UNITED STATES
                       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, 2005

         [ ]   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.)

             8 Inverness Drive East, Suite 100, Englewood, CO 80112
                  (Address of principal executive offices) (Zip Code)

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

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

   Title of each class                 Name of each exchange on which registered
COMMON STOCK, $0.0001 PAR VALUE               AMERICAN STOCK EXCHANGE

      Securities registered under Section 12(g) of the Exchange Act: None.

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.
Yes __No X

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes __ No X

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


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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

 Large accelerated filer __    Accelerated filer X    Non-accelerated filer __

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



<PAGE>


As of June 30, 2005,  approximately 64,587,470 shares of Common Stock, par value
$0.0001  per share  were  outstanding,  and the  aggregate  market  value of the
outstanding  shares of Common  Stock of the Company held by  non-affiliates  was
approximately $238,973,639. As of February 27, 2006, 84,967,792 shares of Common
Stock, par value $0.0001 per share were outstanding.

                      Documents incorporated by reference:

Certain  information  required  by Items  10,  11,  12, 13 and 14 of Part III is
incorporated  by reference from portions of the  registrant's  definitive  proxy
statement relating to its 2006 annual meeting of stockholders to be filed within
120 days after December 31, 2005.


<PAGE>








                                Table of Contents

                                     Part I

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

Item 1 A. Risk Factors.........................................................8

Item 1 B. Unresolved Staff Comments...........................................19

Item 2.   Description of Property.............................................20
               Petroleum and Natural Gas Properties...........................20
               Company Reserve Estimates......................................23
               Volumes, Prices and Operating Expenses.........................23
               Development, Exploration and Acquisition Capital Expenditures..23
               Productive Gas Wells...........................................24
               Oil and Gas Acreage............................................24
               Drilling Activity..............................................26
               Office Space...................................................26

Item 3.   Legal Proceedings...................................................26

Item 4.   Submission of Matters to a Vote of Security Holders.................26

                                Part II

Item 5.   Market for Registrant's Common Equity, Related Stockholder Matters
            and Issuer........................................................27
             Purchases of Equity Securities...................................27
               Equity Compensation Plans......................................27
               Securities Transactions........................................29

Item 6.   Selected Financial Data.............................................29

Item 7.   Management's Discussion and Analysis of Financial Condition and
            Results of Operations.............................................29
               Forward Looking Statements.....................................29
               Overview.......................................................30
               Recent Developments............................................30
               Liquidity and Capital Resources................................32
               Capital Budget.................................................34
               Schedule of Contractual Obligations............................34

<PAGE>

               Critical Accounting Policies and Estimates.....................35
               Results of Operations..........................................37
               Recent Accounting Pronouncements...............................39

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk..........41

Item 8.   Financial Statements and Supplementary Data.........................42

Item 9.   Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure..............................................82

Item 9A.  Controls and Procedures.............................................82

Item 9 B. Other Information...................................................85

                               Part III

Item 10.  Directors and Executive Officers of the Registrant..................85

Item 11.  Executive Compensation..............................................85

Item 12.  Security Ownership of Certain Beneficial Owners and Management and
            Related Stockholder Matters.......................................86

Item 13.  Certain Relationships and Related Transactions......................86

Item 14.  Principal Accountant Fees and Services..............................86

Item 15.  Exhibits and Financial Statement Schedules..........................86










<PAGE>


PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Business of Gasco

Gasco  Energy,  Inc.  ("Gasco" or "the  Company") is a natural gas and petroleum
exploitation,  development  and  production  company  engaged  in  locating  and
developing  hydrocarbon  resources,  primarily in the Rocky Mountain region. Our
principal   business   strategy  is  to  enhance   stockholder  value  by  using
technologies  new to a specific  area to  generate  and  develop  high-potential
exploitation  resources in this area. Our principal  business is the acquisition
of leasehold  interests in petroleum and natural gas rights,  either directly or
indirectly,  and the exploitation and development of properties subject to these
leases. We are currently  focusing our drilling efforts in the Riverbend Project
located  in the  Uinta  Basin  of  northeastern  Utah,  targeting  the  Wasatch,
Mesaverde and Blackhawk  formations.  As of December 31, 2005, we held interests
in 264,329 gross acres (165,577 net acres) located in Utah, Wyoming,  California
and Nevada.  As of December 31, 2005, we held an interest in 42 gross  producing
wells (27.2 wells, net to our interest) located on these properties.

During 2005 we spudded 21 gross  wells (14.9 net) and reached  total depth on 20
gross wells (13.7 net) in the Riverbend Project.  Initial completion  operations
were  conducted  on 21 wells  and 12 well  bores  were  re-entered  to  complete
behind-pipe  pay. As of December 31, 2005,  in the  Riverbend  Project we had 42
gross wells on production.  Currently,  we are operating  three drilling rigs in
the Riverbend Project.

Our initial  capital budget for 2005 of $38 million was increased to $50 million
to allow for increased activity during the fourth quarter.  Our increased budget
included the incremental expenditures for spudding two additional wells, initial
completion  operations on two wells,  and increased  costs  associated  with the
Company's drilling program.

Our capital  budget for 2006 is  approximately  $80 million for the drilling and
completion  of  wells,  pipeline  infrastructure,  distribution  facilities  and
geophysical  operations.  In connection with our exploitation  efforts,  we have
entered into  agreements  with third party  service  providers and investors who
contribute approximately 70% of the cost of developing designated wells.

History

Gasco (formerly known as San Joaquin  Resources Inc.  ("SJRI")) was incorporated
on April 21, 1997 under the laws of the State of Nevada, as "LEK  International,
Inc." The Company  operated as a "shell"  company until December 31, 1999,  when
the Company combined with San Joaquin Oil & Gas Ltd., a Nevada corporation ("Oil
& Gas").  As a  result  of that  transaction,  Oil & Gas  became a wholly  owned
subsidiary of Gasco.

In February  2001,  a  subsidiary  of the Company  merged with Gasco  Production
Company  (formerly  known  as  Pannonian  Energy,   Inc.)  ("GPC"),   a  private
corporation  incorporated  under the laws of the State of  Delaware.  GPC was an
independent   energy  company  engaged  in  the  exploration,   development  and


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<PAGE>

acquisition  of crude oil and natural gas reserves in the western United States.
Prior to closing of the merger GPC divested  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 GPC
stockholders.  The net  book  value of PIL as of the  date of  distribution  was
approximately $174,000.

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

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

Acquisition, Exploration and Development Expenses

During the years ended December 31, 2005 and 2004 the Company spent  $50,069,968
and $23,462,908, respectively for development and exploration activities. During
2004,  the  Company  completed  a property  acquisition  of  additional  working
interests in six producing wells and certain acreage and gathering system assets
in the  Riverbend  area  of  Utah  for a net  purchase  price  of  approximately
$2,400,000  and  acquired  approximately  16,000 net acres in Uinta and Duchesne
Counties,  Utah for  approximately  $3,432,000.  During  2004,  the Company also
completed the expansion of a gathering system located in Uinta County, Utah that
currently  gathers  approximately  97% of the Company's  gas  production in this
area.  As of December  31, 2005,  the Company held working  interests in 264,329
gross acres (165,577 net acres) located in Utah, Wyoming, California and Nevada.
As of December 31,  2005,  the Company held an interest in 42 gross (27.2 net to
the  Company's  interest)  producing gas wells and 3 gross (1.3 net) shut-in gas
wells located on these properties.  As of February 27, 2006 the Company operates
46 wells,  all of which are currently  producing.  See "Item 2 - Description  of
Properties".

Principal Products or Services and Markets

Gasco  focuses its  exploitation  activities  on locating  natural gas and crude
petroleum.   The  principal  markets  for  these  commodities  are  natural  gas
transmission  pipeline  companies,  utilities,  refining  companies  and private
industry end-users. Historically, nearly all of the Company's sales have been to
a few customers.  However, Gasco is not confined to, nor dependent upon, any one
purchaser  or  small  group  of  purchasers.  Accordingly,  the loss of a single
purchaser would not materially  affect the Company's  business because there are
numerous other purchasers in the areas in which Gasco sells its production.  For
the years ended  December 31, 2005,  2004 and 2003,  purchases by the  following
company exceeded 10% of the total oil and gas revenues of the Company.

                                       3
<PAGE>

                                         Percent of Production Purchased
                                        For the Years Ended December 31,
                                ------------------------------------------------
                                  2005                  2004             2003
                                  ----                  ----             ----

    ConocoPhillips Company        96%                    93%              93%


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  competitive  market for hiring  field and  technical
personnel  and obtaining  drilling rigs and services.  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  and
right of way 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.  As a result,
it may have difficulty  acquiring  additional  acreage and/or projects,  and may
have difficulty  arranging for the  transportation  of the oil or natural gas it
produces.

Governmental Regulations and Environmental Laws

We are  subject to  stringent  federal,  state,  and local laws and  regulations
governing the discharge of materials into the environment or otherwise  relating
to  environmental  protection.  These  laws  and  regulations  may  require  the
acquisition of permits before drilling  commences,  limit or prohibit operations
on environmentally  sensitive lands such as wetlands or wilderness areas, result
in capital  expenditures to limit or prevent emissions or discharges,  and place
restrictions on the management of wastes.  Failure to comply with these laws and
regulations may result in the assessment of  administrative,  civil and criminal
penalties,  the  imposition  of  remedial  obligations,   and  the  issuance  of
injunctive relief. Any changes in environmental laws and regulations that result
in more stringent and costly waste  handling,  disposal or cleanup  requirements
could have a material adverse effect on our operations. While we believe that we


                                       4
<PAGE>

are in substantial  compliance with current  environmental  laws and regulations
and that continued  compliance with existing  requirements  would not materially
affect us, there is no assurance that this trend will continue in the future.

The  Comprehensive  Environmental  Response,  Compensation and Liability Act, as
amended, also known as "CERCLA" or "Superfund," and comparable state laws impose
liability  without regard to fault or the legality of the original  conduct,  on
certain  classes of persons who are considered to be responsible for the release
of a hazardous substance into the environment.  Under CERCLA, these "responsible
persons" may be subject to joint and several liability for the costs of cleaning
up the hazardous  substances that have been released into the  environment,  for
damages to natural resources,  and for the costs of certain health studies,  and
it is not uncommon for  neighboring  landowners  and other third parties to file
claims for personal injury and property damage  allegedly  caused by the release
of hazardous substances into the environment.  We also may incur liability under
the Resource  Conservation and Recovery Act, also known as "RCRA", which imposes
requirements  relating to the  management  and  disposal of solid and  hazardous
wastes.  While there exists an exclusion from the definition of hazardous wastes
for "drilling  fluids,  produced  waters,  and other wastes  associated with the
exploration,  development, or production of crude oil, natural gas or geothermal
energy," in the course of our operations,  we may generate  ordinary  industrial
wastes,  including paint wastes, waste solvents,  and waste compressor oils that
may be regulated as hazardous waste.

We currently own or lease, and have in the past owned or leased, properties that
for a number of years have been used for the  exploration  and production of oil
and gas.  Although we have utilized  operating and disposal  practices that were
standard in the industry at the time, hydrocarbons or other wastes may have been
disposed of or released on or under the  properties  owned or leased by us or on
or under other  locations  where such wastes  have been taken for  disposal.  In
addition, some of these properties may have been operated by third parties whose
disposal or release of  hydrocarbons  or other wastes was not under our control.
These properties and the wastes disposed thereon may be subject to CERCLA, RCRA,
and  analogous  state laws.  Under such laws,  we could be required to remove or
remediate  previously  disposed wastes or property  contamination  or to perform
remedial operations to prevent future contamination.

The Federal Water Pollution  Control Act of 1972, as amended,  also known as the
"Clean  Water Act" and  analogous  state  laws  impose  restrictions  and strict
controls  regarding the discharge of pollutants,  including  produced waters and
other oil and gas  wastes,  into  state or  federal  waters.  The  discharge  of
pollutants into regulated waters is prohibited,  except in accord with the terms
of a permit issued by EPA or the state.  The Clean Water Act provides  civil and
criminal  penalties for any discharge of oil in harmful  quantities  and imposes
liabilities for the costs of removing an oil spill.

The Clean Air Act, as amended ("CAA"),  restricts the emission of air pollutants
from many  sources,  including oil and gas  operations.  New  facilities  may be
required to obtain permits before work can begin, and existing facilities may be
required to incur capital costs in order to remain in  compliance.  In addition,
the EPA has promulgated more stringent  regulations governing emissions of toxic
air pollutants from sources in the oil and gas industry,  and these  regulations
may increase the costs of compliance for some facilities.

                                       5
<PAGE>

Under the National  Environmental  Policy Act  ("NEPA"),  a federal  agency,  in
conjunction  with a permit holder,  may be required to prepare an  environmental
assessment or a detailed environmental impact statement, also known as an "EIS,"
before  issuing  a permit  that may  significantly  affect  the  quality  of the
environment.  We are  currently  in  negotiations  with the U.S.  Bureau of Land
Management or "BLM"  regarding  the  preparation  of an EIS in  connection  with
certain  proposed  exploration  and production  operations in the Uinta Basin of
Utah.  We  expect  that the EIS  will  take  approximately  18 to 24  months  to
complete,  at an  estimated  cost  to us of  about  $500,000.  Until  the EIS is
completed and issued by the BLM, we will be limited in the number of oil and gas
wells  that we can drill in the areas  undergoing  EIS  review.  To add  further
assurance  that we will not  experience a significant  curtailment,  we signed a
Memorandum of Understanding  with the Bureau of Land Management during the first
half  of 2005  that  allows  us to  continue  drilling  while  the EIS is  being
completed.  While  we do not  expect  that  the EIS  process  will  result  in a
significant  curtailment in future oil and gas production  from this  particular
area, we can provide no assurance regarding the outcome of the EIS process.

Number of Total Employees and Number of Full-Time Employees

As of February 27, 2006, Gasco had 17 full-time employees.

Available Information

Our Internet website is  http://www.gascoenergy.com  and you may access, free of
charge,  through  the  Investor  Relations  portion of our  website,  our annual
reports on Form 10-K,  quarterly  reports on Form 10-Q,  current reports on Form
8-K and amendments to such reports filed or furnished  pursuant to Section 13(a)
or  15(d)  of the  Securities  Exchange  Act of  1934,  as  amended,  as soon as
reasonably  practicable  after we  electronically  file such  material  with, or
furnish it to, the SEC. Information contained on our website is not part of this
report.

              CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Some  of  the  information  in  this  annual  report,  contains  forward-looking
statements  within the  meaning of Section  27A of the  Securities  Act of 1933.
These statements express, or are based on, our expectations about future events.
Forward-looking  statements give our current expectations or forecasts of future
events.  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. They include statements regarding our:

     o    financial position;

     o    business strategy;

     o    budgets;

     o    amount, nature and timing of capital expenditures;

     o    estimated reserves of natural gas and oil;

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     o    drilling of wells;

     o    acquisition and development of oil and gas properties;

     o    timing and amount of future production of natural gas and oil;

     o    operating costs and other expenses; and

     o    cash flow and anticipated liquidity.

Although we believe the expectations and forecasts  reflected in these and other
forward-looking  statements are  reasonable,  we can give no assurance they will
prove to have been correct. They can be affected by inaccurate assumptions or by
known or  unknown  risks and  uncertainties.  Factors  that could  cause  actual
results to differ  materially  from expected  results are described  under "Risk
Factors" and include:

     o    delays in obtaining drilling permits

     o    uncertainties in the  availability of distribution  facilities for our
          natural gas;

     o    general economic conditions;

     o    natural gas and oil price volatility;

     o    the fluctuation in the demand for natural gas and oil;

     o    uncertainties  in the  projection  of future rates of  production  and
          timing of development expenditures;

     o    operating hazards attendant to the natural gas and oil business;

     o    climatic conditions;

     o    the risks associated with exploration;

     o    our ability to generate sufficient cash flow to operate;

     o    availability of capital;

     o    the strength and financial resources of our competitors;

     o    downhole   drilling  and  completion  risks  that  are  generally  not
          recoverable from third parties or insurance;

     o    actions or inactions of third-party operators of our properties;

     o    environmental risks;

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<PAGE>

     o    regulatory developments;

     o    potential  mechanical  failure  or  under-performance  of  significant
          wells;

     o    availability and cost of material and equipment;

     o    our ability to find and retain skilled personnel;

     o    the lack of liquidity of our common stock; and

     o    our ability to eliminate material  weaknesses in our internal controls
          over financial reporting.

Any of the  factors  listed  above and other  factors  contained  in this annual
report  could  cause our actual  results to differ  materially  from the results
implied by these or any other  forward-looking  statements  made by us or on our
behalf. We cannot assure you that our future results will meet our expectations.

When you  consider  these  forward-looking  statements,  you should keep in mind
these risk factors and the other  cautionary  statements in this annual  report.
Our forward-looking statements speak only as of the date made.

ITEM 1A. 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:

We have incurred losses since our inception and will continue to incur losses in
the future.

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

During the years ended  December  31,  2005 and 2004,  we incurred a net loss of
$37,635  and  $4,205,830,  respectively.  As of  December  31,  2005,  we had an
accumulated deficit of $29,535,226.  Our failure to achieve profitability in the
future could adversely affect the trading price of our common stock, our ability
to raise additional capital and our ability to continue as a going concern.

The  volatility  of  natural  gas and oil prices  could have a material  adverse
effect on our business.

A sharp  decline in the price of natural  gas and oil prices  would  result in a
commensurate  reduction in our income from the production of oil and gas. In the
event prices fall substantially, we may not be able to realize a profit from our
production  and would  continue to operate at a loss. In recent  decades,  there


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<PAGE>

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 resulted in dramatic price  fluctuations even during relatively
short periods of seasonal  market  demand.  Among the factors that can cause the
price volatility are:

     o    worldwide or regional demand for energy, which is affected by economic
          conditions;

     o    the domestic and foreign supply of natural gas and oil;

     o    weather conditions;

     o    domestic and foreign governmental regulations;

     o    political conditions in natural gas or oil producing regions;

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

     o    the price and availability of alternative fuels.

     o    acts of war, terrorism or vandalism; and

     o    market manipulation.

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

     o    the  availability  of gathering  systems with  sufficient  capacity to
          handle local production;

     o    seasonal fluctuations in local demand for production;

     o    local and national gas storage capacity;

     o    interstate pipeline capacity; and

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

In  addition,  because of our size we do not own or lease firm  capacity  on any
interstate  pipelines.  As a result, our  transportation  costs are particularly
subject  to  short-term  fluctuations  in  the  availability  of  transportation


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facilities.  Our  management  believes that the steep  discount in the prices it
receives may be due to pipeline  constraints out of the region,  but there is no
assurance  that  increased  capacity  will  improve the prices to levels seen in
other parts of the country in the future. Even if we acquire additional pipeline
capacity, conditions may not improve due to other factors listed above.

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

Our oil and gas reserve  information is estimated and may not reflect our actual
reserves.

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

     o    the quality and quantity of available data;

     o    the interpretation of that data;

     o    the accuracy of various mandated economic assumptions; and

     o    the judgment of the persons preparing the estimate.

The proved reserve information as of December 31, 2005, included herein is based
on estimates  prepared by  Netherland,  Sewell & Associates,  Inc.,  independent
petroleum engineers.

The most accurate method of determining proved reserve estimates is based upon a
decline  analysis  method,  which  consists of  extrapolating  future  reservoir
pressure and production from historical  pressure  decline and production  data.
The accuracy of the decline analysis method generally  increases with the length
of the production history.  Since most of our wells had been producing less than
five years as of December  31, 2005,  their  production  history was  relatively
short, so other  (generally less accurate)  methods such as volumetric  analysis
and analogy to the  production  history of wells of other  operators in the same
reservoir were used in conjunction with the decline analysis method to determine
our estimates of proved  reserves.  As our wells are produced over time and more
data is available,  the estimated  proved  reserves will be  redetermined  on an
annual basis and may be adjusted based on that data.

Actual  future  production,  gas and oil prices,  revenues,  taxes,  development
expenditures,  operating  expenses and  quantities  of  recoverable  gas and oil
reserves  most likely will vary from our  estimates.  Any  significant  variance
could  materially  affect the quantities  and present value of our reserves.  In
addition,  we may adjust  estimates  of proved  reserves  to reflect  production


                                       10
<PAGE>

history,  results of  exploration  and  development  and  prevailing gas and oil
prices.  Our  reserves  may also be  susceptible  to  drainage by  operators  on
adjacent properties.

It  should  not be  assumed  that the  present  value of future  net cash  flows
included herein is the current market value of our estimated  proved gas and oil
reserves.  In accordance with SEC requirements,  we generally base the estimated
discounted future net cash flows from proved reserves on prices and costs on the
date of the estimate. Actual future prices and costs may be materially higher or
lower than the prices and costs as of the date of the estimate.

Future changes in commodity prices or our estimates and operational developments
may result in impairment charges to our reserves.

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

We follow the full cost method of accounting,  under which,  capitalized gas and
oil property costs less  accumulated  depletion and net of deferred income taxes
may not exceed an amount  equal to the  present  value,  discounted  at 10%,  of
estimated future net revenues from proved gas and oil reserves plus the cost, or
estimated fair value, if lower of unproved properties.

Should capitalized costs exceed this ceiling, an impairment would be recognized.
The  present  value of  estimated  future net  revenues  is computed by applying
current prices of gas and oil to estimated  future  production of proved gas and
oil reserves as of period-end, less estimated future expenditures to be incurred
in developing and producing the proved  reserves  assuming the  continuation  of
existing  economic  conditions.  Once an impairment of gas and oil properties is
recognized,  it is not  reversible  at a later  date  even if oil or gas  prices
increase.

The development of oil and gas properties  involves  substantial  risks that may
result in a total loss of investment.

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

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

                                       11
<PAGE>

We may not be able to obtain adequate financing to continue our operations.

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

We will require significant additional capital to fund our future activities and
to  service  current  and  any  future  indebtedness.  In  particular,  we  face
uncertainties  relating to our ability to  generate  sufficient  cash flows from
operations  to fund the level of capital  expenditures  required for our oil and
gas  exploration  and production  activities and our  obligations  under various
agreements with third parties relating to exploration and development of certain
prospects.  Our failure to find the  financial  resources  necessary to fund our
planned  activities and service our debt and other  obligations  could adversely
affect our business.

Delays in obtaining  drilling permits could have a materially  adverse effect on
our ability to develop our properties in a timely manner.

The average processing time at the Bureau of Land Management in Vernal, Utah for
an application  to drill on federal leases has been  increasing and currently is
approximately  270  days.  Approximately  77% of our  gross  acreage  in Utah is
located on federal leases.  If we are delayed in procuring  sufficient  drilling
permits for our federal  properties,  we will shift more of our drilling in Utah
to our state leases, the permits for which require an average processing time of
approximately  30 days.  While such a shift in resources  would not  necessarily
affect the rate of growth of our cash flow,  it would result in a slower  growth
rate of our total  proved  reserves,  because a higher  percentage  of the wells
drilled  on the  state  leases  will  be  drilled  on  leases  to  which  proved
undeveloped reserves my already have been attributed.

We may have difficulty managing growth in our business.

Because of our small size,  growth in  accordance  with our business  plans,  if
achieved,  will  place  a  significant  strain  on  our  financial,   technical,
operational and management  resources.  As we expand our activities and increase
the number of projects we are evaluating or in which we participate,  there will
be additional demands on our financial,  technical and management resources. The
failure to continue  to upgrade our  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 our
business,  financial  condition  and  results of  operations  and our ability to
timely execute our business plan.

We compete with larger  companies  in acquiring  properties  and  operating  and
drilling services.

Our  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,  we compete with a number of other
companies  operating  in our  areas of  interest,  including  large  oil and gas
companies and other independent  operators with greater financial resources.  We


                                       12
<PAGE>

do not believe that our  competitive  position in the  petroleum and natural gas
industry will be significant.

We anticipate a competitive market for obtaining drilling rigs and services, and
the manpower to operate them. The current high level of drilling activity in our
areas of  exploration  may have a significant  adverse  impact on the timing and
profitability of our operations. In addition, we are required to obtain drilling
and right of way  permits  for our wells,  and there is no  assurance  that such
permits will be available on a timely basis or at all.

We may suffer losses or incur  liability for events that we or the operator of a
property have chosen not to insure against.

