gdn quarterly, page-5

Deliverability Study
The Company received a draft of the Gas Deliverability Study Report and has since been reviewing the document. An important aspect of the study was to provide the economic case for full production from the wells in their existing state. At this stage, the report does not immediately validate expected production volumes because of some apparent inconsistencies contained within the production and testing data. Golden State is seeking further information from the testing contractor and expects receipt of the final report in the first quarter of the 2011 calendar year. The company will make final economic decisions in relation to gas facilities and pipeline connection for the wells in their current state when the report is concluded.

Great to see they dotting the eyes and crossing the tees.
Paradox Basin has enormous potential, they are being extremely careful not to Jump the gun .

Approval for Gas ROW
During the quarter, on successful completion of an Arches Study to in-fill a small gap in the existing survey, Golden State received the renewal of the existing Right of Way from the BLM, extending the ROW until 2015. Previously the company received a stamped copy of the proposed surface use for water and gas pipelines from the Utah State authority SITLA.

It took a while, but another step along the way, water is a problem in 99% of these types of wells, it seems the authorities, being environmentally and historically responsible, made it hard, but now give the go ahead for lines in and out.

WCU investment sale completed
In the quarter, Golden State sold its remaining stake of White Canyon Uranium Shares. The company has also settled on the $1.5m second Tranche of the previously announced sale. The proceeds provided funds to extinguish existing debt and to facilitate continued development of the companys oil and gas assets in Utah, USA.

Have never given a hoot about WCU.

Forward Planning
Three locations were submitted formally as staked future drilling locations, however, some of the decisions for the anticipated activities in the coming quarter have been delayed whilst awaiting the finalised gas deliverability report. Nevertheless, the company will utilise the period to focus on evaluating the conclusion of a number of goals, such as further fracture stimulation of current wells, testing the original primary target of Leadville Limestone and acquiring or establishing production facilities. The Company is looking forward to commencing on- site operations to continue development of the Golden Eagle Field.

Again a careful and measured approach
Well done Unca Ricky and the team.
Look out!!!