Owl Creek, Oklahoma
The Isbill #2 well has now been completed and is producing oil and natural gas. Once flow rates from the Isbill #2 stabilize, they will be reported. This well was drilled to approximately 5,900 feet and revealed two pay zones of approximately 25 feet in total.
The previously drilled Powell #2 at our Owl Creek prospect in Oklahoma continues to produce on average, between 100 and 150 barrels of oil per day along with approximately 40 to 45 mcf natural gas. The drilling of additional wells is currently being examined. Potential exists for up to an additional 9 wells on 80 acre spacing. Delta owns a 20% working interest in this prospect.
Delta has entered into an agreement with Ranken Energy Corporation to participate in a five well drilling program at Garvin and Murray Counties, Oklahoma (the "2006-3 drilling Program") Delta has agreed to take a 10% working interest in this program. This decision was based on the geological information provided to us and on the successes we have already enjoyed working with Ranken at our Owl Creek Prospect. The drilling of the first well is expected to commence in July 2007 and all wells should be drilled within six months of the start date.
Two horizontal wells have now been successfully completed at our Wordsworth prospect in Saskatchewan, Canada. The first well was drilled and completed in June 2006 and has been producing in the range of 200 barrels of oil per day and between 50,000 to 100,000 cubic feet of natural gas per day from a pay zone estimated to be approximately 900 feet.
The second horizontal well was drilled in May 2007. Initial logs indicated hydrocarbon showings in an oil bearing zone estimated to be approximately 770 feet in the horizontal section. However, due to the high water content in fluid removed from this well, the operator determined that it was not commercially productive and will be abandoned.
The operator has indicated that based on the success to date, it expects to drill one additional well every quarter for the next year. Delta owns a 15% working interest in all additional wells to be drilled in this area.
Todd Creek, Alberta
Production of natural gas has commenced at our Todd Creek Well located in 13-28-9 2W5 in Alberta, Canada. The 13-28 well was completed in June 2005 and is now producing natural gas.
Our second well at Todd Creek (the "13-33") was spudded on December 31, 2006 and drilling to the targeted depth of 5,500 feet was completed. The well is now tied in and producing. Production rates will be released once flow rates stabilize.
The operator of the Strachan gas well has recently elected to complete the Strachan well in Alberta, Canada. This well was drilled in 2006 to a depth of 13,650 feet and initial testing revealed extremely high gas pressure of up to 10,000 pounds per square inch in several zones. The operator has now indicated that it intends to re-enter the well to complete the well and to perform additional testing which could occur as early as this summer. Delta owns a 4% working interest in this well.
Cumulative production to date from Phase I wells in Mississippi is 10,267 Mcf. Delta has a 10% working interest in these wells. The Company has also commenced Phase II drilling which has proven to be successful. Results will be released once the drilling campaign is complete.
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 Strachan Prospect, its interest in its Mississippi prospect, its interest in a horizontal oil well in Saskatchewan and its interest at Owl Creek, Oklahoma. Delta Oil & Gas is seeking to expand its portfolio to include additional interests in Canada and the USA.
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