Although  management  believes  the  operator  of any  property  in which we may
acquire interests will acquire and maintain  appropriate  insurance  coverage in
accordance  with  standard  industry   practice,   we  may  suffer  losses  from
uninsurable hazards or from hazards, which we or the operator have chosen not to
insure  against  because of high premium costs or other  reasons.  We may become
subject to liability for pollution, fire, explosion, blowouts, cratering and oil
spills  against  which we  cannot  insure or  against  which we 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 our financial position.

We may incur losses as a result of title deficiencies in the properties in which
we invest.

If an  examination  of the title  history of a property  that we have  purchased
reveals a petroleum and natural gas lease that has been  purchased in error from
a person who is not the owner of the  mineral  interest  desired,  our  interest
would be worthless.  In such an instance, the amount paid for such petroleum and
natural gas lease or leases would be lost.

It is our 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,  we 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 acquire a lease in a specific mineral interest.

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

Our  ability  to market  the oil and gas that we  produce  is  essential  to our
business.

Several  factors  beyond our control may adversely  affect our ability to market
the oil and gas that we discover. These factors include the proximity,  capacity


                                       13
<PAGE>

and  availability  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 our
inability  to sell our oil and gas at prices  that would  result in an  adequate
return on our invested  capital.  For example,  we currently  distribute the gas
that we  produce  through a single  pipeline.  If this  pipeline  were to become
unavailable,  we would incur additional costs to secure a substitute facility in
order to deliver the gas that we produce.  In  addition,  although we  currently
have  access  to  firm  transportation  for  the  majority  of our  current  gas
production,  there is no  assurance  that we will be able to procure  additional
transportation  on terms  satisfactory  to us,  or at all,  as we  increase  our
production through our drilling program.

We could become subject to certain Questar Pipeline Company Gas Requirements.

We currently  deliver all of our gathered  gas into a Questar  Pipeline  Company
("Questar") main line  transportation  system.  Questar is currently  evaluating
their  gas  quality  requirements  to  transport  gas  on  their  system.  These
requirements could and most likely, would be imposed on all companies delivering
gas into their  main line.  If Questar  should  require  companies  to meet more
strict  quality  requirements,  there is no assurance that we could meet the new
requirements in the short term future. It is possible that we would need to make
significant capital expenditures to meet the new gas quality requirements and/or
to transport  our gas.  During this  process  and/or  adding new  transportation
facilities,  our  production  could  be  severely  curtailed  or even  shut  -in
completely.

Environmental costs and liabilities and changing environmental  regulation could
materially affect our cash flow

Our  operations  are  subject  to  stringent  federal,  state and local laws and
regulations relating to environmental protection. These laws and regulations may
require the  acquisition of permits or other  governmental  approvals,  limit or
prohibit our operations on environmentally sensitive lands, and place burdensome
restrictions  on the management  and disposal of wastes.  Failure to comply with
these laws may result in the  assessment of  administrative,  civil and criminal
penalties,  the  imposition  of  remedial  obligations,   and  the  issuance  of
injunctions that may delay or prevent our operations.  Any stringent  changes to
these  environmental  laws and  regulations  may result in increased costs to us
with respect to the disposal of wastes, the performance of remedial  activities,
and  the  incurrence  of  capital   expenditures.   Please  read   "Governmental
Regulations and Environmental Laws," above.

We are subject to complex  governmental  regulations  which may adversely affect
the cost of our business.

Petroleum and natural gas exploration, development and production are subject to
various  types of  regulation by local,  state and federal  agencies.  We may be
required  to  make  large   expenditures   to  comply   with  these   regulatory
requirements.  Legislation  affecting  the petroleum and natural gas industry is
under constant review for amendment and expansion.  Also,  numerous  departments
and  agencies,  both federal and state,  are  authorized by statute to issue and
have  issued  rules and  regulations  binding on the  petroleum  and natural gas
industry and its individual members,  some of which carry substantial  penalties


                                       14
<PAGE>

for failure to comply.  Any increases in the regulatory  burden on the petroleum
and natural gas industry  created by new legislation  would increase our cost of
doing business and,  consequently,  adversely affect our profitability.  A major
risk  inherent  in  drilling  is the need to  obtain  drilling  and right of way
permits from local authorities. Delays in obtaining drilling and/or right of way
permits,  the failure to obtain a drilling and/or right of way permit for a well
or a permit  with  unreasonable  conditions  or costs  could  have a  materially
adverse effect on our ability to effectively develop our properties.

Our  competitors  may have  greater  resources  which could enable them to pay a
higher price for properties and to better withstand periods of low market prices
for hydrocarbons.

The petroleum and natural gas industry is intensely competitive,  and we compete
with other companies,  which have greater resources. Many of these 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 or
define,  evaluate,  bid for and  purchase  a greater  number of  properties  and
prospects  than our  financial or human  resources  permit.  In  addition,  such
companies may have a greater ability to continue  exploration  activities during
periods of low  hydrocarbon  market  prices.  Our ability to acquire  additional
properties  and to discover  reserves in the future will be  dependent  upon our
ability  to  evaluate  and  select   suitable   properties   and  to  consummate
transactions in a highly competitive environment.

Because our  reserves  and  production  are  concentrated  in a small  number of
properties,  production  problems or  significant  changes in reserve  estimates
related to any property could have a material impact on our business.

Our current reserves and production  primarily come from producing properties in
Utah. If mechanical  problems,  depletion or other events  reduced a substantial
portion of the production,  our cash flows would be adversely  affected.  If the
actual reserves associated with our fields are less than our estimated reserves,
our results of operations and financial condition could be adversely affected.

Financial  difficulties  encountered  by our partners or  third-party  operators
could adversely affect the exploration and development of our prospects.

Liquidity and cash flow problems encountered by our partners or the co-owners of
our properties may prevent or delay the drilling of a well or the development of
a project.  Our  partners  and working  interest  co-owners  may be unwilling or
unable to pay their  share of the costs of  projects  as they become due. In the
case of a  farm-out  partner,  we would have to find a new  farm-out  partner or
obtain alternative  funding in order to complete the exploration and development
of the  prospects  subject to the farm-out  agreement.  In the case of a working
interest owner, we could be required to pay the working  interest  owner's share
of the project  costs.  We cannot assure you that we would be able to obtain the
capital necessary to fund either of these contingencies or that we would be able
to find a new farm-out partner.

                                       15
<PAGE>

Shortages  of  supplies,  equipment  and  personnel  may  adversely  affect  our
operations.

Our ability to conduct  operations in a timely and cost effective manner depends
on the  availability  of  supplies,  equipment  and  personnel.  The oil and gas
industry  is cyclical  and  experiences  periodic  shortages  of drilling  rigs,
supplies  and  experienced   personnel.   Shortages  can  delay  operations  and
materially increase operating and capital costs.

Hedging our production may result in losses.

We currently have no hedging agreements in place.  However, we may in the future
enter into  arrangements  to reduce our exposure to  fluctuations  in the market
prices of oil and natural  gas. We may enter into oil and gas hedging  contracts
in order to  increase  credit  availability.  Hedging  will expose us to risk of
financial loss in some circumstances, including if:

     o    production is less than expected;

     o    the other party to the contract defaults on its obligations; or

     o    there is a change in the expected  differential between the underlying
          price in the hedging agreement and actual prices received.

In  addition,  hedging may limit the  benefit we would  otherwise  receive  from
increases in the prices of oil and gas. Further, if we do not engage in hedging,
we may be more  adversely  affected  by changes  in oil and gas prices  than our
competitors who engage in hedging.

Our success  depends on our key  management  personnel,  the loss of any of whom
could disrupt our business.

The success of our  operations  and  activities  is dependent  to a  significant
extent on the efforts and abilities of our  management.  The loss of services of
any of our key managers could have a material adverse effect on our business. We
have not obtained "key man" insurance for any of our management. Mr. Erickson is
the Chief Executive Officer, Mr. Decker is an Executive Vice President and Chief
Operating  Officer  and Mr.  Grant is an  Executive  Vice  President  and  Chief
Financial Officer.  The loss of their services may adversely affect our business
and prospects.

Our officers and directors are engaged in other  businesses  which may result in
conflicts of interest

Certain of our officers and directors also serve as directors of other companies
or have significant shareholdings in other companies. For example, our chairman,
Marc  A.  Bruner,  is the  largest  shareholder  of  Galaxy  Energy  Corporation
("Galaxy").  Mr.  Bruner is involved in  identifying  and  acquiring  large land
packages for exploitation  and development by Galaxy.  Mr. Bruner also serves as
the Chairman and Chief Operating Officer of Falcon Oil and Gas, Ltd. ("Falcon").
Falcon's current drilling activities include projects in Romania and Hungary. In
addition, another of our directors, C. Tony Lotito, is a Director of Galaxy, and
currently  serves as the Executive  Vice  President,  Chief  Financial  Officer,
Secretary-Treasurer  and a  member  of the  Board  of  Directors  of GSL  Energy
Corporation, which is majority owned by Mr. Bruner.

                                       16
<PAGE>

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

In accordance  with the laws of the State of Nevada,  our directors are required
to act honestly and in good faith with a view to the best interests of Gasco. In
determining  whether or not we 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 we may be exposed  and our  financial  position  at that
time.

It may be difficult to enforce  judgments  predicated on the federal  securities
laws on some of our board members who are not U.S. residents.

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

Risks Related to Our Capital Stock

Our  common  stock  has  experienced,  and may  continue  to  experience,  price
volatility and a low trading volume.

The trading price of our common stock has been and may continue to be subject to
large fluctuations, which may result in losses to investors. Our stock price may
increase or decrease in response to a number of events and factors, including:

     o    the results of our exploratory drilling;

     o    trends in our industry and the markets in which we operate;

     o    changes in the market price of the commodities we sell;

     o    changes in  financial  estimates  and  recommendations  by  securities
          analysts;

     o    acquisitions and financings;

     o    quarterly variations in operating results;

                                       17
<PAGE>

     o    the  operating and stock price  performance  of other  companies  that
          investors may deem comparable; and

     o    purchases or sales of blocks of our common stock.

This volatility may adversely affect the price of our common stock regardless of
our operating performance.

Shares  eligible for future sale may cause the market price for our common stock
to drop significantly, even if our business is doing well.

If our existing shareholders sell our common stock in the market, or if there is
a perception that  significant  sales may occur,  the market price of our common
stock could drop  significantly.  In such case, our ability to raise  additional
capital in the  financial  markets at a time and price  favorable to us might be
impaired.  In  addition,  our  board of  directors  has the  authority  to issue
additional  shares of our  authorized  but  unissued  common  stock  without the
approval of our shareholders.  Additional  issuance of common stock would dilute
the ownership  percentage of existing  shareholders  and may dilute the earnings
per share of our common stock. As of December 31, 2005, we had 84,967,792 shares
of common stock issued and  outstanding.  As of such date,  there were 9,292,266
shares of common  stock  issuable  upon  exercise  of  outstanding  options  and
conversion  of our Series B Convertible  Preferred  Stock  ("Preferred  Stock").
Additional  options may be granted to purchase  3,237,612 shares of common stock
under our stock option plan and an additional 155,450 shares of common stock are
issuable  under our  restricted  stock plan. As of December 31 of each year, the
number  of  shares  of  common  stock  issuable  under  our  stock  option  plan
automatically  increases  so that the total  number  of  shares of common  stock
issuable under such plan is equal to 10% of the total number of shares of common
stock outstanding on such date.

Assuming all of the notes are converted at the applicable conversion prices, the
number of shares of our common stock outstanding would increase by approximately
16,250,000  shares to approximately  101,217,792  shares (this number assumes no
exercise of the options or rights described above or conversion of the Preferred
Stock).  We have not previously paid dividends on our common stock and we do not
anticipate doing so in the foreseeable future.

We have not in the past paid,  and do not anticipate  paying in the  foreseeable
future,  cash  dividends  on our  common  stock.  Any future  decision  to pay a
dividend and the amount of any dividend paid, if permitted,  will be made at the
discretion of our board of directors.

We have anti-takeover provisions in our certificate of incorporation and by-laws
that may discourage a change of control.

Our articles of incorporation  and bylaws contain several  provisions that could
delay or make more  difficult  the  acquisition  of us through a hostile  tender
offer,  open market purchases,  proxy contest,  merger or other takeover attempt
that a stockholder  might consider in his or her best interest,  including those
attempts  that might  result in a premium  over the  market  price of our common
stock.

                                       18
<PAGE>

Under the terms of our articles of  incorporation  and as permitted under Nevada
law, we have elected not to be subject to Nevada's  anti-takeover  law. This law
provides that specified  persons who,  together with  affiliates and associates,
own, or within three years did own, 15% or more of the outstanding  voting stock
of a corporation  could not engage in specified  business  combinations with the
corporation  for a period of three  years  after  the date on which  the  person
became an interested stockholder.  With the approval of our stockholders, we may
amend our  articles  of  incorporation  in the future to become  governed by the
anti-takeover  law. This provision would then have an  anti-takeover  effect for
transactions  not  approved  in  advance  by our board of  directors,  including
discouraging  takeover  attempts  that might result in a premium over the market
price for the shares of our common stock.

ITEM 1 B. UNRESOLVED STAFF COMMENTS

None.





                                       19
<PAGE>




ITEM 2 - DESCRIPTION OF PROPERTY

Petroleum and Natural Gas Properties

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

The Company's  corporate strategy is to grow through drilling projects.  We have
been focusing our drilling efforts in the Riverbend Project located in the Uinta
Basin of  northeastern  Utah. The higher realized oil and gas prices during 2004
and 2005 due to factors  such as  inventory  levels of gas in  storage,  extreme
weather  in parts of the  country  and  changing  demand in the  United  States,
combined with the continued  instability  in the Middle East have  increased the
profitability  of our drilling  projects in this area.  The  increased  drilling
activity in the Company's areas of operations  resulting from the higher oil and
gas prices has also decreased the  availability of drilling rigs and experienced
personnel in this area and may continue to do so. The Company also  continues to
incur higher  drilling and operating costs resulting from the increased fuel and
steel costs and from the increased drilling activity in this area.

         Riverbend Project

The Riverbend Project comprises  approximately  124,281 gross acres in the Uinta
Basin of northeastern  Utah, of which we hold interests in approximately  74,471
net acres as of  December  31,  2005.  Our  engineering  and  geologic  focus is
concentrated  on three  tight-sand  formations in the Uinta basin:  the Wasatch,
Mesaverde  and  Blackhawk  formations.  A typical  well may  encounter  multiple
distinct natural gas sands located between  approximately  6,000 and 13,000 feet
in depth that are completed using up to ten staged fracs.

During 2005 we spudded 21 gross  wells (14.9 net) and reached  total depth on 20
gross wells (13.7 net). Initial completion operations were conducted on 21 wells
and 12 well bores were  re-entered to complete  behind-pipe  pay. As of December
31, 2005, Gasco had 42 gross wells on production.

During 2005 the Company had three rigs  operating in its Riverbend  Project.  We
converted  two of the three rigs  currently  drilling  for us from  well-to-well
contracts to two-year term contracts.  The third rig will continue to operate on
a  well-to-well   basis.  During  December  2005,  Gasco  purchased  a  rig  for
approximately  $5,000,000.  Gasco entered into a one-year drilling contract with
an unrelated  third party who will operate the rig. The operator may buy the rig
from Gasco at the fair  market  value of the rig within  three years of when the
rig is delivered. This rig is scheduled to be moved on location in our Riverbend
Project to begin drilling early in the second quarter of 2006. With the addition
of this rig, Gasco will have four rigs drilling in the Riverbend  Project during


                                       20
<PAGE>

most of 2006. Also, during December 2005, we entered into a three-year  contract
for a new-build rig to be delivered in December  2006.  In connection  with this
contract  we  provided  the rig  owner a  letter  of  credit  from  our bank for
$6,564,000.  The cash  collateral  for this letter of credit is  reflected  as a
restricted investment in the accompanying financial statements.

In January  2004 we entered into  agreements,  which were  subsequently  amended
during July 2004,  with a group of industry  providers  (together,  the "Service
Parties") to accelerate  the  development  of Gasco's oil and gas  properties by
drilling up to 50 wells in Gasco's  Riverbend Project in Utah's Uinta Basin. The
development of this project is  contemplated to proceed in increments of 10-well
bundles  to be  approved  by  the  parties  on an  ongoing  basis.  Under  these
agreements,  the Service  Parties have the exclusive  right, as long as they are
able, to provide their  services in the  development  of the Riverbend  acreage.
Under  these  agreements,  we  have  agreed  to  fund  approximately  30% of the
development  costs of each of the  wells  drilled,  with the  service  providers
providing  drilling  and  completion  services  equivalent  to 45% of the  total
development  costs.  The remaining  development  costs are funded by third party
investors  that are also parties to the  agreements.  To secure our  obligations
under the agreements, we have pledged our interests in each of the wells that we
drill. Our interest in the production  stream from each 10-well bundle of wells,
net of royalties,  taxes and lease operating expenses, is estimated to equal the
proportion of the total well costs that we fund.

During the fourth  quarter 2005,  the third 10-well bundle was approved by Gasco
and the Service Parties and is incorporated in our 2006 drilling program.  Under
these  arrangements,  we drilled 12 wells  during 2004 and 10 wells  during 2005
(included in the drilling results described  above),  all of which are currently
producing.

In  connection  with the Service  Parties  agreements,  the Company  completed a
disposition  of net profits  interests of between  18.75% and 25% in the 8 wells
that had been drilled in the  Riverbend  area in Utah during 2004 for total cash
consideration of $4,314,984, net of adjustments and commissions.  The purpose of
this  transaction was to allow the third party investor to become a party to our
service provider  arrangements.  The  consideration  paid to the Company in this
transaction  represented the share of such investor's development costs of the 8
wells  completed as of such date.  This investor has the opportunity to continue
to participate in the development program under the service provider arrangement
by funding 25% of future development costs.

In  November  2004,  we  completed  construction  on a ten mile  pipeline in the
Riverbend Project area to create  additional  pipeline capacity in this area. We
currently  own gas  gathering  and  distribution  facility  assets that  include
approximately 45 miles of pipeline.  This pipeline gathers  approximately 97% of
our natural gas production from the Riverbend  Project.  We continue to evaluate
additional gathering, compression and processing needs in each of the Riverbend,
West Desert,  Wilkin Ridge and Gate Canyon areas from our  Riverbend  Project in
addition to evaluating  alternative  proprosals for  distribution  facilities of
natural gas from the region.

During  December 2004, the Company  completed the  acquisition of  approximately
16,000 net acres in the  Riverbend  Area for a purchase  price of  approximately
$3,432,000.  Pursuant to an existing contract,  an unrelated third party had the
right to  purchase  25% of the  acquired  acreage at a price equal to 25% of the
purchase price.  This right was exercised by the third party during January 2005


                                       21
<PAGE>

which had the effect of reducing the Company's  interest in the acquired acreage
to 12,000  net acres and  reducing  the  purchase  price of the  acquisition  to
approximately $2,575,000.

On March 9, 2004, the Company  completed the  acquisition of additional  working
interests in six producing  wells,  13,062 net acres and gathering system assets
located in the Uinta Basin in Utah for approximately $3,175,000. During May 2004
an  unrelated  third party  exercised  its right to purchase 25% of the acquired
properties  at the  acquisition  price,  which had the  effect of  reducing  the
purchase price to approximately  $2,400,000 and reducing the Company's  interest
in the  acquisition to 75%. The effective date of the acquisition was January 1,
2004;  however,  the net revenue from the producing wells during the period from
January  1,  2004  through  March 9, 2004 was  recorded  as a  reduction  to the
purchase price.

         Greater Green River Basin Project

As of December 31, 2005, the Company has a leasehold  interest in  approximately
90,272 gross acres and 42,783 net acres in the Greater Green River Basin area of
Wyoming.  The acreage  covers two  prospects  identified  by Gasco.  The Company
re-entered  two of its wells in the Muddy  Creek  Project in the  Greater  Green
River Basin Area in Wyoming during 2004 and these wells are currently  producing
intermittently.  The Company is currently  seeking a drilling rig to drill three
wells in its two Wyoming  prospects during 2006. The Company is also considering
additional options for this area such as the farm-out of some of our acreage and
other similar type transactions. Leases covering approximately 8,000 gross acres
(4,055 net acres) will expire during the first six months of 2006,  and will not
be renewed, since management has decided not to drill on these leases.

During  2005,  the Company  reclassified  approximately  $5,300,000  of expiring
acreage  primarily  located in Wyoming  into proved  property.  This  acreage is
located outside of the prospects that the Company intends to develop.

         Southern California Project

The Company has a leasehold  interest in approximately  4,461 gross acres (3,008
net acres) in Kern and San Luis Obispo Counties of Southern  California.  During
2005,  the Company  entered into a farm-out  agreement  under which an unrelated
entity has  committed  to drill one well on our  acreage in San Luis  Obispo and
Kern  Counties,  California.  Under this  agreement,  Gasco will  contribute the
acreage and the  unrelated  entity will pay the drilling and  completion  costs.
Gasco will retain a 25% interest if the well is successful.  The Company is also
continuing  to pay  leasehold  rentals and  geological  expenses to preserve its
acreage positions and develop its remaining California prospects.

         Nevada Project

The Company has a leasehold interest in approximately 45,315 gross and net acres
in six  prospects  within White Pine County  Nevada.  We have signed a letter of
intent  with  an  industry  partner  to  develop  these  prospects  and  are  in
discussions for a definitive agreement covering all six prospects.

                                       22
<PAGE>

Company Reserve Estimates

The  following  table  summarizes  the  Company's  estimated  reserve data as of
December  31,  2005,  as estimated by  Netherland,  Sewell &  Associates,  Inc.,
independent  petroleum engineers.  The present value of future net cash flows is
based on prices at December  31, 2005 of $8.01 per Mcf of gas and $59.87 per bbl
of oil. The present  value of future net cash flows has been adjusted to include
the  estimated  future  income tax expense of  $3,225,000.  All of the Company's
proved reserves are located within the state of Utah.
<TABLE>
<CAPTION>

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

<S>               <C>                <C>          <C>              <C>               <C>
   Total          74,455,128         377,288      $ 40,256,500     $ 64,364,500      $104,621,000
                 ===========        ========      =============     =============     ============
</TABLE>

Actual future prices and costs may be materially higher or lower than the prices
and costs as of the date of any  estimate.  A decrease in price of $0.10 per Mcf
for  natural  gas and $1.00 per barrel of oil would  result in a decrease in the
Company's  December  31,  2005  present  value  of  future  net  cash  flows  of
approximately $3,792,200.

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

Volumes, Prices and Operating Expenses

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

                                                    For the Years Ended December 31,
                                                --------------------------------------------
                                                  2005             2004             2003
                                                ------------    ------------     -----------

<S>                                               <C>               <C>             <C>
  Natural gas production (Mcf)                    1,648,870         505,967         257,035
  Average sales price per Mcf                         $8.16           $5.79           $4.69
  Oil production (Bbl)                               10,636           5,080           1,988
  Average sales price per Bbl                        $56.91          $38.43          $28.52
  Expenses per Mcfe:
     Lease operating                                  $0.51           $1.19           $1.25
     General and administrative                       $3.50           $7.81          $10.48
     Depreciation, depletion and amortization         $2.83           $2.06           $2.06
</TABLE>

Development, Exploration and Acquisition Capital Expenditures

During the years ended  December  31, 2005 and 2004,  we spent  $50,069,968  and
$23,462,908   in   development   and   exploration   activities,   respectively.
Additionally   during  2005  we  purchased  a  drilling  rig  for  approximately
$5,000,000.  The expenditures during 2004 included a property  acquisition for a
net purchase price of approximately $2,400,000 and an acreage acquisition in the


                                       23
<PAGE>

Riverbend Area for approximately  $3,432,000.  Pursuant to an existing contract,
an unrelated  third party had the right to purchase 25% of the acquired  acreage
at a price equal to 25% of the purchase  price.  This right was exercised by the
third party during  January 2005 which had the effect of reducing the  Company's
purchase price of the acquisition to  approximately  $2,575,000.  As of December
31, 2005, the Company held working interests in 264,329 gross acres (165,577 net
acres) located in Utah, Wyoming, California and Nevada. As of December 31, 2005,
the  Company  held an  interest  in 42  gross  (27.2  net to  Gasco's  interest)
producing  gas wells and 3 gross (1.3 net)  shut-in  gas wells  located on these
properties.

