Golden State Resources completed well and access permitting, well location civil works and access road upgrading on the Golden Eagle target, Grand County, Utah and spudded the first well during May 2006. A drilling rig, a GD800 with a depth capability of 4,900m, was contracted and transported to site. The rig is supplied and operated by DHS Drilling Company of Casper, Wyoming. DHS has 15 rigs operating in onshore western USA with depth capabilities ranging from 7,500' to 20,000', and has ample ability to supply experienced crew and suitable backup facilities for the planned 4,420m well at Golden Eagle.

The well is expected to take up to 90 days to drill and will test a target identified from seismic data and nearby wells.

The target structure has an area of up to 2,000 hectares (20 km²) with 11 potential pay zones within 1,450m of Pennsylvanian (Upper Carboniferous) section plus 240m of deeper Mississippian (Lower Carboniferous) carbonates, commencing from a depth of 2,130m, down to 4,420m.

Independent consultants estimate a mid-case reserve target of 440 BCFE of gas, with upside to 3 TCFE (3,000 BCFE) for the maximum 2,000 ha case.

Golden State holds an initial 100% interest in the well. JV partner Eclipse Exploration Inc of Denver has the right to back in with a 16.67% working interest after the drilling of two wells by Golden State. There are state, federal and overriding royalties of up to 22%.

View across Golden Eagle Prospect to first well location