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 Erickson, President
Gasco Energy Inc.
14 Inverness Drive East
Building H, Suite 236
Englewood, CO, USA
80112

Dear Mr. Erickson:

Re:  Engagement as Financial Advisor

The  purpose  of  this  letter  is  to  confirm  the   engagement  of  Canaccord
International  Ltd.  ("Canaccord"  or the  "Advisor")  to  act,  subject  to the
pre-existing  rights of Wet Coast Management  Corp., as the exclusive  financial
advisor to Gasco Energy,  Inc. ("Gasco" or the "Company") in connection with one
or a  series  of  transactions  (collectively  the  "Transactions"  or,  in  the
singular,  a  "Transaction")  involving  the Company.  For purposes  thereof,  a
Transaction  shall  mean,  whether  in  one or a  series  of  Transactions,  the
purchase, directly or indirectly, of all or a portion of the assets, liabilities
or  securities  of  Gasco  or  its  affiliates  or  subsidiaries  or  any  other
extraordinary  corporate transaction involving the Company,  whether by way of a
merger, plan of arrangement, amalgamation, reverse takeover, recapitalization or
restructuring,   takeover,  strategic  investment,  partnership,   collaborative
venture,  securitization,  guarantee of  obligations or otherwise to one or more
third parties.

1.       In connection with its engagement hereunder, the Advisor shall:

a)       review with the Company its  strategic  objectives  and  establish  the
         general terms and  conditions by which the Company would  contemplate a
         Transaction,

b)       analyze  the   acquiror's   financial   statements  and  financial  and
         operational  forecasts  and plans to  establish  a value of the assets,
         liabilities and securities of the Company,

c)       evaluate  and  recommend  financial  and  strategic  alternatives  with
         respect to a  Transaction  and,  upon the Company  adopting a strategy,
         assist the Company in the execution of such strategy,

d)       prepare  the  necessary  marketing   documentation  to  assist  in  the
         execution of such strategy, and

e)       provide such other financial  advisory and investment  banking services
         as are customary for similar transactions and as may be mutually agreed
         upon by the Company and the Advisor.

<PAGE>

2.       As compensation for the Advisor's  services,  the Company hereby agrees
         to pay the Advisor a transaction fee (the  "Transaction  Fee") based on
         the  transaction   value  as  defined  under  paragraph  4  below  (the
         "Transaction  Value")  in the  amount  calculated  in  accordance  with
         Schedule B hereto,  payable in cash  promptly  upon  consummation  of a
         Transaction  if, during the term of this engagement or within 12 months
         thereafter as  contemplated  under  paragraph 5 below, a Transaction is
         consummated or a definitive agreement is entered into that subsequently
         results in a Transaction.

3.       In addition  to any fees that may be payable to the  Advisor  hereunder
         (and  regardless of whether a Transaction  occurs),  the Company hereby
         agrees  from  time to time  upon  request,  to  reimburse  the  Advisor
         promptly  for  reasonable  travel  and  other  out-of-pocket   expenses
         incurred by the Advisor in performing its services hereunder.

4.       Transaction Value shall be defined to include, without limitation,  all
         cash, securities, notes and any other compensation paid to the Company,
         or its or  their  creditors.  If the  Transaction  Value  or a  portion
         thereof  is in the form of equity  securities,  then the  amount of the
         Transaction  Value  will be  based  on the  fair  market  value of such
         securities  determined as of the closing date. The fair market value of
         any of these securities will be determined as follows:

         i)       the closing sale price for such  securities on the  registered
                  national  exchange   providing  the  primary  market  in  such
                  securities on the last trading date prior to the closing date;

         ii)      if the  securities  are not  traded on a  registered  national
                  exchange, the average of the closing bid prices as reported by
                  any  over-the-counter  market for the previous ten consecutive
                  trading days prior to the closing date;

         iii)     if the  securities  are not traded or  reported,  by agreement
                  between the Company and Canaccord; or

         iv)      if the Company and  Canaccord  are unable to agree on the fair
                  market value of such  securities  not traded or  reported,  by
                  binding arbitration.

