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                    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, 2001

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

                         Commission file number: 0-26321

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

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

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

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

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

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

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

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

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

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

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

                      Documents incorporated by reference:

The information called for by Part III of Form 10-K is incorporated by reference
to the definitive proxy statement for the annual meeting of stockholders of the
Company to be filed with the Securities and Exchange Commission not later than
120 days after December 31, 2001.


<PAGE>








PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Business of Gasco

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

History

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

On  February  1,  2001,  the  Company  entered  into an  Agreement  and  Plan of
Reorganization  (the "Pannonian  Agreement") whereby it issued 14,000,000 shares
of its common stock and warrants to the former stockholders of Pannonian Energy,
Inc.  ("Pannonian"),  a private  corporation  incorporated under the laws of the
State of Delaware,  in connection with the merger of Pannonian with a subsidiary
of the Company (the  "Pannonian  Merger").  Pannonian was an independent  energy
company engaged in the exploration, development and acquisition of crude oil and
natural gas  reserves in the western  United  States and was also  considered  a
development  stage oil and gas  company  as defined by  Statement  of  Financial
Accounting Standards ("SFAS") No. 7.

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

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

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

Acquisition, Exploration and Development Expenses

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

Principal Products or Services and Markets

Gasco conducts exploration activities to locate natural gas and crude petroleum.
The  principal  markets  for these  commodities  are  natural  gas  transmission
pipeline   companies,   utilities,   refining  companies  and  private  industry
end-users.

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

The Company's natural gas and petroleum  exploration  activities take place in a
highly  competitive and speculative  business  atmosphere.  In seeking  suitable
natural gas and petroleum  properties  for  acquisition,  Gasco  competes with a
number of other  companies  operating in its areas of interest,  including large
oil and gas companies and other  independent  operators  with greater  financial
resources.  Management does not believe that Gasco's competitive position in the
petroleum and natural gas industry will be significant.

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

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

Governmental Regulations and Environmental Laws

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

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

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

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

It is not  anticipated  that the Company  will be required in the near future to
expend  material  amounts because of  environmental  laws and  regulations,  but
inasmuch as such laws and  regulations  are frequently  changed,  the Company is
unable to predict the ultimate future cost of compliance.

The Company believes it is presently in compliance with all applicable  federal,
state or local  environmental  laws,  rules or regulations;  however,  continued
compliance  (or  failure to comply) and future  legislation  may have an adverse
impact on the Company's present and contemplated business operations.

The  foregoing  is only a brief  summary of some of the  existing  environmental
laws,  rules and  regulations  to which the Company's  business  operations  are
subject,  and there are many others,  the effects of which could have an adverse
impact on Gasco.  Future  legislation  in this area will no doubt be enacted and
revisions  will be made in current  laws.  No assurance  can be given as to what
effect these present and future laws, rules and regulations will have on Gasco's
current and future operations.

Number of Total Employees and Number of Full-Time Employees

As of March 15, 2002, Gasco has nine full-time employees.

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

Risk Factors

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

         Accumulated Losses

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

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.  There can be no assurances  that Gasco will be able to successfully
develop any  prospects  that it acquires or that it will  achieve  profitability
from its operations.

         Absence of a Mature Public Market

The  Company's  common stock has only been trading in the public  markets  since
January  2001,  and such  trading has been  sporadic  and  erratic.  A holder of
Gasco's  common stock may not be able to liquidate his or her  investment in the
event of an emergency and shares of Gasco's  common stock may not be accepted as
collateral for loans.

The Company has applied for listing on the  American  Stock  Exchange  ("AMEX").
Listing on the AMEX is discretionary with the Exchange, however, and there is no
assurance  that Gasco will be accepted for AMEX listing,  or that such a listing
will result in an active trading market.

         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 major risk affecting drilling
is the need to  obtain  drilling  permits  from  local  authorities.  Delays  in
obtaining drilling permits,  the failure to obtain a drilling permit for a well,
or a permit  with  unreasonable  conditions  or costs  could  have a  materially
adverse effect on Gasco's ability to effectively develop its properties.

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.

As with any petroleum property,  there can be no assurance that oil and gas will
be produced  from the  properties in which Gasco,  or any venture,  in which the
Company participates,  may obtain an interest. In addition, the marketability of
oil and gas which may be  acquired  or  discovered  will be affected by numerous
factors  beyond the control of Gasco.  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 not  receiving  an
adequate  return on invested  capital.  There is no assurance  that crude oil or
natural gas in commercial quantities will be discovered by Gasco, or any venture
in which Gasco participates.

         Financing Risks

Gasco has relied on the sale of its equity  capital to fund working  capital and
the acquisition of its prospects and related  leases.  Gasco will be required to
raise additional  capital in 2002. There is no assurance that additional funding
will be available to fund the  acquisition,  exploration  or  development of any
additional  properties.  There can be no  assurance  that  Gasco will be able to
obtain adequate financing in the future or that the terms of such financing will
be favorable. Any future financing will likely result in substantial dilution to
Gasco's  stockholders.  Failure  to  generate  operating  cash flow or to obtain
additional  financing could result in substantial  dilution of Gasco's  property
interests,  or delay or cause indefinite postponement of further exploration and
development of its prospects with the possible loss of such properties.

In this regard,  the Company  entered into an agreement with Phillips  Petroleum
("Phillips")  to  conduct  drilling  operations  on Gasco's  Riverbend  project.
Phillips  will  fund its share of  drilling  and  completion  costs to the total
depth,  and the Company must fund its own drilling and completion costs in order
to maximize its  interests  in the  Riverbend  wells being  drilled by Phillips.
Additionally,  the Company owns a majority interest in the shallower  formations
including  the Wasatch  formation.  The  Riverbend  project  alone will call for
significant new funding that may not be available within a reasonable time or on
terms  acceptable to Gasco.  The Company is considering  several options for its
2002 drilling program.

         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 intends
to engage in  participating  in the drilling of both exploratory and development
wells.  Exploratory wells have much greater dry hole risk than do wells that are
drilled offsetting established production. 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

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.  This practice is
widely followed in the petroleum and natural gas industry.

