Work associated with Budget Period 1 of the East Binger (Marchand) Unit project is nearing completion. A major aspect of this project is accurate modeling of the performance of horizontal wells. Well EBU 37-3H, the first horizontal well drilled in the unit, was drilled in the second quarter of 2001. After much difficulty establishing economic production from the well, the well was hydraulically fractured in November 2001. Post-treatment production has been very encouraging and is significantly better than a vertical well drilled in a similar setting. International Reservoir Technologies, Inc. has completed the final history match of the pilot area reservoir simulation model, including tuning to the performance of the horizontal well. The model's predicted reservoir pressure gradient between injection and production wells accurately matches observed data from the field, a significant improvement from prior model predictions. The model's predicted gas injection profiles now also more accurately match field data. Work has begun toward evaluating the optimum development scenario with the pilot model. Initially, four scenarios will be evaluated--two involving all horizontal infill wells, one involving all vertical infill wells, and one involving a combination of vertical and horizontal infill wells. The model cases for these scenarios have been defined, and construction of them is underway.