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

                                                         For the Years Ended December 31,
                                                 --------------------------------------------------
                                                       2005             2004               2003
                                                 -------------- ---------------- ------------------
Property acquisition costs:
<S>                                                  <C>            <C>                  <C>
   Unproved                                          $ 410,062      $ 5,021,126          $ 667,557
   Proved                                                   -          723,9012                 --
Exploration costs                                    1,064,874          216,165            396,967
Development costs                                    48,595,032      17,501,716          4,218,902
                                                     ----------      ----------         ----------
     Total including asset retirement obligation    50,069,968       23,462,908          5,283,426
                                                    ==========       ==========          =========
     Total excluding asset retirement obligation   $49,968,623      $23,398,559        $ 5,168,174
                                                   ===========      ===========          =========
</TABLE>

Productive Gas Wells

The following  summarizes  the Company's  productive and shut-in gas wells as of
December 31, 2005.  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          42                  27.2
          Shut-in gas wells             3                   1.3
                                        -                   ---
                                       45                  28.5
                                       ==                  ====

The Company  operates  all of the above  producing  wells and one of the shut-in
wells.  The remaining two shut-in wells are located in Sublette  County  Wyoming
and were drilled and are operated by Burlington Oil & Gas, L.P.

Oil and Gas Acreage

The following table sets forth the undeveloped and developed  leasehold acreage,
by area,  held by the Company as of December  31,  2005.  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


                                       24
<PAGE>

whether or not such acreage contains proved reserves. Developed acres are acres,
which are spaced or assignable to  productive  wells.  Gross acres are the total
number of acres in which Gasco has a working interest.  Net acres are the sum of
Gasco's  fractional  interests  owned in the gross  acres.  The  table  does not
include  acreage that the Company has a contractual  right to acquire or to earn
through  drilling  projects,  or any other acreage for which the Company has not
yet received leasehold  assignments.  In certain leases, the Company's ownership
is not the same for all  depths;  therefore,  the net acres in these  leases are
calculated using the greatest  ownership  interest at any depth.  Generally this
greater  interest   represents   Gasco's  ownership  in  the  primary  objective
formation.




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

     Utah                     122,641         73,413           1,640       1,058
     Wyoming                   90,112         42,702             160          81
     Nevada                    45,315         45,315               -           -
     California                 4,461          3,008               -           -
                           -----------   ------------       ---------   --------

         Total acres          262,529        164,438           1,800       1,139
                           ===========   ============       =========   ========



The following table summarizes the gross and net undeveloped  acres by area that
will expire in each of the next three years. The Company's acreage positions are
maintained  by the payment of delay  rentals or by the  existence of a producing
well on the acreage.
<TABLE>
<CAPTION>

                       Expiring in 2006         Expiring in 2007            Expiring in 2008
                       Gross        Net         Gross      Net            Gross             Net

<S>                    <C>          <C>          <C>           <C>            <C>           <C>
   Utah                1,424        978          1,574         886            640           120
   Wyoming             8,993      4,836          4,644       3,628          1,876           399
   California              -          -            357         268            160           120
                     -------      -----          -----       -----          -----           ---
   Total              10,417      5,814          6,575       4,782          2,676           639
                      ======      =====          =====       =====          =====           ===
</TABLE>

As of December  31, 2005,  approximately  79% of the acreage that Gasco holds is
located  on federal  lands and  approximately  19% of the  acreage is located on
state lands. It has been Gasco's  experience that the permitting process related
to the  development  of  acreage  on federal  lands is more time  consuming  and
expensive than the  permitting  process  related to acreage on state lands.  The
Company has generally  been able to obtain state permits  within 30 days,  while
obtaining  federal permits has taken several months or longer.  Accordingly,  if
the  development  of the Company's  acreage  located on federal lands is delayed
significantly  by the permitting  process,  the Company may have to operate at a
loss for an extended period of time.




                                       25
<PAGE>



Drilling Activity

The following table sets forth the Company's  drilling activity during the years
ended  December 31, 2005,  2004 and 2003.  In the table,  "gross"  refers to the
total wells in which we have a working interest, and "net" refers to gross wells
multiplied by the Company's working interest.
<TABLE>
<CAPTION>

                                                             For the Year Ended December 31,
                                      -------------------------------------------------------------------------------
                                            2005                      2004                          2003
                                      ------------------     ------------------------    ----------------------------
                                        Gross     Net          Gross          Net          Gross             Net
     Exploratory Wells:
<S>                                     <C>      <C>           <C>            <C>          <C>              <C>
       Productive                         -         -             -             -             -               -
       Dry                                -         -             -             -             -               -
                                         ---      ---           ---           ---           ---             ---
         Total wells                       -        -             -             -             -               -
                                         ===      ===           ===           ===           ===             ===

     Development Wells:
       Productive                         21      14.9           11            3.0            -               -
       Dry                                 -         -            -             -             -               -
                                          --     -----           --            ---          ---              ---
         Total wells                      21      14.9           11            3.0            -               -
                                          ==     =====           ==            ===          ===             ===
</TABLE>

Office Space

The Company leases approximately 8,776 square feet of office space in Englewood,
Colorado,  under a lease, which terminates on May 31, 2010. The average rent for
this space over the life of the lease is  approximately  $120,500 per year.  The
Company  believes  that this space will meet its needs for at least the next two
years.

ITEM 3 - LEGAL PROCEEDINGS

None.

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

None.




                                       26
<PAGE>



PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common stock commenced  trading on the OTC bulletin board on March
30, 2001, under the symbol "GASE.OB." On December 6, 2004,  Gasco's common stock
commenced  trading as a listed security on the American Stock Exchange under the
symbol "GSX." As of February 27, 2006,  the Company had 103 record  shareholders
of its common stock.  During the last two fiscal years,  no cash  dividends were
declared on Gasco's common stock.  The Company's  management does not anticipate
that dividends will be paid on its common stock in the near future.

The  following  table sets forth,  for the periods  indicated,  the high and low
sales  prices per share of the  Company's  common  stock as  reported on the OTC
bulletin  board for the  periods  indicated  through  December  5, 2004,  and as
reported on the American Stock  Exchange from December 6, 2004 through  December
31, 2005.

                                                      High            Low
2004
         First Quarter                                 $2.45          $1.15
         Second Quarter                                 2.54           1.59
         Third Quarter                                  3.45           1.78
         Fourth Quarter                                 4.30           2.75

2005
         First Quarter                                  4.25           2.95
         Second Quarter                                 3.88           2.85
         Third Quarter                                  6.91           3.57
         Fourth Quarter                                 7.95           5.60

Equity Compensation Plans
The  table  below  provides   information   relating  to  the  Company's  equity
compensation plans as of December 31, 2005.



                                       27
<PAGE>

<TABLE>
<CAPTION>



                                                                                           Number of securities
                                                                                           remaining available
                                            Number of securities    Weighted-average       for future issuance
                                                to be issued        exercise price of       under compensation
                                              Upon exercise of         outstanding           plans (excluding
                                            outstanding options,        options,           securities reflected
Plan Category                               warrants and rights    warrants and rights       in first column)
-------------                               -------------------    -------------------       ----------------
Equity compensation plans
   approved by security holders
<S>                                              <C>                 <C>                        <C>
     Stock option plan                           5,259,167           $      2.42                3,237,612(a)
     Restricted stock plan                         844,550                  N/A (b)               155,450
Equity compensation plans
   not approved by security holders              3,553,500           $      2.10                      (c)
                                                 ---------                                       -----------
Total                                            9,657,217           $      2.29(d)              3,393,062
                                                 =========                  ====                 =========
</TABLE>

(a)      As of  December 31 of each year,  the number of shares of common  stock
         issuable  under our stock option plan  automatically  increases so that
         the number of shares of common  stock  issuable  under the plan will be
         equal to 10% of the total number of shares of common stock  outstanding
         on that date.

(b)      The  restricted  shares vest 20% on the first  anniversary,  20% on the
         second  anniversary  and 60% on the third  anniversary  of the  awards,
         provided the holder remains employed by the Company.

(c)      The equity  compensation plan not approved by shareholders is comprised
         of  individual  common stock  option  agreements  issued to  directors,
         consultants  and  employees of the Company,  as summarized  below.  The
         common  stock  options  vest  between zero and two years of the date of
         issue and expire during the period from 2006 through 2008. The exercise
         prices of these  options range from $1.00 per share to $3.70 per share.
         Since these options are issued in individual compensation arrangements,
         there are no options available under any plan for future issuance.  The
         material terms of these options are as follows:
<TABLE>
<CAPTION>

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

<S>                            <C>           <C>     <C>          <C>    <C>           <C>    <C>
         Employees             2,076,000     $1.00 - $3.15        2001 - 2003          2006 - 2008
         Consultants             302,500     $1.80 - $3.70        2001 - 2003          2006 - 2008
         Directors             1,175,000     $2.00 - $3.15        2001 - 2003          2006 - 2008
                               ---------

    Total Issued               3,553,500
                               =========
</TABLE>

     (d)  Weighted  average  exercise  price of options  to  purchase a total of
          8,812,667 shares of common stock.




                                       28
<PAGE>



Securities Transactions

The Company's  securities  transactions  during the year ended December 31, 2005
that were not  registered  under the  Securities  Act of 1933 are  described  as
follows:

During 2005,  certain  holders of the Company's  Series B Convertible  Preferred
Stock ("Preferred Stock") converted 1,492 shares of Preferred Stock into 937,827
shares of common stock in accordance with the terms of such Preferred Stock. The
issuance of these shares of common stock was exempt from registration  under the
Securities Act of 1933 pursuant to Section 3(a)(9) thereof.

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 GPC because GPC was
considered the acquiring entity for accounting purposes.
<TABLE>
<CAPTION>

                                                                 As of and for the Year Ended December 31,
                                                  2005            2004             2003             2002            2001
                                                  ----            ----             ----             ----            ----
Summary of Operations
<S>                                              <C>             <C>                <C>             <C>               <C>
      Oil, gas and gathering revenue             $15,479,566     $3,267,214         $1,263,443      $ 164,508         $ 36,850
      General & administrative expense             5,987,019      4,191,978          2,819,675      5,080,287        4,326,065
      Net loss                                      (37,635)    (4,205,830)        (2,526,525)    (5,649,682)      (4,129,459)
      Net loss per share                              (0.00)         (0.07)             (0.07)         (0.16)           (0.63)

                                                                  As of and for the Year Ended December 31,
                                                 2005               2004              2003              2002             2001
                                                 ----               ----              ----              ----             ----
Balance Sheet
      Working capital (deficit)                  $86,078,958       $52,719,245        $1,192,246      $(2,857,539)     $11,860,584
      Cash and cash equivalents                   62,661,368        25,717,081         3,081,109         2,089,062      12,296,585
      Oil and gas properties, net                100,334,852        50,820,383        28,470,917        24,760,149       9,152,740
      Total assets                               201,199,972       117,368,168        33,059,179        27,505,501      21,658,525
      Long-term obligations                       65,302,674        65,108,566         2,483,084                 -               -
      Stockholders' equity                       127,440,160        46,213,198        27,382,083        22,014,265      21,065,425
</TABLE>

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

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.



                                       29
<PAGE>



Overview

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

The  Company's  corporate  strategy is to grow through  drilling  projects.  The
Company has been focusing its drilling efforts in the Riverbend  Project located
in the Uinta Basin of  northeastern  Utah.  The higher oil and gas prices during
2004 and 2005 due to factors such as inventory levels of gas in storage, extreme
weather in parts of the  country  and  increasing  demand in the United  States,
combined with the continued  instability  in the Middle East have  increased the
profitability of the Company's  drilling projects in this area. The wells in the
Riverbend Project tend to have multiple productive zones. The increased drilling
activity  resulting  from  the  higher  oil and gas  prices  has  decreased  the
availability  of drilling  rigs and  experienced  personnel in this area and may
continue to do so in the future.  The Company  also  continues  to incur  higher
drilling and operating  costs  resulting from the increased fuel and steel costs
and from the increased drilling activity in this area.

Recent Developments

Gasco  increased  its 2005  capital  budget to $50 million  from $38 million for
drilling and  completion  operations  and pipeline  connections in the Riverbend
project area.  The increased  budget  included  spudding two  additional  wells,
initial completion  operations on two wells, and increased costs associated with
the Company's drilling program. During 2005 we spudded 21 gross wells (14.9 net)
and  reached  total  depth on 20 gross  wells  (13.7  net).  Initial  completion
operations  were  conducted  on 21 wells and 12 well  bores were  re-entered  to
complete  behind-pipe  pay. The Company  anticipates an overall  increase in its
compensation expense because it continues to hire additional personnel to manage
the workload associated with its operational plans for 2006.

During 2005 the Company had three rigs  operating in its Riverbend  Project.  We
converted  two of the three rigs  currently  drilling  for us from  well-to-well
contracts to two-year term contracts.  The third rig will continue to operate on
a  well-to-well   basis.  During  December  2005,  Gasco  purchased  a  rig  for
approximately  $5,000,000.  Gasco entered into a one-year drilling contract with
an unrelated  third party who will operate the rig. The operator may buy the rig
from Gasco at the fair  market  value of the rig within  three years of when the
rig is delivered. This rig is scheduled to be moved on location in our Riverbend
Project to begin drilling early in the second quarter of 2006. With the addition
of this rig, Gasco will have four rigs drilling in the Riverbend  Project during
most of 2006. Also, during December 2005, we entered into a three-year  contract
for a new-build rig to be delivered in December  2006.  In connection  with this
contract  we  provided  the rig  owner a  letter  of  credit  from  our bank for


                                       30
<PAGE>

$6,564,000.  The cash  collateral  for this letter of credit is  reflected  as a
restricted investment in the accompanying financial statements.

On November 23, 2005, we closed a public offering of 12,500,000 shares of common
stock  at a price  to the  public  of  $6.50  per  share.  We also  granted  the
underwriters  a 30-day option to purchase up to 1,875,000  additional  shares of
our common stock solely to cover  over-allotments.  Pursuant to this option, the
underwriters  purchased an additional 439,400 shares of common stock on December
6, 2005. The net proceeds from this offering,  after  underwriting  discount and
offering costs were $79,418,386. We expect to use these proceeds to fund capital
expenditures  for the  development  and  exploration  of our oil and natural gas
properties and the development ofassociated infrastructure,  working capital and
general corporate purposes.

The Board of  Directors  of Gasco  approved a budget of $80 million for our 2006
capital expenditure  program.  The program will primarily cover the drilling and
completion  of  approximately  32 gross  wells (15 net  wells) on our  Riverbend
Project and the drilling  and  completion  of up to three wells in Wyoming.  The
budget also includes  expenditures for the  installation of associated  pipeline
infrastructure,   distribution   facilities  and  geophysical   operations.   In
implementing  our  planned  increase in  drilling  activity we have  encountered
difficulties in obtaining  additional  drilling supplies and services as well as
experienced personnel,  which may reduce the number of wells the Company is able
to drill during 2006. The Company  anticipates an overall increase in its salary
expense because it will have to hire additional employees to manage the workload
associated  with its  operational  plan for  2006.  Management  believes  it has
sufficient  capital  for its 2006  operational  budget,  but will  need to raise
additional  capital for its capital  budget in 2007.  The Company will  consider
several options for raising  additional  funds such as entering into a revolving
line of credit, selling securities,  selling assets or farm-outs or similar type
arrangements.  Any  financing  obtained  through  the sale of Gasco  equity will
likely result in substantial dilution to the Company's stockholders.

The following table presents the Company's reserve information as of December 31
of each of last three  years and  production  information  for each of the three
years ended  December 31, 2005. The Mcfe  calculations  assume a conversion of 6
Mcf's for each Bbl of oil.
<TABLE>
<CAPTION>

                                              For the Years Ended December 31,
                                       ----------------------------------------------------
                                         2005                2004                2003
                                       -------------    ---------------     ---------------

<S>                                       <C>                  <C>                 <C>
  Natural gas production (Mcf)            1,648,870            505,967             257,035
  Average sales price per Mcf                 $8.16              $5.79               $4.69
  Year-end proved gas reserves (Mcf)     74,455,128         39,700,156          13,601,003

  Oil production (Bbl)                       10,636              5,080               1,988
  Average sales price per Bbl                $56.91             $38.43              $28.52
  Year-end proved oil reserves (Bbl)        377,288            274,074             100,987

  Production (Mcfe)                       1,712,686            536,447             268,963
  Year-end proved reserves (Mcfe)        76,718,856         41,344,600          14,206,925
</TABLE>


                                       31
<PAGE>

The Company's oil and gas production increased by approximately 219% during 2005
as compared with 2004 primarily due to the Company's  drilling of 21 gross (14.9
net) wells  during  2005.  During  2005,  on a combined  basis,  the oil and gas
reserve  quantities  increased by  approximately  86%  primarily  due to reserve
additions of 122% which were  partially  offset by annual  production  of 4% and
revisions  of  previous  estimates  of 32%.  The  majority of the  revisions  of
previous estimates were a result of the following:

     -    Four  locations  previously  classified  as  proved  undeveloped  were
          omitted from the 2005 reserve report because these locations  required
          a higher capital investment than originally  estimated due to drilling
          and completion problems and due to the lack of historical data related
          to recent completions and recompletions in this area.

     -    Six locations previously classified as proved undeveloped were omitted
          from  the  2005  reserve  report  because  recent  drilling   activity
          indicates  that these  locations may be outside of or on the edge of a
          previously identified zone.

     -    Two   proved   developed   non-producing   completions   significantly
          underperformed previous forecasts.

During 2004, the Company's oil and gas production increased by approximately 99%
as compared with 2003  primarily  due to our 2004 drilling  projects and working
interest acquisitions. During 2004, on a combined basis, the oil and gas reserve
quantities increased by approximately 191% primarily due to reserve additions of
196% and  purchases of reserves of 56%  partially  offset by  production  of 4%,
property  sales of 21% and revisions of previous  estimates of 36%. The previous
estimate revisions relate to the write down of the reserves related to two wells
and their offset locations resulting from scale deposits in the wellbores.

Liquidity and Capital Resources

The following table  summarizes the Company's  sources and uses of cash for each
of the three years ended December 31, 2005, 2004 and 2003.
<TABLE>
<CAPTION>

                                                  For the Year Ended December 31,
                                           ----------------------------------------------
                                               2005              2004            2003
                                               ----              ----            ----

<S>                                          <C>              <C>           <C>
Net cash provided by (used in) operations    $ 2,135,032      $ (905,369)   $ (2,191,914)
Net cash used in investing activities       (45,851,527)     (58,400,053)     (5,286,690)
Net cash provided by financing activities     80,660,782       81,941,394       8,470,651
Net cash flow                                 36,944,287       22,635,972         992,047
</TABLE>

The increase in cash provided by  operations  from 2004 to 2005 is primarily due
to a 219% increase in oil and gas production, a 41% increase in gas prices and a
48%  increase  in oil prices.  The  production  increase is due to the  drilling
activity during 2005 as described above. The decrease in cash used in operations
from 2003 to 2004 was primarily due to the increase in revenue  resulting from a
99% increase in oil and gas  production due to the Company's  drilling  activity
and the  acquisition of additional  working  interests in six wells during 2004,
partially  offset  by  a  decrease  in  the  changes  in  operating  assets  and
liabilities primarily due to the timing of the Company's operational activity.

                                       32
<PAGE>

The Company's  investing  activities  during the three years ended  December 31,
2005 related primarily to the Company's  development and exploration  activities
and the purchase of a drilling rig. During 2004, we also completed  acquisitions
of acreage and additional working interests in producing wells for approximately
$5,800,000.  We had sales proceeds of $828,102 during 2005 which represented the
sale  of  acreage  to an  unrelated  entity.  Our  sales  proceeds  during  2004
represented a disposition  of net profits  interests in 8 wells in the Riverbend
area for  $4,463,161.  We also invested  $27,000,000  in short-term  investments
during 2004 and sold $12,000,000 of these investments during 2005. The remaining
investing  activity  during  2005,  2004 and 2003  consisted  of  changes in our
restricted investments.

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

On November 23, 2005, we closed a public offering of 12,500,000 shares of common
stock  at a price  to the  public  of  $6.50  per  share.  We also  granted  the
underwriters  a 30-day option to purchase up to 1,875,000  additional  shares of
our common stock solely to cover  over-allotments.  Pursuant to this option, the
underwriters  purchased an additional 439,400 shares of common stock on December
6, 2005. The net proceeds from this offering,  after  underwriting  discount and
offering costs were $79,418,386. We expect to use these proceeds to fund capital
expenditures  for the  development  and  exploration  of our oil and natural gas
properties and the development of associated infrastructure, working capital and
general corporate purposes.

During 2005,  643,083  options to purchase Gasco common stock were exercised for
proceeds of $1,275,743.

During  2004,  the Company  completed  the sale  through a private  placement of
14,333,334  shares of its common stock to a group of  accredited  investors at a
price of $1.50 per share,  receiving net proceeds of $20,070,000  and closed the
private  placement of  $65,000,000  in aggregate  principal  amount of its 5.50%
Convertible Senior Notes due 2011, receiving net proceeds of $61,793,000.

During 2004,  33,336  options to purchase  Gasco common stock were exercised for
proceeds of $33,336.

During  2003  the  Company  closed  the  sale of  $2,500,000  of 8%  Convertible
Debentures  in a private  placement,  sold 11,052 shares of Series B Convertible
Preferred Stock to a group of accredited investors, including members of Gasco's
management  for  $440 per  share  resulting  in net  proceeds  of  approximately
$4,797,000  and  completed  the sale  through a private  placement  of 4,788,436
shares of its common  stock to a group of  accredited  previous  investors  at a
selling  price of $0.58 per  common  share  for net  proceeds  of  approximately
$2,765,000.




                                       33
<PAGE>



Capital Budget

The Board of  Directors  of Gasco  approved a budget of $80 million for our 2006
capital expenditure  program.  The program will primarily cover the drilling and
completion  of  approximately  32 gross  wells (15 net  wells) on our  Riverbend
Project and the drilling  and  completion  of up to three wells in Wyoming.  The
budget also includes  expenditures for the  installation of associated  pipeline
infrastructure, distribution facilities and geophysical operations.

This budget will be funded primarily from cash on hand and the proceeds from our
November stock offering described above.

Management  believes it has sufficient capital for its 2006 operational  budget,
but may need to raise  additional  capital for its capital  budget in 2007.  The
Company  may  consider  several  options for  raising  additional  funds such as
entering into a revolving line of credit, selling securities,  selling assets or
farm-outs or similar type arrangements.  Any financing obtained through the sale
of Gasco  equity will likely  result in  substantial  dilution to the  Company's
stockholders.

Schedule of Contractual Obligations

The following table summarizes the Company's obligations and commitments to make
future payments under its notes payable, operating leases, employment contracts,
consulting  agreement  and service  contracts  for the periods  specified  as of
December 31, 2005.
<TABLE>
<CAPTION>

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

Convertible Notes
<S>                                <C>                  <C>              <C>             <C>         <C>
    Principal                      $65,000,000     $         -      $         -      $        -      $ 65,000,000
    Interest                        20,605,903       3,575,000        7,150,000       7,150,000         2,730,903
Drilling Rig Contracts *            54,514,375      17,542,625       29,306,750       7,665,000                 -
Operating Lease - office space         564,579         105,844          251,858         206,877                 -
Employment Contracts                   509,167         470,000           39,167               -                 -
Consulting Agreements                  253,000         243,000           10,000               -                 -
                                   -----------      ----------       ----------     -----------        ----------
Total Contractual Cash
  Obligations                     $141,447,024     $21,936,469      $36,757,775     $15,021,877       $67,730,903
                                  ============     ===========      ===========     ===========       ===========
</TABLE>

     *    The three year  drilling  contract  for the  new-build  rig contains a
          provision  for the Company to  terminate  the contract for $12,000 per
          day for the number days remaining in the original contract.

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




                                       34
<PAGE>



Critical Accounting Policies and Estimates

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

         Oil and Gas Reserves

Gasco  follows the full cost method of  accounting  whereby all costs related to
the acquisition and development of oil and gas properties are capitalized into a
single cost center referred to as a full cost pool. Depletion of exploration and
development costs and depreciation of production equipment is computed using the
units of  production  method based upon  estimated  proved oil and gas reserves.
Under the full cost method of accounting, capitalized oil and gas property costs
less  accumulated  depletion and net of deferred  income taxes may not exceed an
amount equal to the present  value,  discounted at 10%, of estimated  future net
revenues from proved oil and gas reserves plus the cost, or estimated fair value
if lower, of unproved properties.  Should capitalized costs exceed this ceiling,
an impairment would be recognized.