Prior to the drilling of a petroleum  and natural gas well,  however,  it is the
normal  practice in the  petroleum  and natural gas  industry  for the person or
company acting as the operator of the well to obtain a preliminary  title review
of the spacing unit within which the proposed  petroleum and natural gas well is
to be drilled to ensure there are no obvious  deficiencies in title to the well.
It frequently happens,  as a result of such examinations,  that 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.

From  time to  time,  the  examination  made by  title  lawyers  reveals  that a
petroleum and natural gas lease or leases is worthless, having been purchased in
error from a person who is not the owner of the  mineral  interest  desired.  In
such  instances,  the amount  paid for such  petroleum  and natural gas lease or
leases is generally lost.

To date Gasco has not lost title to any of its petroleum and natural gas leases,
nor is Gasco aware that any of its currently held properties is subject to being
lost as a result of faulty titles.

         Environmental Regulations

In general, as noted above, the exploration and proposed  production  activities
of Gasco are subject to certain  federal,  state and local laws and  regulations
relating  to  environmental   quality  and  pollution  control.  Such  laws  and
regulations  increase the costs of these activities and may prevent or delay the
commencement or continuance of a given operation. Compliance with these laws and
regulations  has not had a material  effect on Gasco's  operations  or financial
condition  to date.  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 are frequently changed and Gasco
is unable to predict the ultimate cost of compliance.  Generally,  environmental
requirements  do not appear to affect Gasco any differently or to any greater or
lesser extent than other companies in the industry.

Gasco believes that its operations  comply, in all material  respects,  with all
applicable environmental regulations.

         Governmental Regulations

Petroleum and natural gas exploration, development and production are subject to
various types of regulation by local,  state and federal  agencies.  Legislation
affecting the petroleum  and natural gas industry is under  constant  review for
amendment and expansion.  Also, numerous departments and agencies,  both federal
and  state,  are  authorized  by  statute  to issue  and have  issued  rules and
regulations binding on the petroleum and natural gas industry and its individual
members,  some of which carry substantial  penalties for failure to comply.  The
regulatory  burden on the petroleum and natural gas industry  increases  Gasco's
cost of doing business and, consequently, affects its profitability. There is no
assurance  that laws and  regulations  enacted in the future will not  adversely
affect the petroleum and natural gas industry.  However, since these regulations
generally apply to all petroleum and natural gas producers,  management of Gasco
believes that these regulations should not put Gasco at a material  disadvantage
with respect to other petroleum and natural gas producers.

Most  states in which Gasco may own and/or  operate  properties  have  statutes,
rules and regulations  governing  conservation matters including the unitization
or pooling of petroleum  and natural gas  properties,  establishment  of maximum
rates of production from petroleum and natural gas wells and the spacing of such
wells.

Petroleum and natural gas mineral rights may be held by individuals or
corporations and, in certain circumstances, by governments having jurisdiction
over the area in which such mineral rights are located. As a general rule,
parties holding such mineral rights grant licenses or leases to third parties to
facilitate the exploration and development of these mineral rights. The terms of
the leases and licenses are generally established to require timely development.
Notwithstanding the ownership of mineral rights, the government of the
jurisdiction in which mineral rights are located generally retains authority
over the manner of development of those rights.

In addition to royalties paid to freehold owners, each state generally imposes a
production or severance  tax with respect to  production  and sale of crude oil,
natural gas and natural gas liquids within their respective  jurisdictions.  For
the most part,  state production taxes are applied as a percentage of production
or sales.  Payment of these taxes is in the normal  course of  operations in the
petroleum  and natural  gas  industry  and should not have a material  impact on
Gasco's financial condition.

         Natural Gas and Oil Prices

In recent decades, there have been periods of both worldwide  overproduction and
underproduction of hydrocarbons and periods of both increased and relaxed energy
conservation  efforts. Such conditions have resulted in periods of excess supply
of, and reduced demand for,  crude oil on a worldwide  basis and for natural gas
on a domestic basis. These periods have been followed by periods of short supply
of, and  increased  demand for,  crude oil and natural  gas. The excess or short
supply of crude oil has placed  pressures on prices and has resulted in dramatic
price  fluctuations  even during  relatively  short  periods of seasonal  market
demand.

         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.  Gasco's ability to
acquire  additional  properties  and to discover  reserves in the future will be
dependent  upon its ability to evaluate and select  suitable  properties  and to
consummate  transactions  in a  highly  competitive  environment.  There is also
competition  between the petroleum and natural gas industry and other industries
with  respect  to the supply of energy and fuel to  industrial,  commercial  and
individual  customers.  There  is no  assurance  that  Gasco  will  be  able  to
effectively compete against such companies.



<PAGE>


Risks Associated with Management of Growth

Because of its small size,  Gasco's growth will be seen as rapid as the Company
seeks to acquire a critical  mass of assets and  capacities  through  mergers or
acquisitions.  These growth steps are aimed at improving  the value of Gasco and
to achieve certain economies of scale.  Although there is no assurance that this
rapid  growth  will occur,  to the extent  that it does  occur,  it 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.

         Dependence upon Key Personnel

The success of Gasco's  operations  and activities is dependent to a significant
extent on the efforts and abilities of its  management.  The loss of services of
any of its key managers could have a material adverse effect on Gasco. Gasco has
not obtained "key man" insurance for any of its management.

Mr.  Erickson is the  President  and CEO of Gasco.  The loss of his services may
adversely affect the business and prospects of Gasco.

         Adequate Labor

In the event Gasco needs to employ additional  personnel,  the Company will need
to recruit qualified personnel to staff our operations. Gasco believes that such
personnel  currently  are  available  at  reasonable  salaries  and wages in the
geographic  areas in which Gasco operates.  There can be no assurance,  however,
that such  personnel  will be  available in the future.  In addition,  we cannot
predict whether the labor staffing at any of Gasco's projects will be unionized,
which may result in potentially higher operating costs.

