re: news out Drilling Status Report – 24 October 2006· Paradox...

re: news out Drilling Status Report – 24 October 2006
· Paradox Basin #1 well is at 11,950 feet (3,642 m) and drilling on
· Strong formation gas pressures and gas influx to well upgrade
production potential
· Target potential 3 TCF gas
Golden State Resources is pleased to announce progress on the Paradox Basin #1 well in
Grand County, Utah.
The well is at 11,950 feet (3,642 m), still drilling in first major objective of the well,
the Barker Creek member of the Pennsylvanian Paradox Formation (see Table
below). 700 feet of Barker Creek remains above the Alkali Gulch member.
Since last report background gas in the well has doubled and connection gas (methane,
ethane and propane) is maintaining consistent levels.
Full assessment of the production capacity of reported gas shows will follow drill stem
testing at the completion of the well. At this stage, from formation pressures and the
amount of gas bleeding into the well, it is likely that production will be obtained from the
following intervals:
Interval Target Zone
9742’ – 9746’ Upper Ismay
9930’ – 9960’ Barker Creek
10714’ – 10765’ Barker Creek
11016’ – 11030’ Barker Creek
Permitting is progressing for a connector to the gas transmission pipeline, which crosses
the Golden Eagle leases 10 km from the well site. Once the right-of-way permit is
granted, laying of the connector is expected to be completed quickly.
The well is drilling on towards its main targets, which have been interpreted from seismic
data to have the potential to contain up to 3 TCF of gas, the Barker Creek
(estimated depth to base 12,730 feet) and the Leadville Limestone (estimated depth
of top 13,700 feet). The Leadville Limestone hosts the Lisbon Oil & Gas Field, 80 km to
the south. The Lisbon Field has produced 54 million barrels of oil and 750 BCF of gas, at
current prices equivalent to a gross income of A$10 billion.
It is anticipated that the well will reach the primary objective Leadville Limestone within 7
days.