CANACCORD INTERNATIONAL LTD.
             Valle Verde, No. 1 Lancaster, St. James, Barbados, W.I.
                    Phone: (246) 432-1423 Fax: (246) 432-9703



March 15, 2001

Mr. Mark Bruner
Gasco Energy Inc.
14 Inverness Drive East
Building H, Suite 236
Englewood, CO, USA
80112

Dear Mr. Bruner:

Re:  Proposed Financing

Canaccord  International Ltd. (the "Agent") is interested in acting as agent for
Gasco Energy Inc. (the "Company" or "Gasco Energy") in connection with a private
offering of common shares (the "Common Shares") of the Company on a best efforts
basis to raise gross proceeds up to US$4,200,000  (the  "Offering") as described
in the term sheet  attached  hereto as Schedule B. This  represents  the Agent's
allocation of a private placement which totals US$7,200,000. The purpose of this
letter  is to set forth  the  understanding  of the  Agent's  engagement  by the
Company in respect of the  Offering.  The  completion  of the Offering  shall be
subject to,  among other  things as outlined  below,  full due  diligence by the
Agent to its complete  satisfaction and the receipt of all necessary  regulatory
approvals which the Company agrees to use its best efforts to obtain.

It is understood that this letter  agreement is an agreement in principle and is
subject  to the  execution  by the  Company  and the  Agent of a  formal  agency
agreement (the "Agreement") in a form satisfactory to both parties. In the event
that for any reason no Agreement is executed,  no legal  obligation  will result
from  this  letter,  except  for any  obligations  of the  Company  to the Agent
pursuant to paragraphs 4 and 7 herein.

The Agreement shall include, without limitation, the terms listed below:

1.       The Offering

The Agent will act in connection with a private  offering of Common Shares to be
qualified  by the  relevant  SEC  documents  to  raise up to  US$4,200,000.  The
Offering will be made, and the Agent's  compensation  therefore will be paid, on
the terms set out in Schedule B attached  hereto and  incorporated  by reference
herein.  The Offering will be planned in close

<PAGE>

consultation  with the  Company  in order to  establish  further  terms that are
compatible with the progress of the Company at the time.

2.       Standard Provisions

The Agreement shall contain those  representations  and warranties,  conditions,
indemnities and contribution  provisions as well as "due diligence out", "market
out",  "disaster  out" and  "material  change  out"  provisions  as are usual in
agreements of this type.

3.       Due Diligence

The Agent and its  counsel  will be given  access  to the  Company's  corporate,
financial  and other  records for the purposes of  conducting  due  diligence in
respect of the Company and the Offering. Due diligence shall be completed to the
Agent's complete satisfaction prior to the completion of the Offering.

4.       Expenses

The  Company  will pay all of the  expenses  and fees of the Agent  incurred  in
connection with the  transactions  and services  described  herein including the
fees of the Agent's legal counsel and consultants and specialists,  if required,
and all reasonable  out-of-pocket  costs incurred by the Agent including  travel
expenses for any road-shows and  otherwise.  Subject to the following,  any such
expenses not paid by the Company prior to the Offering will be deducted from the
proceeds of the Offering.

Upon  signing  this  letter,  the Company  hereby  agrees to deposit a US$25,000
retainer in trust with the Agent.  The said retainer will be applied towards the
Agent's  fees and  disbursements.  Once the  retainer is drawn  down,  the Agent
shall,  from time to time,  send an  invoice  to the  Company  representing  any
additional  fees and  expenses  of the Agent  incurred  in  connection  with the
Offering.

All fees and expenses  shall be payable by the Company upon receiving an invoice
from the Agent and shall be payable by the Company  whether or not the  Offering
is completed, terminated or withdrawn.

5.       Corporate Fee

The Agent will work  exclusively  with the  Company in Europe with regard to its
financing requirements. The Agent will, from time to time, assist the Company as
to the required  legal,  accounting and regulatory  requirements of offerings in
Europe.  The Agent shall be paid a corporate  finance fee of US$5,000  per month
for 12 months (the  "Corporate  Fee"),  commencing upon closing of the Offering.
The Corporate  Fee  compensates  the Agent for its fiscal agency costs,  and the
Agent will continue to provide fiscal  advice,  assistance  with contacts,  road
shows, and related financial services during that period.

<PAGE>

6.       Right of First Refusal

The Company will grant the Agent,  subject to  pre-existing  rights of Wet Coast
Management  Corp., a right of first refusal on any further equity  financings up
to US$25 million that it may require or propose to obtain for a period of twelve
months  following the closing date of the Offering.  If over US$25 million,  the
Agent will be entitled to a minimum  commission of 2.5% of the gross proceeds of
the contemplated  offering.  If the Agent is not willing to match the conditions
of a financing  as  available  by the "right of first  refusal",  the Agent will
relinquish its exclusivity rights with regard to that particular financing only.

7.       Indemnity

The Company  covenants  and agrees to  indemnify  the Agent as  provided  for in
Schedule "A" attached hereto.