         Dividend Risks

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

Conflicts of Interest

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

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

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

Penny Stock Regulation

The SEC has adopted  rules that regulate  broker-dealer  practices in connection
with  transactions  in "penny  stock".  Generally,  "penny  stocks"  are  equity
securities with a price of less than $5.00 (other than securities  registered on
certain  national  securities  exchanges  or quoted on the  NASDAQ  system).  If
Gasco's shares are traded for less than $5 per share, as they currently are, the
shares will be subject to the SEC's  penny  stock  rules  unless (1) Gasco's net
tangible assets exceed $5,000,000 during Gasco's first three years of continuous
operations  or  $2,000,000   after  Gasco's  first  three  years  of  continuous
operations;  (2) Gasco has had average  revenue of at least  $6,000,000  for the
last three years; or (3) Gasco becomes listed on a national  securities exchange
or becomes quoted on the NASDAQ system.

The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not  otherwise  exempt  from the  rules,  to deliver a  standardized  risk
disclosure document prescribed by the SEC that provides  information about penny
stocks  and the  nature  and  level of  risks in the  penny  stock  market.  The
broker-dealer  also  must  provide  the  customer  with  current  bid and  offer
quotations for the penny stock,  the compensation of the  broker-dealer  and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. In addition, the penny
stock rules require that prior to a  transaction  in a penny stock not otherwise
exempt  from  those  rules,  the  broker-dealer  must  make  a  special  written
determination  that the penny stock is a suitable  investment  for the purchaser
and  receive  the  purchaser's  written  agreement  to  the  transaction.  These
requirements  may have the effect of reducing  the level of trading  activity in
the secondary  market for a stock that becomes subject to the penny stock rules.
As long as Gasco's  Common Stock remains  subject to the penny stock rules,  the
holders of the Common Stock may find it difficult to sell their shares.

         Enforcement of Legal Process

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

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

Cautionary Statement Regarding Forward-Looking Statements

In the interest of providing the shareholders with certain information regarding
the Company's future plans and operations,  certain statements set forth in this
Form 10-K relate to management's  future plans and  objectives.  Such statements
are  forward-looking  statements  within  the  meanings  of  Section  27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934,  as amended.  All  statements  other than  statements of historical
facts  included  in  this  report,  including,  without  limitation,  statements
regarding the Company's future financial position,  business strategy,  budgets,
projected  costs and plans and objectives of management  for future  operations,
are  forward-looking   statements.  In  addition,   forward-looking   statements
generally can be identified by the use of  forward-looking  terminology  such as
"may,"  "will,"  "expect,"  "intend,"   "project,"   "estimate,"   "anticipate,"
"believe,"  or  "continue"  or the  negative  thereof  or  similar  terminology.
Although any forward-looking statements contained in this Form 10-K or otherwise
expressed  by or on behalf  of the  Company  are,  to the  knowledge  and in the
judgment  of  the  officers  and  directors  of  the  Company,  believed  to  be
reasonable, there can be no assurances that any of these expectations will prove
correct  or  that  any  of  the  actions   that  are  planned   will  be  taken.
Forward-looking  statements  involve known and unknown  risks and  uncertainties
which may cause the Company's actual performance and financial results in future
periods to differ materially from any projection, estimate or forecasted result.
Important  factors that could cause actual results to differ materially from the
Company expectations  ("Cautionary  Statements") include those discussed in this
report under the caption "Risk Factors",  above. All subsequent written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf, are expressly qualified in their entirety by the Cautionary  Statements.
The Company assumes no duty to update or revise its  forward-looking  statements
based on changes in internal estimates or expectations or otherwise.


<PAGE>



ITEM 2 - DESCRIPTION OF PROPERTY

Petroleum and Natural Gas Properties

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

         Riverbend Project

The Riverbend  project is comprised of approximately  117,000 gross acres in the
Uinta  Basin of  northeastern  Utah,  some of which is leased by Gasco,  some of
which is subject to farmout  and other  agreements  under  which  Gasco may earn
leasehold  interests,  and  some of  which  is held by  third  parties.  Gasco's
geologic and engineering focus is concentrated on three tight-sand formations in
the basin: the Wasatch, Mesaverde and Mancos formations.

In December  2000,  Gasco entered into an agreement with Phillips that defined a
60,000-acre  Area of Mutual Interest ("AMI") within the Riverbend  project,  not
all of which is currently leased by either Gasco or Phillips. Under the terms of
this  agreement,  Phillips  paid  $1,000,000  to  Gasco  upon  execution  of the
agreement,  and later  expended  $8,000,000 in connection  with the drilling and
completion of three producing  wells. As a result of Phillips'  drilling,  Gasco
earned  additional  acreage under certain  farmout  agreements  during 2001. The
agreement  further afforded Phillips the right to acquire an 80% interest in all
of Gasco's  leases and farmout  agreements  within the AMI by assigning to Gasco
leasehold  interests in two leases within the AMI that Gasco  heretofore  had no
ownership.

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

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

         Greater Green River Basin Project

In Wyoming,  Gasco established an AMI with Burlington  Resources  ("Burlington")
covering  approximately  330,000 acres in Sublette  County,  Wyoming  within the
Greater  Green  River  Basin.   As  of  March  15,  2002,   the  Company  leases
approximately 67,000 acres in this area. The exploration agreement governing the
AMI  requires  Burlington  to  drill  two  wells  and  to  shoot  180  miles  of
high-resolution  2-D seismic.  During 2001,  three shallow wells were drilled in
this area for the purpose of holding acreage and earning expiring leasehold. Two
of the wells tested only the Fort Union and Upper Lance formations and the third
well  tested  all zones.  All of these  wells have been cased and are in various
stages of completion.  They did not evaluate the deeper,  high-potential  Middle
and Lower Lance formations that are prolific producers in the nearby Jonah Field
and Pinedale  Anticline  area.  Gasco and Burlington are targeting  these deeper
formations with their ongoing seismic and exploration activities.

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

During  February 2002, the Company  purchased a 50% interest in 21,613 acres for
approximately  $1,411,000  and a 20%  interest in 4,098 acres for  approximately
$107,000 in Sublette  County,  Wyoming.  The Company also  purchased  additional
leasehold interests in Sublette County,  Wyoming covering  approximately  16,606
acres  for a total  purchase  price of  $1,500,000  on  February  19,  2002.  In
connection with this  transaction,  the Company  received an exclusive option to
purchase an additional  72,583 acres in this area.  Monthly payments of $300,000
are required during 2002 in order to maintain this option. The Company may elect
to exercise its option to complete the transaction at any time.