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


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


The most accurate method of determining proved reserve estimates is based upon a
decline  analysis  method,  which  consists of  extrapolating  future  reservoir
pressure and production from historical  pressure  decline and production  data.
The accuracy of the decline analysis method generally  increases with the length
of the production history. Since most of the Company's wells have been producing
less than five years,  their  production  history is relatively  short, so other
(generally less accurate) methods such as volumetric analysis and analogy to the
production  history of wells of other  operators in the same reservoir were used
in  conjunction  with the decline  analysis  method to determine  the  Company's
estimates  of  proved  reserves   including   developed   producing,   developed
non-producing and undeveloped. As the Company's wells are produced over time and


                                       35
<PAGE>

more data is available, the estimated proved reserves will be redetermined on an
annual basis and may be adjusted based on that data.


Actual  future  production,  gas and oil prices,  revenues,  taxes,  development
expenditures,  operating  expenses and  quantities  of  recoverable  gas and oil
reserves most likely will vary from the  Company's  estimates.  Any  significant
variance  could  materially  affect  the  quantities  and  present  value of the
Company's reserves. For example a decrease in price of $0.10 per Mcf for natural
gas and $1.00 per  barrel of oil would  result in a  decrease  in the  Company's
December  31,  2005  present  value of future  net cash  flows of  approximately
$3,792,200.  In addition, the Company may adjust estimates of proved reserves to
reflect  production  history,  acquisitions,  divestitures,  ownership  interest
revisions,  results of exploration  and  development  and prevailing gas and oil
prices.  The Company's reserves may also be susceptible to drainage by operators
on adjacent properties.


         Impairment of Long-lived Assets

The cost of the  Company's  unproved  properties  is withheld from the depletion
base  as  described  above,  until  such a time  as the  properties  are  either
developed or abandoned.  These properties are reviewed periodically for possible
impairment. During 2003, the Company's management reviewed the unproved property
located  within  the  state of  Wyoming  and  determined  that it  would  not be
developing  some of the acres that were not considered to be  prospective.  As a
result,  the  Company  estimated  the value of these  acres for the  purpose  of
recording the related impairment.  The impairment was estimated by calculating a
per acre value from the total unproved  costs  incurred for the Wyoming  acreage
divided by the total net acres owned by the Company.  This per acre estimate was
applied to the acres that the Company did not plan to develop to  calculate  the
impairment.  As a result,  $1,725,000 of costs  associated with this acreage was
reclassified  into the full cost pool during the year ended  December  31, 2003.
During the year ended  December 31, 2005,  approximately  $5,300,000 of unproved
lease costs related primarily to expiring acreage in Wyoming was reclassified to
proved  property.  A change in the  estimated  value of the acreage could have a
material impact on the total of the impairment recorded by the Company.


         Revenue Recognition


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


                                       36
<PAGE>

         Stock Based Compensation


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

Results of Operations

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

                                            For the Year Ended December 31,
                                    --------------------------------------------
                                           2005             2004            2003
                                           ----             ----            ----

    Natural gas production (Mcf)       1,648,870        505,967          257,035
    Average sales price per Mcf           $ 8.16         $ 5.79           $ 4.69
    Oil production (Bbl)                  10,636          5,080            1,988
    Average sales price per Bbl           $56.91         $38.43           $28.52

2005 Compared to 2004

Oil and gas revenue increased  $10,944,419 during 2005 compared with 2004 due to
an increase in oil and gas  production  of 5,556 bbls and 1,142,903 Mcf combined
with an  increase  in the average oil and gas prices of $18.48 per bbl and $2.37
per Mcf during 2005. The $10,944,419 increase in oil and gas revenue during 2005
is comprised of $9,650,353  related to the  production  increase and  $1,294,066
related to the price increase.  The production  increase is due to the Company's
drilling,  completion  and  recompletion  activity  during  2004 and 2005 and is
partially  offset  by the  production  decrease  resulting  from  the  Company's
disposition of approximately 50% of its revenue interest in two wells during the
first  quarter of 2004 in  accordance  with its service  party  arrangements  as
discussed above and by normal production declines on all wells.

The Company  recognized  gathering income of $1,411,259 and gathering expense of
$1,166,841  during 2005 which  represents the income earned from third party gas
gathering and compression and expenses incurred from the Riverbend area pipeline
that was  constructed  by the Company  during 2004. The increase in this revenue
and expense from 2004 is due to the full year of activity during 2005 as well as
the increased production as described above.

Interest income increased  $1,058,858 during 2005 compared 2004 primarily due to
higher  average cash and cash  equivalent  and  short-term  investment  balances
during 2005  relating  primarily  to  proceeds  from the  Company's  $65,000,000
Convertible  Note issuance  during October 2004 and the proceeds from the common
stock offering during November 2005.

                                       37
<PAGE>

Lease  operating  expense  increased  $232,326  during 2005  compared  with 2004
primarily due to the increased number of producing wells during 2005.

Depletion,  depreciation  and  amortization  expense during 2005 is comprised of
$4,772,000  of depletion  expense  related to the  Company's  proved oil and gas
properties,  $57,403 of depreciation expense related to the Company's equipment,
furniture,  fixtures and other assets and $14,036 of accretion  expense  related
the Company's asset retirement obligation. The corresponding expense during 2004
consists of $1,025,100 of depletion expense, $60,812 of depreciation expense and
$16,663 of accretion  expense.  The increase in depletion expense during 2005 as
compared with 2004 is due  primarily to the increase in  production  and related
costs resulting from the Company's  increased  drilling and completion  activity
discussed above.

General  and  administrative  expense  increased  by  $1,795,041  during 2005 as
compared  with  2004,  primarily  due to  the  Company's  increased  operational
activity.  The increase in these expenses is comprised of approximately $855,000
in salary expense and consulting fees associated with our increased  operational
activity,  $355,000  in fees  associated  with the  Company's  audit of internal
controls as required  under the Sarbanes Oxley Act of 2002 and $525,000 in stock
based compensation  primarily related to the Company's restricted stock issuance
and the issuance of stock  options to  consultants.  The  remaining  increase in
general and administrative  expenses is due to the fluctuation in numerous other
expenses, none of which are individually significant.

Interest  expense  during  2005  consists  of  interest  expense  related to the
Company's  outstanding  Convertible Notes which were issued on October 20, 2004.
Interest  expense  during  2004  consists  of  the  interest  on  the  Company's
outstanding  Convertible Debentures that were converted into common stock during
October 2004 and interest on the Convertible Notes for approximately two months.

2004 Compared to 2003

Oil and gas revenue  increased  $1,860,445 during 2004 compared with 2003 due to
an increase in gas  production of 248,932 Mcf and an increase in oil  production
of 3,092 bbls during 2004  combined  with an increase in the average gas and oil
prices of $1.10 per Mcf and $9.91 per bbl during 2004. The  $1,860,445  increase
in oil and gas revenue  during 2004 is  comprised of  $1,558,355  related to the
production increase and $302,090 related to the price increase.  The increase in
production  is primarily due to the  Company's  2004  drilling and  recompletion
activity as well as the acquisition of additional working interests in six wells
during March 2004.

The  gathering  income of  $143,326  during the year  ended  December  31,  2004
represents  the  income  earned  from  the  Riverbend  area  pipeline  that  was
constructed by the Company during 2004.

Interest  income  increased  $313,014 from 2003 to 2004  primarily due to higher
average cash and cash equivalent and short-term  investment balances during 2004
relating primarily to proceeds from the Company's  $65,000,000  Convertible Note
issuance  during October 2004 and its  $21,500,000  common stock offering during
February 2004.

                                       38
<PAGE>

General  and  administrative  expense  increased  by  $1,372,303  during 2004 as
compared  with  2003,  primarily  due to  the  Company's  increased  operational
activity.  The increase in these expenses is comprised of approximately $305,000
in salary  expense  due to the  hiring of  additional  full-time  employees  and
employee and officer bonuses, approximately $280,000 in stock based compensation
primarily  related to the Company's  restricted  stock  issuance,  approximately
$215,000  related to increased  shareholder  communication  due to the Company's
expanded operational activity during 2004,  approximately $245,000 in consulting
expenses due to the increased  operational activity,  approximately  $185,000 in
audit and legal fees related to the property and financing  transactions  during
the year and approximately $140,000 of increased administrative expenses related
to the operations of the Company's corporate office resulting from the increased
operational activity and the increase number of consultants and employees during
2004. The remaining  increase in general and  administrative  expenses is due to
the  fluctuation  in numerous  other  expenses,  none of which are  individually
significant.

Lease operating  expense  increased by $300,989,  during 2004,  primarily due to
increased  operating  costs  and  production  taxes  relating  to the  increased
production discussed above.

Gathering  operation  expense  during  2004  relates  to the  operations  of the
Company's  pipeline in the Riverbend  area that was  constructed  by the Company
during 2004.

Depletion,  depreciation  and  amortization  expense during 2004 is comprised of
$1,025,100  of depletion  expense  related to the  Company's  proved oil and gas
properties,  $60,812 of depreciation expense related to the Company's equipment,
furniture,  fixtures and other assets and $16,663 of accretion  expense  related
the Company's asset retirement obligation. The corresponding expense during 2003
consists of $480,000 of depletion expense,  $61,128 of depreciation  expense and
$11,795 of accretion  expense.  The increase in depletion expense during 2004 as
compared with 2003 is due primarily to the increase in production resulting from
the Company's increased drilling and completion activity as well as the property
acquisition discussed above.

Interest  expense  during  2004  consisted  of interest  expense  related to the
Company's  outstanding  Convertible  Notes which were issued on October 20, 2004
and interest expense related to the Company's  outstanding  Debentures that were
converted  into common stock in October 2004.  The interest  expense during 2003
consisted  of the  interest  incurred on an  outstanding  note  payable that was
repaid during  February  2004 as well as interest on the  Company's  outstanding
Debentures.

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R),  "Share-Based Payment," which
is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123(R) is effective  for public  companies  for the first fiscal year  beginning
after June 15, 2005,  supersedes APB Opinion No. 25, Accounting for Stock Issued
to Employees, and amends SFAS No. 95, Statement of Cash Flows.

                                       39
<PAGE>

SFAS No. 123(R) requires all share-based payments to employees, including grants
of employee stock  options,  to be recognized in the income  statement  based on
their fair values.  Pro-forma  disclosure is no longer an  alternative.  The new
standard will be effective for the Company,  beginning January 1, 2006. SFAS No.
123R  permits  companies  to adopt its  requirements  using  either a  "modified
prospective" method, or a "modified  retrospective"  method. Under the "modified
prospective" method, compensation cost is recognized in the financial statements
beginning with the effective  date,  based on the  requirements of SFAS No. 123R
for  all  share-based  payments  granted  after  that  date,  and  based  on the
requirements  of SFAS  No.  123 for all  unvested  awards  granted  prior to the
effective date of SFAS No. 123R. Under the "modified  retrospective" method, the
requirements are the same as under the "modified  prospective"  method, but also
permits entities to restate financial statements of previous periods, either for
all prior periods  presented or to the beginning of the fiscal year in which the
statement is adopted, based on previous pro forma disclosures made in accordance
with SFAS No. 123.  The Company is currently  evaluating  the impact of this new
standard and estimates  that the adoption SFAS No. 123(R) will have an effect on
the financial  statements similar to the pro-forma effects reported in Note 2 of
the accompanying financial statements.

The Securities and Exchange  Commission  issued Staff Accounting  Bulletin (SAB)
No. 106 in September 2004 regarding the application of SFAS No. 143, "Accounting
for Asset  Retirement  Obligations,"  for oil and gas  producing  entities  that
follow the full cost accounting  method. SAB No. 106, states that after adoption
of SFAS No.  143,  the future  cash  outflows  associated  with  settling  asset
retirement  obligations  that have been  accrued on the balance  sheet should be
excluded from the present value of estimated  future net cash flows used for the
full cost ceiling test calculation.  The Company has calculated its ceiling test
computation  in this manner since the  adoption of SFAS No. 143 and,  therefore,
SAB No. 106 had no effect on the Company's  financial  statements,  effective in
the fourth quarter of 2004.

In March 2005, the FASB issued  Interpretation (FIN)
No.  47,  "Accounting  for  Conditional  Asset  Retirement   Obligations  --  An
Interpretation  of SFAS No. 143",  which clarifies the term  "conditional  asset
retirement  obligation"  used in SFAS No. 143,  "Accounting for Asset Retirement
Obligations",  and specifically when an entity would have sufficient information
to reasonably  estimate the fair value of an asset  retirement  obligation.  The
adoption did not have an impact on the company's financial statements.

In December  2004, the FASB issued SFAS 153,  Exchanges of  Nonmonetary  Assets,
which changes the guidance in APB 29,  Accounting for Nonmonetary  Transactions.
This  Statement  amends  APB  29 to  eliminate  the  exception  for  nonmonetary
exchanges of similar  productive assets and replaces it with a general exception
for exchanges of nonmonetary  assets that do not have  commercial  substance.  A
nonmonetary  exchange has  commercial  substance if the future cash flows of the
entity are expected to change  significantly  as a result of the exchange.  SFAS
153 is effective  during fiscal years  beginning  after June 15, 2005. We do not
believe the  adoption of SFAS 153 will have a material  impact on our  financial
statements.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections",  which  replaces  Accounting  Principles  Board  Opinion  No.  20,
Accounting  Changes and SFAS No. 3. SFAS 154 provides guidance on the accounting
for and reporting of accounting  changes and error  corrections.  It establishes
retrospective  application,  or the latest  practicable  date,  as the  required
method for  reporting a change in  accounting  principle  and the reporting of a


                                       40
<PAGE>

correction  of an  error.  SFAS 154 is  effective  for  accounting  changes  and
corrections  of errors made in fiscal years  beginning  after December 15, 2005.
The  Company  does not  expect  that the  adoption  of SFAS No. 154 will have an
impact on the Company's financial statements.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

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.  The Company does not have any obligations  that are subject
to variable rates of interest.




                                       41
<PAGE>



ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firms              43-44

Consolidated Balance Sheets at December 31, 2005 and 2004              45-46

Consolidated Statements of Operations for the Years Ended
    December 31, 2005, 2004 and 2003                                   47

Consolidated Statements of Stockholders' Equity for the Years
    Ended December 31, 2005, 2004 and 2003                             48

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2005, 2004 and 2003                                   49

Notes to Consolidated Financial Statements                             50-81




                                       42
<PAGE>




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have  audited the  consolidated  balance  sheets of Gasco  Energy,  Inc.  and
subsidiaries  (the  "Company") as of December 31, 2005 and 2004, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the years ended December 31, 2005 and 2004.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
December 31, 2005 and 2004,  and the results of their  operations and their cash
flows for the years ended  December 31, 2005 and 2004, in  conformity  with U.S.
generally accepted accounting principles.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the effectiveness of the Company's
and subsidiaries'  internal control over financial  reporting as of December 31,
2005,  based on criteria  established in Internal  Control-Integrated  Framework
issued by the Committee of Sponsoring  Organizations of the Treadway  Commission
(COSO) and our report dated March 1, 2006  expressed an unqualified  opinion
on  management's  assessment  of the  effectiveness  of the  Company's  internal
control over financial reporting and an unqualified opinion on the effectiveness
of the Company's internal control over financial reporting.



/s/ Hein & Associates LLP
Denver, Colorado
March 1, 2006






                                       43
<PAGE>



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders'  equity, and cash flows of Gasco Energy,  Inc. (the "Company") and
its  subsidiaries  for  the  year  ended  December  31,  2003.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial  reporting.  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,  such consolidated  financial  statements present fairly, in all
material  respects,  the results of operations and cash flows of the Company for
the year ended  December 31, 2003,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

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



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










                                       44
<PAGE>

<TABLE>
<CAPTION>




                                                             GASCO ENERGY, INC.
                                                        CONSOLIDATED BALANCE SHEETS


                                                                         December 31,
                                                                ------------------------------------
                                                                  2005                  2004
ASSETS

CURRENT ASSETS
<S>                                                               <C>                   <C>
  Cash and cash equivalents                                       $62,661,368           $25,717,081
  Restricted investment                                            10,139,000             3,535,055
  Short-term investments                                           15,000,000            27,000,000
  Accounts receivable
    Joint interest billings                                         1,792,038               429,779
    Revenue                                                         3,115,154               615,265
  Inventory                                                         1,182,982             1,009,914
  Prepaid expenses                                                    645,554               458,555
                                                                  -----------           -----------
          Total                                                   94,536,096            58,765,649
                                                                  -----------           ----------

PROPERTY, PLANT AND EQUIPMENT, at cost
  Oil and gas properties (full cost method)
    Proved mineral interests                                       83,972,300            29,811,483
    Unproved mineral interests                                     13,323,712            18,449,330
  Gathering assets                                                  4,831,050             2,469,580
  Equipment                                                         5,148,388                89,900
  Furniture, fixtures and other                                       175,607               158,590
                                                                  -----------            ----------
           Total                                                  107,451,057            50,978,883
                                                                  -----------            ----------
  Less accumulated depreciation, depletion and amortization       (6,986,662)           (2,247,032)
                                                                  -----------           -----------
           Total                                                 100,464,395            48,731,851
                                                                 ------------           ----------

NON-CURRENT ASSETS
  Restricted investment                                             3,565,020             6,778,040
  Deferred financing costs                                          2,634,461             3,092,628
                                                                    ---------             ---------
                                                                    6,199,481             9,870,668
                                                                    ---------             ---------

TOTAL ASSETS                                                    $ 201,199,972         $ 117,368,168
                                                                =============         =============


</TABLE>











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





                                       45
<PAGE>

<TABLE>
<CAPTION>




                                                             GASCO ENERGY, INC.
                                                  CONSOLIDATED BALANCE SHEETS (continued)


                                                                                         December 31,
                                                                                 -------------------------------------
                                                                                   2005                        2004

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
<S>                                                                                 <C>                    <C>
  Accounts payable                                                                  $   907,772            $ 1,447,149
  Revenue payable                                                                     1,658,141                334,765
  Advances from joint interest owners                                                 2,476,080                891,999
  Accrued interest                                                                      844,098                695,139
  Accrued expenses                                                                    2,571,047              2,677,352
                                                                                     ----------             ----------
           Total                                                                     8,457,138              6,046,404
                                                                                     ----------             ---------

NONCURRENT LIABILITIES
   5.5% Convertible Senior Notes                                                     65,000,000             65,000,000
   Asset retirement obligation                                                          223,947                108,566
   Deferred rent expense                                                                 78,727                      -
                                                                                     ----------             ----------
       Total                                                                         65,302,674             65,108,566
                                                                                     ----------             ----------

COMMITMENTS AND CONTINGENCIES (NOTES 5, 13, 14)

STOCKHOLDERS' EQUITY
  Series B  Convertible  Preferred  stock  -  $.001  par  value;  20,000  shares
     authorized; 763 shares issued and outstanding with a liquidation preference
     of $335,720 in 2005 and 2,255 shares issued and
    outstanding with a liquidation preference of $992,200 in 2004                             1                      2
  Common stock - $.0001 par value; 300,000,000 shares authorized;
     85,041,492 shares issued and 84,967,792 outstanding in 2005;
     70,590,909 shares issued and 70,517,209 shares outstanding in 2004                   8,504                  7,059
  Additional paid in capital                                                        157,540,755             76,346,463
  Deferred compensation                                                               (443,579)              (512,440)
  Accumulated deficit                                                              (29,535,226)           (29,497,591)
  Less cost of treasury stock of 73,700 common shares                                 (130,295)              (130,295)
                                                                                   ------------            -----------
           Total                                                                   127,440,160             46,213,198
                                                                                   ------------            ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $ 201,199,972          $ 117,368,168
                                                                                 =============-         =============



</TABLE>






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






                                       46
<PAGE>

<TABLE>
<CAPTION>



                                                         GASCO ENERGY, INC.
                                               CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                              For the Year Ended December 31,
                                                                       -------------------------------------------------
                                                                                2005             2004             2003

REVENUES
<S>                                                                     <C>               <C>              <C>
  Gas                                                                   $ 13,462,977      $  2,928,689     $  1,206,741
  Oil                                                                        605,330           195,199           56,702
  Gathering                                                                1,411,259           143,326                -
  Interest income                                                          1,383,859           325,001           11,987
                                                                          ----------         ---------        ---------
          Total                                                           16,863,425         3,592,215        1,275,430
                                                                          ----------         ---------        ---------

OPERATING EXPENSES
  Lease operating                                                            870,593           638,267          337,278
  Gathering operations                                                     1,166,841           267,450                -
  Depletion, depreciation, amortization and asset retirement
    liability accretion                                                    4,843,439         1,102,575          552,923
  General and administrative                                               5,987,019         4,191,978        2,819,675
  Interest expense                                                         4,033,168         1,597,775           82,392
                                                                          ----------         ---------        ---------
           Total                                                          16,901,060         7,798,045        3,792,268
                                                                          ----------         ---------        ---------
LOSS BEFORE CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING PRINCIPLE                                            (37,635)       (4,205,830)      (2,516,838)

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE                                                                       -                 -           (9,687)
                                                                          -----------       ----------        ---------
NET LOSS                                                                    (37,635)       (4,205,830)      (2,526,525)

Preferred stock dividends                                                   (33,347)         (140,853)        (304,172)
                                                                          ----------       -----------      -----------
NET LOSS ATTRIBUTABLE TO COMMON
   STOCKHOLDERS                                                          $  (70,982)     $ (4,346,683)    $ (2,830,697)
                                                                         ===========     =============    =============

PER COMMON SHARE DATA - BASIC AND DILUTED:
  Loss before cumulative effect of change in accounting principle          $  (0.00)         $  (0.07)        $  (0.07)
  Cumulative effect of change in accounting principle                             -                 -                -
                                                                            ---------          --------          ------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED                              $  (0.00)         $  (0.07)        $  (0.07)
                                                                           =========         =========        =========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - BASIC AND DILUTED                                         72,152,977        63,194,223       41,262,778
                                                                         =============     =============    ===========


</TABLE>



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



                                       47
<PAGE>

<TABLE>
<CAPTION>



                                                                   GASCO ENERGY, INC.
                                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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

<S>                          <C>       <C>   <C>         <C>     <C>           <C>         <C>            <C>          <C>
Balance, December 31, 2002      -         -  40,362,500  $ 4,036 $ 44,958,593  $  (52,833) $ (22,765,236) $ (130,295)  $ 22,014,265
Issuance of preferred stock   11,052   $ 11                         4,797,398                                             4,797,409
Issuance of common stock                      4,888,436      490    2,808,719                                             2,809,209
Issuance of restricted stock                    425,000       42      250,708    (221,250)                                   29,500
Amortization of deferred
  compensation                                                                     94,317                                   94,317
Beneficial conversion feature                                         166,667                                               166,667
Dividends paid                   682      1                           (4,092)                                               (4,091)
Net loss                                                                                      (2,526,525)               (2,526,525)
Other                                                                   1,332            -             -            -         1,332
                               -----   ----  ----------    ------     -------    ---------    -----------    --------   -----------

Balance December 31, 2003     11,734     12  45,675,936    4,568   52,979,325    (179,766)   (25,291,761)   (130,295)    27,382,083
 Conversion of preferred
  shares to common shares     (9,479)   (10)   5,958,226      596        (586)                                                     -
 Issuance of common stock                    14,714,787    1,472   20,786,130    (748,157)                               20,039,445
 Conversion of Convertible
    Debentures                                 4,166,665      416    2,503,376                                             2,503,792
 Exercise of common stock
   options                                        33,336        3       33,333                                                33,336
Amortization of deferred
  compensation                                                                     415,483                                  415,483
Proceeds from 16b violation                                           106,858                                               106,858
Dividends paid                                   41,959        4     (61,973)                                              (61,969)
Net loss                           -      -           -        -            -            -    (4,205,830)               (4,205,830)
                                ----    ---     --------    ----   ----------     --------    ----------       -------   -----------

Balance December 31, 2004      2,255      2  70,590,909    7,059   76,346,463    (512,440)   (29,497,591)   (130,295)    46,213,198
Issuance of common stock                     12,929,516    1,293   79,449,446    (172,773)                               79,277,966
 Conversion of preferred
  shares to common shares     (1,492)    (1)     937,827       94         (93)                                                     -
 Exercise of common stock
  options                                        583,240       58    1,275,685                                             1,275,743
Amortization of deferred
   compensation                                                       502,601      241,634                                  744,235
Dividends paid                                                       (33,347)                                              (33,347)
Net loss                                                                                         (37,635)                  (37,635)
                               -----  ------ ----------    ------   ---------     --------    -----------    -------     ----------

