The previous report provided a detailed summary of the work data on the project at the Rulison field. Key to this report was the finding that the regions where wells showed good EURs were spatially associated with faulting. Specifically, areas considered more permeable due to the presence of natural fractures are generally located in the high-side (footwall) of reverse faults. While this association seems to hold in the Rulison seismic data coverage, this association requires corroboration. Thus the work plan for the quarter of July 1, 1997--September 30, 1997 consisted of three tasks: (1) perform detailed fault mapping of Rulison 3-D seismic data with Barrett Resources; (2) review SOCO 2-D seismic fault mapping and structural interpretations; and (3) initial work into developing a predictive method for locating fault-related natural fractures. The first two tasks were initiated and completed during this reporting period. The work involved required at the collaborative effort between the field operators and ARI staff. The third task marks the beginning of quantitative fracture mechanics analysis of the geologic processes that are involved for the development of fault-related natural fractures. The goal of this work is to develop a predictive capability of locating natural fractures prior to drilling.