GDN - Golden State Resources

Makes you wonder if any of the directors sold any this morning, could be
a very timely uranium ann because we all know what would happen to the
share price if their well is a dud.

Hammered again!! If this DST report is not good, I am gunna jump off a bridge (a very low one..say 1/2 metre)

I would imagine that the success of the Uranium mining and exploration venture float could very much depend on what happens with GDN's current drilling for gas@

If the GDN well is a flop and the SP drops, which GDN shareholders will be interested in subscribing for shares in the new company run by the current GDN managment????

Bigdog,
Thats the prob I spose.
I have had the stock since IPO and I am gettin old FAST.
My bro (broker) ses its all rosy and hang on. While I am in front thats ok but its a long way back to $1.12 of a few days ago.

bigdog said:

I would imagine that the success of the Uranium mining and exploration venture float could very much depend on what happens with GDN's current drilling for gas@

If the GDN well is a flop and the SP drops, which GDN shareholders will be interested in subscribing for shares in the new company run by the current GDN managment????

Click to expand...

I thought a new management team will be assembled to run the new U company? or is it going to be the same old team that runs GDN.

Does anyone know when the dst report is due. I may as well hold on till that is announced. Good news and they will go through the roof, the more likely of the two and bad news, the stock won't be worth the paper it is written on. Was looking at selling my options today, but when i was trying to early on the only buyers of depth were at 35 cents.

My bro ses about a week (from Wed) for the report(he thought)
Isnt there also another 3 wells planned?

Re Uranium management comments.
GDN ann stated:
"Experienced Management with successful underground uranium mining expertise who are currently contract mining and shipping ore to the White Mesa Mill, Blanding, Utah."
Let's face it they have been busy working on this move for six months.Yes! One could dream up all sorts of devious reasons, twists and turns but you can do that in most situations. Have faith lads and have a good weekend!

.... i bought back in and am now trying to work out tactics for next week..... and apologies.. to some extent this is just me typing out stuff that comes to mind... seems to me as per threads on other sites the stock now contains a small element of value due to the uranium and an expectation value due to confidence that the gas well has at least 50bcf of reserves... if on Monday an announcement is made re. the DST it would thus seem irrelevant with respect to the 2 reasons above... i.e. there's high confidence that there's at least the 50bcf in the shallower sections...and so represent only upside..... and so a negtaive report on Monday although will have a direct negative impact on the SP will not reflect the actual value as the leedville has now been removed from the market value of the stock.... so that means wait and buy at the low....and hold with confidence if you already hold....or if you fancy a gamble sell at the open and buy back lower later..... whatever... once this is all over i'm cashing out of the market... going on holiday.. and hopefully get rid of the black bags that are starting to appear under my eyes!!!! This could just be crap... but interested in any comments....

chance fate said:

.... i bought back in and am now trying to work out tactics for next week..... and apologies.. to some extent this is just me typing out stuff that comes to mind... seems to me as per threads on other sites the stock now contains a small element of value due to the uranium and an expectation value due to confidence that the gas well has at least 50bcf of reserves... if on Monday an announcement is made re. the DST it would thus seem irrelevant with respect to the 2 reasons above... i.e. there's high confidence that there's at least the 50bcf in the shallower sections...and so represent only upside..... and so a negtaive report on Monday although will have a direct negative impact on the SP will not reflect the actual value as the leedville has now been removed from the market value of the stock.... so that means wait and buy at the low....and hold with confidence if you already hold....or if you fancy a gamble sell at the open and buy back lower later..... whatever... once this is all over i'm cashing out of the market... going on holiday.. and hopefully get rid of the black bags that are starting to appear under my eyes!!!! This could just be crap... but interested in any comments....

Click to expand...

Plenty getting out today, any exhuberance was convincingly squashed by 11.30. Lost 6 ticks myself and although i looked for re entry it just wasnt there. This one's the gamblers' nightmare or dream, take your pick!
I should add, it just ranges so wide that i couldnt help myself!!