Balance December 31, 2005        763   $  1  85,041,492  $ 8,504 $157,540,755   $(443,579) $ (29,535,226) $ (130,295) $ 127,440,160
                                 ===   ====  ==========  ======= ============   ========== ============== =========== =============

</TABLE>



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


                                       48
<PAGE>



<PAGE>
<TABLE>
<CAPTION>


                                                             GASCO ENERGY, INC.
                                                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                   For the Years Ended December 31,
                                                                              -------------------------------------------------
                                                                                   2005             2004                2003
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                            <C>            <C>                 <C>
  Net loss                                                                     $ (37,635)     $(4,205,830)        $(2,526,525)
  Adjustment to reconcile net loss to net cash used in operating activities
     Depreciation, depletion and impairment expense                             4,829,403        1,085,912             541,128
     Accretion of asset retirement obligation                                      14,036           16,663              11,795
     Stock compensation                                                           744,235          415,483              94,317
    Non-cash rent expense                                                          48,727
    Landlord incentive payment                                                     30,000
     Amortization of beneficial conversion feature                                      -          161,514               6,945
     Amortization of deferred financing costs                                     458,167          294,993               7,758
     Cumulative effect of change in accounting principle                                -                -               9,687
     Changes in operating assets and liabilities:
      Accounts receivable                                                     (3,862,148)        (545,681)           (403,219)
      Inventory                                                                 (173,068)      (1,009,914)                   -
         Prepaid expenses                                                       (186,999)           59,992           (320,059)
         Accounts payable                                                       (679,797)        (600,723)             164,303
         Revenue payable                                                        1,323,376           91,252             185,215
         Advances from joint interest owners                                    1,584,081          891,999                   -
         Accrued interest                                                         148,959          695,139                   -
         Accrued expenses                                                     (2,106,305)        1,743,832              36,741
                                                                              -----------       ----------           ---------
                  Net cash provided by (used in) operating activities           2,135,032        (905,369)         (2,191,914)
                                                                                ---------      -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for acquisitions, development and exploration                     55,181,914)     (25,736,066)         (5,283,426)
  Cash paid for furniture, fixtures and other                                   (106,790)         (64,053)             (3,264)
  Proceeds from property sales                                                    828,102        4,463,161                   -
  Investment in short-term investments                                                  -     (27,000,000)                   -
  Proceeds from the sale of short term investments                             12,000,000                -                   -
  Cash designated as restricted                                               (6,816,967)     (10,313,095)           (250,000)
  Cash undesignated as restricted                                               3,426,042          250,000             250,000
                                                                              -----------      -----------         -----------
                 Net cash used in investing activities                        (45,851,527)     (58,400,053)        (5,286,690)
                                                                              -----------      -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from sale of common stock                                           79,693,764       21,500,001           2,777,292
  Issuance of convertible notes                                                         -       65,000,000                   -
  Exercise of options to purchase common stock                                  1,275,743           33,336                   -
  Cash paid for offering costs                                                  (275,378)      (4,636,828)           (266,721)
  Preferred dividends                                                            (33,347)         (61,973)             (4,092)
  Proceeds from sale of preferred stock                                                 -                -           4,862,840
  Proceeds from sale of convertible debentures                                          -                -           2,500,000
  Repayment of note payable                                                             -                -         (1,400,000)
  Proceeds from 16b violation                                                           -          106,858               1,332
                                                                               ----------       ----------           ---------
                Net cash provided by financing activities                      80,660,782       81,941,394           8,470,651
                                                                               ----------       ----------           ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                      36,944,287       22,635,972             992,047

CASH AND CASH EQUIVALENTS:
    BEGINNING OF PERIOD                                                        25,717,081        3,081,109           2,089,062
                                                                               ----------      -----------           ---------
    END OF PERIOD                                                             $62,661,368      $25,717,081         $ 3,081,109
                                                                              ===========      ===========         ===========
</TABLE>


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

                                       49
<PAGE>

                                GASCO ENERGY INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

NOTE 1 - ORGANIZATION

Gasco Energy,  Inc. ("Gasco" or the "Company") is an independent  energy company
engaged in the exploration, development, and acquisition and production of crude
oil and natural gas in the western United States.  "Our", "we", and "us" as used
herein also refer to Gasco Energy, Inc.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  consolidated financial statements include Gasco and its wholly
owned  subsidiaries.   All  significant  intercompany   transactions  have  been
eliminated.

Cash and Cash Equivalents

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

Restricted Investment

The  restricted  investment  balance as of  December  31, 2005 is  comprised  of
$7,140,020  invested in U.S.  government  securities in an amount  sufficient to
provide for the payment of four semi-annual  scheduled  interest payments on the
Company's outstanding 5.5% Convertible Notes ("Notes"),  as further described in
Note 8, and $6,564,000 of cash invested in cash  equivalents as collateral for a
one year letter of credit.  The letter of credit was obtained in connection with
one of the Company's long-term rig contracts.  The current portion of restricted
investment represents the interest payments that are due within one year and the
collateral  for the letter of credit.  The  non-current  portion  represents the
interest  payments  that are due after one year.  This  investment  will be held
until maturity and the cost of the investment approximates its market value. The
restricted cash balance at December 31, 2004 consisted of funds invested in U.S.
government  securities that provided for payment of six interest payments on the
Company's outstanding Notes.

Short-term Investments

The Company's short-term investments consist primarily of preferred auction rate
securities,  which are classified as available-for-sale.  Preferred auction rate
securities  represent  preferred  shares  issued  by  closed  end  funds and are
typically traded at auctions that are held periodically  where the dividend rate
for the next  period is set.  The  Company  invests in AAA/Aaa  rated  preferred
auctions that have a dividend rate period of 28 days or less.  These  securities


                                       50
<PAGE>

are stated at fair value based on quoted  market  prices.  The income  earned on
these  investments is included in interest income in the accompanying  financial
statements.

Inventory

Inventory  consists  of  pipe  and  tubular  goods  intended  to be  used in the
Company's oil and gas  operations,  and is stated at the lower of cost or market
using the average cost valuation method.

Property, Plant and Equipment

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

Depletion of exploration  and development  costs and  depreciation of production
equipment is computed using the units of production  method based upon estimated
proved oil and gas reserves.  The costs of unproved properties are withheld from
the  depletion  base until such time as they are either  developed or abandoned.
The properties are reviewed periodically for impairment.

Total well  costs are  transferred  to the  depletable  pool even when  multiple
targeted  zones have not been fully  evaluated.  For depletion and  depreciation
purposes,  relative volumes of oil and gas production and reserves are converted
at the energy  equivalent  rate of six thousand cubic feet of natural gas to one
barrel of crude oil.

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.

During  December  2005,  Gasco  purchased  a  drilling  rig  for   approximately
$5,000,000.  The rig and the other oil and gas equipment owned by the Company is
depreciated  using  the  straight-line  method  over  the  useful  life  of  the
equipment.




                                       51
<PAGE>



Gathering Assets

Gathering  assets are comprised of the costs associated with the construction of
the Company's  pipeline and gathering  system  located in the Riverbend  area of
Utah. These assets are being  depreciated on a units of production  method based
upon  estimated  proved oil and gas  reserves of the wells that are  expected to
flow through the gathering system.

Impairment of Long-lived Assets

The Company's unproved properties are evaluated periodically for the possibility
of potential  impairment.  During the year ended December 31, 2005 approximately
$5,300,000  of unproved  lease costs  related  primarily to expiring  acreage in
Wyoming was reclassified to proved  property.  Other than oil and gas properties
and a drilling rig, the Company has no other  long-lived  assets and to date has
not recognized any impairment losses.

Deferred Financing Costs

Deferred  financing  costs  consist of the costs  associated  with the Company's
issuance of $65,000,000  of Notes during  October 2004, as further  described in
Note 8. These costs are being  amortized over the seven-year  life of the Notes.
The Company  recorded  amortization  expense of $458,167 and $294,993 related to
these costs during the years ended December 31, 2005 and 2004, respectively.

Asset Retirement Obligation

The Company follows 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 was incurred if a reasonable
estimate of fair value could be made. The associated  asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset. The increase
in carrying value of a property  associated with the  capitalization of an asset
retirement cost is included in proved oil and gas properties in the consolidated
balance  sheets.  The Company  depletes  the amount  added to proved oil and gas
property  costs.  The future cash  outflows  associated  with settling the asset
retirement obligations that have been accrued in the accompanying balance sheets
are excluded from the ceiling test  calculations.  The Company also depletes the
estimated dismantlement and abandonment costs, net of salvage values, associated
with future  development  activities that have not yet been capitalized as asset
retirement  obligations.  These  costs are also  included  in the  ceiling  test
calculation.  The asset  retirement  liability  will be  allocated  to operating
expense by using a systematic  and  rational  method.  The Company  adopted this
statement as of January 1, 2003 and recorded a net asset of $139,247,  a related
liability of $148,934  (using a 9% discount rate and a 2% inflation  rate) and a
cumulative  effect of change in  accounting  principle on prior years of $9,687.
The information  below reconciles the value of the asset  retirement  obligation
for the periods presented.



                                       52
<PAGE>




                                                     Year Ended December 31,
                                                      2005                  2004

        Balance beginning of period                  $108,566           $142,806
          Liabilities incurred                        123,190             29,394
          Liabilities settled                        (21,845)           (25,188)
          Revisions in estimated cash flows                 -           (55,109)
          Accretion expense                            14,036             16,663
                                                    ---------          ---------
        Balance end of period                      $ 223,947          $ 108,566
                                                   ==========         =========


The  revisions in estimated  cash flows during 2004 was  primarily the result of
the  Company's  decision to revise the life of the  producing  wells from twenty
years to thirty  years based upon the  drilling  and  production  results in the
area.

Revenue Recognition

The  Company  records  revenues  from the  sales of  natural  gas and  crude oil
recognized as income when the  production is produced and sold.  The Company may
have an interest with other producers in certain  properties,  in which case the
Company uses the sales method to account for gas imbalances.  Under this method,
revenue  is  recorded  on the  basis of gas  actually  sold by the  Company.  In
addition,  the Company records revenue for its share of gas sold by other owners
that  cannot  be  volumetrically  balanced  in the  future  due to  insufficient
remaining reserves.  The Company also reduces revenue for other owners' gas sold
by the  Company  that  cannot be  volumetrically  balanced  in the future due to
insufficient   remaining   reserves.   The   Company's   remaining   over-   and
under-produced  gas balancing  positions are considered in the Company's  proved
oil and gas  reserves.  Gas  imbalances  at December  31, 2004 and 2005 were not
significant.

Computation of Net Loss per Share

Basic net loss per share is computed by dividing  net loss  attributable  to the
common  stockholders by the weighted average number of common shares outstanding
during the reporting  period.  The shares of restricted  common stock granted to
certain  officers,  directors  and  employees of the Company are included in the
computation  only after the shares become fully  vested.  Diluted net income per
common share  includes the potential  dilution that could occur upon exercise of
the options to acquire  common stock  computed  using the treasury  stock method
which assumes that the increase in the number of shares is reduced by the number
of shares  which could have been  repurchased  by the Company  with the proceeds
from the  exercise of the options  (which were  assumed to have been made at the
average  market price of the common  shares during the  reporting  period).  The
Series B Convertible  Preferred Stock ("Preferred  Stock"), the 5.5% Convertible
Senior Notes due 2001 and the  outstanding  common  stock  options have not been
included in the  computation  of diluted  net loss per share  during all periods
because their inclusion would have been anti-dilutive.

                                       53
<PAGE>

As of December 31, 2005, we had 84,967,792  shares of common stock  outstanding.
As of such date,  there were  9,292,267  shares of common  stock  issuable  upon
exercise of  outstanding  options  and  conversion  of our Series B  Convertible
Preferred Stock.  Additional options may be granted to purchase 3,237,612 shares
of common stock under our stock option plan and an additional  155,450 shares of
common stock are issuable  under our  restricted  stock plan. As of December 31,
2005,  and as of December 31 of each  succeeding  year,  the number of shares of
common stock  issuable  under our stock option plan  automatically  increases so
that the total  number of shares of common  stock  issuable  under  such plan is
equal to 10% of the total number of shares of common stock  outstanding  on such
date.

Assuming all of the Notes are converted at the applicable conversion prices, the
number of shares of our common stock outstanding would increase by approximately
16,250,000  shares to approximately  101,217,792  shares (this number assumes no
exercise of the options or rights  described above or conversion of the Series B
Convertible Preferred Stock).

Significant Customers

Although the Company sells the majority of its  production to a few  purchasers,
there  are  numerous  other  purchasers  in the areas in which  Gasco  sells its
production;  therefore, the loss of its significant customer would not adversely
affect the Company's operations. For the years ended December 31, 2005, 2004 and
2003,  purchases by the following  company exceeded 10% of the total oil and gas
revenues of the Company.

                                             For the Year Ended December 31,
                                         --------------------------------------
                                          2005            2004            2003
                                          ----            ----            ----

      ConocoPhillips Company              96%              93%            93%

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.

The  Company's  financial  statements  are  based  on a  number  of  significant
estimates,  including oil and gas reserve quantities which are the basis for the
calculation of depreciation, depletion and impairment of oil and gas properties,
and timing and costs associated with its retirement obligations.

Other Comprehensive Income

The Company's  short-term  investments are classified as available for sale, and
are carried on the balance sheet at market value.  Unrealized  gains and losses,
net of deferred  income  taxes,  are generally  reported as other  comprehensive
income and as an adjustment to stockholders equity. If a decline in market value


                                       54
<PAGE>

below  cost is  assessed  as being  other than  temporary,  such  impairment  is
included in the  determination of net income.  The Company's  available-for-sale
securities are readily marketable and available for use in its operations should
the need arise. Therefore, the Company has classified such securities as current
assets.  As of December  31, 2005 and 2004,  the market  value of the  Company's
short-term investments approximates its cost basis and therefore,  there were no
unrealized gains and losses included in other  comprehensive  income during 2005
or 2004.

The Company does not have any other items of other comprehensive  income for the
years ended December 31, 2005,  2004 and 2003.  Therefore,  total  comprehensive
income (loss) is the same as net income (loss) for these periods.

Income Taxes

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

Stock Based Compensation

The  Company  accounts  for  its  stock-based   compensation   using  Accounting
Principles  Board's  Opinion No. 25 ("APB No. 25") and related  interpretations.
Under APB 25,  compensation  expense is  recognized  for stock  options  with an
exercise  price  that is less than the  market  price on the  grant  date of the
option. The Company has adopted the  disclosure-only  provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation
("SFAS 123") for the stock options granted to the employees and directors of the
Company.  Accordingly,  no  compensation  cost has  been  recognized  for  these
options.  Had compensation expense for the options granted been determined based
on the  fair  value  at the  grant  date for the  options,  consistent  with the
provisions  of SFAS 123, the Company's pro forma net loss and net loss per share
for the years ended  December 31, 2005,  2004 and 2003 would have been increased
to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
                                                              For the Year Ended December 31,
                                                        2005               2004               2003
                                                        ----               ----               ----
Net loss attributable to common shareholders:
<S>                                                      <C>            <C>                 <C>
    As reported                                          $ (70,982)     $ (4,346,683)       $ (2,830,697)
    Add: Stock-base employee compensation
       included in net loss (a)                             344,873           312,243              41,484
    Less: Stock based employee compensation
      determined under the fair value based method        2,920,997           757,294             742,211
                                                        -----------       -----------        ------------
    Pro forma                                          $(2,647,106)      $(4,791,734)        $(3,531,424)
                                                       ============      ============        ============

Net loss per common share:
    As reported                                            $ (0.00)          $ (0.07)            $ (0.07)
                                                           ========          ========            ========
    Pro forma                                              $ (0.04)          $ (0.08)            $ (0.09)
                                                           ========          ========            ========
</TABLE>

                                       55
<PAGE>

(a)      Represents  the  compensation  expense  associated  with the  Company's
         restricted stock awards, further described in Note 9.

The fair value of the common stock options  granted during 2005,  2004 and 2003,
for disclosure purposes was estimated on the grant dates using the Black Scholes
Pricing Model and the following assumptions.

                                             For the Year Ended December 31,
                                       -----------------------------------------
                                             2005              2004        2003
                                             ----              ----        ----

     Expected dividend yield                   --                --          --
     Expected price volatility           75 - 79%          79 - 87%         82%
     Risk-free interest rate           3.7 - 3.9%        3.2 - 3.9%        2.9%
     Expected life of options             5 years           5 years     5 years

Concentration of Credit Risk

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

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

Fair Value

The  Company's  financial  instruments  including  cash  and  cash  equivalents,
restricted  cash,  short-term  investments,  accounts  receivable  and  accounts
payable are carried at cost, which approximates fair value due to the short-term
maturity of these instruments. The Company's 5.5% Convertible Notes are recorded
at cost, and the fair value is disclosed in Note 8. Since considerable  judgment
is required to develop  estimates of fair value, the estimates  provided are not
necessarily  indicative  of the  amounts  the  Company  could  realize  upon the
purchase or refinancing of such instruments.

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R),  "Share-Based Payment," which
is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123(R) is effective  for public  companies  for the first fiscal year  beginning
after June 15, 2005,  supersedes APB Opinion No. 25, Accounting for Stock Issued
to Employees, and amends SFAS No. 95, Statement of Cash Flows.

                                       56
<PAGE>

SFAS No. 123(R) requires all share-based payments to employees, including grants
of employee stock  options,  to be recognized in the income  statement  based on
their fair values.  Pro-forma  disclosure is no longer an  alternative.  The new
standard will be effective for the Company,  beginning January 1, 2006. SFAS No.
123R  permits  companies  to adopt its  requirements  using  either a  "modified
prospective" method, or a "modified  retrospective"  method. Under the "modified
prospective" method, compensation cost is recognized in the financial statements
beginning with the effective  date,  based on the  requirements of SFAS No. 123R
for  all  share-based  payments  granted  after  that  date,  and  based  on the
requirements  of SFAS  No.  123 for all  unvested  awards  granted  prior to the
effective date of SFAS No. 123R. Under the "modified  retrospective" method, the
requirements are the same as under the "modified  prospective"  method, but also
permits entities to restate financial statements of previous periods, either for
all prior periods  presented or to the beginning of the fiscal year in which the
statement is adopted, based on previous pro forma disclosures made in accordance
with SFAS No. 123.  The Company is currently  evaluating  the impact of this new
standard and estimates  that the adoption SFAS No. 123(R) will have an effect on
the financial  statements similar to the pro-forma effects reported in the Stock
Based Compensation disclosure above.

The Securities and Exchange  Commission  issued Staff Accounting  Bulletin (SAB)
No. 106 in September 2004 regarding the application of SFAS No. 143, "Accounting
for Asset  Retirement  Obligations,"  for oil and gas  producing  entities  that
follow the full cost accounting  method. SAB No. 106, states that after adoption
of SFAS No.  143,  the future  cash  outflows  associated  with  settling  asset
retirement  obligations  that have been  accrued on the balance  sheet should be
excluded from the present value of estimated  future net cash flows used for the
full cost ceiling test calculation.  The Company has calculated its ceiling test
computation  in this manner since the  adoption of SFAS No. 143 and,  therefore,
SAB No. 106 had no effect on the Company's  financial  statements,  effective in
the fourth quarter of 2004.

In March 2005,  the FASB issued  Interpretation  (FIN) No. 47,  "Accounting  for
Conditional Asset Retirement  Obligations -- An Interpretation of SFAS No. 143",
which clarifies the term "conditional asset retirement  obligation" used in SFAS
No. 143, "Accounting for Asset Retirement Obligations", and specifically when an
entity would have sufficient  information to reasonably  estimate the fair value
of an asset  retirement  obligation.  The adoption did not have an impact on the
company's  financial  statements.

In December  2004, the FASB issued SFAS 153,  Exchanges of  Nonmonetary  Assets,
which changes the guidance in APB 29,  Accounting for Nonmonetary  Transactions.
This  Statement  amends  APB  29 to  eliminate  the  exception  for  nonmonetary
exchanges of similar  productive assets and replaces it with a general exception
for exchanges of nonmonetary  assets that do not have  commercial  substance.  A
nonmonetary  exchange has  commercial  substance if the future cash flows of the
entity are expected to change  significantly  as a result of the exchange.  SFAS
153 is effective  during fiscal years  beginning  after June 15, 2005. We do not
believe the  adoption of SFAS 153 will have a material  impact on our  financial
statements.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections",  which  replaces  Accounting  Principles  Board  Opinion  No.  20,
Accounting  Changes and SFAS No. 3. SFAS 154 provides guidance on the accounting
for and reporting of accounting  changes and error  corrections.  It establishes


                                       57
<PAGE>

retrospective  application,  or the latest  practicable  date,  as the  required
method for  reporting a change in  accounting  principle  and the reporting of a
correction  of an  error.  SFAS 154 is  effective  for  accounting  changes  and
corrections  of errors made in fiscal years  beginning  after December 15, 2005.
The  Company  does not  expect  that the  adoption  of SFAS No. 154 will have an
impact on the Company's financial statements.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

Reclassifications

Certain  reclassifications  have been made to prior years' amounts to conform to
the  classifications  used in the current year.  Such  reclassifications  had no
effect on the Company's net loss in any of the periods presented.

NOTE 3 - CONSOLIDATING FINANCIAL STATEMENTS
On September 23, 2005, Gasco filed a Form S-3 shelf registration  statement with
the Securities  Exchange  Commission  which was  subsequently  amended in a Form
S-3/A that was filed on October 27,  2005.  Under this  registration  statement,
which was declared effective on November 1, 2005, we may from time to time offer
and sell common stock,  preferred stock,  depositary  shares and debt securities
that may be fully,  irrevocably  and  unconditionally  guaranteed  by all of our
subsidiaries:  Gasco Production Company,  San Joaquin Oil & Gas, Ltd., Riverbend
Gas Gathering, LLC and Myton Oilfield Rentals, LLC ("Guarantor Subsidiaries").
Set forth below are the condensed  consolidating  financial statements of Gasco,
the parent, and the Guarantor Subsidiaries.

