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

Intermediate casing has been set and cemented at 9,800 feet
 Wireline logging has confirmed Paradox Basin #2 intersected the top
of the Paradox Basin sequence at 9,738 feet (2,968m), 352 feet
higher than expected
 The look ahead is to drill‐out the casing shoe, then to conduct a
formation integrity test before running cement bond logs
 Drilling is expected to resume within 24 hours of completion of cased
hole logging
 The first major objective, the Upper Ismay Formation, should be
reached later this week
 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
The directors of Golden State Resources are pleased to announce that intermediate
casing has been set and cemented at 9,800 feet within the Upper Pennsylvanian Paradox
Basin sequence. The intermediate casing point is a major commercial and operational
milestone for the Paradox Basin #2 appraisal and development well. Operations to date
have taken 45 days, 17 days ahead of schedule, representing a large improvement in
operations in comparison to the previous well, which took 132 days before drilling out of
the intermediate casing.
Wireline logs have confirmed that the casing has been set into the top of the prospective
Paradox Basin Sequence, which was intersected at 9,738 feet (2,968m), 352 feet higher
than predicted. It is expected that the Upper Pennsylvanian objectives should also be
higher based on formation thicknesses in Paradox Basin #1. The variation in depth is due
to seismic imaging close to the bounding faults, rather than depth conversion, and
consequently deeper objectives are not affected.
Paradox Basin #2 will appraise the Upper Ismay Formation approximately 730 feet (222m)
lower than the tested interval of the discovered gas accumulation in Paradox Basin #1.
This places Paradox Basin #2 within the known extent of Upper Pennsylvanian gas shows
in the previous well which extended from 9,743’ to 11,368’.
During April Paradox Basin #2 will test eight major reservoir objectives over a 5,000 foot
(1,542m) interval in the Pennsylvanian and Mississippian. The objectives are the Upper
and Lower Ismay, Desert Creek, Akah, Barker Creek, Alkali Gulch, Pinkerton and Leadville
formations. Gas was produced on test in Paradox Basin #1 from the Barker Creek
Formation and Ismay Formation.
Paradox Basin #2 is positioned to optimally test the Akah, Barker Creek, Alkali Gulch,
Pinkerton and Leadville formations. The strongest indications of gas in the previous well,
in the Pinkerton Trail and Leadville formations, were not definitively tested due to
mechanical problems.
The Paradox Basin #2 well remains ahead of schedule and, provided the current drilling
performance can be maintained, is expected to be under budget. In the event Paradox
Basin #2 encounters commercial gas the well will be cased and suspended and a test rig
will be mobilised.
Richard Sciano
Executive Director
1 April 2009
Golden Eagle