The objective of this program is to develop a system to both monitor the vibration of a bottomhole assembly, and to adjust the properties of an active damper in response to these measured vibrations. Phase I of this program entails modeling and design of the necessary subsystems and design, manufacture and test of a full laboratory prototype. The project continues to advance, but is behind the revised (14-month) schedule. Tasks 1-3 (Modeling, Specification and Design) are all essentially complete. The test bench for the Test and Evaluation (Tasks 4 & 5) has been designed and constructed. The design of the full-scale laboratory prototype and associated test equipment is complete and the components are out for manufacture. Barring any unforeseen difficulties, laboratory testing should be complete by the end of March, as currently scheduled. We anticipate the expenses through March to be approximately equal to those budgeted for Phase I.