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This report summarizes progress of the government-sponsored projects directed toward increasing gas production from the low-permeability gas sands of the western United States. Bartlesville Energy Technology Center continued work on rock-fluid interaction and advanced logging techniques. Lawrence Livermore Laboratory continued experimental and theoretical work on hydraulic fracturing mechanics and analysis of well test data. Los Alamos Scientific Laboratory continued work on permeability and porosity determination of core samples and geological support studies. Sandia Laboratories continued work on their EGR Instrumentation and Diagnostic Program. Cyclic gas injection continued at Colorado Interstate Gas Company's Miller No. 1 and Sprague No. 1 wells. The DOE Well Test Facility is continuing to provide technical support to the Gas Research Institute/Rio Blanco Natural Gas MHF experiment. The Gas Producing Enterprises, Inc. Natural Buttes Unit wells continued to flow to sales. The Mitchell Energy Corporation Muse-Duke No. 1 was opened after a 28-day shut-in period. The hydraulic fracturing containment experiment continued for the Sandia-mineback program. (ERA citation 05:005380)