On February 26, 2002,  Gasco began drilling a well in the Southwest  Jonah field
located in the Greater Green River Basin in Sublette County,  Wyoming.  This was
the  first  well  drilled  within a newly  created  AMI with  Cabot Oil and Gas,
consisting of nine sections (5,760 gross acres,  1,440 net acres).  The well was
drilled to a total  depth of 11,000  feet.  The well  encountered  natural  gas,
however not of sufficient  quantities to be deemed  economic.  The Company still
has an option to drill additional wells within the AMI if the new interpretation
of the well's data in  integration  with the seismic data warrants such testing.
The net dry hole cost of the well is estimated at $500,000.

         Southern California Project

The Company currently leases  approximately  3,900 net acres in the Kern and San
Luis  Obispo  Counties of  southern  California.  The Company has no drilling or
development  plans for this acreage  during 2002,  but plans to continue  paying
leasehold  rentals  and  other  minimum  geological  expenses  to  preserve  the
Company's  acreage  positions  on these  three oil  prospects.  The  Company may
consider selling these positions in the future.

Productive Gas Wells

The following  summarizes  the Company's  productive and shut-in gas wells as of
December 31, 2001.  Productive  wells are  producing  wells and wells capable of
production.  Shut-in  wells are wells  that are  capable of  production  but are
currently not producing.  Gross wells are the total number of wells in which the
Company  has an  interest.  Net  wells are the sum of the  Company's  fractional
interests owned in the gross wells.

                                                        Productive Gas Wells
                                                   Gross                     Net

       Producing gas wells                         4                         1.5
       Shut-in gas wells                           4                         3.2
                                                   -                         ---
                                                   8                         4.7
                                                   =                         ===

Gasco does not operate any of these wells.

Oil and Gas Acreage

The following table sets forth the undeveloped  leasehold acreage, by area, held
by the Company as of December  31,  2001.  Undeveloped  acres are acres on which
wells have not been  drilled  or  completed  to a point  that  would  permit the
production of commercial quantities of oil and gas, regardless of whether or not
such acreage contains proved reserves. Gross acres are the total number of acres
in  which  Gasco  has a  working  interest.  Net  acres  are the sum of  Gasco's
fractional  interests owned in the gross acres. 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 lowest ownership  interest at any depth.  Gross
Net

     Utah                                           116,997               81,034
     Wyoming                                         52,363               45,232
     California                                       3,868                3,866
                                               ------------         ------------

         Total acres                                173,228              130,132
                                               ============         ============

Subsequent to December 31, 2001, the Company acquired approximately 42,317 gross
(28,233 net) undeveloped  acres in Sublette County,  Wyoming.  On March 7, 2002,
the Company completed a strategic  exchange of acreage within the Uinta Basin in
northeastern Utah, whereby it received 3,359 gross acres (2,474 net) in exchange
for 320 gross acres (160 net) and the  contractual  right to earn Wasatch rights
on approximately 2,463 net Uinta Basin acres.

The Company has a right to purchase an  additional  72,583  acres in the Greater
Green River Basin by paying  monthly  option fees of $300,000  during 2002.  The
Company can also earn a 37.5% interest in an additional 21,760 acres in Sublette
County, Wyoming if it participates in the drilling of one well prior to November
2002.  The Company  also has the right to earn a 20%  interest  in 21,951  gross
acres  within the Uinta  Basin by  participating  in the  drilling of four wells
prior to February 2004.

Drilling Activity

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

                                                   Gross                     Net
       Exploratory Wells:
         Productive                                  4                       1.6
         Dry                                         2                       2.0
                                               ---------                 -------

           Total wells                               6                       3.6
                                               =========                 =======

Office Space

The Company leases approximately 2,400 square feet of office space in Englewood,
Colorado for  approximately  $34,500 per year under a lease that  terminates  on
August 30,  2004.  The  Company's  management  believes  that this space will be
adequate for its operations during the next year.

ITEM 3 - LEGAL PROCEEDINGS

None.

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

None.

PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  Company's  common  stock was  initially  admitted  for  trading  on the OTC
Bulletin  Board on August 25, 2000 under the trading  symbol  "SJQR" and trading
did not commence until January 2001. On March 30, 2001, SJRI changed its name to
Gasco and began  trading  under the symbol  "GASE".  As of March 15,  2002,  the
Company had 84 registered  shareholders of its common stock. During the last two
fiscal  years,  no cash  dividends  were  declared on Gasco's  common  stock and
management does not anticipate that dividends will be paid in the near future.

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

                                                         High              Low

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

Equity Transactions

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

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

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

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

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

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

In July 2001, Brek Energy Corporation  (formerly known as First Ecom.com,  Inc.)
("Brek")   purchased   1,000  shares  of  the  Company's   Preferred  Stock  for
$19,000,000. Brek agreed not to transfer the Preferred Stock or the common stock
issuable upon  conversion  thereof for three years (the "lock up period") except
under  certain  circumstances  and except for 10% of such common stock per year.
During the lock up period, Brek has given the Company the right of first refusal
on all of the Company securities it holds. Certain principal stockholders of the
Company also gave Brek a similar right of first refusal for a five-year  period.
Costs of the  sale,  including  1,025,000  shares  of  common  stock  valued  at
$3,280,000  ($3.20 per  share),  were  $4,849,633.  The total  costs of the sale
included $1,500,000 and the issuance of 125,000 shares of common stock valued at
$400,000 paid to Canaccord International Ltd. and the issuance of 900,000 shares
of common stock  valued at  $2,880,000  paid to Wet Coast  Management  Corp.  as
brokerage commissions.

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

During  the year  ended  December  31,  2001,  the  Company  granted  options to
employees,  directors and consultants to purchase an aggregate  6,519,000 shares
of the Company's common stock at exercise prices ranging from $1.00 to $3.15 per
share.  The options vest at varying  schedules within three years of their grant
date and expire within ten years from the grant date.  The aggregate fair market
value of options,  determined using the Black Scholes Pricing Model,  granted to
consultants of $423,594 was charged to operations during the year ended December
31, 2001.

