settlement of weatherford litigation ..., page-50

Thanks for that, prf

I trade through asb nz. The asx announcements only go back 12 months so I use the archives of the GDN web site for looking back further. I remember reading it there, and was surprised it is no longer there. I have now, after reading many Ann. found what I was looking for. The reasons I wanted to view the litigation is simple.

If gdn had drilled to leadville and discovered gas in this zone then the litigation with Weatherfords may have been higher than it has been settled at now. Weatherfords were resoponsible for the damaged well( see ann 26th of October 08 which states)

"Mechanical issues associated with the casing hanger, caused by the contractor, resulted in the
requirement to ream cement for 4 months. During which time, the Cane Creek and Pinkerton Trail
zones, which had originally demonstrated favourable reservoir quality, were exposed to salt and over
pressured drilling fluids which is likely to have damaged the well.
The Barker Creek gas zone at 12,562’ had persistent shows for a further 1000’, presumably implying
good reservoir, however as the zone was not cemented no valid test was possible. Valid testing of the
primary objective Leadville Limestone was also prevented due to damage to the liner and lack of
isolation from the overlying salt."

If Gdn had discovered good gas flows in the formations below Barker Creek in pb2 it may have favoured the outcome of settlement in GDN's favour quite considerably.

This did not happen, the formations above and including Barker Creek were tested in pb1, so that part of the well may have only been considered in the settlement as a posibble delay to income. The increased viability and or profitability of pb1 may not have been arguable without testing the zones below LBC.

The settlement, as a result of not drilling the lower levels in PB2 may now have gone considerably in Weatherfords favour, as it may have been hard to argue what the results would been, without testing Leadville etc.

It would seem that Pb1 may need Pb2 to flow enough gas to justify a connection to the Williams pipeline, if Pb1 already has enough gas it may have been prudent to connect it as soon as was practical to produce income, and would have given more leverage over Weatherfords because of their drilling delays and possible loss of potential income.

Further to this

11/03/09
RELEASE OF INDEPENDENT AUDITORS REPORT
The Paradox Basin #2 well will appraise both the discovered and the undiscovered GIIP and once
completed will extend the area attributed to the P90 estimate which was determined by using a 640
acre area around the Paradox Basin #1 discovery well. Successful tests in the Alkali Gulch or Leadville
Formation would move their respective GIIP into the discovered category.

The Auditors report above clearly states that PB2 needed to test the lower zones to move the GIIP zones into the discovered catagory, unfortunately this has not happened.

This is all water under the bridge and has taught me to be even more asute in buying and selling shares.

I now sit and wait, along with everyone else, to see the long awaited testing programme and results.

I genuinely hope that the results are as favourable as was indicated in the drilling, and that gdn's share price will come up to yours and everyones elses expectations.

Good luck to you and all holders. IMO DYOR