Implementation of the work program of Budget Period 2 of the East Binger Unit (''EBU'') DOE Project continues. The drilling of new horizontal well EBU 63-2H, scheduled for this reporting period, was delayed due to a lack of rig availability. This well was spud near the end of the reporting period. EBU 59-1 was converted to injection service, and injection capacity at the plant was increased from 19 MMscf/d to 22 MMscf/d. Although other factors have temporarily limited the field's ability to fully utilize the increased capacity, injection in the pilot area has been increased over 2 MMscf/d since the start of the project. Nitrogen recycle within the pilot area has been reduced with the projects implemented to date. Prior to pilot development, nitrogen production was 56% of nitrogen injected. Currently, nitrogen production is only 26% of injection. Pilot area oil production has increased 90 bpd or 30%, with 160 bpd from new wells offset by a loss of 70 bpd from wells converted to injection.

Implementation of the work program of Budget Period 2 of the East Binger Unit (''EBU'') DOE Project is progressing and nearing completion. EBU 63-2H has been drilled, completed, and brought on line. This is the second of three horizontal wells planned for this Budget Period, but based on the costs and performances to date of all new wells, could be the last. It will take some time to evaluate their impact on sweep and ultimate recovery. In addition to the drilling of new wells, the project also includes conversions of five wells from producers to injectors. Three wells were previously converted, and a fourth, EBU 37-3H, was prepared for conversion at the end of this reporting period. The fifth will require an expensive workover and will be re-evaluated. Project response to the various projects continues to be very favorable. Gas injection into the pilot area has increased from 4.0 MMscf/d prior to development to an average 7.3 MMscf/d in this reporting period, while gas production has actually decreased from 4.1 MMscf/d to 3.9 MMscf/d. The nitrogen content of produced gas has dropped from 58% to 52%. This has reduced the nitrogen recycle within the pilot area from 60% to 27%. …

Implementation of the work program of Budget Period 2 of the East Binger Unit (''EBU'') DOE Project continues. Significant advances with the reservoir simulation model have led to changes in the program. One planned horizontal well location, EBU 44-3H, has been eliminated from the program, and another, EBU 45-3H, has been deferred, and may be replaced by a vertical well or completely eliminated at a future date. A new horizontal well location, EBU 63-2H, has been added. EBU 74G-2, the one new injection well planned for the project, was completed and brought on production. It will be produced for a period of time before converting it to injection. Performance is exceeding expectations. Work also continued on projects aimed at increasing injection in the pilot area. EBU 65-1 was converted to injection service. The project to add compression and increase injection capacity at the nitrogen management facility is nearing completion. Additional producer-to-injector conversions will follow.

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 …