pb news

11 August 2011
Market Release (via electronic lodgement)
PERMIAN BASIN PROJECT UPDATE? TWO WELL DRILLING PROGRAM TO COMMENCE IN
SEPTEMBER
Golden Gate Petroleum Ltd (ASX: GGP) is pleased to provide a market update on activities involving
the Permian Basin Project and the commencement of a two well drilling program to start in
September which is on plan with our earlier market updates.
Since purchasing the four leaseholds totalling 8,806 gross acres in Reagan and Irion County, Texas;
GGP through its wholly owned US subsidiary, Cathie Energy Texas LLC, has been focusing on a
development program covering the leasehold where GGP holds all rights to all intervals from the
surface through the Wolfcamp and Strawn. Progress to date includes:
 A rig contract has been executed with Union Drilling Inc. (UDI) to drill two wells in
September. Rig # 205 has been contracted to drill both wells back to back. UDI is a public
company with over 50 rigs in operation, many of which operate in the Permian Basin. UDI
has drilled numerous wells on the adjacent acreage surrounding the GGP leasehold with
tremendous success, both from a commercial and financial standpoint.
 The lessor, the Texas Scottish Rite Hospital, has given their consent to drill on the leasehold
and approval has been given for the two wells to be drilled at the identified locations. All
permits are in place and work has commenced on arranging surface locations.
 A new Drilling Manager has been hired with a successful four year history of drilling Permian
wells on the adjacent acreage. Recent drilling programs have been able to drill wells to
approximately 8,500 feet in less than 10 days at costs under US$ 600,000 which is below our
original planning estimates. GGP has contracted the UDI rig at rates which are expected to
result in these very competitive cost parameters.
 Plans are being put in place for a 10 well drilling program to begin before the end of 2011.
New drilling locations are being selected and UDI is reviewing rig scheduling to support the
new program.
 Further investigations into the drilling and completion success in our area have identified
horizontal wells into the Wolfcamp intervals proving to be some of the most commercial and
financially successful wells. Work has commenced on identifying drilling locations where 4,000
to 6,000 feet laterals can be drilled and completed at competitive rates with significantly
higher production levels than straight holes. In the GGP leaseholds where not all intervals are
available, horizontal drilling appears to be an excellent option to exploit the hydrocarbon
riches.
As previously advised, challenges to certain leasehold positions have been presented. These
challenges involve certain legal matters that originated from earlier disclosed events. Attempts to
mediate these matters proved unsuccessful so far. Legal proceedings are scheduled for late
September and will hopefully begin to resolve the outstanding issues. The current drilling program is
not directly impacted by these proceedings.