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

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

ITEM 6 - SELECTED FINANCIAL DATA

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

                                                                      As of and for the Year Ended December 31,
                                                                      -----------------------------------------
                                                               2001              2000              1999             1998
                                                               ----              ----              ----             ----
Summary of Operations
<S>                                                           <C>                 <C>               <C>                <C>
     Revenue                                                     $ 36,850                 -                 -                -
     General & administrative expense                           4,331,825          $951,734          $738,153           $6,000
     Net loss                                                 (4,129,459)         (843,261)         (736,834)          (6,000)
     Net loss per share                                            (0.63)            (0.06)             (.06)                -
</TABLE>



<PAGE>
<TABLE>
<CAPTION>



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


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Business Combination

On February 1, 2001, the Company entered into the Pannonian Agreement whereby it
issued  14,000,000  shares of its common stock in connection  with the Pannonian
Merger.  Pannonian was an independent energy company engaged in the exploration,
development and acquisition of crude oil and natural gas reserves in the western
United States. Pannonian is an exploration stage oil and gas company.

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

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

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


<PAGE>


Overview

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

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

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

Forward Looking Statements

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

Results of Operations

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

2001 Compared to 2000

During 2001,  the Company owned  interests in two wells that began  producing in
late October.  The oil and gas revenue and lease  operating  expense during 2001
relate to these wells and is comprised of approximately  17,545 mcf of gas at an
average  price of $2.10 per mcf. The Company had no producing  wells during 2000
and 1999.  Interest  income during 2001  represents  the interest  earned on the
Company's  cash balance,  which  increased  from $881,041 in 2000 to $12,296,585
primarily due to the sale of preferred and common stock during 2001. General and
administrative  expense  increased  from $951,734 in 2000 to $4,331,825 in 2001,
primarily due to the increase in staff and professional fees associated with the
commencement  of its own operations.  The interest  expense during 2001 and 2000
represents the amounts incurred on the Company's outstanding notes payable which
were paid off during 2001.  Other income  during 2000  consisted  primarily of a
$200,000 gain on the sale of a drilling permit offset by miscellaneous expenses.
Other income during 2001 is comprised of numerous  miscellaneous  items, none of
which is individually significant.

2000 Compared to 1999

General and administrative  expenses increased from $738,153 in 1999 to $951,734
in 2000 primarily due to increased  consulting  expenses  during 2000.  Interest
expense  during 2000 and 1999 was  comprised  of the  interest on the  Company's
notes payable  balances.  The increase was due to a higher average notes payable
balance  during 2000 as compared to 1999.  Other  income  during 2000  consisted
primarily  of a  $200,000  gain  on the  sale of a  drilling  permit  offset  by
miscellaneous  expenses.  Other  income  during 1999 was  comprised  of numerous
miscellaneous items, none of which were individually significant.

Financial Condition and Plan of Operations

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

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

In  management's  view,  given the  nature of the  Company's  operations,  which
consist of the acquisition,  exploration and evaluation of petroleum and natural
gas properties and participation in drilling activities on these properties, the
most  meaningful  information  relates to current  liquidity and  solvency.  The
Company's financial success will be dependent upon the extent to which Gasco can
discover sufficient economic reserves and successfully  develop and produce from
the properties  containing  those reserves.  Such  development may take years to
complete and the amount of resulting  income,  if any, is difficult to determine
with any  certainty.  The sales  value of any  petroleum  or natural gas that is
discovered is largely dependent upon other factors beyond the Company's control.

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

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

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

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

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

d.       Continue  paying  monthly  option fee of $300,000 to preserve the
         Company's right to acquire approximately  72,583  acres in the  Greater
         Green River Basin as discussed above.

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

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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


<PAGE>




ITEM 8 - FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Reports                                              24-26

Consolidated Balance Sheets at December 31, 2001 and 2000                     27

Consolidated Statements of Operations for the Years Ended
    December 31, 2001, 2000 and 1999                                          28

Consolidated Statements of Stockholders' Equity for the Years
    Ended December 31, 2001, 2000 and 1999                                    29

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2001, 2000 and 1999                                          30

Notes to Consolidated Financial Statements                                 31-43



<PAGE>


                          INDEPENDENT AUDITORS' REPORT


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

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

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

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


Deloitte & Touche, LLP


Denver, Colorado
March 15, 2002



<PAGE>





                          INDEPENDENT AUDITOR'S REPORT


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

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

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Gasco
Energy,  Inc. and its  subsidiaries  as of December 31, 2000, and the results of
their  operations  and their cash  flows for the year then ended and  cumulative
amounts  from  inception  to December  31, 2000 in  conformity  with  accounting
principals generally accepted in the United States of America.


                                            Wheeler Wasoff, P.C.

Denver, Colorado
September 20, 2001







<PAGE>





Report of Independent Accountants

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

In  our  opinion,  the  accompanying   statements  of  operations,   changes  in
stockholders  equity and cash  flows  from  inception  on May 21,  1998  through
December  31, 1999 present  fairly,  in all  material  respects,  the results of
operations  and cash flows of Gasco Energy,  Inc,  (formerly  Pannonian  Energy,
Inc.) from  inception  on May 21, 1998 through  December 31, 1999 in  conformity
with accounting  principles  generally accepted in the United States of America.
These financial  statements are the responsibility of the Company's  management;
our responsibility is to express an opinion on these financial  statements based
on our audit.  We conducted  our audit of these  statements  in  accordance  wit
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

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



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

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

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

                                                                              December 31,
                                                                        2001                 2000
ASSETS

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

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

PROPERTY AND EQUIPMENT, net                                               52,101                7,985
                                                                         -------                -----
                                                                    $ 21,658,525         $  3,007,259
                                                                   =============         ============
LIABILITIES AND STOCKHOLDERS' EQUITY

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

COMMITMENTS (see Note 9)