This letter  agreement will be governed by and construed in accordance  with the
laws of Barbados and the parties submit to the non-exclusive jurisdiction of the
Barbadian courts.

If this letter accurately  reflects the Company's  understanding of the terms of
its agreement  with the Agent,  please so indicate by executing and returning to
the Agent a copy of this letter.

Yours truly,

CANACCORD INTERNATIONAL LTD.


Per:________________________________


AGREED TO AND ACCEPTED this ______ day of March, 2001.

GASCO ENERGY INC.


Per: ______________________________


<PAGE>

                                  SCHEDULE "A"

Gasco  Energy  Inc.  (the  "Indemnitor)  hereby  agrees  to  indemnify  and hold
Canaccord International Ltd. and/or any of its affiliate or subsidiary companies
and/or divisions (hereinafter referred to as the "Agent") and each and every one
of the directors, officers, employees and shareholders of the Agent (hereinafter
referred to as the "Personnel")  harmless from and against any and all expenses,
losses,  claims,  actions,  damages  or  liabilities,  whether  joint or several
(including  the aggregate  amount paid in reasonable  settlement of any actions,
suits,  proceedings  or claims),  and the  reasonable  fees and  expenses of its
counsel that may be incurred in advising  with respect to and/or  defending  any
claim that may be made against the Agent to which the Agent and/or its Personnel
may become  subject or otherwise  involved in any capacity  under any statute or
common law or  otherwise  insofar as such  expenses,  losses,  claims,  damages,
liabilities or actions arise out of or are based,  directly or indirectly,  upon
the performance of professional services rendered to the Indemnitor by the Agent
and its Personnel hereunder or otherwise in connection with the matters referred
to in the attached  letter  agreement,  provided,  however,  that this indemnity
shall not apply to the extent that a court of competent  jurisdiction in a final
judgment that has become non-appealable shall determine that:

i.       the Agent or its  Personnel  have been  negligent  or dishonest or have
         committed any fraudulent act in the course of such performance; and

ii.      the  expenses,  losses,  claims,  damages or  liabilities,  as to which
         indemnification  is claimed,  were directly  caused by the  negligence,
         dishonesty or fraud referred to in (i).

If for any reason (other than the  occurrence  of any of the events  itemised in
(i) and (ii) above, the foregoing indemnification is unavailable to the Agent or
insufficient to hold it harmless,  then the Indemnitor  shall  contribute to the
amount paid or payable by the Agent as a result of such  expense,  loss,  claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative  benefits  received by the  Indemnitor on the one hand and the Agent on
the other hand but also the relative fault of the  Indemnitor and the Agent,  as
well as any relevant equitable considerations provided that the Indemnitor shall
in any event  contribute  to the amount paid or payable by the Agent as a result
of such expense, loss, claim, damage or liability any excess of such amount over
the amount of the fees received by the Agent hereunder.

The Indemnitor agrees that in case any legal proceeding shall be brought against
the  Indemnitor  and/or the Agent by any  governmental  commission or regulatory
authority or any stock  exchange or other entity  having  regulatory  authority,
either domestic or foreign,  shall  investigate the Indemnitor  and/or the Agent
and Personnel

<PAGE>

of the Agent shall be required to testify in  connection  therewith  or shall be
required to respond to procedures designed to discover information regarding, in
connection  with,  or by  reason of the  performance  of  professional  services
rendered  to the  Indemnitor  by the  Agent,  the Agent  shall have the right to
employ its own counsel in  connection  therewith,  and the  reasonable  fees and
expenses  of such  counsel  as well as the  reasonable  costs and  out-of-pocket
expenses  incurred by the Agent and its Personnel in connection  therewith shall
be paid by the Indemnitor as they occur.

Promptly  after receipt of notice of the  commencement  of any legal  proceeding
against  the Agent or any of its  Personnel  or after  receipt  of notice of the
commencement of any investigation,  which is based, directly or indirectly, upon
any  matter  in  respect  of  which  indemnification  may  be  sought  from  the
Indemnitor,  the Agent will notify the Indemnitor in writing of the commencement
thereof and, throughout the course thereof,  will provide copies of all relevant
documentation  to the  Indemnitor,  will  keep  the  Indemnitor  advised  of the
progress  thereof and will discuss with the Indemnitor all  significant  actions
proposed.

The  indemnity  and  contribution  obligations  of the  Indemnitor  shall  be in
addition to any liability which the Indemnitor may otherwise have,  shall extend
upon the same terms and  conditions  to the  Personnel of the Agent and shall be
binding  upon and enure to the  benefit of any  successors,  assigns,  heirs and
personal  representatives of the Indemnitor,  the Agent and any of the Personnel
of  the  Agent.  The  foregoing  provisions  shall  survive  the  completion  of
professional  services  rendered  under the  attached  letter  agreement  or any
termination of the authorization given by the attached letter agreement.

___________________________         for  Canaccord International Ltd.


___________________________         for Gasco Energy Inc.