         If the  Transaction  Value  or a  portion  thereof  is in the  form  of
         non-cash  assets or  liabilities  assumed,  then the value shall be the
         fair market value  thereof as  determined  in good faith by the Company
         and Canaccord.

5.       The term of this engagement  shall commence on the date of signing this
         engagement  and  continue  until the earlier of the  consummation  of a
         Transaction  and 12 months after the date of signing,  or upon 30 day's
         written notice of termination by any party acting in good faith, unless
         extended  by mutual  written  consent  by any party but only as to such
         party upon 30 days' prior written notice;  provided,  however,  that no
         such  termination  shall affect the  indemnification,  contribution and
         confidentiality   obligations  of  the  Company,   the  confidentiality
         obligations  of the  Advisor,  the right of the  Advisor to

<PAGE>

         receive any fees payable  hereunder or fees that have accrued  prior to
         such  termination or the right of the Advisor to receive  reimbursement
         for its out-of-pocket expenses as described above, and provided further
         that in the event that this  engagement is terminated and a Transaction
         is   consummated   or  a  definite   agreement  is  entered  into  that
         subsequently  results  in a  Transaction  within 12 months  after  such
         termination,  with a party with whom discussions were in progress prior
         to such termination,  or to whom the Company has been introduced by the
         Advisor in writing or who the Advisor has  evaluated  and  presented in
         writing during the term of the engagement to the Company as a candidate
         for a  Transaction,  the Advisor  shall be entitled to receive the fees
         described  in  paragraph  2 above.  The  entire  work fee  outlined  in
         Schedule "B" hereto shall be paid  irrespective  of whether or not this
         engagement is cancelled by either party and  irrespective  of whether a
         Transaction is consummated.

6.       The Company  agrees to  indemnify  the  Advisor and related  persons in
         accordance with the indemnification  letter attached hereto as Schedule
         "A", the provisions of which are incorporated herein in their entirety.

7.       The Company recognizes and confirms that the Advisor in acting pursuant
         to this  engagement  will  be  using  information,  reports  and  other
         communications  provided  by  others  including,   without  limitation,
         information  provided  by or on  behalf  of the  Company,  and that the
         Advisor  does  not  assume  responsibility  for and may  rely,  without
         independent verification,  on the accuracy and completeness of any such
         reports  and   information.   The  Company  hereby  warrants  that  any
         information relating to the Company that is furnished to the Advisor by
         or on behalf of the Company  will be fair,  accurate  and  complete and
         will not contain any material  omissions or  misstatements of fact. The
         Company agrees that any  information or advice  rendered by the Advisor
         or its  representatives  in connection  with this engagement is for the
         confidential  use of the  Company's  Board  of  Directors  only  in its
         evaluation of a Transaction  and, except as otherwise  required by law,
         the Company will not and will not permit any third party to disclose or
         otherwise refer to such advice or information in any manner without the
         Advisor's   prior  written   consent.   The  Advisor  agrees  that  any
         information  provided  by or on behalf of the Company to the Advisor in
         connection  with this  engagement  is for the  confidential  use of the
         Advisor only in its execution of a Transaction and, except as otherwise
         required by law, the Advisor will not disclose such information without
         the Company's prior written consent.

8.       The Company will, on a timely basis, make available or cause to be made
         available to the Advisor or provide the Advisor with access to all such
         information,  data,  documents,  advise  and  opinions  respecting  the
         Company as the Advisor may  reasonably  require in order to perform its
         engagement  hereunder,  and will provide or cause to be provided access
         to  management,  auditors and such other  professional  advisors of the
         Company  as  the  Advisor  considers  necessary  or  desirable,  acting
         reasonably  in  order  to  perform  its   engagement   hereunder,   and
         certificates  as to matters of a factual  nature as may be  required by
         Canaccord from time to time.