Hi. Jessie Livermore, a well-known an early 20th century stock market investor said, "I made a lot more money sitting than trading." I think that still holds. We've all heard of Warren Buffet, who invests on fundamentals, but I think few of us can name a comparably well-known and successful trader, if one such exists. Now as to what we know about the fundamentals of GDN... We know GDN has a well with potential in eleven zones for gas and one for oil. We know GDN has a relatively rich uranium play that is being monitized by a listing on the ASX. We know that GDN has an interest in an iron play that may eventually result in GDN being paid a regular royality.

Regarding the well, management has all but stated that it is commercial. They are planning a gathering pipe and gas plant. How productive will this well be and what does it mean for the approximately 7 square mile formation that the well is on that GDN has a large interest in? We'll know much about that only after frac operations and testing. But there is high pressure here and lots of shows and after fracture a number of these shows could flow in a big way. Fracturing is usually fundamental to these wells. It opens up paths for the overpressured gas to flow through - a good frac goes up to 400 feet or so from the well bore in all directions and the gas flows into the well bore from this great space and beyond. This 7 mile structure could very easily give up a lot of gas. A slightly larger high-pressure Paradox structure that Delta Petroleum has drilled two wells about 7 miles apart on (40 miles to the north) is now estimated to hold between 2.5 and 4 Tcf of gas. The bottom line. It's time for sitting with GDN not trading it.

Is that Greentown you are refering to.No reserve declared yet but looks very promising.
I have little patience and at one well per year things could take a while.You are right though , in the future GDN holds the lease and all that gas.Those heady s.p. bandied around will come around one day.

Thanks for that post rosesny_1. Gives me a bit of confidence to hang tough.
I have only been on ASF for a short time, so spent the last 18 months relying on ASX announcements and trying to extract info from my broker.
These forums are great.

...just lost some typing and redoing it so hope this doesn't appear twice!!

I must be pretty slow but anyhow... i was re-reading the DST announcement and trying to understand why they are doing a DST at this stage... after thinking about it it seems from a technical standpoint (i.e. all sinister reasons aside) that something isn't adding up.... here's my logic...

The announcement states that due to hydrostatic pressure the gas shows are likely to have been subdued... it seems that the hypothesis is that with the high mud density being used to counter the over-pressure i.e. higher than hydrostatic, gas has not been absorbed into the mud and so the shows have been less than expected... this suggests that the leedville was not overpressured... and consequently it could be that heavier than needed mud has penetrated the formation and clogged the rock so that gas doesn't flow as readily into the well.... on the face of it the DST would enable the mud to be 'blown' back and so improve the gas flow...

This doesn't explain why the DST needs to be done right now... the well is only a few hundred feet away from total depth.. why not drill on and do the test along with the other shallower zones as part of the testing program to follow completion of drilling?

A possible reason why could be that with declining back ground gas due to possibly the effect of drilling mud penetrating the rock, they need to make a decision on whether to run more casing to protect the formation from being 'damaged', and drill ahead with a smaller diameter drill....:
* if the DST showed that gas flow improved and appeared commercial after cleaning out the mud then it would be a good reason to go ahead and case the leedville before drilling ahead (another week or so delay)...
* if the gas flow was poor, the leedville could be dismissed as a potential producer and drilling ahead would be ok as there would be no need to protect the formation from being damaged..

To me this seems to be reasonable logic for doing the test right now.... but although I've had some experience in this area I wouldn't say i've got the expertise to make the call... so was wondering if anyone out there could shed some light.....

Chance Fate, I like your logic. There was a major drop off in background gas in the Molas Formation at 15531' (dropped to 40 from 800 at 15397'). Then, after the Leadville gas shows at 200 units, background gas got back up to 300 then dropped way down again. Perhaps there's less natural fracturing in the Leadville/McCracken than in upper formations and therefore less gas pressure, and as you point out this may have resulted in the mud being too heavy to allow much of the gas to flow into it. Thus the DST.

rosesny_1 ... not sure if i'm interpreting you right... but the well was cased down to 15531 'i.e. communication with formation rock above 15531' cannot occur... so the background gas levels we're seeing now come entirely from the formation that has been drilled since drilling started again after the lost pipe delays...i.e the leedville and downwards......

The upper figures for gas content are the ones in GDN announcements before casing. They were reportedly higher throughout the potentially productive levels.

rosesny_1..ok ... yeah...sorry... the rock properties could be the reason for the difference... and if so...like you say fraccing might enable the gas to flow more readily.... the DST results should give an indication...

