drilling status report

ABN 39 063 074 635
Level 1 181 Roberts Road Subiaco Western Australia
Postal: PO Box 616 West Perth 6872 Australia Ph: +61 8 9486 4633 Fax: +61 8 9486 4634
Email: [email protected]
Drilling Status Report – 31 October 2006
• Paradox Basin #1 well is at 12,985 feet (3,958 m)
• Significant gas discovery in Alkali Gulch zone of Paradox Formation
• Drilling on to primary objective, the Leadville Limestone
Golden State Resources is pleased to announce progress on the Paradox Basin #1 well in
Grand County, Utah.
Paradox Basin #1 is at 12,985 feet (3,958 m), in the Alkali Gulch Member of the
Pennsylvanian Paradox Formation (see table and graphic below). The Alkali Gulch
Member comprises a cyclic sequence of sandstone, dolomite, black shale, salt and
anhydrite.
The well intersected a major pressured gas interval, from 12,549’ to 12,577’ in
dolomitic sandstone at the top of the Alkali Gulch member. Gas (methane and ethane
with trace propane) was present at levels of up to 2,300 units.
Connection gas ranges from 2,000 to 3,300 units. Background gas has increased 40-fold
to consistent levels of 500-900 units. Trip gas ranges up to 3,520 units. All gas levels are
highly significant, however full assessment of the production capacity of reported gas
shows will follow testing at the completion of the well.
The well is approximately 350 feet above the primary objective of the well, the
Leadville Limestone Formation (estimated depth: 13,350 feet).
It is anticipated that the well will reach the top of the Leadville Limestone within 3 days.
Initial 100% Ownership and Operator
Golden State holds an initial 100% interest in this well, and operatorship through its
100%-owned US subsidiary, Golden Eagle Exploration LLC. Denver-based joint venture
partner Eclipse Exploration Inc has the right to back in with a 16.67% working interest
after the drilling of two wells by Golden State.
DEFINITIONS
Connection gas: Pressured formation gas introduced into the well during short periods of
mud pump shutdown, such as when connecting additional drilling pipe.
Trip gas: Gas that infiltrates the well when withdrawing the drill string (i.e. making a trip).
Gas units: 10,000 units = 100% gas i.e. 3,000 units = 30% gas.
2
3
PARADOX BASIN #1 TARGETS
Formation or
Zone
Geological Age Lithology Depth
(metres)
Depth
(feet)
Result
Honaker Trail Pennsylvanian Limestone 2,682 8,800 -
Upper Ismay Pennsylvanian Limestone 2,987 9,800 * Gas shows
Hovenweep Pennsylvanian Limestone 3,045 9,989 -
Lower Ismay Pennsylvanian Limestone 3,050 10,006 Minor gas show
Desert Creek Pennsylvanian Limestone 3,126 10,256 Gas shows
Akah Pennsylvanian Limestone 3,209 10,528 * Gas shows
Barker Creek Pennsylvanian Limestone 3,355 11,016 * Gas show
Alkali Gulch Pennsylvanian Sandstone 3.705 12,154 * Major gas interval
Pinkerton Trail Fm Pennsylvanian Limestone 3,962 12,950
Leadville Fm Mississippian Limestone 4,084 13,350
McCracken Devonian Sandstone 4,267 14,000
Lynch Dolomite Cambrian Dolomite 4,389 14,400
TOTAL
BOLD: Primary Targets
ITALICS: Minor Targets
* Potential Production
Richard Sciano
Executive Director
31 October 2006
Further information:
Executive Director: Richard Sciano 0416 096 148
Exploration Director: John Hasleby 0011 1 435 220 0720