Ann: Independent auditors report on Golden Eagle , page-2

re: Ann: Independent auditors report on Golde... The Directors of Golden State Resources Limited are pleased to announce
the completion of an independent audit of the Golden Eagle gas field in
Grand County Utah by RPS Energy. The results confirm Golden Eagle as a
new field discovery which has confirmed discovered gas and significant
upside potential
Hydrocarbon in place estimates for the Golden Eagle gas field where prepared in accordance with
SPE/WPC/AAPG/SPEE Resource Management System (PRMS, 2007), by a team of independent experts
from RPS Energy. The results confirm the large potential of the Golden Eagle gas field. Full details are
provided in the Opinion letter.
In accordance with the above standards of resource management the Gas Initially in Place (GIIP) is
categorised firstly into confirmed discovered gas which has been produced on test and is supported by
petrophysical data. Both the Barker Creek and Ismay Formation accumulations fall into this category.
The second category is undiscovered gas. Undiscovered gas represents zones which have not
produced gas on test but which have strong indications of gas initially from ditch cuttings and
petrophysical evaluation indicates contain movable hydrocarbons.
The GIIP is estimated at Low volume and high confidence (P90), Mid volume and mid case (P50) and
High volume lower confidence (P10) levels. These divisions reflect the expected ranges in key
parameters such as areal extent, thickness, porosity, and hydrocarbon saturations.
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. Paradox Basin #1 did not
successfully test the Alkali Gulch or Leadville Limestone. On completion of Paradox Basin #2 the
additional data recovered will enable the resource estimate for Paradox Basin #1 to re�]defined at the
Alkali Gulch and Leadville levels.