                                       58
<PAGE>
<TABLE>
<CAPTION>

                                                   Condensed Consolidating Balance Sheet
                                                          As of December 31, 2005
                                                                (Unaudited)
                                                                                           Guarantor
                                                               Parent         Subsidiaries      Eliminations      Consolidated
ASSETS
CURRENT ASSETS
<S>                                                           <C>                  <C>                 <C>           <C>
  Cash and cash equivalents                                   $ 59,314,343         $3,347,025          $     -       $ 62,661,368
  Restricted investment                                         10,139,000                  -                -         10,139,000
  Short-term investments                                        15,000,000                  -                -         15,000,000
  Accounts receivable                                                    -          4,907,192                -          4,907,192
  Inventory                                                              -          1,182,982                -          1,182,982
  Prepaid expenses                                                 645,229                325                -            645,554
                                                                ----------          ---------       -----------        ----------
          Total                                                 85,098,572          9,437,524                          94,536,096
                                                                ----------          ---------       ------------       ----------
PROPERTY, PLANT AND EQUIPMENT, at cost
  Oil and gas properties (full cost method)
    Proved mineral interests                                             -         83,972,300                -         83,972,300
    Unproved mineral interests                                     274,540         13,049,172                -         13,323,712
    Gathering assets                                                     -          4,831,050                -          4,831,050
    Equipment                                                            -          5,148,388                -          5,148,388
  Furniture, fixtures and other                                    175,607                 -                 -            175,607
                                                                 ---------        ------------      ------------      -----------
           Total                                                   450,147        107,000,910                -        107,451,057
                                                                 ---------        -----------       ------------      -----------
  Less accumulated depreciation, depletion and amortization       (46,064)        (6,940,598)                -        (6,986,662)
                                                                 ---------        -----------       ------------      -----------
           Total                                                   404,083        100,060,312                -        100,464,395
                                                                 ---------        -----------        ------------     -----------
OTHER ASSETS
  Restricted investment                                          3,565,020                  -                -          3,565,020
  Deferred financing costs                                       2,634,461                                              2,634,461
  Intercompany                                                 103,081,444      (103,081,444)                -                  -
                                                               -----------      -------------        -----------      -----------
           Total                                               109,280,925      (103,081,444)                           6,199,481
                                                               -----------      -------------        -----------        ---------
TOTAL ASSETS                                                 $ 194,783,580   $      6,416,392                -       $201,199,972
                                                             =============   ================        ===========-    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                               $ 661,307          $ 246,465           $    -         $  907,772
  Revenue payable                                                        -          1,658,141                -          1,658,141
  Advances from joint interest owners                                    -          2,476,080                -          2,476,080
  Accrued interest                                                 844,098                  -                -            844,098
  Accrued expenses                                                 507,066          2,063,981                -          2,571,047
                                                                ----------          ---------           ------          ---------
           Total                                                 2,012,471          6,444,667                -          8,457,138
                                                                ----------          ---------           ------          ---------
NONCURRENT LIABILITES
   5.5% Convertible Senior Notes                                65,000,000                  -                -         65,000,000
   Asset retirement obligation                                           -            223,947                -            223,947
   Deferred rent expense                                            78,727                  -                -             78,727
                                                                ----------           --------           ------         ----------
       Total                                                    65,078,727            223,947                          65,302,674
                                                                ----------           --------           ------         ----------
STOCKHOLDERS' EQUITY
  Series B Convertible Preferred stock                                   1                  -                -                  1
  Common stock                                                       8,504                  -                -              8,504
  Other                                                        127,683,877          (252,222)                -        127,431,655
                                                               -----------          ---------           ------        -----------
           Total                                               127,692,382          (252,222)                -        127,440,160
                                                               -----------          ---------           ------        -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                                     $194,783,580      $   6,416,392           $    -      $ 201,199,972
                                                              ============      =============           ======      =============


</TABLE>

                                       59
<PAGE>
<TABLE>
<CAPTION>





                                                   Condensed Consolidating Balance Sheet
                                                          As of December 31, 2004
                                                                (Unaudited)
                                                                                           Guarantor
                                                               Parent         Subsidiaries      Eliminations      Consolidated
ASSETS
CURRENT ASSETS
<S>                                                           <C>                  <C>                               <C>
  Cash and cash equivalents                                   $ 23,357,073         $2,360,008                -       $ 25,717,081
  Restricted investment                                          3,535,055                                   -          3,535,055
  Short-term investments                                        27,000,000                  -                -         27,000,000
  Accounts receivable                                                    -          1,045,044                -          1,045,044
  Inventory                                                              -          1,009,914                -          1,009,914
  Prepaid expenses                                                                    458,555                             458,555
                                                                -----------       -----------      ------------       -----------
          Total                                                 53,892,128         4,873,521                           58,765,649
                                                                ----------         ----------      -------------       ----------
PROPERTY, PLANT AND EQUIPMENT, at cost
  Oil and gas properties (full cost method)
    Proved mineral interests                                             -         29,811,483                -         29,811,483
    Unproved mineral interests                                     274,540         18,174,790                -         18,449,330
    Gathering assets                                                     -          2,469,580                -          2,469,580
    Equipment                                                            -             89,900                -             89,900
  Furniture, fixtures and other                                    158,590                                                158,590
                                                                 ---------        -----------       -----------       -----------
           Total                                                   433,130         50,545,753                          50,978,883
                                                                 ---------         ----------        ----------        ----------
  Less accumulated depreciation, depletion and amortization       (90,189)        (2,156,843)                         (2,247,032)
                                                                 ---------        -----------        ----------       -----------
           Total                                                   342,941        48,388,910                           48,731,851
                                                                 ---------                           ----------       -----------
OTHER ASSETS
  Restricted investment                                          6,778,040                  -                -          6,778,040
  Deferred financing costs                                       3,092,628                                              3,092,628
  Intercompany                                                  57,098,600       (57,098,600)                -                  -
                                                                ----------       ------------       -----------        ----------
           Total                                                66,969,268       (57,098,600)                           9,870,668
                                                             -------------       ------------       -----------         ---------
TOTAL ASSETS                                                $ 121,204,337       $ (3,836,169)       $     -         $ 117,368,168
                                                            ==============      =============         =========     =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                                $274,269        $ 1,172,880         $      -        $ 1,447,149
  Revenue payable                                                        -            334,765                -            334,765
  Advances from joint interest owners                                    -            891,999                -            891,999
  Accrued interest                                                 695,139                  -                -            695,139
  Accrued expenses                                                 755,139          1,922,213                -          2,677,352
                                                                 ---------          ---------            --------       ---------
            Total                                                 1,724,547          4,321,857               -           6,046,404
                                                                ----------          ---------            --------       ---------
NONCURRENT LIABILITES
   5.5% Convertible Senior Notes                                65,000,000                  -                -         65,000,000
   Asset retirement obligation                                          -             108,566                -            108,566
                                                                -----------           -------              -------     ----------
       Total                                                    65,000,000            108,566                -         65,108,566
                                                                ----------            -------              -------     ----------
STOCKHOLDERS' EQUITY
  Series B Convertible Preferred stock                                   2                  -                -                  2
  Common stock                                                       7,059                  -                -              7,059
  Other                                                         54,472,729        (8,266,592)                -         46,206,137
                                                                ----------        -----------           ----------     ----------
       Total                                                    54,479,790        (8,266,592)                -         46,213,198
                                                                ----------        -----------           -----------    ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                                    $ 121,204,337       $(3,836,169)          $     -      $ 117,368,168
                                                             =============       ============             =======   =============


</TABLE>



                                       60
<PAGE>

<TABLE>
<CAPTION>



                                                  Consolidating Statements of Operations

For the Year Ended December 31, 2005                                                     Guarantor
                                                     Parent          Subsidiaries      Eliminations     Consolidated
REVENUES
<S>                                                       <C>           <C>                  <C>           <C>
  Oil and gas                                             $    -        $ 14,068,307         $     -       $ 14,068,307
  Gathering                                                    -           2,258,206       (846,947)          1,411,259
  Interest income                                      1,383,740                 119               -          1,383,859
                                                       ---------          ----------      ----------         ----------
          Total                                        1,383,740          16,326,632       (846,947)         16,863,425
                                                       ---------          ----------       ---------         ----------
OPERATING EXPENSES
  Lease operating                                              -           1,717,540       (846,947)            870,593
  Gathering operations                                         -           1,166,841               -          1,166,841
  Depletion, depreciation and amortization                45,648           4,797,791               -          4,843,439
  General and administrative                           5,987,019                   -               -          5,987,019
  Interest expense                                     4,033,168                   -               -          4,033,168
                                                       ---------           ---------        --------          ---------
           Total                                      10,065,835           7,682,172       (846,947)         16,901,060
                                                      ----------           ---------       ---------         ----------
NET INCOME (LOSS)                                    (8,682,095)           8,644,460               -           (37,635)
Preferred stock dividends                               (33,347)                                               (33,347)
                                                     -----------           ---------        --------          ---------
NET INCOME (LOSS) ATTRIBUTABLE TO
  COMMON STOCKHOLDERS                              $ (8,715,442)          $8,644,460          $    -         $ (70,982)
                                                   =============          ==========          ======         ==========



For the Year Ended December 31, 2004                                    Guarantor
                                                        Parent          Subsidiaries      Eliminations     Consolidated
REVENUES
  Oil and gas                                            $     -         $ 3,123,888         $     -       $  3,123,888
  Gathering                                                    -             143,326               -            143,326
  Interest income                                        324,897                 104                            325,001
                                                         -------           ---------          ----------      ---------
          Total                                          324,897           3,267,318               -          3,592,215
                                                         -------           ---------          ----------      ---------
OPERATING EXPENSES
  Lease operating                                              -             638,267               -            638,267
  Gathering operations                                                       267,450                            267,450
  Depletion, depreciation and amortization                12,132           1,090,443                          1,102,575
  General and administrative                           2,714,031           1,477,947               -          4,191,978
  Interest expense                                     1,597,775                                              1,597,775
                                                       ---------           ---------           ----------     ---------
           Total                                       4,323,938           3,474,107                          7,798,045
                                                       ---------           ---------           ----------     ---------
NET LOSS                                             (3,999,041)           (206,789)               -        (4,205,830)
Preferred stock dividends                              (140,853)                 -                 -          (140,853)
                                                      ----------            --------           -----------    ---------
NET LOSS ATTRIBUTABLE TO
   COMMON STOCKHOLDERS                              $(4,139,894)     $     (206,789)         $     -       $(4,346,683)
                                                    ============     ===============           =======       ============



</TABLE>



                                       61
<PAGE>


<TABLE>
<CAPTION>


                                                  Consolidating Statements of Operations


For the Year Ended December 31, 2003                                         Guarantor
                                                            Parent          Subsidiaries      Eliminations      Consolidated
REVENUES
<S>                                                          <C>             <C>                  <C>           <C>
  Oil and gas                                                $     -         $ 1,263,443          $     -       $ 1,263,443
  Interest income                                             11,836                 151                -            11,987
                                                            --------           ---------           ------         ---------
          Total                                               11,836           1,263,594               -          1,275,430
                                                            --------           ---------           ------         ---------
OPERATING EXPENSES
  Lease operating                                                  -             337,278                -           337,278
  Depletion, depreciation and amortization                         -             552,923                -           552,923
  General and administrative                               1,357,126           1,462,549                -         2,819,675
  Interest expense                                             1,750              80,642                -            82,392
                                                           ---------           ---------            ------        ---------
           Total                                           1,358,876           2,433,392                -         3,792,268
                                                           ---------           ---------            ------        ---------
NET LOSS BEFORE CHANGE IN ACCOUNTING
  PRINCIPLE                                              (1,347,040)         (1,169,798)                -       (2,516,838)
Cumulative effect of change in accounting principle               -              (9,687)                -           (9,687)
                                                          -----------        -----------           --------      ----------
NET LOSS                                                 (1,347,040)         (1,179,485)                -       (2,526,525)

Preferred stock dividends                                  (304,172)                   -                          (304,172)
                                                         -----------          ----------            -----      ------------
NET LOSS ATTRIBUTABLE TO
  COMMON STOCKHOLDERS                                  $ (1,651,212)       $ (1,179,485)        $       -     $ (2,830,697)
                                                       =============       =============         =========      ===========


</TABLE>



                                       62
<PAGE>

<TABLE>
<CAPTION>





                                                 Consolidating Statements of Cash Flows

For the Year Ended December 31, 2005                                        Guarantor
                                                          Parent          Subsidiaries      Eliminations     Consolidated

<S>                                                       <C>                   <C>                <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES                       (7,222,953)         $9,357,985         $     -        $2,135,032

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for furniture, fixtures and other                (106,790)                  -               -         (106,790)
  Cash paid for acquisitions, development and exploration            -       (55,181,914)               -      (55,181,914)
  Proceeds from property sales                                       -            828,102               -           828,102
  Proceeds from sale of short-term investments              12,000,000                  -               -        12,000,000
  Cash designated as restricted                            (6,816,967)                  -               -       (6,816,967)
  Cash undesignated as restricted                            3,426,042                                            3,426,042
                                                            ----------       -------------        -----------    ----------
    Net cash provided by (used) in investing activities      8,502,285       (54,353,812)                      (45,851,527)
                                                             ---------       ------------         -----------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from the sale of common stock                    79,693,764                                           79,693,764
  Preferred dividends                                         (33,347)                  -               -          (33,347)
  Cash paid for offering costs                               (275,378)                  -               -         (275,378)
  Exercise of options to purchase common stock               1,275,743                  -               -         1,275,743
  Intercompany                                            (45,982,844)         45,982,844               -                 -
                                                          ------------        ------------         ---------      ---------
              Net cash provided by financing activities     34,677,938         45,982,844               -        80,660,782
                                                          ------------         ----------          ---------     ----------
NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                             35,957,270            987,017                        36,944,287
CASH AND CASH EQUIVALENTS:

    BEGINNING OF PERIOD                                     23,357,073          2,360,008               -        25,717,081
                                                            ----------          ---------           ---------    ----------
     END OF PERIOD                                         $ 59,314,343        $ 3,347,025          $            $62,661,368
                                                          ============        ===========            ========    ===========

For the Year Ended December 31, 2004                                          Guarantor
                                                             Parent          Subsidiaries      Eliminations     Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES                        $(456,645)        $ (448,724)  $                    $ (905,369)
                                                                                           -

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for furniture, fixtures and other                 (64,053)                  -               -          (64,053)
  Cash paid for acquisitions, development and exploration            -       (25,736,066)               -      (25,736,066)
  Proceeds from property sales                                       -          4,463,161               -         4,463,161
  Investment in short-term investments                    (27,000,000)                  -               -      (27,000,000)
  Cash designated as restricted                           (10,313,095)                  -               -      (10,313,095)
  Cash undesignated as restricted                              250,000                  -               -           250,000
                                                           -----------        ------------           ------     -----------
               Net cash used in investing activities      (37,127,148)       (21,272,905)               -      (58,400,053)
                                                          ------------  -----------------            -------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from the issuance of convertible notes           65,000,000                  -               -        65,000,000
  Preferred dividends                                         (61,973)                  -               -          (61,973)
  Exercise of options to purchase common stock                  33,336                  -               -            33,336
  Proceeds from sale of common stock                        21,500,001                  -               -        21,500,001
  Cash paid for offering costs                             (4,636,828)                  -               -       (4,636,828)
  Proceeds from 16b violation                                  106,858                  -               -           106,858
  Intercompany                                            (23,700,657)         23,700,657               -                 -
                                                          ------------         ----------           --------      ---------
  Net cash provided by financing activities                 58,240,737         23,700,657                        81,941,394
                                                          ------------         ----------            -------     ----------
NET INCREASE IN CASH AND CASH
  EQUIVALENTS                                               20,656,944          1,979,028               -        22,635,972
CASH AND CASH EQUIVALENTS:

    BEGINNING OF PERIOD                                      2,700,129            380,980               -         3,081,109
                                                             ---------          ---------          ---------      ---------
    END OF PERIOD                                          $23,357,073        $ 2,360,008         $     -      $ 25,717,081
                                                           ===========        ===========           ========   ============

</TABLE>


                                       63
<PAGE>
<TABLE>
<CAPTION>

                                                 Consolidating Statements of Cash Flows

For the Year Ended December 31, 2003                                           Guarantor
                                                             Parent          Subsidiaries      Eliminations     Consolidated

<S>                                                         <C>                   <C>                <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES                        $ (3,698,768)         $1,506,854         $     -      $(2,191,914)

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for furniture, fixtures and other                     (3,264)                  -               -           (3,264)
    Cash paid for acquisitions, development and exploration             -        (5,283,426)               -       (5,283,426)
  Cash designated as restricted                                 (250,000)                  -               -         (250,000)
  Cash undesignated as restricted                                 250,000                                              250,000
                                                                ---------        --------------      ----------     ----------
               Net cash used in investing activities              (3,264)        (5,283,426)              -        (5,286,690)
                                                               ----------        -----------         -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from the sale of common stock                        2,777,292                                            2,777,292
  Preferred dividends                                             (4,092)                  -               -           (4,092)
  Cash paid for offering costs                                  (266,721)                  -               -         (266,721)
  Proceeds from the sale of preferred stock                     4,862,840                  -               -         4,862,840
  Proceeds from the sale of convertible debentures              2,500,000                  -               -         2,500,000
  Repayment of note payable                                   (1,400,000)                  -               -       (1,400,000)
  Proceeds from 16b violation                                       1,332                  -               -             1,332
  Intercompany                                                (3,891,515)          3,891,515               -                 -
                                                              -----------          ---------          ---------    -----------
              Net cash provided by financing activities         4,579,136          3,891,515              -          8,470,651
                                                              -----------          ---------          -----------  -----------
NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                   877,104            114,943                           992,047
CASH AND CASH EQUIVALENTS:

    BEGINNING OF PERIOD                                         1,823,025            266,037               -         2,089,062
                                                                ---------          ---------           ---------     ---------
    END OF PERIOD                                              $2,700,129          $ 380,980         $     -       $ 3,081,109
                                                               ==========          =========           =========   ===========
</TABLE>

NOTE 4 - OIL AND GAS PROPERTY

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

                                                        For the Years Ended December 31,
                                                 ----------------------------------------------------
                                                   2005              2004                2003
                                                 -------------------------------- -------------------
Property acquisition costs:
<S>                                                  <C>             <C>                    <C>
   Unproved                                          $ 410,062       $ 5,021,126            $667,557
   Proved                                                   --          723,9012                  --
Exploration costs (a)                                1,064,874           216,165             396,967
Development costs                                    48,595,032       17,501,716          4,218,9024
                                                     ----------        ---------          ----------
   Total including asset retirement obligation       50,069,968        23,462,908          5,283,426
                                                     ==========      ============        ===========
   Total excluding asset retirement obligation      $49,968,623      $ 23,398,559        $ 5,168,174
                                                    ===========      ============        ===========
</TABLE>

Depletion and impairment expense related to proved properties per equivalent Mcf
of production  for the years ended  December 31, 2005,  2004 and 2003 was $2.83,
$2.06 and $2.06, respectively.

                                       64
<PAGE>

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

                              2005                 2004
                              ----                 ----

        Utah              $ 3,040,717          $ 5,950,861
        Wyoming             9,779,223           12,312,742
        California            313,586              185,727
        Nevada                190,186                    -
                          -----------          -----------
                          $13,323,712          $18,449,330
                          ===========          ===========

During 2005,  approximately $5,300,000 of unproved lease costs related primarily
to expiring acreage in Wyoming was reclassified to proved property.  These costs
became subject to amortization during the fourth quarter of 2005.

The following table  represents the additions,  net of impairments and transfers
to proved oil and gas  properties,  to unproved  acreage from inception  through
December 31, 2004:

                                                          Net Acquisition
                     Years                                     Costs
               2001 and earlier                            $ 9,152,740
                     2002                                    4,831,796
                     2003                                    (772,497)
                     2004                                    5,237,291
                     2005                                  (5,125,618)
                                                           -----------
Unproved Mineral Interest as of
    December 31, 2005                                     $ 13,323,712
                                                          ============

The Company's drilling activities are located primarily in the Riverbend Area of
Utah,  and the Company plans to drill  approximately  32 gross (15 net) wells in
this area  during  2006.  The  Company  also plans to drill up to three wells in
Wyoming during 2006 and continues to consider several additional options for its
Wyoming  acreage such as the  farm-out of some of its acreage and other  similar
type arrangements.  The Company entered into a farm-out agreement under which an
unrelated  entity has committed to drill one well on its acreage in  California.
Under this agreement, Gasco will contribute the acreage and the unrelated entity
will pay the drilling and completion costs.  Gasco will retain a 25% interest if
the well is successful.

NOTE 5 - PROPERTY ACQUISITIONS

During December 2005, Gasco purchased a rig for approximately $5,000,000.  Gasco
entered into a one-year drilling contract with an unrelated third party who will
operate  the rig.  The  operator  may buy the rig from Gasco at the fair  market
value of the rig within  three years of when the rig is  delivered.  This rig is
scheduled  to be moved on location in our  Riverbend  Project to begin  drilling
early in the second  quarter of 2006.  With the addition of this rig, Gasco will
have four rigs  drilling in the  Riverbend  Project  during most of 2006.  Also,


                                       65
<PAGE>

during December 2005, we entered into a three-year  contract for a new-build rig
to be delivered in December  2006. In connection  with this contract we provided
the rig  owner a  letter  of  credit  from our  bank  for  $6,564,000.  The cash
collateral for this letter of credit is reflected as a restricted  investment in
the accompanying financial statements.

On March 9, 2004 the Company  completed the  acquisition  of additional  working
interests in six producing  wells,  13,062 net acres and gathering system assets
located in the Uinta Basin in Utah for approximately $3,175,000. During May 2004
an  unrelated  third party  exercised  its right to purchase 25% of the acquired
properties  at the  acquisition  price,  which had the  effect of  reducing  the
purchase price to approximately  $2,400,000 and reducing the Company's  interest
in the  acquisition to 75%. The effective date of the acquisition was January 1,
2004;  however,  the net revenue from the producing wells during the period from
January  1,  2004  through  March 9, 2004 was  recorded  as a  reduction  to the
purchase price.

The  following  unaudited  pro forma  consolidated  results  of  operations  are
presented as if the acquisition occurred on January 1, 2003. The results for the
year ended December 31, 2005 are the same as the actual results.

                                             For the Years Ended December 31,
                                              2004                   2003
                                              ----                   ----

Revenue                                     $ 3,742,586          $2,363,046
Loss before cumulative effect of
   Change   in accounting principle         (4,136,633)         (1,918,451)
Net Loss                                    (4,136,633)         (1,928,138)
Net Loss Attributable to Common
  Stockholders                              (4,277,486)         (2,232,310)

Net Loss per Common Share - Basic
  and Diluted                                  $(0.07)            $ (0.05)

During  December  2004,  the Company  completed  the  acquisition  of additional
acreage in the Riverbend Area for a purchase price of approximately  $3,432,000.
Pursuant  to an existing  contract,  an  unrelated  third party had the right to
purchase  25% of the  acquired  acreage at a price equal to 25% of the  purchase
price. This right was exercised by the third party during January 2005 which had
the effect of  reducing  the  Company's  purchase  price of the  acquisition  to
approximately $2,575,000.

NOTE 6 - SERVICE PARTIES' AGREEMENT

On January 20, 2004 the Company entered into agreements, which were subsequently
amended in July 2004, with a group of industry providers (together, the "Service
Parties") to accelerate  the  development  of Gasco's oil and gas  properties by
drilling up to 50 wells in Gasco's  Riverbend Project in Utah's Uinta Basin. The
development of this project is  contemplated to proceed in increments of 10-well
bundles  to be  approved  by the  parties  on an  ongoing  basis.  To secure its
obligations  under the agreement,  described  above, the Company has pledged its
interests in each of the wells in each bundle.

                                       66
<PAGE>

Under  these  agreements,  the service  providers  have the  exclusive  right to
provide  their  services,  as long as they are able, in the  development  of the
Riverbend acreage. Under these agreements,  we have agreed to fund approximately
30% of the  development  costs of each of the wells  drilled,  with the  service
providers  providing drilling and completion  services  equivalent to 45% of the
total  development  costs. The remaining  development  costs are funded by third
party  investors  that are also parties to the  agreements.  Our interest in the
production stream from each 10-well bundle of wells, net of royalties, taxes and
lease operating expenses, is estimated to equal the proportion of the total well
costs that we fund.  The drilling of the second bundle  commenced  late in 2004.
During the fourth  quarter of 2005,  the Service  Parties agreed to proceed with
the third bundle of ten wells.

NOTE 7 - PROPERTY DIVESTITURES

In  connection  with the Service  Parties  agreements,  described in Note 6, the
Company  completed a disposition of net profits  interests of between 18.75% and
25% in the 8 wells that have been drilled in the  Riverbend  area in Utah during
2004  for  total  cash  consideration  of  $4,314,984,  net of  adjustments  and
commissions.  The purpose of this transaction was to allow third party investors
to  become  a  party  to  the  Company's  service  provider  arrangements.   The
consideration  paid to the Company in this transaction  represented the share of
such  investor's  development  costs of the 8 wells  completed  as of such date.
These  investors  have  the  opportunity  to  continue  to  participate  in  the
development  program under the service  provider  arrangement  by funding 25% of
future development costs.

The cash received by the Company consisted of $4,314,984,  which represented the
purchase price for the  transaction of $4,790,387  less  adjustments of $327,227
for net revenue minus lease operating  expense for the properties from June 2004
and $148,176,  representing a commission to the purchasers'  financial  advisor,
which the Company agreed to pay.

The  following  unaudited  pro forma  consolidated  results  of  operations  are
presented as if the disposition occurred on January 1, 2003. The results for the
year ended December 31, 2005 are the same as the actual results.

                                            For the Years Ended December 31,
                                           2004                      2003
                                           ----                      ----

Revenue                                 $ 3,139,967               $1,222,848
Loss before cumulative effect of
   change  in accounting principle      (4,688,491)              (2,605,703)
Net Loss                                (4,688,491)              (2,615,390)
Net Loss Attributable to Common
  Stockholders                          (4,829,344)              (2,919,562)

Net Loss per Common Share - Basic
  and Diluted                               $(0.08)                 $ (0.07)

                                       67
<PAGE>

NOTE 8 - CONVERTIBLE NOTES

On October 20, 2004 (the "Issue Date"), the Company closed the private placement
of $65,000,000 in aggregate  principal  amount of its 5.50%  Convertible  Senior
Notes due 2011 (the  "Notes")  pursuant to an Indenture  dated as of October 20,
2004 (the  "Indenture"),  between the  Company  and Wells  Fargo Bank,  National
Association,  as trustee.  The amount sold  consisted of  $45,000,000  principal
amount originally  offered plus the exercise by the initial  purchasers of their
option to purchase an additional  $20,000,000  principal amount.  The Notes were
sold only to qualified  institutional  buyers in reliance on Rule 144A under the
Securities Act of 1933.

