Gasco issues 5.5% convertibles due 2015 in exchange for notes due 2011

By Susanna Moon

Chicago, June 28 - Gasco Energy, Inc. said it issued $64,532,000 principal amount of 5.5% convertible senior notes due Oct. 5, 2015 in exchange for $64,532,000 principal amount, or 99.28%, of its 5.5% convertible senior notes due Oct. 5, 2011.

The 2015 notes are convertible, at the holder's option, into common shares or into the company's newly designated series C convertible preferred stock, which are convertible into common stock. The notes are unsecured and unsubordinated and are guaranteed by all of the company's domestic subsidiaries.

The company entered in exchange agreements on June 22 with some holders of its 5.5% convertibles due 2011, according to an 8-K filing with the Securities and Exchange Commission.

The exchange was completed on June 25.

Gasco also paid $788,724.44 in cash for accrued interest to the closing date.

The initial conversion price for the 2015 notes is $0.60 per share, which is a conversion rate of 1,666.6667 common shares per $1,000 principal amount of notes.

The company's stock (NYSE Amex: GSX) closed at $0.38 on June 25.

The company may redeem the notes at par plus accrued interest to the redemption date if the company's stock price closes at or above 150% of the conversion price for at least 20 trading days out of any 30 consecutive trading days.

The notes are putable upon a change of control at par plus accrued interest and any liquidated damages to the purchase date.

Gasco is an Englewood, Colo.-based natural gas and petroleum exploitation, development and production company.

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