GDN - Golden State Resources

well i must say todays sp looks sick. given past performance one can't help feeling scepticism that first zone of three is no go. i hope not.

Looks like some jumping ship, but insignifigant numbers really.
53 trades for 4mill shares and $217k value.
29 trades for 17mill oppies and $106k value.
Hardly a rout.
Will be happy when that ann comes with good numbers tho.

27/05/2010 11:44:00 AM Operations Update

ASX ANNOUNCEMENT 27TH MAY 2010
ACTIVITY UPDATE: PARADOX BASIN #3

KEY POINTS:
● The Coil Tubing Unit has successfully clean-out the casing in Paradox Basin #3
● The well is now being circulated and conditioned prior to fraccing
● The company is confident of establishing commercial gas production in both Paradox Basin #1 and #3
● Paradox Basin #3 encountered some of the best gas shows so far encountered on the Golden Eagle Field
● Wellhead pressure in Paradox Basin #1 continues to increase and further flow tests will be run in parallel current operations on PB #3

US focussed oil and gas company Golden State Resources Limited (ASX: GDN) (“Golden State” or “the Company”) has commenced cleaning out the Paradox Basin #3 well. A Halliburton Coil Tubing Unit (CTU) arrived on location last night. The CTU has cleaned out the remnant frac fluids and sand from the 5” casing. The well is now being circulated and conditioned in preparation for further operations.

Planning fracture stimulation of zones 5 and 6 is advanced. The stimulation has been re-engineered based on analysis and modelling of the previous partial stimulation conducted on the 18th May. Procurement of materials and services for the stimulation are also advanced. Once the programme has been finalised Golden State will issue an update.

The company is confident that Paradox Basin #3 will be successfully stimulated as commercial gas well.

Wellhead pressures on Paradox Basin #1 continue to increase since the flow tests conducted earlier in May. Further tests will be conducted to evaluate whether the commercial rates seen during those tests are sustainable. The testing will also evaluate the effectiveness of the existing completion and stimulation of Paradox Basin #1.

28/05/2010 9:58:00 AM Operations Update
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01067607

ASX ANNOUNCEMENT 28TH MAY 2010

ACTIVITY UPDATE: PARADOX BASIN #3

KEY POINTS:
● Paradox Basin #3 is currently flowing gas

● The initial gas rate was estimated at approximately 900,000 cubic feet per day

● A flow test will be conducted prior to fraccing

US focussed oil and gas company Golden State Resources Limited (ASX: GDN) (“Golden State” or “the Company”) is very pleased to announce that on commencement of the clean-out operation Paradox Basin #3 began to flow gas to surface. The gas has been diverted to the flare. The flow was estimated at 900,000 cubic feet per day. The flow will be monitored over the next few days as part of the clean-up.

The well will be fracture stimulated. The initial stimulation conducted 18 May was only partially successful in that only 60,000 pounds of the intended 125,000 pounds of proppant was able to be injected into the formation. The remaining material was left in the casing and the mixing tanks.

A coil tubing unit was able to clear the casing in a few hours yesterday, and after circulating and conditioning during the past 24 hours, the well was displaced to nitrogen. Flammable gas was observed at surface almost immediately and the flow was diverted to flare. Paradox Basin #3 will be flow tested over the weekend as preparations for the larger fracture stimulation continue.

The current completion covers the lower two of six gas bearing intervals identified in the well. The gas occurs in the Pennsylvanian Ismay, Desert Creek and Akah formations.

The directors of Golden State are very pleased with this result. This result has greatly lifted our confidence in the casing design, which augments well for successfully completing Paradox Basin #3 as a producer.

1962

At least things are moving on site again.
They are very excited over on HC..and just on 0.9mmcf/d lol
Thats about $4k/day $1m/year
First zone tho, imo they will get 4 to 5mmcf/d from P3 and I would be happy with that.
I saw posts saying that there was no one on site till this weekend.. someone being mischevious??

DAZT49 said:

Thats about $4k/day $1m/year

Click to expand...

well it is alright money when you are not making money. Nothing to get excited about I do agree Dazt49.

Perhaps they can get the pthers to open up a bit and turn that into $12grand a day. Perhaps

mrga,
At a mill a year they can pay off P1 in about 15 years lol
We should get an ann early this week about the 1st frac, and maybe a flow rate.

Hello Dazt, GDN ol'timer.

Well Fridays announcement sounded more promising too me. More flow testing and complete another frac to compensate for the screen out and hopefully they will be reporting on even better flows soon.

Two more zones after this bottom zone to test as well. Thats a good back up plan LOL.

Pilots, a Q if I may regards horizontal well vrs vertical. PB#3 being horizontal, does that provide better bonding of cement to prevent the frac traveling the outside of casing? Still coming to grips how this well seems to be a much improved one compared to the other two, dare I say disasters, PB#1 which they are still trying to recover. Possible they will have to side track a short radius.

