Golden State Resources (ASX: GDN) is primarily focused on oil and natural gas exploration in the USA and Ukraine
Golden States Resources provides update on Golden Eagle Gas Field
Golden States Resources (ASX: GDN) has provided an update on production initiatives at the Golden Eagle Gas Field in Grand County, Utah, USA.
The gas field contains substantial contingent gas resources independently estimated to be in the range of 16.7 to 212 billion cubic feet of gas initially in place (BCF GIIP).
The Golden Eagle field comprises two producing wells on a large US acreage holding with considerable retained infrastructure.
Past operational activities have achieved significant gas discovery, learning outcomes and retained valuable infrastructure.
Further drilling is likely to increase gas resources and the size of the field is potentially appreciable.
Golden State expects to increase production from current levels with appropriate fracture stimulations.
The company is also investigating methods to handle co-produced water and examine target areas which are less prone to natural fracturing.
The draft gas deliverability study report has now been received and is undergoing review by the company. The study is regarded as essential to provide the economic base to commit expenditure to production.
The company will not make final economic decisions in relation to gas facilities and pipeline connection until the report is concluded.
The company is also actively establishing all the required clearances for construction of a gas pipeline.
During the previous quarter the Golden State applied for extension of the existing water Right of Way (ROW) with State and Federal authorities and received a stamped copy of the proposed surface use for water and gas pipelines from the Utah State authority SITLA.
The company was required to conduct an Arches Study to in-fill a small gap in the existing survey as part of the renewal process. The study was completed and submitted to the BLM on December 17th and the renewal has now been received, extending the ROW until 2015.
In addition, Golden State has received the final payment of $1.5 million for the second tranche of the previously announced sale of the company’s investment in WCU.
The proceeds will be used to extinguish current debt and provide additional working capital.
The company has completed scouting of seven potential new drilling locations. Three locations were submitted formally as staked future drilling locations as part of the over-all development strategy.
The company is focused on further fracture stimulation of current wells, testing the original primary target of Leadville Limestone and acquiring or establishing production facilities.
Golden State has positioned itself to benefit from any increases in gas prices, with 220 new gas power stations in the US expected by 2013, supporting steadily increasing demand.
