Previously, the PP F-12 oil well at Palmetto Point, Mississippi (the "PP F-12") was drilled and completed and revealed a new oil discovery exceeding our original expectations. This well has been producing since October 2, 2007. The well is now in production on an 11/64th choke and is producing at a rate of approximately 110 barrels of oil per day with no water. At this rate, we are expecting a very quick return on our investment.
These wells occur in our Phase I prospect at Palmetto Point, Mississippi, which prospect was targeting natural gas. As such, this new oil discovery is extremely exciting for the Company in terms of the overall success of the Phase I Drilling Program, potential cash flow to the Company from this Program and the direction that might be taken in future drilling in the area. Once these two wells flow for some time, we will assess whether additional drilling is warranted.
To date, in the Palmetto Point, Phase I Drilling Program, we have participated in the drilling on 13 wells, out of which 11 have produced, are producing and/or are expected to produce oil and/or natural gas.
Delta Oil & Gas, Inc. has a 10% working interest in these wells.
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