STOCKHOLDERS' EQUITY
   Series A Convertible Redeemable preferred stock-
   $.001 par value; 5,000,000 shares authorized; 1,000
   shares issued and outstanding in 2001, none in 2000                         1                    -

   Common stock-$.0001 par value; 100,000,000 shares
    authorized; 27,252,500 shares issued and 27,178,800
    shares outstanding in 2001; 13,800,595 shares issued
    and outstanding in 2000                                                2,725                1,380
   Additional paid in capital                                         38,569,923            3,163,620
   Deferred compensation                                               (261,375)
   Deficit accumulated during the development stage                 (17,115,554)          (1,586,095)
   Less cost of treasury stock of 73,700 common shares in 2001         (130,295)                    -
                                                                       ---------        -------------
                                                                      21,065,425            1,578,905
                                                                      ----------          -----------

                                                                    $ 21,658,525         $  3,007,259
                                                                   =============         ============
<FN>

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

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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


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

REVENUES
<S>                                                         <C>            <C>              <C>                    <C>
     Oil and gas                                            $  36,850              -             -              $    36,850
     Gain on sale of permit                                         -      $ 200,000             -                  200,000
     Interest                                                 193,352                                               193,352
                                                             ---------    ------------      ---------           ----------
                                                              230,202        200,000        $    -                  430,202
                                                            ---------     -----------       ----------           ----------

OPERATING EXPENSES

     General and administrative                              4,331,825        951,734       738,153                6,027,175
     Lease operating                                            12,679              -             -                   12,679
     Interest                                                   67,363         61,776        13,347                  142,486
                                                              ---------       ---------   -------------           ----------

                                                             4,411,867      1,013,510       751,500                6,182,340
                                                             ---------      ---------       ----------             ----------

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

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

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

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

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

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










<FN>

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


<PAGE>



47



<TABLE>
<CAPTION>

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

                        Convertible Redeemable
                           Preferred Stock    Common Stock      Additional     Deferred   Accumulated  Treasury       Total
                          Shares    Amount  Shares   Amount  Paid in Capital Compensation   Deficit      Stock
<S>                      <C>       <C>    <C>       <C>       <C>           <C>           <C>           <C>         <C>
Balance, at Inception
 (May 21, 1998)
 Net loss                                                                                  $  (6,000)                $  (6,000)
                           -------   ------ ------- -------     ------------   ---------   ---------     -------     ----------
Balance, December 31, 1998                                                                    (6,000)                   (6,000)
 Issuance of common shares                13,800,595  $1,380    $ 3,163,620                                          3,163,620
 Net loss                                                                                   (736,834)                 (736,834)
                           -------   -----  ---------  -----    ------------   ---------   ----------    -------     -----------
Balance, December 31, 1999                 13,800,595  1,380      3,163,620                 (742,834)                 (742,834)
 Net loss                                                                                   (843,261)                 (843,261)
                           -------   ----   ---------  -----    ------------   ----------  ----------    -------     ----------
Balance, December 31, 2000                 13,800,595  1,380      3,163,620               (1,586,095)                 1,578,905
 Distribution of assets                                          (2,023,568)                                        (2,023,568)
 Issuance of common shares
 in connection with
 reverse acquisition of San
 Joaquin Resources, Inc.                   9,549,405     955        571,389                                             572,344
 Issuance of 1,000 convertible
 redeemable preferred shares 1,000 $  1                           17,430,366                                         17,430,367
 Issuance of common shares                 3,902,500     390       7,343,147                                          7,343,537
 Options issued for services                                         686,148  $ (686,148)
 Amortization of deferred
 compensation expense                                                            423,594                                423,594
 Deemed distribution                                              11,400,000               (11,400,000)
 Repurchase of common stock                                                                               (130,295)    (130,295)
 Net loss                                                                                   (4,129,459)               (4,129,459)
                         -------    ----- -----------  -----     ------------  -----------  -----------   ----------  -----------
Balance, December 31, 2001 1,000     1    27,252,500  $2,725     $ 38,571,102 $ (262,554) $ (17,115,554)  $(130,295) $ 21,065,425
                          ======    ===== ===========  =====     ============ ============ ============ ============  ============

<FN>

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


<PAGE>

<TABLE>
<CAPTION>

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

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

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






<FN>

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



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

NOTE 1 - ORGANIZATION

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

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

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

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

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

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

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


<PAGE>

<TABLE>
<CAPTION>


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

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

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

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

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  consolidated financial statements include Gasco and its wholly
owned  subsidiaries,  Pannonian and San Joaquin Oil and Gas, Ltd. as of December
31, 2001.  The  consolidated  financial  statements as of and for the year ended
December 31, 2000 include  Pannonian  and its wholly owned  subsidiary  PIL. The
statements  for the year ended  December 31, 1999 include  only  Pannonian.  All
significant intercompany transactions have been eliminated upon consolidation.

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

Cash and Cash Equivalents

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

Property, Plant and Equipment

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

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

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

Impairment of Long-lived Assets

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

Revenue Recognition

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

Computation of Net Income (Loss) Per Share

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


<PAGE>



Use of Estimates

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

Other Comprehensive Income

The Company does not have any items of other comprehensive  income for the years
ended December 31, 2001, 2000 and 1999.  Therefore,  total comprehensive  income
(loss) is the same as net income (loss) for these periods.

Income Taxes

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

Stock Based Compensation

The  Company  accounts  for  its  stock-based   compensation   using  Accounting
Principles  Board's  Opinion No. 25 ("APB No. 25").  Under APB 25,  compensation
expense is recognized for stock options with an exercise price that is less than
the  market  price on the  grant  date of the  option.  For stock  options  with
exercise prices at or above the market value of the stock on the grant date, the
Company  adopted  the  disclosure-only  provisions  of  Statement  of  Financial
Accounting  Standards No. 123 "Accounting for Stock-Based  Compensation"  ("SFAS
123"). Under SFAS 123, the Company provides pro forma information  regarding net
income  (loss) as if  compensation  expense  for the  options  granted  had been
determined in accordance with the fair value method of SFAS 123.

