Implementation of the work program of Budget Period 2 of the East Binger Unit (''EBU'') DOE Project continues. Major development work planned for the project includes the drilling of three horizontal production and one vertical injection wells, the conversion of five wells from production to injection service, and the expansion of injection capacity at the nitrogen management facility. Other work items include initiation of project monitoring and continued reservoir simulation. EBU 74G-2, the injection well planned to support the production of EBU 64-3H, has been drilled. Completion was underway at the time of this report. EBU 64-3H was fracture-stimulated during the period, further increasing production from this new horizontal well. Drilling of the final two wells of the pilot project is planned for 2003. Both are planned as horizontal producing wells. Work also began on projects aimed at increasing injection in the pilot area. The project to add compression and increase injection capacity at the nitrogen management facility was initiated, with completion targeted for March 2003. Additional producer-to-injector conversions are expected to be implemented around the same time. The revised history match of the simulation model has been completed, and work has begun to evaluate options with forecast simulations. The …