here is the ann

• A gas show of 207 Units was encountered in fractured limestone and
sandstone of the Barker Creek Formation from 13,430’ to 13,440’.
• The well is currently at 13,839’ (4218m) in the Alkali Gulch Formation
and is drilling ahead at rates ranging from 16 to 37 feet per hour.
• Final petrophysical results confirm a minimum of 95 ft of net gas pay
in 6 intervals, three of which have commercial potential and will be
tested at the completion of the well. It is likely actual pay is higher.
• Drilling progress was slowed when the well encountered a thick
extremely hard and abrasive dolomite cemented sandstone which
has required four bit changes since 12,967’.
• The abrasive sandstone corresponds to a subtle fault zone on the
seismic and current indications are that the well has crossed to the
upthrown fault block into the Alkali Gulch Formation.
• Remaining targets are the Alkali Gulch, and Pinkerton Trail
formations and Mississippian Leadville Limestone.
Paradox Basin #2 is currently at 13,839’ (4218m) in the Alkali Gulch Formation and drilling
ahead in carbonates and evaporates comprising salt dolomite and limestone. Drilling
rates are currently high ranging from 16 to 37 feet per hour. A gas show of 207 Units was
encountered in fractured limestone and sandstone of the Barker Creek Formation from
13,430’ to 13,440’. Back ground gas before and after show ranges from 18 to 25 units.
Due to the presence of mineral salt the mud weight has increased to 10.5 suppressing
background gas. A propriety gas referencing system is being used to assist in recognising
suppression of formation gases, and confirms that gas detection is currently fully
functional.
Petrophysical evaluation of the 8 ½” section has been finalised by RPS Energy including a
review by tight gas experts in the US. The results confirm net pay in six intervals including
three with commercial potential. Golden State Resources is currently planning production
tests on the Ismay, Chimney Rock and Barker Creek formations. The net pay thickness in
all of the zones has potential to increase as several sections which are in likely pay zones
previously reported in the preliminary results associate with poor hole conditions and gas