Concentration of Credit Risk

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

Recent Accounting Pronouncements

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

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

In June 2001 the FASB  issued  SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,  " which  requires  that the fair value of a liability for an asset
retirement  obligation  be recognized in the period in which it is incurred if a
reasonable  estimate of fair value can be made. The associated  asset retirement
costs are  capitalized as part of the carrying  amount of the long-lived  asset.
The asset retirement liability will be allocated to operating expense by using a
systematic  and rational  method.  The  statement is effective  for fiscal years
beginning  June 15,  2002.  The  Company  has not yet  determined  the impact of
adoption of this statement.

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

Reclassifications

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

NOTE 3 - OIL AND GAS PROPERTY

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

                                                     2001                 2000
                                                     ----                 ----

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

NOTE 4 - PROPERTY DISPOSITIONS

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

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

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

The Company held,  through PIL,  non-United  States oil and gas  properties.  In
accordance with the Agreement,  the Company distributed,  as a dividend in kind,
all of the outstanding shares of PIL to the shareholders of the Company on a one
to one basis with their Pannonian shares. The book value of the PIL shares as of
the date of distribution was approximately $174,000.

NOTE 5 - STOCKHOLDERS' EQUITY

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

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

In July 2001, Brek Energy Corporation  (formerly known as First Ecom.com,  Inc.)
("Brek")   purchased   1,000  shares  of  the  Company's   Preferred  Stock  for
$19,000,000. Brek agreed not to transfer the Preferred Stock or the common stock
issuable upon  conversion  thereof for three years (the "lock up period") except
under  certain  circumstances  and except for 10% of such common stock per year.
During the lock up period, Brek has given the Company the right of first refusal
on all of the Company securities it holds. Certain principal stockholders of the
Company also gave Brek a similar right of first refusal for a five-year  period.
Costs of the  sale,  including  1,025,000  shares  of  common  stock  valued  at
$3,280,000  ($3.20 per  share),  were  $4,849,633.  The total  costs of the sale
included $1,500,000 and the issuance of 125,000 shares of common stock valued at
$400,000 paid to Canaccord International Ltd. and the issuance of 900,000 shares
of common stock  valued at  $2,880,000  paid to Wet Coast  Management  Corp.  as
brokerage commissions.

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

Common Stock - Gasco has 27,252,000 shares of Common Stock issued and 27,178,300
shares outstanding as of December 31, 2001. The common shareholders are entitled
to one  vote  per  share on all  matters  to be  voted  on by the  shareholders;
however, there are no cumulative voting rights. Additionally,  as long as 50% of
the Preferred Stock is outstanding,  the Preferred Stock holders are entitled to
vote as a class equal to 26%, therefore, the common shareholders are effectively
entitled  to 0.74  votes per share.  The common  shareholders  are  entitled  to
dividends and other  distributions as may be declared by the board of directors.
Upon  liquidation or dissolution,  the common  shareholders  will be entitled to
share  ratably  in  the  distribution  of all  assets  remaining  available  for
distribution   after   satisfaction  of  all  liabilities  and  payment  of  the
liquidation preference of any outstanding preferred stock.

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

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

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

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

In July 2001,  the Company  acquired  unproved  oil and gas  properties  from an
entity for  $700,000  cash and 300,000  shares of the  Company's  common  stock,
valued at $846,000 ($2.82 per share). See related party discussion in Note 8 for
further discussion.

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

Stock Option Plan - During the year ended December 31, 2001, the Company granted
options to  employees,  directors  and  consultants  to  purchase  an  aggregate
6,519,000  shares of the Company's  common stock at exercise prices ranging from
$1.89 to $3.15 per share.  The options  vest at varying  schedules  within three
years of their grant date and expire  within ten years from the grant date.  The
aggregate  fair market  value of  options,  determined  using the Black  Scholes
Pricing Model, granted to consultants,  including the Pannonian officer issuance
above, of $423,594 was charged to operations  during the year ended December 31,
2001.

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

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

<TABLE>
<CAPTION>

                                                                                           Weighted Average
                                                                                            Exercise Price
                                                                 Number of Options

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

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

    Weighted average fair value of options granted                                                 $1.37
                                                                                                   =====

    Weighted average remaining contractual life of options outstanding                        8.91 years
                                                                                              ==========
</TABLE>

The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation ("SFAS
123") for the stock options granted to the employees and directors of the
Company. Accordingly, no compensation cost has been recognized for these
options. Had compensation expense for the options granted been determined based
on the fair value at the grant date for the options, consistent with the
provisions of SFAS 123, the Company's net loss and net loss per share for the
year ended December 31, 2001 would have been increased to the pro forma amounts
indicated below:

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

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

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

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

NOTE 6 - STATEMENT OF CASH FLOWS

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

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

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

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

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

         The Company entered into notes for the acquisition of oil and gas
         properties in the aggregate amount of $781,917. The Company assumed an
         18.75% interest in the notes, which was $143,609. The notes and the
         related properties were spun off as part of the Pannonian Agreement as
         described in Notes 1 and 4.

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

NOTE 7 - NOTES PAYABLE

Notes  payable - related at  December  31,  2000  consists  four notes  totaling
$529,280 payable to directors or officers of the Company and one note payable of
$15,000 to an entity  owned by a director  of the  Company  with  similar  terms
bearing interest at rates ranging from 5% to 10%.

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

All of these notes were settled during 2001.

NOTE 8 - INCOME TAXES

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

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

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

NOTE 9 - RELATED PARTY TRANSACTIONS

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

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

An  officer of the  Company  earned a $28,000  fee and 12,500  shares of Gasco's
common stock for  consulting  services  provided in  connection  with a property
acquisition  described  in Note  4.  This  same  officer  was  paid  $22,879  in
consulting  fees prior to his  appointment.  As part of this officer's  offer of
employment, the Company has committed to purchase the consulting business of the
officer for 250,000  shares of common stock.  The  transaction is expected to be
completed within the next year.

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

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

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

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

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

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

NOTE 10 - COMMITMENTS

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

            Year Ending December 31,                              Annual Rentals

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

Rent expense for the years ending  December 31, 2001, 2000 and 1999 was $46,476,
$52,573 and $45,216, respectively.

