)  The  revisions  of  previous  estimates  are  due  primarily  to  a  failed
re-completion  on one of the Company's  wells,  which resulted in a reduction in
the reserves associated with the producing wellbore location and the loss of the
surrounding proved undeveloped offset locations.


Standardized Measure of Discounted Future Net Cash Flows

                                                       December 31,
                                            ------------------------------------
                                                 2003                 2002
                                                 ----                 ----

Future cash flows                            $  83,099,200       $   73,763,406
Future production and development costs        (32,804,600)        (38,958,416)
                                            -------------        --------------
Future net cash flows before discount           50,294,600           34,804,990
                                              -------------        -------------
10% discount to present value                  (34,099,500)         (22,492,988)
                                              -------------       --------------
Standardized measure of discounted future
  net cash flows                             $  16,195,100       $    12,312,002
                                               =============      ==============




                                       65
<PAGE>


<TABLE>
<CAPTION>

Changes in the Standardized Measure of Discounted Future Net Cash Flows

                                                           For the Years Ended December 31,
                                                          ----------------------------------------
                                                                    2003                   2002
                                                                    ----                   ----
Standardized measure of discounted future net cash
<S>                                                        <C>                 <C>
   flows at the beginning of year                          $     12,312,002    $                -
Sales of oil and gas produced, net of production costs             (926,165)              (44,699)
Net changes in prices and production costs                       13,209,650                     -
Extensions and discoveries, net of future
   production and development costs                               7,250,499            21,007,459
Development costs incurred                                        4,218,902             7,319,184
Changes in estimated future development costs                     1,890,021           (31,717,307)
Revisions of previous quantity estimates                         (2,629,973)                    -
Purchases of reserves in place                                            -                     -
Sales of reserves in place                                         (391,020)                    -
Accretion of discount                                             1,231,200                     -
Changes in production rates and other                           (19,970,015)           15,747,365
                                                               -------------     ----------------
Standardized  measure of  discounted  future net
cash flows at the end of year                                  $  16,195,100          $ 12,312,002
                                                              =============      =================

</TABLE>



                                       66
<PAGE>



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

None.

ITEM 9A - CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer and Chief  Financial  Officer,  of the  effectiveness  of the
design and operation of the Company's  disclosure  controls and procedures as of
December 31, 2003  pursuant to Rule 13a-15 under the  Exchange  Act.  Based upon
that  evaluation,  the Company's  Chief  Executive  Officer and Chief  Financial
Officer  concluded  that the Company's  disclosure  controls and  procedures are
effective.  Disclosure  controls and procedures are controls and procedures that
are  designed to ensure that  information  required to be  disclosed  in Company
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange Commission's rules and forms.

There have been no changes in the  Company's  internal  control  over  financial
reporting  (as defined in Rule  13a-15(f)  under the Exchange Act) that occurred
during the  Company's  last fiscal  quarter that has  materially  affected or is
reasonably  likely to  materially  affect the  Company's  internal  control over
financial reporting.

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2004 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 11 - EXECUTIVE COMPENSATION

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2004 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                       MANAGEMENT

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2004 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.





                                       67
<PAGE>



ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2004 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2004 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  1. See  "Index to  Financial  Statements"  under Item 8 on page 37. 2.
          Financial Statement Schedules - none. 3. Exhibits

                                INDEX TO EXHIBITS

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

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

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

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

2.5  Purchase and Sale Agreement between ConocoPhillips and the Company relating
     to the  Riverbend  Field,  Uintah and Duchesne  Counties,  Utah,  Effective
     January 1, 2004  (incorporated by reference to Exhibit 2.1 to the Company's
     Form 8-K dated March 9, 2004, filed on March 15, 2004).

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

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

3.3  Certificate of Designation  for Series A Preferred Stock  (incorporated  by
     reference to Exhibit 3.5 to the  Company's  Form 10-Q for the quarter ended
     September 30, 2001, filed on November 14, 2001).

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



                                       68
<PAGE>

3.5  Certificate  of  Designation  for  Series  B  Convertible  Preferred  Stock
     (incorporated  by  reference  to  Exhibit  3.5 to the  Company's  Form  S-1
     Registration Statement, File No. 333-104592).

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

4.2  Form of Gasco Energy, Inc. 8.00% Convertible  Debenture,  dated October 15,
     2003 between each of The Frost National Bank,  Custodian FBO Renaissance US
     Growth &  Investment  Trust PLC Trust No.  W00740100,  HSBC Global  Custody
     Nominee (U.K.) Limited  Designation No. 896414 and The Frost National Bank,
     Custodian FBO Renaissance  Capital Growth & Income Fund III, Inc. Trust No.
     W00740000  (incorporated  by reference to Exhibit 4.6 to the Company's Form
     10-Q for the quarter ended September 30, 2003, filed on November 10, 2003).

