gdn article on gas discovery

below is an article from proactive investors, which includes some very upbeat quotes from the GDN chief geologist which indicate there is better still to come



Strong gas shows at Paradox #2, Utah for Golden State Resources in Upper Ismay Formation
by Proactive Investors


Golden State Resources (ASX:GDN) has advised of the following progress of Paradox #2 well in Grand County,Utah:

- Paradox Basin #2 has penetrated the Upper Ismay Formation at approximately 10,340 feet (3,152m) and encountered significant gas shows of 398 and 787 units in the Upper Pennsylvanian Ismay Formation. The level of gas shows is higher than shows observed in the Ismay Formation production interval in Paradox Basin #1.

- The first Upper Ismay Formation gas show displayed a sharp increase from 26 units to a peak of 398 units. The gas is primarily methane (40,177 ppm) with lesser ethane (743 ppm). The show persisted for 32 feet from 10,336 to 10,368 feet. Lithology consisted of sandstones and shales. The sandstone has fair visual porosity.

- The highest gas reading of 787 units at 10,387�]10,392 feet (5,079�]5,084ftSS) occurred in coarse grained conglomeratic sandstone with good visual porosity.

- The Ismay Formation in Paradox Basin #2 contains a higher percentage of marine sandstones, which are interpreted as near shore bar deposits that are highly prospective as reservoirs.

- The Paradox Basin sequence contains 8 major objectives in the Pennsylvanian and Mississippian over a 5,000 foot (1,542m) interval.

- The well is currently ahead of schedule and under budget.

Proactive Comment:

Speaking with Rick De Boer (Chief Geologist at GDN), who previously worked at AED Oil as Chief Geologist, on today's announcement the difference between the wildcat #1 well and #2 to date is night and day. While the drilling programme still in early days, this time GDN appears to have got it right with Rick and the technical team in place.

The increase in gas shows from 26 units to 398 is important for the sheer qantum increase in gas shows as anything else. There appears no question, that a gas zone was encountered. As Rick indicated about the gas shows in Upper Ismay formation, "it is a nice little pay zone". The good porosity was also a big positive.

Hitting marine sandstone was important as it could indicate a "better and bigger reservoir" putting GDN in a "wonderful position" as Rick put it.

Rick and GDN will now re-evaluate the approach given the positive results in the Upper Ismay Formation on next steps. The Lower Ismay, Barker Creek and Alkali Gulch are next targets.

For GDN investors, it has been an excellent run in price from 6 cents to 15 cents. Given results to date, it would be hard to bet against further gas shows and further market action.