The Notes are convertible into Company Common Stock,  $.0001 par value per share
("Common  Stock"),  at any time prior to  maturity at a  conversion  rate of 250
shares of Common Stock per $1,000  principal  amount of Notes  (equivalent  to a
conversion price of $4.00 per share), which is subject to certain  anti-dilution
adjustments.

Interest on the Notes accrues from the most recent interest payment date, and is
payable in cash  semi-annually  in arrears on April 5th and  October 5th of each
year,  and commenced on April 5, 2005.  Interest is payable to holders of record
on March 15th and September  15th  immediately  preceding  the related  interest
payment dates, and will be computed on the basis of a 360-day year consisting of
twelve 30-day months.

The Company,  at its option,  may at any time on or after  October 10, 2009,  in
whole,  and from time to time in part,  redeem the Notes on not less than 20 nor
more  than 60 days'  prior  notice  mailed to the  holders  of the  Notes,  at a
redemption  price equal to 100% of the principal  amount of Notes to be redeemed
plus any accrued and unpaid  interest to but not including the redemption  date,
if the closing  price of the Common  Stock has exceeded  130% of the  conversion
price for at least 20 trading days in any consecutive 30 trading-day period.

Upon a "change of control" (as defined in the  Indenture),  each holder of Notes
can require the Company to repurchase  all of that holder's  notes 45 days after
the Company gives notice of the change of control,  at a repurchase  price equal
to 100% of the  principal  amount of Notes to be  repurchased  plus  accrued and
unpaid  interest to, but not including,  the repurchase  date, plus a make-whole
premium under certain circumstances described in the Indenture.

Pursuant to a Collateral  Pledge and Security  Agreement dated October 20, 2004,
between the Company and Wells Fargo Bank, National  Association,  as Trustee and
Collateral Agent (the "Pledge Agreement"),  the Company pledged U. S. government
securities  in an amount  sufficient  upon  receipt of scheduled  principal  and
interest  payments with respect to such securities to provide for the payment of
the first six scheduled  interest payments on the Notes.  $10,313,095 of the net
proceeds  from the offering of Notes was used to acquire  such U. S.  government
securities,  which is  recorded as  restricted  investment  in the  accompanying
financial statements.

The  Notes  are  unsecured  (except  as  described  above)  and   unsubordinated
obligations of the Company and rank on a parity  (except as described  above) in
right of payment with all of the  Company's  existing and future  unsecured  and
unsubordinated  indebtedness.  The Notes  effectively  rank junior to any future


                                       68
<PAGE>

secured indebtedness and junior to the Company's subsidiaries' liabilities.  The
Indenture does not contain any financial  covenants or any  restrictions  on the
payment  of  dividends,  the  repurchase  of  the  Company's  securities  or the
incurrence of indebtedness.

Upon a continuing event of default,  the trustee or the holders of 25% principal
amount of a series of Notes may declare the Notes  immediately  due and payable,
except that a default  resulting  from the  Company's  entry into a  bankruptcy,
insolvency  or  reorganization  will  automatically  cause all  Notes  under the
Indenture to become due and payable.

Based on the market price of the Company's common stock as of December 31, 2005,
the fair value of the Notes is $106,112,500.

The Notes are due in 2011 and  therefore do not have any  maturities  within the
next five years.

NOTE 9 - STOCKHOLDERS' EQUITY

The  Company's  capital  stock as of  December  31,  2005 and 2004  consists  of
300,000,000  authorized shares of common stock, par value $0.0001 per share, and
20,000  authorized  shares of Series B Convertible  Preferred  stock,  par value
$0.001 per share.

Series B Convertible  Preferred  Stock - As of December 31, 2005,  Gasco had 763
shares of Series B Preferred Stock  ("Preferred  Stock") issued and outstanding.
The Preferred Stock is entitled to receive dividends at the rate of 7% per annum
payable semi-annually in cash, additional shares of Preferred Stock or shares of
common stock at the  Company's  option.  The  conversion  price of the Preferred
Stock is $0.70 per common share,  which was greater than the market price on the
issuance  date,   making  each  share  of  Preferred  Stock   convertible   into
approximately  629 shares of Gasco common stock.  Shares of the Preferred  Stock
are convertible  into Gasco common shares at any time at the holder's  election.
Gasco  may  redeem  shares  of the  Preferred  Stock  at a price  of 105% of the
purchase price at any time after February 10, 2006. The Preferred Stock votes as
a class on issues that affect the  Preferred  Stockholder's  interests and votes
with  shares of  common  stock on all other  issues  on an  as-converted  basis.
Additionally,  the holders of the Preferred Stock exercised their right to elect
one member to Gasco's board of directors during March 2003. All of the preferred
shares were  converted by the holders into 479,599 shares of common stock during
January 2006.

During the year ended  December  31,  2005,  the  Company  paid  $33,347 of cash
dividends to the holders of its Preferred Stock.

Common Stock - Gasco has 85,041,492 shares of Common Stock issued and 84,967,792
shares outstanding as of December 31, 2005. The common shareholders are entitled
to one  vote  per  share on all  matters  to be  voted  on by the  shareholders;
however, there are no cumulative voting rights. Additionally, the holders of the
Preferred  Stock  were  entitled  to vote  with  shares  of  common  stock on an
as-converted  basis. The common shareholders are entitled to dividends and other
distributions as may be declared by the board of directors.  Upon liquidation or
dissolution,  the common  shareholders  will be entitled to share ratably in the


                                       69
<PAGE>

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  2005  and  2004 are
described as follows:

On December 15, 2005, the Company's Board of Directors  approved the issuance of
23,700 shares of common stock, under the Gasco Energy, Inc. Amended and Restated
2003  Restricted  Stock  Plan  ("Restricted  Stock  Plan"),  to  certain  of the
Company's  officers and employees.  The restricted  shares vest 20% on the first
anniversary,  20% on the second  anniversary and 60% on the third anniversary of
the  awards.  The shares  fully vest upon  certain  events,  such as a change in
control of the Company,  expiration of the individual's employment agreement and
termination by the Company of the  individual's  employment  without cause.  Any
unvested  shares are forfeited  upon  termination  of  employment  for any other
reason.

The  compensation  expense  related  to the  restricted  stock was  measured  on
December 15, 2005 using the trading  price of the Company's  common  stock,  the
date the  restricted  shares were issued and is  amortized  over the  three-year
vesting  period.  The  shares of  restricted  stock are  considered  issued  and
outstanding at the date of grant and are included in shares  outstanding for the
purposes  of  computing  diluted  earnings  per share.  The  Company had 595,379
unvested  shares of restricted  stock  outstanding  as of December 31, 2005. The
compensation  expense related to the restricted  stock  outstanding  during year
ended December 31, 2005 was $344,873.

On November 23, 2005, we closed a public offering of 12,500,000 shares of common
stock  at a price  to the  public  of  $6.50  per  share.  We also  granted  the
underwriters  a 30-day option to purchase up to 1,875,000  additional  shares of
our common stock solely to cover  over-allotments.  The  underwriters  exercised
this  option  for  an  additional  439,400  shares  of  common  stock  and  this
transaction was closed on December 6, 2005. The net proceeds from this offering,
after underwriting discount and offering costs were $79,418,386.  These proceeds
will be used to fund capital expenditures for the development and exploration of
Gasco's  oil  and  natural  gas  properties  and  the   development   associated
infrastructure, working capital and general corporate purposes.

During 2005,  certain  holders of the Company's  Series B Convertible  Preferred
Stock ("Preferred Stock") converted 1,492 shares of Preferred Stock into 937,827
shares of common stock in accordance with the terms of such Preferred Stock.

On February 11, 2004 the Company  completed the sale through a private placement
of 14,333,334 shares of its common stock to a group of accredited investors at a
price of $1.50 per share. Proceeds to the Company, net of fees and expenses were
approximately  $20,070,000.  The  proceeds  from this  sale are  being  used for
general  corporate  purposes  including the  acquisition  of oil and natural gas
assets and the development and exploitation of Gasco's  Riverbend Project in the
Uinta Basin in Uintah County, Utah.

During 2004,  certain  holders of the Company's  Preferred Stock converted 9,479
shares of Preferred Stock into 5,958,226 shares of common stock.

                                       70
<PAGE>

On June 14, 2004, the Company  issued of 395,850  shares of common stock,  under
the Restricted  Stock Plan, to certain of the Company's  officers and employees.
The  restricted  shares  vest 20% on the first  anniversary,  20% on the  second
anniversary  and 60% on the third  anniversary  of the awards.  The shares fully
vest upon certain events, such as a change in control of the Company, expiration
of the individual's  employment  agreement and termination by the Company of the
individual's  employment  without cause.  Any unvested shares are forfeited upon
termination of employment for any other reason.

During the third quarter of 2004,  upon vesting of a previous  restricted  stock
grant,  an officer  of Gasco  returned  14,397 of his  shares to the  Company in
satisfaction of his personal tax liability that resulted from the vesting of the
restricted stock. The Company canceled these shares during the fourth quarter of
2004.

NOTE 10 - STOCK OPTIONS

During 2005, the Company granted  2,450,000 options to purchase shares of common
stock to its employees,  directors and outside  consultants  at exercise  prices
ranging  from  $3.39 to $7.39 per share.  The  options  issued to the  Company's
directors vest 25% at the end of each calendar quarter  beginning  September 30,
2005 and the remaining options vest 16 2/3% at the end of each four-month period
after the issuance  date. All of the options issued expire within ten years from
the grant date.

During 2005 the Company issued 643,083 shares of common stock in connection with
the  exercise of options to  purchase  shares of common  stock at strike  prices
ranging from $1.00 per common share to $3.91 per common share for total proceeds
of $1,274,743.

During 2004,  the Company  granted an additional  1,410,000  options to purchase
shares of common stock to employees,  directors and  consultants of the Company,
at exercise  prices  ranging from $1.61 to $2.15 per share.  The options vest 16
2/3% at the end of each  four-month  period after the  issuance  date and expire
within ten years from the grant date.

During 2003,  the Company  granted an additional  1,658,000  options to purchase
shares of common stock to employees and directors of the Company, at an exercise
price of $1.00 per share. The options vest 16 2/3% at the end of each four-month
period after the issuance date.  Additionally,  the Company cancelled  2,346,664
options to purchase shares of common stock during the first quarter of 2003. The
exercise  price of the cancelled  options  ranged from $1.95 to $3.15 per share.
None of the 1,658,000 options granted during 2003 were issued to the individuals
whose options were cancelled.

As of December 31, 2005 options to purchase an aggregate 8,812,667 shares of the
Company's common stock were outstanding. These options were granted during 2005,
2004, 2003, 2002 and 2001 to the Company's employees,  directors and consultants
at exercise  prices  ranging from $1.00 to $7.39 per share.  The options vest at
varying  schedules  within two years of their  grant date and expire  within ten
years  from the  grant  date.  The  aggregate  fair  market  value  of  options,
determined using the Black Scholes Pricing Model,  granted to consultants and an


                                       71
<PAGE>

officer  of the  Company,  of  $399,364,  $73,705  and  $52,833  was  charged to
operations   during  the  years  ended   December  31,  2005,   2004  and  2003,
respectively.

A summary  of the  options  granted to  purchase  common  stock and the  changes
therein  during the years ended  December 31,  2005,  2004 and 2003 is presented
below.
<TABLE>
<CAPTION>

                                              2005                         2004                            2003
                                              ----                         -----                           ----
                                                     Weighted                     Weighted                         Weighted
                                                      Average                      Average                         Average
                                      Number of      Exercise       Number of     Exercise         Number of       Exercise
                                       Options         Price         Options        Price           Options         Price
                                       -------         -----         -------        -----           -------         -----

<S>                                   <C>               <C>         <C>             <C>             <C>              <C>
Outstanding at beginning of year      7,043,250         $ 1.85      5,666,586       $ 2.07          6,355,250        $ 2.17
Granted                               2,450,000           3.53      1,410,000         1.98          1,658,000          1.00
Exercised                             (643,083)           2.16       (33,336)         1.00                  -             -
Cancelled                              (37,500)           3.39                           -        (2,346,664)          2.18
                                      ---------           ----      ----------       -----        -----------          ----
Outstanding at end of year            8,812,667         $ 2.29      7,043,250       $ 1.85          5,666,586        $ 1.83
                                      =========         ======      =========       ======          =========        ======
Exercisable at December 31,           6,574,281         $ 1.97      5,624,417       $ 1.42          4,476,586        $ 2.07
                                      =========         ======      =========       ======          =========        ======

Weighted average fair value of options granted          $ 2.25                      $ 1.28                           $ 0.45
                                                        ======                      ======                           ======
</TABLE>

Weighted average remaining contractual life of options
    Outstanding as of December 31, 2005                                6.9 years
                                                                      ====

The  following  table  presents  additional  information  related to the options
outstanding as of December 31, 2005.

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


          $1.00           2,445,000       2,445,000           6.1
           1.61              33,332          16,666           8.1
           1.73             100,000         100,000           6.0
           1.80              50,000          50,000           5.7
           1.92             710,001         464,972           8.6
           2.00           1,451,000       1,400,996           6.3
           2.15             425,000         283,324           8.6
           3.00             450,000         450,000           4.4
           3.10              82,500          82,500           0.9
           3.15             550,000         550,000           1.4
           3.39           2,192,500         579,991           9.4
           3.70             120,000         120,000           1.3
           3.91              83,334          16,666           9.1
           5.18              85,000          14,166           9.6
           7.39              35,000               -           10.0
           ----           ---------       ---------           ----
          Total           8,812,667       6,574,281           6.9
                          =========       =========           ===

                                       72
<PAGE>

NOTE 11 - STATEMENT OF CASH FLOWS

During the year ended  December 31, 2005, the Company's  non-cash  investing and
financing activities consisted of the following transactions:

     Recognition  of  an  asset  retirement  obligation  for  the  plugging  and
     abandonment costs related to the Company's oil and gas properties valued at
     $123,190.

     Additions  to oil and gas  properties  included  in  accounts  payable  and
     accrued expenses of $2,007,522.

     Reduction in the asset  retirement  obligation of $21,845  representing the
     plugging and abandonment activity during 2005.

     Conversion of 1,492 shares of Preferred Stock into 937,827 shares of common
     stock.

     Write-off of fully depreciated furniture and fixtures of $89,773.

During the year ended  December 31, 2004, the Company's  non-cash  investing and
financing activities consisted of the following transactions:

     Conversion  of $2,500,000 of  Debentures  into  4,166,665  shares of common
     stock.

     Additions  to oil and gas  properties  included  in  accounts  payable  and
     accrued expenses of $2,556,624.

      Recognition  of an  asset  retirement  obligation  for  the  plugging  and
      abandonment  costs related to the Company's oil and gas properties  valued
      at $29,394.

      Reduction in the asset retirement  obligation of $25,188  representing the
      sale of certain  property  interests  discussed  above and a reduction  of
      $55,109   representing  a  revision  to  the  Company's  asset  retirement
      obligation.

      Conversion  of 9,479 shares of Preferred  Stock into  5,958,226  shares of
      common stock.

      Issuance of 41,959  shares of common stock in payment of the June 30, 2004
      Preferred Stock dividend.

      Issuance of 395,850  shares of  restricted  common stock to certain of the
      Company's employees.

      Write - off of fully depreciated furniture and fixtures of $71,514.

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

                                       73
<PAGE>

     Additions  to oil and gas  properties  included  in  accounts  payable  and
     accrued expenses of $845,067.

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

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

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

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

Cash paid for interest was $3,575,000,  $463,769 and $82,392 for the years ended
December  31,  2005,  2004 and  2003,  respectively.  There was no cash paid for
income taxes in any of the years ended December 31, 2005, 2004 and 2003.

NOTE 12 - INCOME TAXES

A provision  (benefit)  for income taxes for the years ended  December 31, 2005,
2004 and 2003 consists of the following:

                                          2005           2004           2003
                                          ----           ----           ----
Current taxes:
  Federal                               $     -           $   -       $     -
  State                                       -               -             -
Deferred taxes:
  Federal                             (189,075)     (1,371,000)   (2,556,837)
  State                                   (783)       (157,580)     (285,004)
  Less: valuation allowance             189,858       1,528,580     2,841,841
                                        -------       ---------     ---------
Net income tax provision (benefit)     $     -         $     -      $      -
                                       ========        ========     =========

A  reconciliation  of the provision  (benefit) for income taxes  computed at the
statutory  rate to the  provision  for  income  taxes as shown in the  financial
statements of operations for the years ended December 31, 2005, 2004 and 2003 is
summarized below:



                                       74
<PAGE>


<TABLE>
<CAPTION>


                                                     2005                 2004              2002
                                                     ----                 ----              ----

<S>                                                 <C>              <C>                  <C>
Tax provision (benefit) at federal statutory rate   $ (13,172)       $ (1,429,982)        $ (859,019)
State taxes, net of federal tax effects                  (509)           (104,032)          (188,102)
Valuation adjustment on assets distributed in
  stock redemption                                           -                   -                  -
Prior year tax return permanent true-up                      -                   -        (1,798,941)
Change in Tax Rate from Prior Year                   (182,551)                   -                  -
Other Permanent items                                    6,374               5,434              4,221
Valuation allowance                                    189,858           1,528,580          2,841,841
                                                       -------           ---------  ---     ---------
Net income tax provision (benefit)                     $     -             $     -            $     -
                                                       =======             =======            =======
</TABLE>

The  components  of the deferred tax assets and  liabilities  as of December 31,
2005 and 2004 are as follows:

                                                         2005          2004
                                                         ----          ----
Deferred tax assets:
Federal and state net operating loss carryovers      $ 12,232,737   $ 7,415,121
Oil and gas property                                            -       133,530
Deferred rent                                              30,727             -
Deferred compensation                                     589,306       362,029
                                                       ----------     ---------
    Total deferred tax assets                          12,852,770     7,910,680
  Less: valuation allowance                           (8,134,543)   (6,935,384)
                                                      -----------   -----------
                                                        4,718,227       975,296
Deferred tax liabilities:
Oil and gas property                                    2,177,627             -
Other property, plant & equipment                       2,327,118       758,796
Other                                                     213,482       216,500
                                                        ---------       -------
     Total deferred tax liabilities                     4,718,227       975,296
                                                        ---------       -------
Net deferred tax asset                                 $     -        $     -
                                                        =========       =======


The Company has a $31,451,525  net operating  loss  carryover for federal income
tax purposes and a $25,233,976 net operating loss carryover for state income tax
purposes as of December 31, 2005.  The net operating  losses may offset  against
taxable  income  through the year ended  December 31, 2025. A portion of the net
operating  loss  carryovers  begins  expiring in 2019.  The  Company  provided a
valuation  allowance  against  its net  deferred  tax  asset of  $8,134,543  and
$6,935,384 as of December 31, 2005and 2004 respectively,  since it believes that
it is more  likely than not that the net  deferred  tax assets will not be fully
utilized on future income tax returns.

NOTE 13 - RELATED PARTY TRANSACTIONS

On October 11, 2004,  the Board of Directors of Gasco,  other than Mr.  Erickson
and Mr.  Bruner,  approved a  transaction  pursuant  to which Marc  Bruner,  the


                                       75
<PAGE>

chairman  of Gasco's  Board of  Directors,  and Mark  Erickson,  a director  and
President  and Chief  Executive  Officer of Gasco,  will transfer to Gasco their
rights to receive  certain  overriding  royalty  interests in its  properties in
exchange for the grant to each of them of options to purchase  100,000 shares of
Gasco common stock at the market price on the date of grant. Messrs.  Bruner and
Erickson  subsequently agreed to transfer such rights to Gasco for no options or
other consideration.

For each  individual,  these  interests  range  between .06% and 0.6% of Gasco's
working interest in certain of its Utah and Wyoming properties.  Gasco will also
agree to convey equivalent royalty interests to Mr. Bruner and Mr. Erickson,  or
either of them,  in the event that it sells any of the  property  subject to the
royalty interests, upon certain change of control events or upon the involuntary
termination of either  individual.  Mr. Bruner and Mr.  Erickson  acquired these
rights under a Trust Termination and Distribution Agreement,  dated December 31,
2002, with respect to the Pannonian  Employee  Royalty Trust ("Royalty  Trust").
The Royalty Trust had been established by Pannonian Energy,  Inc.  ("Pannonian")
prior to  Pannonian  becoming a wholly  owned  subsidiary  of Gasco,  to provide
additional  compensation  to the employees and founding  directors of Pannonian,
which  included  Mr.  Bruner  and  Mr.  Erickson,  in the  form  of oil  and gas
interests.  The  terms  of the  Trust  Termination  and  Distribution  Agreement
("Termination  Agreement")  required Gasco to assign to the  participants of the
Royalty Trust overriding  royalty  interests that arise out of the production of
oil and gas  from  certain  properties  as a  result  of  future  drilling.  The
transaction  was reviewed and approved by Gasco's Audit Committee and was signed
by Mr. Erickson and Mr. Bruner on December 23, 2004.

During May 2004,  the  Company's  Board of Directors  authorized  the payment of
approximately  $65,000  to the  chairman  of the  Gasco  Board of  Directors  as
reimbursement of legal fees paid by the chairman for legal services  provided to
the Company.

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

During the each of years ended  December  31, 2005,  2004 and 2003,  the Company
paid $120,000 in consulting fees to a company owned by a director of Gasco.  The
Company is committed to pay $120,000 per year in consulting fees to this company
through January 31, 2007.

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.




                                       76
<PAGE>



NOTE 14 - COMMITMENTS

The Company leases approximately 8,776 square feet of office space in Englewood,
Colorado,  under a lease, which terminates on May 31, 2010. The average rent for
this space over the life of the lease is  approximately  $120,500 per year.  The
Company  believes  that this space will meet its needs for at least the next two
years.

The following table shows the annual rentals per year for the life of the lease.

                  Year Ending December 31,       Annual Rentals

                            2006                   $  105,844
                            2007                      122,332
                            2008                      129,526
                            2009                      136,719
                            2010                       70,158
                         Thereafter                         -
                                                     ---------
                                                     $564,579
                                                     ========

Rent expense for the years ending December 31, 2005, 2004 and 2003 was $121,648,
$52,822 and $56,970, 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 entered into employment  agreements with three key officers  through
January 31, 2007. These agreements were revised during the first quarter of 2003
to reduce the total  compensation  for the  officers  covered by the  employment
agreements from $560,000 per annum to $470,000 per annum. The agreements contain
clauses  regarding  termination  and demotion of the officer that would  require
payment  of an  amount  ranging  from one  times  annual  compensation  to up to
approximately  five times annual  compensation plus a cash payment from $250,000
to $500,000.  Included in the employment  agreements is a bonus  calculation for
each of the covered officers totaling 2.125% of a defined cash flow figure based
on net after tax earnings adjusted for certain expenses.

During 2005 the Company  converted  two of the three rigs  drilling  for us from
well-to-well contracts to two-year term contracts.  The drilling rate in each of
the  contracts is  approximately  $18,500 per day and both  contracts  expire in
December 2007.  During December 2005,  Gasco  purchased a rig for  approximately
$5,000,000.  Gasco entered into a one-year  drilling  contract with an unrelated
third party who will operate the rig. The operator may buy the rig from Gasco at
the  fair  market  value  of the rig  within  three  years  of  when  the rig is
delivered.  This  rig is  scheduled  to be moved on  location  in our  Riverbend
Project to begin  drilling  early in the second  quarter of 2006.  Gasco entered
into a one-year  drilling  contract  that has a drilling  rate of  approximately
$18,500 per day with an unrelated third party who will operate the rig. This rig


                                       77
<PAGE>

is scheduled to be moved on location in our Riverbend  Project to begin drilling
early in the second quarter of 2006. Also, during December 2005, we entered into
a three-year  contract  with a drilling  rate of $21,000 per day for a new-build
rig to be delivered in December 2006.  The three year drilling  contract for the
new-build rig contains a provision for the Company to terminate the contract for
$12,000 per day for the number  days  remaining  in the  original  contract.  In
connection  with this contract we provided the rig owner a letter of credit from
our bank for  $6,564,000.  The cash  collateral  for this  letter  of  credit is
reflected as a restricted investment in the accompanying financial statements.

