The overall objective of this research is to show how gas can flow from the rock matrix to natural or induced fractures, and undergo commercial production. In this quarterly report, accomplishments are presented for the following tasks: (1) advanced core analysis; (2) flow along and across fractures; (3) chemical alteration; and (4) effect of water on gas production. Cores are being tested from the fluvial, coastal, and paludal zones of the Mesaverde. Properties measured include permeability, porosity and for selected samples, water adsorption and desorption isotherms. Some of the findings are: production from some low permeability gas sands is much higher than would be expected from properties of the rock matrix as determined by core analysis; the cores show that by far the majority of fractures are filled with calcite cement; the effects of six chemical treatments on rock properties are presented for a fluvial sample; water and brine permeabilities and desorption-adsorption isotherms are presented for both preserved and oven-dried plugs, and results are compared. 15 figs., 2 tabs.