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

The Company has entered  into  employment  agreements  with certain key officers
through  January  31,  2006.  Total  compensation  for the  officers  covered is
$560,000 per annum.  The agreements  contain clauses  regarding  termination and
demotion of the officer that would require payment of an amount ranging from one
times  compensation to up to approximately  ten times the defined  compensation.
Included in the  employment  agreements is a bonus  calculation  for each of the
covered  officers  totaling  2.125% of a defined  cash flow figure  based on net
after tax earnings  adjusted for certain  expenses.  The agreements also contain
anti-dilution  provisions that contain the  requirements to grant options to the
officers  and one  director  for  them to  remain  at  their  current  ownership
percentages.


<PAGE>



NOTE 11 - EMPLOYEE BENEFIT PLANS

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

NOTE 12 - SELECTED QUARTERLY INFORMATION (Unaudited)

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

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

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

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

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

c - The increase in the net loss per share during the third quarter of 2001 is
due to the recognition of $11,400,000 in a deemed distribution to the holders of
the Preferred Stock as further described in Note 3.
<TABLE>
<CAPTION>

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

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

NOTE 13 - SUBSEQUENT EVENTS

The Company  acquired a 50% interest in 21,613 acres in Sublette  County Wyoming
for approximately $1,411,000 on February 13, 2002.

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

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

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

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


<PAGE>



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

Not applicable.

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

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  Annual Meeting of  Shareholders to
be  filed  with  the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 14 - EXHIBITS AND REPORTS ON FORM 8-K

              (a)    Exhibits:


Exhibit
Number                                           Exhibit

2.1     Agreement and Plan of Reorganization dated January 31, 2001 among San
        Joaquin Resources Inc., Pannonian Acquisition Corporation, and Pannonian
        Energy (1)
3.1     Amended and Restated Articles of Incorporation (2)
3.2     Certificate of Amendment to Articles of Incorporation of San Joaquin
        Resources (1)
3.3     Bylaws (3)
3.4     Amendment to Article II, Section 6 of the Bylaws (4)
10.1    1999 Stock Option Plan (5)
10.2    Financing Agreement with Wet Coast Management Corp. (6)
10.3    Consulting Agreement with Wet Coast Management Corp. (6)
10.4    Acquisition Agreement with Phillips Petroleum Company and Pannonian
        Energy, Inc. dated December 18, 2000 (6)
10.5    Financing Agreement with Canaccord International Ltd.
        dated March 15,2001(6)
10.6    Financial Services Agreement with Canaccord International Ltd.
        dated March 15, 2001 (6)
10.7    Private Placement Agency Agreement with Canaccord International Ltd.
        dated as of March 22, 2001 (7)
10.8    Form of Stock Option Agreement under the 1999
        Stock Option Plan 10.9 Stock Option Agreement dated
        January 2, 2001 between Gasco and Mark A.
        Erickson
10.10   Form of Stock Option Agreement dated February 8, 2001 between Gasco and
        each of Mark A. Erickson, Marc Bruner, J. Timothy Bowes,
        Carl Stadelhofer and Howard O. Sharpe
10.11   W. King Grant Employment Contract dated June 22, 2001
10.12   Michael Decker Employment Contract dated June 29, 2001
10.13   Mark A. Erickson Employment Contract dated July 11, 2001
10.14   Consulting Agreement dated July 11, 2001, between Gasco and Marc Bruner
10.15   Muddy Creek Exploration Agreement dated August 15, 2001, between Gasco,
        Shama Zoe Limited Partnership and Burlington Oil and Gas Company
10.16   CD Exploration Agreement dated August 15, 2001, between Gasco, Shama Zoe
        Limited Partnership and Burlington Oil and Gas Company
10.17   Gamma Ray Exploration Agreement dated August 15, 2001, between Gasco,
        Shama Zoe Limited Partnership and Burlington Oil and Gas Company
10.18   Sublette County WY AMI Agreement dated August 22, 2001 between Gasco,
        Alpine Gas Company and Burlington Oil and Gas Company
10.19   Lead Contractor Agreement dated January 24, 2002, between Gasco and
        Halliburton Energy Services, Inc.


                     (1)   Incorporated by reference to the exhibits filed with
                           the Company's Form 8-K dated January 31, 2001.
                     (2)   Incorporated by reference to the exhibits filed with
                           the Company's Form 8-K dated December 31, 1999.
                     (3)   Incorporated  by reference to the exhibits filed with
                           the Company's Form 10-SB dated July 23, 1999.
                     (4)   Incorporated by reference to the exhibits filed with
                           the Company's Form 10-QSB for the quarter ended
                           September 30, 2000.
                     (5)   Incorporated by reference to the exhibits filed with
                           the Company's Form 10-KSB for the fiscal year ended
                           December 31, 1999.
(6)                          Incorporated by reference to the exhibits filed
                             with the Company's Form 10-KSB for the fiscal year
                             ended December 31, 2000.
(7)                          Incorporated by reference to the exhibits filed
                             with the Company's Form 10-QSB for the quarter
                             ended June 30, 2001.
<TABLE>
<CAPTION>

       (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:

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

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

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

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

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

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

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

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

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

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


<PAGE>


SIGNATURES

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

GASCO ENERGY, INC.                                         Dated: March 15, 2002



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

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


SIGNATURE                               TITLE                         DATE



/s/ Mark Erickson               Director and President            March 15, 2002
-------------------------      Chief Executive Officer
Mark Erickson


/s/ Marc Bruner                         Director                  March 15, 2002
------------------------
Marc Bruner


/s/ Gregory Pek                        Director                   March 15, 2002
------------------------
Gregory Pek


/s/ Carl Stadelhofer                   Director                   March 15, 2002
------------------------
Carl Stadelhofer


/s/ Carmen Lotito                      Director                   March 15, 2002
-----------------------
Carmen Lotito


/s/ Michael Decker       Director and Executive Vice President    March 15, 2002
---------------------          Chief Operating Officer
Michael Decker


/s/ W. King Grant         Director and Executive Vice President   March 15, 2002
---------------------  Principal Financial and Accounting Officer
W. King Grant