The future contractual obligations under the rig contracts are summarized below:

                                                   Annual Drilling Obligations
                  Year Ending December 31,

                            2006                           $17,542,625
                            2007                            21,641,750
                            2008                             7,665,000
                            2009                             7,665,000
                                                           -----------
                           Total                           $54,514,375
                                                           ===========


NOTE 15 - 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 $58,110,
$36,225 and $32,708  during the years ended  December 31,  2005,  2004 and 2003,
respectively.

NOTE 16 - SELECTED QUARTERLY INFORMATION (Unaudited)

The following represents selected quarterly financial  information for the years
ended December 31, 2005 and 2004.
<TABLE>
<CAPTION>

             2005                                                 For the Quarter Ended
                                     ----------------------------------------------------------------------------
                                         March 31,           June 30,          September 30,         December 31,

<S>                                       <C>              <C>              <C>                      <C>
Gross revenue                             $1,285,347       $2,548,900       $  4,696,727             $8,458,948
Net revenue from oil
  and gas operations                         544,115        1,796,945          3,927,771             7,173,301
Net income (loss)                        (1,700,128)         (998,867)           649,303             2,012,057
Net income (loss) per share
basic and diluted                             (0.02)           (0.01)               0.01                  0.03
</TABLE>

The increase in gross  revenue,  net revenue from oil and gas operations and net
income is due to the Company's  drilling  activity  during the year as described
above and the increase in average oil and gas prices during 2005.  The Company's


                                       78
<PAGE>

number of gross  producing  wells  increased  from 21 gross  producing  wells at
December  31,  2004  to  42  gross   producing   wells  at  December  31,  2005.
Additionally,  the average oil and gas prices  increased  from $5.79 per mcf and
$38.43 per bbl during 2004 to $8.16 per mcf and $56.91 per bbl during 2005.
<TABLE>
<CAPTION>

            2004                                                  For the Quarter Ended
                                 ------------------------------------------------------------------------------------
                                     March 31,            June 30,          September 30,            December 31,

<S>                                  <C>                 <C>                  <C>                      <C>
Gross revenue                        $766,775            $ 810,303            $ 860,390                $1,154,747
Net revenue from oil and
gas operations                        590,450            521,411                   638,084                611,552
Net loss                             (544,086)          (720,981)                 (540,411)            (2,400,352)  a
Net loss per share
  basic and diluted                    (0.01)             (0.01)                    (0.01)                 (0.03)
</TABLE>

a - The increase in the Company's net loss during the fourth quarter as compared
with the previous  quarters is primarily due to the additional  interest expense
related to the  conversion of the  Debentures  of  approximately  $555,000,  the
interest expense accrued on the Notes during the fourth quarter of approximately
$700,000 and the increased  amortization  expense  related to the offering costs
related to the issuance of the Notes of  approximately  $115,000.  The remaining
increase is due to higher general and administrative  costs due to the increased
operational activity and increased depletion expense resulting from the increase
in the number of producing wells.

NOTE 17 - SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (Unaudited)

The  following  reserve  quantity and future net cash flow  information  for the
Company represents proved reserves located in the United States. The reserves as
of December 31, 2005,  2004 and 2003 have been estimated by  Netherland,  Sewell
and Associates,  Inc., independent petroleum engineers. The determination of oil
and  gas  reserves  is  based  on  estimates,   which  are  highly  complex  and
interpretive.  The  estimates  are subject to  continuing  change as  additional
information becomes available.

The standardized  measure of discounted  future net cash flows is prepared under
the guidelines set forth by the  Securities and Exchange  Commission  (SEC) that
require the calculation to be performed  using year-end oil and gas prices.  The
oil and gas prices used as of December 31,  2005,  2004 and 2003 were $59.87 per
bbl of oil and $8.01 per mcf of gas,  $42.25 per bbl of oil and $5.56 per Mcf of
gas and $29.69 per bbl of oil,  and $5.89 per mcf of gas,  respectively.  Future
production costs are based on year-end costs and include  severance taxes.  Each
property  that is  operated  by the  Company is also  charged  with  field-level
overhead in the reserve calculation. The present value of future cash inflows is
based on a 10% discount rate.



                                       79
<PAGE>

<TABLE>


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

      Balance, December 31, 2003              13,601,003           100,987
       Extensions and discoveries              26,788,308            168,451
       Revisions of previous estimates (b)    (4,940,340)           (28,898)
       Sales of reserves in place             (2,879,772)           (23,712)
       Purchases of reserves in place           7,636,924             62,326
       Production                               (505,967)            (5,080)
                                                ---------           --------

      Balance, December 31, 2004               39,700,156            274,074
        Extensions and discoveries             49,217,928            222,943
        Revisions of previous estimates (c)  (12,814,086)          (109,093)
      Sales of reserves in place                        -                  -
      Purchases of reserves in place                    -                  -
      Production                              (1,648,870)           (10,636)
                                              -----------           --------

      Balance, December 31, 2005               74,455,128            377,288
                                               ==========            =======

Proved Developed Reserves
      Balance, December 31, 2005              18,974,697             111,655
                                              ==========           =========
      Balance, December 31, 2004               8,163,127              69,752
                                             ===========           =========
      Balance, December 31, 2003               2,937,388              24,818
                                             ===========           =========
</TABLE>


     (a)  The revisions of previous estimates during 2003 was due primarily to a
          failed  re-completion on one of the Company's wells, which resulted in
          a reduction in the reserves  associated  with the  producing  wellbore
          location and the loss of the  surrounding  proved  undeveloped  offset
          locations.

     (b)  The  revisions of previous  estimates  during 2004 relate to the write
          down of the reserves  related to two wells and their offset  locations
          resulting from scale  deposits in the  wellbores.

     (c)  The majority of the  revisions of previous  estimates  during 2005 are
          comprised of the following:

          o    Four proved  undeveloped  locations  were  omitted  from the 2005
               reserve report because these locations  required a higher capital
               investment  than   originally   estimated  due  to  drilling  and
               completion  problems  and  due to the  lack  of  historical  data
               related to recent completions and recompletions in this area.

          o    Six  proved  undeveloped  locations  were  omitted  from the 2005
               reserve report because recent  drilling  activity  indicates that
               these  locations may be outside of or on the edge of a previously
               identified zone.

                                       80
<PAGE>


          o    Two  proved  developed  non-producing  completions  significantly
               underperformed previous forecasts.
<TABLE>
<CAPTION>

Standardized Measure of Discounted Future Net Cash Flows

                                                               December 31,
                                                  -------------------------------------------
                                                2005                  2004                 2003
                                                ----                  ----                 ----

<S>                                          <C>                   <C>                 <C>
Future cash flows                            $ 618,843,800         $ 231,958,400       $ 83,099,200
Future production and development costs      (300,991,100)         (123,579,100)        (32,804,600)
Future income taxes                           (23,006,800)                    -                   -
                                              ------------          -------------        -----------
Future net cash flows before discount          294,845,900           108,379,300         50,294,600
                                               -----------           -----------       -------------
10% discount to present value                (190,224,900)          (76,077,700)        (34,099,500)
                                             -------------          ------------       -------------
Standardized measure of discounted
  future net cash flows                      $ 104,621,000          $ 32,301,600         $16,195,100
                                             =============          ============         ===========
</TABLE>
<TABLE>
<CAPTION>

Changes in the Standardized Measure of Discounted Future Net Cash Flows

                                                                                For the Years Ended December 31,
                                                                             ---------------------- --------------------
                                                                              2005                  2004                  2003
                                                                              ----                  ----                  ----
Standardized measure of discounted future net
<S>                                                                      <C>                     <C>                  <C>
   cash flows at the beginning of year                                   $ 32,301,600            $16,195,100          $12,312,002
Sales of oil and gas produced, net of production
   Costs                                                                 (13,197,714)            (2,485,621)            (926,165)
Net changes in prices and production costs                                 28,283,823            (4,045,575)           13,209,650
Extensions and discoveries, net of future
   production and development costs                                       107,380,301             34,439,255            7,250,499
Previously estimated development costs incurred                           (1,681,163)             17,499,346            4,218,902
Changes in estimated future development costs                            (34,138,277)           (62,687,146)            1,890,021
Revisions of previous quantity estimates                                 (28,607,463)            (1,055,871)          (2,629,973)
Purchases of reserves in place                                                      -              1,654,068                    -
Sales of reserves in place                                                          -              (623,985)            (391,020)
Net change in income taxes                                                (3,225,000)                      -                    -
Accretion of discount                                                       3,214,885              1,619,510            1,231,200
Changes in production rates and other                                      14,290,008             31,792,519         (19,970,016)
                                                                          -----------           ------------         ------------
Standardized measure of discounted future net cash flows at
   the end of year                                                      $ 104,621,000          $ 32,301,600           $16,195,100
                                                                        =============          =============          ===========
</TABLE>



                                       81
<PAGE>



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

None.

ITEM 9A - CONTROLS AND PROCEDURES

Disclosure Controls and Procedures
         Our  management  has  evaluated  the  effectiveness  of our  disclosure
controls and  procedures as of December 31, 2005.  Our  disclosure  controls and
procedures  are  designed  to provide us with a  reasonable  assurance  that the
information  required to be disclosed in reports filed with the SEC is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms. The disclosure  controls and procedures are also designed
to  provide  reasonable  assurance  that such  information  is  accumulated  and
communicated  to our  management  as  appropriate  to allow such persons to make
timely decisions regarding required disclosures.

         Our  management  does not  expect  that  our  disclosure  controls  and
procedures will prevent all errors and all fraud. The design of a control system
must reflect the fact that there are resource  constraints,  and the benefits of
controls  must be  considered  relative to their  costs.  Based on the  inherent
limitations  in all control  systems,  no  evaluation  of  controls  can provide
absolute  assurance  that all control  issues and  instances  of fraud,  if any,
within the Company have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty and that  breakdowns
can occur  because of simple errors or mistakes.  Additionally,  controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management  override of the controls.  The design of any system of
controls also is based in part upon certain  assumptions about the likelihood of
future events.  Therefore,  a control  system,  no matter how well conceived and
operated,  can  provide  only  reasonable,  not  absolute,  assurance  that  the
objectives of the control system are met. Our disclosure controls and procedures
are  designed to provide such  reasonable  assurances  of achieving  our desired
control objectives, and our CEO and CFO have concluded, as of December 31, 2005,
that our  disclosure  controls and  procedures  are effective in achieving  that
level of reasonable assurance.

Changes in internal  control over financial  reporting during the fourth quarter
of 2005.  There have been no changes in our  internal  controls  over  financial
reporting  (as defined in Rule  13a-15(f)  under the  Exchange  Act) or in other
factors that occurred  during the fiscal quarter ended  December 31, 2005,  that
have  materially  affected or are  reasonably  likely to  materially  affect our
internal  controls over  financial  reporting.

Internal control over financial reporting

         Our internal controls over financial  reporting are designed to provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation of our financial  statements in accordance with GAAP. These internal
controls over financial  reporting  were designed  under the  supervision of our
management  and  include  policies  and  procedures  that:  (i)  pertain  to the
maintenance of records that in reasonable  detail  accurately and fairly reflect
the  transactions  and  dispositions  of our  assets,  (ii)  provide  reasonable
assurance that  transactions are recorded as necessary to permit  preparation of


                                       82
<PAGE>

financial  statements  in  accordance  with  GAAP,  and  that our  receipts  and
expenditures  are  being  made only in  accordance  with  authorizations  of our
management  and  directors  and (iii)  provide  reasonable  assurance  regarding
prevention or timely detection of unauthorized  acquisition,  use or disposition
of our assets that could have a material effect on our financial statements.
         In  accordance  with  Item 308 of SEC  Regulation  S-K,  management  is
required  to provide  an annual  report  regarding  internal  controls  over our
financial reporting.  This report, which includes management's assessment of the
effectiveness of our internal controls over financial reporting, is found below.

        Management's Report on Internal Control Over Financial Reporting

     Management of the Company is responsible for  establishing  and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
and  15d-15(f)  under the Exchange  Act.  The  Company's  internal  control over
financial  reporting is designed,  under the  supervision of the Company's chief
executive  and  chief  financial  officers,   to  provide  reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial  statements  for  external  purposes  in  accordance  with  accounting
principles  generally  accepted  in the  United  States of America  (GAAP).  The
Company's internal control over financial  reporting includes those policies and
procedures  that: (i) pertain to the  maintenance of records that, in reasonable
detail,  accurately and fairly reflect the  transactions and dispositions of the
assets of the Company;  (ii) provide reasonable  assurance that transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
accordance  with GAAP,  and that  receipts and  expenditures  of the Company are
being made only in accordance with authorizations of management and directors of
the Company;  and (iii) provide  reasonable  assurance  regarding  prevention or
timely  detection  of  unauthorized  acquisition,  use  or  disposition  of  the
Company's assets that could have a material effect on the financial statements.

     Because  of the  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures my deteriorate.

     Management  assessed the  effectiveness  of the Company's  internal control
over  financial  reporting as of December 31, 2005.  In making this  assessment,
management   used  the  criteria  set  for  by  the   Committee  of   Sponsoring
Organizations  of  the  Treadway   Commission  in  Internal   Control-Integrated
Framework.

     Based on our assessment and those  criteria,  management  believes that the
Company  maintained  effective  internal control over financial  reporting as of
December 31, 2005.

     The Company's  assessment of the  effectiveness  of the Company's  internal
control  over  financial  reporting  as of December 31, 2005 has been audited by
Hein & Associates  LLP, an independent  registered  public  accounting  firm, as
stated in their report which appears elsewhere in this report.

                                       83
<PAGE>

Pursuant to the  requirements of Rules 13a-15(f) and 15d-15(f) of the Securities
Exchange Act of 1934, as amended,  this Annual  Report on Internal  Control Over
Financial  Reporting has been signed below by the following persons on behalf of
the registrant and in the capacities indicated below on March 1, 2006.

                                          Mark A. Erickson
                                          President & Chief Executive Officer

                                          W. King Grant
                                          Chief Financial Officer


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
Gasco Energy, Inc.
Englewood, Colorado

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal  Control Over  Financial  Reporting  that Gasco
Energy,  Inc.  ("Gasco")  maintained  effective  internal control over financial
reporting  as of December 31, 2005,  based on criteria  established  in Internal
Control--Integrated   Framework   issued   by  the   Committee   of   Sponsoring
Organizations  of  the  Treadway   Commission  (COSO).   Gasco's  management  is
responsible for maintaining  effective internal control over financial reporting
and for its assessment of the  effectiveness  of internal control over financial
reporting.   Our  responsibility  is  to  express  an  opinion  on  management's
assessment and an opinion on the effectiveness of the company's internal control
over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to


                                       84
<PAGE>

permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion,  management's  assessment  that Gasco  Energy,  Inc.  maintained
effective internal control over financial  reporting as of December 31, 2005, is
fairly  stated,  in all  material  respects,  based on criteria  established  in
Internal  Control--Integrated  Framework  issued by COSO.  Also in our  opinion,
Gasco  maintained,  in all material  respects,  effective  internal control over
financial  reporting as of December 31, 2005,  based on criteria  established in
Internal Control--Integrated Framework issued by COSO.

We have also  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight  Board  (United  States),   the  consolidated   financial
statements of Gasco Energy, Inc. and our report dated March 1, 2006 expressed an
unqualified opinion.



/s/ Hein & Associates LLP
Denver, Colorado
March 1, 2006


ITEM 9B - OTHER INFORMATION

None.

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 2006 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 2006 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

                                       85
<PAGE>

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                       MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2006 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 2006 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information  required by this item will be included in the definitive  proxy
statement of Gasco relating to the Company's 2006 Annual Meeting of Shareholders
to be filed with the SEC  pursuant  to  Regulation  14A,  which  information  is
incorporated herein by reference.

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

          (a)  1. See "Index to Financial Statements" under Item 8 on page 42.
               2. Financial  Statement  Schedules - none.
               3. Exhibits - See Index to Exhibits, below.

                                INDEX TO EXHIBITS

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

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

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

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

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



                                       86
<PAGE>




          2.6  Net Profits Purchase Agreement between Gasco Production  Company,
               Red Oak Capital  Management,  LLC,  MBG, LLC and MBGV  Partition,
               LLC, dated August 6, 2004  (incorporated  by reference to Exhibit
               2.1 of the Company's  Current Report on Form 8-K filed  September
               7, 2004).

          2.7  Purchase  Supplement to Net Profits  Purchase  Agreement  between
               Gasco Production Company,  Red Oak Capital Management,  LLC, MBG,
               LLC and MBGV Partition,  LLC, dated August 20, 2004 (incorporated
               by reference to Exhibit 2.2 of the  Company's  Current  Report on
               Form 8-K filed September 7, 2004.

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

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

          3.3  Certificate of Amendment to Articles of Incorporation  dated June
               21,  2005  (incorporated  by  reference  to  Exhibit  3.3  to the
               Company's Form 10-Q/A for the quarter ended June 30, 2005,  filed
               on August 9, 2005).

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

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

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

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

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

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

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

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



                                       87
<PAGE>




          4.7  Form of Subscription  and Registration  Rights Agreement  between
               the Company and  investors  purchasing  Common Stock in February,
               2004  (incorporated  by reference to Exhibit 4.7 to the Company's
               Form 10-K for the year ended  December 31,  2003,  filed on March
               26, 2004).

          4.8  Indenture  dated as of October 20, 2004,  between  Gasco  Energy,
               Inc.  and Wells  Fargo  Bank,  National  Association,  as Trustee
               (incorporated  by  reference  to  Exhibit  4.1 to  the  Company's
               Current Report on Form 8-K filed on October 20, 2004).

          4.9  Form of Global Note  representing $65 million principal amount of
               5.5% Convertible Senior Notes due 2011 (incorporated by reference
               to Exhibit A to Exhibit 4.1 to the  Company's  Current  Report on
               Form 8-K filed on October 20, 2004).

          4.10 Registration Rights Agreement dated October 20, 2004, among Gasco
               Energy,  Inc.,  J.P.  Morgan  Securities  Inc.  and First  Albany
               Capital Inc  (incorporate  by  reference  to Exhibit  4.10 to the
               Company's  Form 10-Q for the  quarter  ended  September  30, 2004
               filed on  November  12,  2004).

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

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

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

          #10.4Form of Stock  Option  Agreement  between  Gasco  and each of the
               individuals  named therein  (incorporated by reference to Exhibit
               4.6 to the Company's Form S-8  Registration  Statement  (Reg. No.
               333-122716), filed on February 10, 2005).

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

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

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

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

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

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

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



                                       88
<PAGE>




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

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

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

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

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

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

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

          10.19Termination  and Settlement  Agreement,  dated as of December 23,
               2004,  among  Gasco  Energy,  Inc.,  Marc A.  Bruner  and Mark A.
               Erickson  (Filed as Exhibit 10.1 to the Company's  Current Report
               on Form 8-K filed on October 20, 2004).

          10.20Joint Value  Enhancement  Agreement by and among Pannonian Energy
               Inc.,  M-I, LLC, Nabors Drilling USA, LP, Pool Well Services Co.,
               Red  Oak  Capital  Management  LLC  and  Schlumberger  Technology
               Corporation dated January 16, 2004  (incorporated by reference to
               Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
               January 21, 2004).

          *21  List of Subsidiaries

          *23.1 Consent of Deloitte & Touche, LLP

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

          *23.3 Consent of Hein & Associates LLP

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

          *32  Section 1350 Certifications


          *    Filed   herewith.

          #    Identifies   management   contracts  and  compensatory  plans  or
               arrangements.




                                       89
<PAGE>



SIGNATURES

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

GASCO ENERGY, INC.                                     Dated:  February 27, 2006



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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

             Signature                                           Title                                       Date

<S>                                  <C>                                                               <C>
/s/ Mark A. Erickson                 Director and President and Chief Executive Officer                February 27, 2006
--------------------
Mark A. Erickson

/s/ Marc A. Bruner                   Director                                                          February 27, 2006
---------------------
Marc A. Bruner

/s/ Carl Stadelhofer                 Director                                                          February 27, 2006
--------------------
Carl Stadelhofer

/s/ W. King Grant                    Executive Vice President and Chief Financial Officer              February 27, 2006
-----------------
W. King Grant                        (Principal Financial Officer and Principal Accounting
                                     Officer)

/s/ Carmen Lotito                    Director                                                          February 27, 2006
-----------------
Carmen ("Tony") Lotito

/s/ Charles B. Crowell               Director                                                          February 27, 2006
----------------------
Charles B. Crowell

/s/ Richard S. Langdon               Director                                                          February 27, 2006
----------------------
Richard S. Langdon

/s/ R. J. Burgess                    Director                                                          February 27, 2006
---------------------
R.J. Burgess

/s/ John A. Schmit                   Director                                                          February 27, 2006
------------------
John A. Schmit

</TABLE>

                                       90
<PAGE>


                                INDEX TO EXHIBITS

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

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

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

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

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

          2.6  Net Profits Purchase Agreement between Gasco Production  Company,
               Red Oak Capital  Management,  LLC,  MBG, LLC and MBGV  Partition,
               LLC, dated August 6, 2004  (incorporated  by reference to Exhibit
               2.1 of the Company's  Current Report on Form 8-K filed  September
               7, 2004).

          2.7  Purchase  Supplement to Net Profits  Purchase  Agreement  between
               Gasco Production Company,  Red Oak Capital Management,  LLC, MBG,
               LLC and MBGV Partition,  LLC, dated August 20, 2004 (incorporated
               by reference to Exhibit 2.2 of the  Company's  Current  Report on
               Form 8-K filed September 7, 2004.

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

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

          3.3  Certificate of Amendment to Articles of Incorporation  dated June
               21,  2005  (incorporated  by  reference  to  Exhibit  3.3  to the
               Company's Form 10-Q/A for the quarter ended June 30, 2005,  filed
               on August 9, 2005).

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

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

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

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

                                       91
<PAGE>

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

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

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

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

          4.7  Form of Subscription  and Registration  Rights Agreement  between
               the Company and  investors  purchasing  Common Stock in February,
               2004  (incorporated  by reference to Exhibit 4.7 to the Company's
               Form 10-K for the year ended  December 31,  2003,  filed on March
               26, 2004).

          4.8  Indenture  dated as of October 20, 2004,  between  Gasco  Energy,
               Inc.  and Wells  Fargo  Bank,  National  Association,  as Trustee
               (incorporated  by  reference  to  Exhibit  4.1 to  the  Company's
               Current Report on Form 8-K filed on October 20, 2004).

          4.9  Form of Global Note  representing $65 million principal amount of
               5.5% Convertible Senior Notes due 2011 (incorporated by reference
               to Exhibit A to Exhibit 4.1 to the  Company's  Current  Report on
               Form 8-K filed on October 20, 2004).

          4.10 Registration Rights Agreement dated October 20, 2004, among Gasco
               Energy,  Inc.,  J.P.  Morgan  Securities  Inc.  and First  Albany
               Capital Inc  (incorporate  by  reference  to Exhibit  4.10 to the
               Company's  Form 10-Q for the  quarter  ended  September  30, 2004
               filed on November 12, 2004).

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

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

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

          #10.4Form of Stock  Option  Agreement  between  Gasco  and each of the
               individuals  named therein  (incorporated by reference to Exhibit
               4.6 to the Company's Form S-8  Registration  Statement  (Reg. No.
               333-122716),  filed on February  10,  2005).  #10.5 W. King Grant
               Amended and Restated  Employment Contract dated February 14, 2003
               (Filed as Exhibit 10.10 to the Company's Form 10-K for the fiscal
               year ended December 31, 2002, filed on March 29, 2003).

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



                                       92
<PAGE>




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

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

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

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

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

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

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

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

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

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

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

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

          10.19Termination  and Settlement  Agreement,  dated as of December 23,
               2004,  among  Gasco  Energy,  Inc.,  Marc A.  Bruner  and Mark A.
               Erickson  (Filed as Exhibit 10.1 to the Company's  Current Report
               on Form 8-K filed on October 20, 2004).

          10.20Joint Value  Enhancement  Agreement by and among Pannonian Energy
               Inc.,  M-I, LLC, Nabors Drilling USA, LP, Pool Well Services Co.,
               Red  Oak  Capital  Management  LLC  and  Schlumberger  Technology
               Corporation dated January 16, 2004  (incorporated by reference to
               Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
               January 21, 2004).

          *21  List of Subsidiaries



                                       93
<PAGE>

          *23.1 Consent of Deloitte & Touche, LLP

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

          *23.3 Consent of Hein & Associates LLP

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

          *32  Section 1350 Certifications

*  Filed herewith.

# Identifies management contracts and compensatory plans or arrangements.



                                       94
<PAGE>