announcement

Expert opinion confirms that Paradox Basin #2 encountered the Upper Ismay Formation at 10,270’ (3130.3m) and that three of the four reported gas shows are in the Upper Ismay Formation
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Paradox Basin #2 is currently at 10,611’ (3234.2m) and drilling ahead at nine feet per hour
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Connection gas and trip gas to 5102 units has been recorded after tripping back in hole and the mud weight has been increased to 8.8ppg
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Since the previously reported gas shows the levels of background gas in the Upper Ismay Formation have ranged from 40 to 170 Units
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The look‐ahead is to continue drilling to 13,200’or the top of the Alkali Gulch salt before running 7” casing
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Prior to casing the well will to test the Lower Ismay, Desert Creek, Akah, Barker Creek, and Alkali Gulch formations above the Alkali Gulch Salt
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The well remains ahead of schedule and under budget
Since encountering gas in the Upper Ismay Formation, Paradox Basin #2 has required a bit change and is now back on bottom drilling ahead at nine feet per hour. Very high levels of trip gas were observed at 10,569’ with 5102 units. Trip gas is the result of formation gas entering the mud. Ditch gas levels below the previously reported show zones remained above 30 Units with peaks of 155 units over the interval 10,524’ to 10528’, 170 units at 10,547’ and 131 units at 10,560’
A stratigraphic expert on the Paradox Basin has reviewed the formation tops in the Paradox Basin #2, and correlated against Paradox Basin #1. The review indicates that the Upper Ismay Formation was encountered at 10,270’ . The position of the formation top confirms that three of the previously reported gas zones are in the Upper Ismay Formation. The gas shows could indicate a continuous accumulation within the proven Ismay Formation production zone.
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Golden State Resources considers that the shows encountered are significant and will be further evaluated after the next logging run and tested after completion of the well. The next logging run will occur prior to setting casing above the salt. Seven inch casing will be run at 13,200’ or the top of the Alkali Gulch salt.
Golden Eagle gas field Upper Pennsylvanian gas shows
Drilling operations have taken 53 days since commencing, and are 18 days ahead of the schedule. In comparison to the previous well, operations are approximately 80 days faster.
During April Paradox Basin #2 will test eight major reservoir objectives over a 5,000 foot (1,542m) interval in the Pennsylvanian and Mississippian. The objectives are the Upper and Lower Ismay, Desert Creek, Akah, Barker Creek, Alkali Gulch, Pinkerton and Leadville formations. Gas was produced on test from the Barker Creek Formation and Ismay Formation in Paradox Basin #1. Paradox Basin #2 is positioned to optimally test the Akah, Barker Creek, Alkali Gulch, Pinkerton and Leadville formations.