... given that we haven't heard anything on the results up to last Friday .. i was starting to think (could be stretching it) that that may be a good sign that at least they've obtained results worth interpreting... otherwise they could have announced something immediately along the lines of ... 'insufficient gas flow for measurement'.... for me at the moment (on a weekday!) no news=good news...

ASX ann today
GDN 9:46 AM Drilling status report
http://www.asx.com.au/asxpdf/20070507/pdf/312b5kfnvx0hgv.pdf

Drilling Status Report – 7 May 2007
• Paradox Basin #1 oil & gas well, Grand County, Utah, has successfully reached its final depth of 16,471 feet (5,020m) in the Cambrian Lynch Dolomite
• A geophysical wireline survey was completed
• The Company has opted to use the current rig to proceed immediately to well completion, initially testing the Pinkerton Trail Formation gas show, to be followed by gas shows in the Alkali Gulch, Barker Creek, Akah and Upper Ismay intervals

PARADOX BASIN #1 OIL & GAS WELL, UTAH USA
The Directors of Golden State Resources are pleased to announce that the Paradox Basin #1 oil & gas well has successfully reached its total depth of 16,471 feet (5,020m) after passing into the Cambrian Lynch Dolomite at 16,368 feet (4,989m).

DEVELOPMENT AND PRODUCTION
The Company has elected to use the current drilling rig to proceed immediately to well completion (the process of finishing a well so that it is ready to produce natural gas), given the difficulty in acquiring a work-over rig capable of operating to depths in excess of 15,000 feet (the depth of the Pinkerton Trail Formation gas show).

Testing of the Pinkerton Trail gas show will commence within 36 hours. The production potential for the intervals annotated below will be known within two weeks.

As a first priority, perforation and testing will be undertaken on the following gas shows:

Upper Ismay 9,845’ - 9,858’ 3,001 - 3,005 Gas in dolomite reservoir rocks at up to 520 units, with connection gas levels up to 3,000 units.

Akah 10,815 - 10,834’ 3,296 - 3,302 A gas show of up to 790 units.

Barker Creek 12,558’ - 12,580’ 11,015’ - 11,031’ 3,828 - 3,834 3,357 – 3,362
A major pressured gas interval in dolomitic sandstone. Gas (methane, ethane and trace propane) was present at levels of up to 2,300 units, with connection gas up to 3,300 units.
-- A 16’ gas-bearing interval (390 units), in a sandstone unit marking the top of the Barker Creek member.

Alkali Gulch 13,097’ - 13,106’ 13,145’ - 13,154’ 3,992 – 3,995 4,006 – 4,009
Two significant gas intervals in vuggy dolomite between salt horizons, with gas levels up to 800 units. The host dolomite was the best quality reservoir rock seen in the well.

Pinkerton Trail 15,288’ - 15,321’ 4,660 – 4,670 A significant show over a 33’ interval within a strongly fractured cyclic sequence of limestone and black shale, with gas up to 1,020 units.

Other oil and gas shows in other formations, may be assessed in conjunction with the above intervals.

Following the completion of a geophysical wireline survey, the Mississippian to Cambrian bottom interval of the well was plugged to allow development of the upper Pennsylvanian section of the well.

Drill Stem Test – Leadville Limestone Fm
The drill stem test on the Mississippian Leadville Limestone target yielded water at this depth, indicating that the Leadville target will be better tested further up dip, above the inferred oil/gaswater interface (see diagram below). The proposed second well for the project targets the Leadville Limestone one mile (1.6 km) up dip to the SSW, and would intersect the Leadville Limestone 1,000 feet (305 m) higher vertically above the intersection in Paradox Basin #1. Permitting is currently under way for the next location.

PRODUCTION PERMITTING
Permit applications for a connector production pipeline to the nearby Williams Northwest Pipeline have been lodged. Permitting for an onsite gas plant awaits completion of the well.

The maarket did not like todays ANN and now down 8.5 cents to 60 cents

GDN $0.60 -$0.085 -12.41% high of $0.705 and low of $0.595 1,693,815 shares $1,104,491

@ 07-May 10:22:28