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Golden State Resources to kick off drilling of Paradox Basin #3

US-focused oil and gas explorer Golden State Resources (ASX: GDN) has announced the imminent commencement of the drilling of Paradox Basin #3 within the Golden Eagle Prospect, located in Grand County in Utah.

Since the award of the permit by the Department of Natural Resources of the State of Utah on December 21, Golden State Resources has completed site preparations and has prepared the cellar, rat-hole and mouse-hole in readiness for the drilling rig.

During the morning trade, shares in Golden State increased 17% to 6.9c.

Mobilisation of Unit Drilling Rig 234 is scheduled to commence on Monday 18 January, with the rig-up expected to take approximately 6 to 7 days after which the well will spud.

Paradox Basin #3 is a directional well which is specifically targeting gas production from the Ismay.

Golden State Resources discovered the Golden Eagle Gas field in 2006 with the drilling of the Paradox Basin #1 well as part of a two well farmin with Eclipse Exploration.

Paradox Basin #3 will spud from the existing Paradox Basin #1 pad, which has been re surveyed and has been upgraded for re-use. The well will then be directionally drilled into the Ismay Formation gas zone and completed with 5” casing.

Drilling time is estimated to be under 55 days

The Cost estimate for Paradox Basin #3 is significantly lower than the previous wells at $5.5 million.

The company is in discussions with potential financiers to debt fund the expansion of the field is advanced and is the preferred option.

The Golden Eagle Gas field is located in Grand County in Utah it is located close to the Williams gas distributor which feeds Portland. Production can be readily commercialised once commercial gas production rates are established.

Both existing wells on Golden Eagle Field have demonstrated gas flows at rates up to 3.6 million cubic feet per day.

Disclosure: The author holds no positions in the company