significant oil and gas discovery, page-4

Golden Gate Petroleum Ltd (ASX: GGP) is pleased to announce a significant oil and gas discovery at
the SRH-C # 6H well located in Reagan County, Texas. The SRH-C # 6H well was drilled to a total
depth of 9,235 feet. Electric logs were run over the targeted intervals.
Eight pay intervals ranging from 5,220 feet to 9,176 feet have been identified. There appears to be
over 130 feet of conventional oil sand along with approximately 1,600 feet of rich oil shales
interspersed among these sands which have been identified for testing and fracture stimulation. The
decision has been made to complete the well. 5½ inch casing has been run as completion work
continues.
During circulation, the mud weight declined due to oil flowing into the circulating mud. Several barrels
of oil were recorded at the surface. Normally, these formations require stimulation for oil to flow. As a
consequence, expectations are that some of the intervals to be tested will most likely produce at
above normal flow rates given that the oil is flowing to surface before any fracturing treatments.
Haliburton has been selected to run the testing and hydraulic fracture stimulation program. They are
scheduled to begin testing in approximately three weeks.
Once the SRH-C # 6H is completed, the UDI rig # 205 will be moved to the SRH-A # 8A location and
immediately commence drilling operations. The well is expected to spud over the weekend.
The SRH-C # 6H is the first well in a back to back two well program. Once these first two wells are
drilled and completed, they will be followed by many more wells planned over the 8,800 acre
leasehold position in order to develop this highly regarded unconventional oil and gas resource
representing the largest single project of known hydrocarbon development in the Company’s history.
Permitting has been completed on the next 10 well drilling program. At least six of the next ten wells
are planned to be straight holes with fracture stimulation across intervals expected to be the most
productive. The remaining four planned wells are being designed as horizontal wells.
Investigations into the drilling and completion success in our area have identified horizontal wells into
the Wolfcamp intervals as proving to be some of the most commercial and financially successful wells.
Work has commenced on identifying drilling locations where 4,000 to 6,000 feet laterals can be drilled
and completed at competitive rates with significantly higher production levels than straight holes. In
the GGP leaseholds where not all intervals are available, horizontal drilling appears to be an excellent
option to exploit the hydrocarbon resources. Stephen Graves, Executive Chairman, said; “The preliminary results in GGP’s first well in the Permian
Project are very encouraging. As we embark on a new chapter in the Company’s history with this very
large development of known oil and gas producing formations in a highly prolific producing area,
tremendous upside is possible for GGP. Successful extraction of the hydrocarbon resources is
expected to prove up valuations that could be many multiples of our current market capitalization.”