Preview | Agreement and Plan of Merger |

TABLE OF CONTENTS


ARTICLE I THE MERGER			1
	1.1	The Merger	1
	1.2	Effective Time of the Merger	1
	1.3	Tax Treatment	2

ARTICLE II THE SURVIVING CORPORATION			2
	2.1	Articles of Incorporation	2
	2.2	Bylaws	2
	2.3	Directors and Officers	2

ARTICLE III CONVERSION OF SHARES			2
	3.1	Conversion of Capital Stock	2
	3.2	Dissenting Shares	4
	3.3	Surrender and Exchange	4
	3.4	Stock Options	6
	3.5	Warrants	6
	3.6	No Fractional Shares	7
	3.7	Closing	7

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY			7
	4.1	Organization and Qualification	7
	4.2	Capitalization	8
	4.3	Authority	9
	4.4	Consents and Approvals; No Violation	9
	4.5	Company SEC Reports	10
	4.6	Company Financial Statements	10
	4.7	Material Agreements	11
	4.8	Absence of Undisclosed Liabilities	11
	4.9	Absence of Certain Changes	11
	4.10	Taxes	12
	4.11	Litigation	13
	4.12	Employee Benefit Plans; ERISA	13
	4.13	Environmental Liability	14
	4.14	Compliance with Applicable Laws	14
	4.15	Insurance	15
	4.16	Labor Matters; Employees	15
	4.17	Permits	15
	4.18	Properties	15
	4.19	Reserve Report	17
	4.20	Operations; Equipment	17
	4.21	Prepayments; Hedging; Calls	18
	4.22	Restrictive Agreements	18
	4.23	Required Shareholder Vote or Consent	18
	4.24	Proxy Statement/Prospectus; Registration Statement	19


	4.25	Brokers	19
	4.26	Tax Matters	19
	4.27	Opinion of Financial Advisor	19

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			19
	5.1	Organization and Qualification	19
	5.2	Capitalization	20
	5.3	Authority	21
	5.4	Consents and Approvals; No Violation	21
	5.5	Parent SEC Reports	22
	5.6	Parent Financial Statements	22
	5.7	Absence of Undisclosed Liabilities	22
	5.8	Absence of Certain Changes	22
	5.9	Proxy Statement/Prospectus; Registration Statement	23
	5.10	Brokers	23
	5.11	Tax Matters	23

ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER			23
	6.1	Conduct of Business by Company Pending the Merger	23
	6.2	Conduct of Business by Parent Pending the Merger	25

ARTICLE VII ADDITIONAL AGREEMENTS			26
	7.1	Access and Information	26
	7.2	No Solicitation of Transactions	26
	7.3	Subsidiary Spin Off	27
	7.4	Further Assurances	27
	7.5	Cooperation	27
	7.6	Publicity	28
	7.7	Additional Actions	28
	7.8	Filings	28
	7.9	Section 16 Matters	28
	7.10	Shareholders Meetings	28
	7.11	Preparation of the Proxy Statement/Prospectus and Registration Statement	29
	7.12	Stock Exchange Listing	29
	7.13	Affiliate Agreements	29
	7.14	Tax Treatment	30
	7.15	Expenses	30

ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER			30
	8.1	Conditions to the Obligation of Each Party	30
	8.2	Conditions to the Obligations of Parent and Merger Sub	31
	8.3	Conditions to the Obligations of Company	31

ARTICLE IX SURVIVAL			32
	9.1	Survival of Representations and Warranties	32
	9.2	Survival of Covenants and Agreements	32


ARTICLE X TERMINATION, AMENDMENT AND WAIVER			32
	10.1	Termination	32
	10.2	Effect of Termination	33
	10.3	Fees, Expenses and Other Payments	34

ARTICLE XI INDEMNIFICATION			35
	11.1	Indemnification	35
	11.2	Method of Asserting Claims, Etc	36
	11.3	Satisfaction of Claims from Escrow Shares	37
	11.4	Instructions to Escrow Agent	37
	11.5	No Waiver Relating to Claims for Fraud/Willful Misconduct	38

ARTICLE XII MISCELLANEOUS			38
	12.1	Notices	38
	12.2	Separability	39
	12.3	Assignment	39
	12.4	Interpretation	39
	12.5	Counterparts	39
	12.6	Entire Agreement	39
	12.7	Governing Law	39
	12.8	Attorneys Fees	39
	12.9	No Third Party Beneficiaries	39
	12.10	Amendments and Supplements	39
	12.11	Extensions, Waivers, Etc	40

iii

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this Agreement) dated as of September 20, 2006, by and among Gasco Energy, Inc. (Parent), a Nevada corporation, Gasco Acquisition, Inc. (Merger Sub), a Nevada corporation and a wholly-owned subsidiary of Parent and Brek Energy Corporation (Company), a Nevada corporation.

WHEREAS, the respective boards of directors of each of Parent, Merger Sub and Company deem it advisable and in the best interests of their respective shareholders that Parent acquire Company through the merger of Merger Sub with and into Company (the Merger) upon the terms and subject to the conditions set forth herein, and such boards of directors have approved the Merger; and

WHEREAS, concurrently with the execution and delivery of this Agreement, with the approval of Companys board of directors, Parent has entered into voting agreements with Richard N. Jeffs, Gregory Pek, Ian Robinson, Michael L. Nazmack, Eugene Sweeney and Shawne Malone (under which such party has among other things agreed to support the Merger upon the terms and conditions set forth therein (the Voting Agreement)); and

WHEREAS, for federal income tax purposes, the parties intend that the Merger will qualify as a reorganization under the provisions of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the Code);

NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein, the parties hereto agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger. Upon the terms and subject to the conditions hereof, at the Effective Time (as defined in Section 1.2) Merger Sub shall merge with and into the Company and the separate corporate existence of Merger Sub shall cease and Company shall be the surviving corporation in the Merger (sometimes referred to herein as the Surviving Corporation). The Merger shall have the effects set forth in Section 92A.250 of the Nevada Revised Statutes (the NRS), including the Surviving Corporations succession to and assumption of all rights and obligations of Merger Sub.

1.2 Effective Time of the Merger. The Merger shall become effective (the Effective Time) upon the later of (i) the filing of the properly executed articles of merger relating to the Merger with the Secretary of State of Nevada in accordance with the NRS (the Articles of Merger), and the issuance by the Secretary of State of Nevada of a certificate of merger with respect thereto, and (ii) at such later time as the parties shall agree and set forth in such Articles of Merger. The filing of the Articles of Merger referred to above shall be made as soon as practicable after the satisfaction or waiver of the conditions set forth in Article VIII.

1.3 Tax Treatment. It is intended that the Merger shall constitute a reorganization under Section 368(a) of the Code.

ARTICLE II

THE SURVIVING CORPORATION

2.1 Articles of Incorporation. At the Effective Time, the articles of incorporation of Company in effect immediately prior to the Effective Time shall be amended so that they are identical to the articles of incorporation of Merger Sub in effect immediately prior to the Effective Time until thereafter amended in accordance with the terms thereof and the NRS.

2.2 Bylaws. The bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation at and after the Effective Time until thereafter amended in accordance with the terms thereof and as provided by the articles of incorporation of the Surviving Corporation and the NRS.

2.3 Directors and Officers.

(a) The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified.

(b) The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation, each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified.

ARTICLE III

CONVERSION OF SHARES

3.1 Conversion of Capital Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of any capital stock described below:

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