Extended reach drilling will be utilized to develop reserves in the eastern half of OCS Block P-0451, in which Delta has an interest.
Planned wells will target the previously explored and delineated but never produced Rocky Point structure within the limits of the P-0451 block. Delta's ultimate interest in the new drilling will be dependent upon elections on assignments and well proposals, but in no event shall Delta's interest be less than 6%.
In previously tested exploratory wells, the Rocky Point structure produced high quality, low sulfur crude oil. Future Rocky Point production will be transported to shore via pipeline and exported away from the operator's onshore Santa Barbara County, California metering facility via the Plains All America Pipeline. The unit operator has reached agreement in principle for mobilization of a suitable drilling rig and expects to initiate drilling operations in the first quarter of calendar 2004.
"Lease P-0451 is not a part of the offshore Santa Barbara, California leases that are currently the subject of a breach of contract lawsuit by Delta and other parties against the U.S. government," noted Roger A. Parker, President and Chief Executive Officer of Delta Petroleum Corporation.
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