Delta Petroleum Overcomes Challenges, Drills on in Utah
Delta Petroleum has drilled the Federal 28-11 to a depth of 9,472 feet, which was reached on Nov. 19, 2007. At that time, the well began flowing and flaring natural gas at bottomhole pressures of approximately 8,000 psi from the lowest interval referred to as the "O" zone.
The "O" zone is the same clastic interval that caused the surface blowout in the company's Greentown State 36-11 discovery well. The pressures experienced in this interval are very consistent with pressures seen in both the Greentown State 36-11 and 32-42 wells, which are 6 miles to the north and l.5 miles to the south, respectively.
For approximately two weeks the well flowed at rates and pressures that made it challenging to run production casing, which has now been accomplished. The Federal 28-11 well has encountered the same sequence of alternating clastic intervals and interbedded salt sections as found in the company's two previously drilled Greentown project wells. The results from the Federal 28-11 thus far, in conjunction with the initial results from the Greentown State 36-11 and Greentown State 32-42, provide the Delta with ample evidence to believe in the economic viability and immense reserve potential of the Greentown field.
Within an 11 township area surrounding the Greentown Project, 38 wells have now been drilled that penetrated at least some of the Paradox Salt section. Based on this control, the Paradox formation can be characterized as consistent and continuous over a large area.
Delta is also drilling the Greentown Federal 36-24 which is located three-quarters of a mile south of the previously referenced 36-11 discovery well, and 1.5 miles southeast of the Federal 35-12 well. The 35-12 well was temporarily abandoned this summer due to excessive over-pressuring in the upper interval at approximately 5,700 feet in depth. The Federal 36-24, which has drilled through the same upper over-pressured intervals that were evident in the Federal 35-12, did not encounter any excessive over-pressuring and appears to be hydrocarbon-bearing in all clastic intervals encountered thus far based on mud log shows. Information from the other 37 wells drilled in the immediate area also did not encounter this degree of over-pressuring, further substantiating our belief that the excessive over-pressuring experienced in the Federal 35-12 was anomalous and localized.
With regard to the Greentown pipeline project, the National Environmental Protection Act (NEPA) work has been completed, and the environmental assessment has been submitted to the Bureau of Land Management. The company believes that new well permits and the pipeline permitting process will move forward in an expeditious manner. Pipeline construction and initial operations should occur by the end of the second quarter of 2008.
The company expects to report additional results from the Paradox Basin in the near future and will continue to drill with two rigs in the Greentown project.
The company reaffirms its fourth quarter production guidance of 4.95 - 5.13 billion cubic feet of gas equivalents (Bcfe), as well as previously stated guidance for 2008 that anticipates production increases of 40% – 60% above 2007 levels.