paradox basin no 2 update ..., page-13

Hi, its a newsletter that has been uploaded on the goldenstate website, looks like each month they are going to give a newsletter on how the golden eagle project is going.

Some interesting points made in the newsletter.

They say all aspects running ahead of schedule.
Under budget and since quarter expenses is 4m must be moving towards costing less than the originally expected 4m budget, which would be good to show they can drill at under 5m per well in future.
Banks have expressed interest in debt funding the field.

Independent audit confirms discovered gas field potentially one of the most significant new recent discoveries in the US.

Gas volumes in report confirm previous statements the golden eagle gas field could possibly be the most significant gas discoveryt in utah in decades and may be one of the largest onshore discoveries in US in recent times.

Mid case estimate being 118bcf on 640 acres.

Total amount of new field reserves discovered in the US for 2007 was 796bcf.

There is also some questions and answers on the 2nd page of the newsletter a couple of things mentioned were.

Demonstrating can drill future wells cost effectively.

Interest from banks for future debt funding, banks have expressed interest in paradox field potential and could provide debt funding for future wells once production is achieved and proved sustainable over a short 3-6 month period.

If this was to happen with a raising with the last tranch, currently being under budget with over 5 million in bank and outlays under 4m for the quarter, and options expiry in june if they get exercised gdn should have enough after this tranch to last until pb2 is flowing long enough to get the bank funding.

The 118bcf reported is the p50 estimate on 640 acres, after this 2nd well is completed the acres should be upto 1280 which would mean a p50 estimate of 240bcf or over 1/4 of what was discovered in 2007. Those p50 and p90 estimates on those 4 formations could increase after 2nd well flow tests are completed if much better then the first well tests.

This was just in a newsletter most of the above but it does show there is confidence in this gas field by the company.