4.3  Deed of Trust and  Security  Agreement,  dated  October  15,  2003  between
     Pannonian and BFSUS Special  Opportunities  Trust PLC,  Renaissance Capital
     Growth & Income Fund III, Inc. and Renaissance US Growth & Income Trust PLC
     (incorporated  by reference to Exhibit 4.7 to the  Company's  Form 10-Q for
     the quarter ended September 30, 2003, filed on November 10, 2003).

4.4  Subsidiary Guaranty Agreement, dated October 15, 2003 between Pannonian and
     Renn Capital Group,  Inc  (incorporated  by reference to Exhibit 4.8 to the
     Company's  Form 10-Q for the quarter  ended  September  30, 2003,  filed on
     November 10, 2003).

4.5  Subsidiary Guaranty  Agreement,  dated October 15, 2003 between San Joaquin
     Oil and Gas, Ltd. And Renn Capital Group, Inc (incorporated by reference to
     Exhibit 4.9 to the Company's Form 10-Q for the quarter ended  September 30,
     2003, filed on November 10, 2003).

4.6  Form of Subscription and Registration  Rights Agreement between the Company
     and  investors  purchasing  Common Stock in October 2003  (incorporated  by
     reference to Exhibit 4.10 to the Company's  Form 10-Q for the quarter ended
     September 30, 2003, filed on November 10, 2003).

*4.7 Form of Subscription and Registration  Rights Agreement between the Company
     and investors purchasing Common Stock in February, 2004.

#10.11999 Stock  Option Plan  (incorporated  by  reference to Exhibit 4.1 to the
     Company's Form 10-KSB for the fiscal year ended December 31, 1999, filed on
     April 14, 2000).

#10.2Form  of  Stock  Option   Agreement   under  the  1999  Stock  Option  Plan
     (incorporated  by reference to Exhibit 10.8 to the Company's  Form 10-K for
     the fiscal year ended December 31, 2001, filed on March 29, 2002).

#10.3Stock Option  Agreement  dated  January 2, 2001  between  Gasco and Mark A.
     Erickson  (Filed as Exhibit 10.9 to the Company's  Form 10-K for the fiscal
     year ended December 31, 2001, filed on March 29, 2002).

#10.4Form of Stock Option  Agreement  dated  February 8, 2001 between  Gasco and
     each of Mark A. Erickson,  Marc Bruner,  J. Timothy Bowes, Carl Stadelhofer
     and Howard O. Sharpe (Filed as Exhibit 10.10 to the Company's Form 10-K for
     the fiscal year ended December 31, 2001, filed on March 29, 2002).

#10.5W. King Grant Amended and Restated  Employment  Contract dated February 14,
     2003 (Filed as Exhibit 10.10 to the Company's Form 10-K for the fiscal year
     ended December 31, 2002, filed on March 29, 2003).

#10.6Michael Decker Amended and Restated  Employment Contract dated February 14,
     2003 (Filed as Exhibit 10.11 to the Company's Form 10-K for the fiscal year
     ended December 31, 2002, filed on March 29, 2003).




                                       69
<PAGE>


#10.7Mark A. Erickson  Amended and Restated  Employment  Contract dated February
     14, 2003 (Filed as Exhibit 10.12 to the Company's  Form 10-K for the fiscal
     year ended December 31, 2002, filed on March 29, 2003).

#10.8Amended and Restated Consulting  Agreement dated February 14, 2003, between
     Gasco and Marc Bruner (Filed as Exhibit  10.13 to the  Company's  Form 10-K
     for the fiscal year ended December 31, 2002, filed on March 29, 2003).

#10.92003  Restricted  Stock Plan  (Filed as Appendix B to the  Company's  Proxy
     Statement   dated   August  25,  2003  for  its  2003  Annual   Meeting  of
     Stockholders, filed on August 25, 2003).

10.10Muddy Creek  Exploration  Agreement  dated August 15, 2001,  between Gasco,
     Shama Zoe Limited  Partnership and Burlington Oil and Gas Company (Filed as
     Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended December
     31, 2001, filed on March 29, 2002).

10.11CD Exploration  Agreement dated August 15, 2001,  between Gasco,  Shama Zoe
     Limited  Partnership  and  Burlington Oil and Gas Company (Filed as Exhibit
     10.16 to the  Company's  Form 10-K for the fiscal year ended  December  31,
     2001, filed on March 29, 2002).

