Production from the Marg Area 1 at Port Neches is averaging 222 BOPD for this quarter. The production drop is due in part to mechanical problems and to poor sweep efficiency caused by water blockage that prevented the CO, from contacting new residual oil deeper in the reservoir. Alternating water and gas injection assisted to some extent in maintaining oil production and improved the reservoir yield by reducing the gas production. A workover was performed on well Kuhn #38 to correct failed gravel pack setting. Production from the well was restored to 60 BOPD. Plugging of the injection wells continue to be a problem, reducing the injection rate in critical areas of the reservoir, near well Kuhn #15R. Texaco drilled the well Polk B #39 to The Marg Area 3 reservoir to gain structural position based on the 3D seismic, and found the sand present as anticipated. However, the sand did not have any hydrocarbon accumulation. For this reason, Texaco will abandon testing the idea of utilizing CO, to accelerate the primary production rate and reduce water production and primary production cycle time, in the reservoir.