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Golden Gate Petroleum Close To Hydraulic Fracturing Of First Permian Horizontal Well

Golden Gate Petroleum (ASX: GGP) has begun preparations for hydraulic fracturing of the 5H well in the "A" bench of the Wolfcamp interval at its Permian Project in Texas, with the initial perforations for the first stage having been shot.

Oil field services provider Halliburton is currently scheduled to rig up at the end of the week and begin the logging and fracture stimulation program shortly thereafter.

Good communications with the formation were established.

The Nabors rig has been used to test the casing, clean out the hole, circulate KCL and spot acid.

The next step is to install the frac tree.

Production tanks will be set onsite during the week along with other production equipment.

Water transfer lines will go through final installation from the frac pond.

Meanwhile, Golden Gate is this week preparing to bring back the No. 1 well on production from the Wolfcamp/Cline interval.

Once the Nabors rig completed work on the No.5 well in preparation for the frac program, the rig was moved to the No.1 well.

A capillary tube will be installed in the well to inject chemicals to inhibit the paraffin coming from the Cline. The No.2 well will also go through the same installation.

Both wells will undergo frac completions in the Spraberry Dean intervals after sufficient production data has been gathered from the Wolfcamp/Cline interval.

Permian Project funding

Golden Gate recently reached agreements for A$7.5 million in funding from a U.S. asset management firm for continued development of the Permian Project.

This development work, which will also be funded by the recent Entitlement Offering, is expected to generate enough cash flow for the company to keep all its booked proved and probable gas reserves in the project.

It will allow Golden Gate to start drilling up the reserves and maintain the lease where those reserves are located.

The Permian Project has proved and probable reserves of 5 million barrels of oil equivalent.

The company is extending its Permian Project leases, which expire at the end of this month, under the lease agreements.

It plans to execute a monthly extension for up to four months while its work and fund raising for a scaled up drilling program continues.

The Company is currently in detailed discussions with several financiers and potential farm-in partners involving the continued development of the Permian Project.

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