10.12Gamma Ray  Exploration  Agreement  dated  August 15, 2001,  between  Gasco,
     Shama Zoe Limited  Partnership and Burlington Oil and Gas Company (Filed as
     Exhibit 10.17 to the Company's Form 10-K for the fiscal year ended December
     31, 2001, filed on March 29, 2002).

10.13Sublette  County,  WY AMI  Agreement  dated August 22, 2001 between  Gasco,
     Alpine Gas Company  and  Burlington  Oil and Gas Company  (Filed as Exhibit
     10.18 to the  Company's  Form 10-K for the fiscal year ended  December  31,
     2001, filed on March 29, 2002).

10.14Lead  Contractor  Agreement  dated  January  24,  2002,  between  Gasco and
     Halliburton Energy Services,  Inc. (Filed as Exhibit 10.19 to the Company's
     Form 10-K for the fiscal year ended  December 31, 2001,  filed on March 29,
     2002).

10.15Property  Purchase  Agreement,  dated as of April  23,  2002,  between  the
     Company  and Shama Zoe  Limited  Partnership  (Filed as Exhibit  2.1 to the
     Company's Form 8-K dated May 1, 2002, filed on May 9, 2002).

10.16Purchase  Agreement,  dated  as  of  July  16,  2002,  among  the  Company,
     Pannonian Energy Inc., San Joaquin Oil & Gas Ltd., Brek Energy Corporation,
     Brek  Petroleum  Inc.,  Brek  Petroleum  (California),   Inc.  and  certain
     stockholders (Filed as Exhibit 2.1 to the Company's Form 8-K dated July 16,
     2002, filed on July 31, 2002).

10.17Amendment No. 1 to Property  Purchase  Agreement dated as of August 9, 2002
     between the Company  and Shama Zoe Limited  Partnership.  (Filed as Exhibit
     10.21 to the Company's Form S-1 dated November 15, 2002,  filed on November
     15, 2002).

10.18Financial  Advisory Services  Agreement dated August 22, 2002,  between the
     Company and Energy Capital  Solutions  LLC.  (Filed as Exhibit 10.21 to the
     Company's Form S-1 Registration Statement, filed on November 15, 2002).

*21  List of Subsidiaries

*23.1 Consent of Deloitte & Touche, LLP

*23.2 Consent of Netherland, Sewell & Associates, Inc.

*31  Rule 13a-14(a)/15d-14(a) Certifications.

*32  Section 1350 Certifications

*  Filed herewith.
# Identifies management contracts and compensatory plans or arrangements.

                                       70
<PAGE>

     (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 15, 2003, filed October 15, 2003
                                               Item 9, Item 7(c) - Press Release

   Form 8-K dated October 15, 2003, filed October 16, 2003
                                               Item 9, Item 7(c) - Press Release

   Form 8-K dated October 23, 2003, filed October 24, 2003
                                               Item 9, Item 7(c) - Press Release

   Form 8-K dated November 6, 2003, filed November 6, 2003
                                               Item 9, Item 7(c) - Press Release

   Form 8-K dated December 2, 2003, filed December 2, 2003
                                               Item 9, Item 7(c) - Press Release

   Form 8-K dated December 23, 2003, filed December 23, 2003
                                               Item 9, Item 7(c) - Press Release




                                       71
<PAGE>



SIGNATURES

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

GASCO ENERGY, INC.                                      Dated:  March 25, 2004



By: /s/ Mark A. Erickson
    ------------------------------------
    Mark A. Erickson, President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, 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 A. Erickson                 Director and President and Chief Executive Officer                 March 25, 2004
--------------------
Mark A. Erickson

/s/ Marc A. Bruner                   Director                                                           March 25, 2004
------------------
Marc A. Bruner

/s/ Carl Stadelhofer                 Director                                                           March 25, 2004
--------------------
Carl Stadelhofer

/s/ W. King Grant                    Executive Vice President and Chief Financial Officer               March 25, 2004
-----------------
W. King Grant                        (Principal Financial Officer and Principal Accounting
                                     Officer)

/s/ Carmen Lotito                    Director                                                           March 25, 2004
-----------------
Carmen ("Tony") Lotito

/s/ Charles B. Crowell               Director                                                           March 25, 2004
----------------------
Charles B. Crowell

/s/ Richard S. Langdon               Director                                                           March 25, 2004
----------------------
Richard S. Langdon

/s/ R. J. Burgess                    Director                                                           March 25, 2004
---------------------
R.J. Burgess

/s/ John A. Schmit                   Director                                                           March 25, 2004
----------------------
John A. Schmit


</TABLE>

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<PAGE>