Construction of a new gas processing plant just south of this Todd Creek discovery has commenced and Delta expects to tie its anticipated gas production into this gas plant by spring of 2006. The gas plant is initially capable of accommodating 10 million cubic feet of gas per day with significant expansion capabilities. While Delta will have no direct interest in the plant, the immediate access to market for its anticipated production from the area is of substantial benefit.
Cache Slough Prospect
Delta's Cache Slough Well, located near Sacramento, California has been drilled, completed and classified as a significant new natural gas pool discovery. Review of the preliminary data indicates that the well tested at flow rates exceeding our expectations. Delta and partners have elected to tie-in the well to a nearby gas pipeline to accommodate the natural gas production which is expected to commence in January 2006. Flow rates and reserve size will be announced after the well has commenced commercial production. Future drilling plans with regards to the Cache Slough prospect will be announced in early 2006.
Drilling continues on Delta's potential natural gas well in its recently acquired, highly prospective property in the Deep Basin along the edge of the Alberta foothills belt approximately 80 miles Northwest of Calgary, Alberta ("Strachan Prospect"). The targeted depth of the well is approximately 13,500 feet and this depth is expected to be achieved before the end of December 2005.
The original Strachan gas pool was discovered 35 years ago, however, in November 2004 Shell Oil announced a new Leduc Pool discovery at Ricinus with potential One Trillion cubic feet gas reserves.
Earlier this year, Delta Oil & Gas acquired a 10% working interest in 640 gross sections of land in the Hillspring area of Alberta. The operator of the Hillspring prospect has drilled 4 wells adjacent to the lands Delta has acquired. The operator is currently reviewing the data on these 4 wells and it is anticipated that a well will be drilled on Delta's land in 2006.
Delta Oil and Gas is a growing exploration company focused on developing North American oil and natural gas reserves. The Company's current focus is on the exploration of its land portfolio comprised of working interests in highly prospective acreage in the Southern Alberta Foothills area, its interest in the Cache Slough Project in California and its newest interest in the Strachan Prospect. Delta Oil & Gas is seeking to expand its portfolio to include additional interests in Canada and the USA.
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