         To the extent that it could reasonably be concluded to be relevant, the
         Company  shall  keep the  Advisor  fully  advised  at all  times of the
         activities of the Company.

<PAGE>

9.       After closing a Transaction, the Advisor may, at its own expense, place
         announcements or  advertisements  in financial  newspapers and journals
         describing its services hereunder.

10.      This  agreement  (a) shall be governed by and  construed in  accordance
         with the laws of British  Columbia,  (b) may not be amended or modified
         except in writing executed by the Company and the Advisor and (c) shall
         be binding upon and inure to the benefit of the  Company,  the Advisor,
         the other  Indemnified  parties  and their  respective  successors  and
         assigns.

11.      The foregoing,  together with the Schedules  hereto,  incorporates  the
         entire  understanding of the parties with respect to the subject matter
         hereof and  supersedes all previous  agreements  should they exist with
         respect thereto. Capitalized terms used in the Schedules hereto and not
         otherwise defined have the meaning ascribed thereto herein.

12.      The parties agree to execute and deliver any other  documents as may be
         considered  necessary  or  desirable  in  order to give  effect  to the
         foregoing.

This agreement may be executed in counterparts by facsimile, each of which shall
be deemed to be an original,  but all of which shall constitute one and the same
agreement.  Please  confirm  that  the  foregoing  is in  accordance  with  your
understanding  of our  agreement  by signing and  returning to us a copy of this
letter.

Yours very truly,

Canaccord International Ltd.


Per: ______________________


Accepted and agreed to this ____ day of March, 2001

Gasco Energy, Inc.


Per: _____________________
           President

<PAGE>

                                  SCHEDULE "A"

            FORMING PART OF AND INCLUDED IN THE LETTER AGREEMENT OF
              MARCH 15, 2001 BETWEEN CANACCORD INTERNATIONAL LTD.
                              AND GASCO ENERGY INC.

Gasco  Energy,  Inc.  (the  "Indemnitor")  hereby  agrees to indemnify  and hold
Canaccord  International  Ltd.  and/or any of its affiliates  and/or  subsidiary
companies and/or divisions (hereinafter referred to as the "Agent") and each and
every  of  the  directors,   officers,  employees,   shareholders,   agents  and
representatives  of the  Agent  (hereinafter  referred  to as  the  "Personnel")
harmless  from  and  against  any and all  expenses,  losses,  claims,  actions,
obligations,  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 insofar as such expenses,  losses,
claims,  damages,  liabilities or actions arise out of or are based, directly or
indirectly,  upon the  engagement of the Agent  hereunder or 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, actions, obligations, 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  itemized 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,
actions, 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, actions, damage or liability any
excess  of such  amount  over the  amount  of the  fees  received  by the  Agent
hereunder pursuant to the attached letter agreement.

<PAGE>

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 any  Personnel  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 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
(including  an amount to reimburse  the Agent for time spent by its Personnel in
connection  therewith) and  out-of-pocket  expenses incurred by 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 ensure 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.

CANACCORD INTERNATIONAL LTD.

By:______________________________________

GASCO ENERGY INC.

By:_______________________________________
             President

<PAGE>

                                  SCHEDULE "B"

             FORMING PART OF AND INCLUDED IN THE LETTER AGREEMENT OF
               MARCH 15, 2001 BETWEEN CANACCORD INTERNATIONAL LTD.
                             AND GASCO ENERGY INC.

Transaction Fee Schedule:

         1.       US$10,000  payable  immediately as a retainer upon the signing
                  of this letter. US$50,000 work fee payable in five (5) monthly
                  installments of US$10,000 per month  commencing on the monthly
                  anniversary of the date of this letter.

         2.       5% of the  Transaction  Value,  payable in Gasco Energy,  Inc.
                  freely tradable common stock.