Cheers

Sharemadder, The cementing is the same for both wells, they run centralizers to keep the casing in the center of the well so as the cement is all around the casing.

Sharemadder - just a small point, PB#3, although not vertical, is not horizontal either - the cross sections displayed on their recent drilling progress reports give an indication of the true angle.

Yeah, I know that its not a true horizontal well but it ain't true vertical either

Thanks Pilots for the reply.

One would assume (I know you cant assume anything with GDN) that prelim talks/contracts/permits would have been undertaken with the owners of the pipeline pending a good outcome from P3.
Any estimates on how long it will take to run out 7k of HD garden hose??

sharemadder said:

Hello Dazt, GDN ol'timer.

Well Fridays announcement sounded more promising too me. More flow testing and complete another frac to compensate for the screen out and hopefully they will be reporting on even better flows soon.

Two more zones after this bottom zone to test as well. Thats a good back up plan LOL.

Pilots, a Q if I may regards horizontal well vrs vertical. PB#3 being horizontal, does that provide better bonding of cement to prevent the frac traveling the outside of casing? Still coming to grips how this well seems to be a much improved one compared to the other two, dare I say disasters, PB#1 which they are still trying to recover. Possible they will have to side track a short radius.

Cheers

Click to expand...

Hey madman...not so much of the "old"ya young whippersnapper.
Hopefully I dont kick the bucket before they actually start producing..

Update way overdue imo.
GDN have never been eager to make any anns but with the small probs they had I would have thought a "everything is ok you nervous nellies" would ease my indigestion.....buuurp.

D49 and Sharemadder, you now have a gas field, and don't forget it is ALL GDNs, 100% GDN only.

Pilots,
We ALWAYS new it was there lol
What a relief.
Its good to see they are going "slowly slowly catchee monkey" and getting the first three zones up and running before returning to the remaining 5 zones.
Should build some credibility in the market too.
Still a way to go tho.
Sharemadder and I may get to have that bottle of Margaret River Shiraz and the lobster yet.

IMO the oppies will not get up.
Nov 30 th expiry date?
For the oppies to get anywhere near the 12c the SP would have to be around 50c-60c. (about 30% of the SP) and punters would really like to see them (oppies) up around 20c.
If the SP was flying (volatility)that would push the Oppie price to maybe 50% of the SP, much better proposition, but with only P3 to go on till Nov (I havent seen any timetable for rework of P1) there would have to be great results from the remaining zones to attain 50%.
Its gunna be toit!
All IMO of course.

For those that have not read the ANN

8/06/2010 1:54:00 PM Running Production Casing in PB 3
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01070169

ASX ANNOUNCEMENT 8TH JUNE 2010
ACTIVITY UPDATE: PARADOX BASIN #3

KEY POINTS:
● Indications are the currently completed interval will be capable of independent commercial production with anticipated intial production levels of 2 million cubic feet per day
● Production casing is being run in Paradox Basin #3
● The fracture stimulation has been effective
● Reservoir pressures are higher than Paradox Basin #1
● Gas rates are expected to increase significantly on previously stated results as the well unloads the remaining fracture fluids

US focussed oil and gas company Golden State Resources Limited (ASX: GDN) (“Golden State” or “the Company”) is very pleased to announce that production casing will be run in Paradox Basin #3. Indications are that the fracture stimulation has been effective and that the currently stimulated zone is capable of independent commercial production.

The stimulation conducted on 18 May covered the lower three of the eight gas bearing intervals representing 15 feet of the 116 feet of pay identified in the well. The fracture has accessed permeable gas bearing formation suggesting the screen-out observed during the fracture stimulation was due to better than expected formation permeability, rather than blocking of the perforations.

Strong gas rates and rapid pressure recovery during the initial clean-up operations on the well indicate the fracture is effective. A pressure survey and tracer log have since confirmed effective placement of the stimulation and high reservoir pressure. The reservoir pressure was measured at 4910 psi. A second stimulation which was booked for the 12 June has been cancelled.

In light of these excellent results the directors of Golden State have decided to run the production casing and to conduct a production test on the currently stimulated interval and are confident of achieving commercial rates. In concert with the completion and testing the company is endeavouring to potentially increase production rates by completing additional pay zones.

The completions rig is on site and will commence running the production casing later today. The current completion covers the lower three of eight gas bearing intervals identified in the well. The gas occurs in the Pennsylvanian Ismay, Desert Creek and Akah formations.

* Only zones 5, 5a and 6 have been stimulated

pilots said:

D49 and Sharemadder, you now have a gas field, and don't forget it is ALL GDNs, 100% GDN only.

Click to expand...

Thanks Pilots I am very happy right now. Pity I am working as I would have a celebration drink LOL.

This is a long awaited for announcement that Dazt and I have thirsted for some time.

Just super

pilots,
For all our jousting over the last few years , we are all in the same (gas powered) boat.
Gas field....has a nice ring to it.
cheers
daz