Delta Petroleum Sees 198% Increase in FY2005 Net Income

Delta Petroleum reports its operating results for the quarter and fiscal year ended June 30, 2005.

For the three months ended June 30, 2005, total revenue from continuing operations increased 143% to $28.3 million, versus $11.7 million in the fourth quarter of the previous fiscal year. Net income rose to $1.4 million in the fourth quarter of FY2005, versus $586,000 in the corresponding period of the previous fiscal year. Production from continuing operations in the fourth quarter of FY2005 rose 89% to 3.9 Bcfe compared with 2.0 Bcfe in the quarter ended June 30, 2005. During the quarter, we anticipated collecting an additional .2 Bcfe relating to a under balanced gas position that was recorded in July. Average prices realized for the quarter ended June 30, 2005 approximated $50.57 per barrel for onshore oil production, $38.55 per barrel for offshore oil production and $6.01 per Mcfe for natural gas production.

The Company experienced certain increases in expenses during the fourth quarter of FY2005 that were primarily related to increases in depreciation, depletion and amortization ("DD&A") and exploration expense. In the Gulf Coast region, the acquisition of certain properties, the timing of related expenditures and reserve reductions primarily relating to our South Angleton field caused the depletion rate per Mcfe to increase for the period. In addition, the Company incurred higher than normal seismic expense primarily related to a 50-square mile 3-D shoot also in the Gulf Coast region.

For the fiscal year ended June 30, 2005, total revenue from continuing operations increased 161% to $94.7 million, compared with $36.4 million in the previous fiscal year. Net income rose 198% to $15.1 million, or $.37 per diluted share, versus net income of $5.1 million, or $0.17 per diluted share, in FY2004. EBITDAX (see reconciliation table at the end of this release) increased 144% to $52.7 million in FY2005, compared with $21.6 million in the previous fiscal year. Total proved reserves approximated 224.3 billion cubic feet equivalents (Bcfe) as of June 30, 2005, which represents a 34% increase when compared with 167.7 Bcfe as of June 30, 2004. The increase in reserves was due to acquisitions and increased drilling activity during the most recent fiscal year.

The increases in revenue and net income for the year ended June 30, 2005 were primarily due to a 91% increase in production from continuing operations and higher oil and natural gas prices. Production from continuing operations in FY2005 reached 13.8 Bcfe compared with total production from continuing operations of 7.2 Bcfe for the fiscal year ended June 30, 2004. Production increases reflect acquisitions and drilling development activities. Comparing the prices that the Company received for oil and gas for the year ended June 30, 2005 versus the prior year, the average realized price for onshore oil production increased 42% to $47.05 per barrel (Bbl), the average realized price for offshore oil production increased 51% to $33.37 per Bbl and the average realized price received for natural gas production increased 10% to $5.79 per Mcfe (thousand cubic feet equivalent).


        * Acquired approximately $70 million in producing properties
        * Divested approximately $20 million in non-core producing properties
        * Acquired DHS Drilling Company which as of September has 10 rigs with
          depth ratings from 7,500 - 20,000 feet
        * Acquired 280,284 acres of additional undeveloped leaseholds in
          various core areas plus 30,000 acres of leasehold option acreage
          surrounding the Newton Field
        * Completed a $150 million Senior Unsecured Note offering providing
          liquidity to significantly increase drilling capital expenditures
        * Increased drilling capital expenditures almost 170% to approximately
          $100 million

"Fiscal 2005 was a year in which Delta significantly expanded revenues, earnings, production, proved reserves, and the breadth and depth of its oil and gas property portfolio," noted Roger Parker, Chief Executive Officer of Delta Petroleum Corporation. "We also regained a measure of control over our ability to drill wells on schedule, despite a very 'tight' rig environment, by acquiring DHS Drilling Company in April 2005."

"While we continued to experience some 'growing pains' related to the rapid expansion in the Company's activities, management believes Delta is well-positioned to achieve its strategic goals for the current and future years," continued Parker.


    Production and Drilling Activity

Since the Company's last operations update on July 25, 2005, Delta has completed or recompleted 7 wells. Those wells experienced an aggregate net initial production rate of 2.98 Mmcfe per day and are currently producing at an aggregate net rate of 3.48 Mmcfe per day as of September 1, 2005. The Company currently has 3 wells cased and waiting on completion.

In the Howard Ranch development project DHS Drilling Company Rig #1 is currently drilling at a depth of 15,900 feet on the Diamond State #36-13 and is expected to reach total depth within the next 30 days. Completion activity on the principal Lance sands in the Diamond State #36-31 is expected to start on September 16, 2005. Gas lift is being installed on the West Madden #6-27 well, which should resume production shortly. Delta recently started drilling the Gates Butte Unit #10-17 well with DHS Drilling Company Rig #7 and expects to reach total depth by mid-November (see the discussion below regarding the Howard Ranch area farmout transaction).

In the Piceance Basin DHS Drilling Company Rig #5 recently reached total depth on the Vega 34-14. The rig is now moving to drill the Vega # 10-23 and is expected to continuously drill in the unit for the foreseeable future.

In the Newton Field, since the July 25, 2005 update, 3 additional wells have been drilled and completed. Total field production is now 10.4 Mcfe per day. The Company is currently drilling the Burns #6.

In Washington County, Colorado Delta is currently permitting several locations and plan to begin drilling within 30 days.


On September 7, 2005 the Company entered into an agreement with Savant Resources, LLC ("Savant") to purchase an undivided 50% working interest in approximately 145,000 net undeveloped acres in the Columbia River Basin in Washington and to purchase an interest in an entity that owns undeveloped acreage in the Piceance Basin in Colorado for an aggregate purchase price of $85 million (to close on or before September 30, 2005).

The majority of the acreage that Delta has agreed to acquire in the Columbia River Basin will consolidate its current leasehold position, and subsequent to the acquisition Delta expects to own a 100% working interest in approximately 350,000 net acres. The consummation of this acquisition will result in Delta having control of several large geologic structures that will be the focus of later drilling activity.

In the Piceance Basin the Company has agreed to acquire Savant's 25% non-operated interest in an entity that owns approximately 6,314 gross acres located northwest of the Grand Valley Field targeting Mesaverde Williams Fork sands similar to those under development in the Vega Unit. This region is being extensively developed by numerous operators and the project interest that the Company is acquiring is in the initial stages of what will be a long term development program.

On August 19, 2005 Delta entered into a farmout and option agreement with another operator in the area of the Company's Howard Ranch development project in the Wind River Basin of Wyoming. The agreement calls for the Company, as farmee, to fund 80% of the drilling of an initial test well in order to earn 50% of the well and 50% of the farmor's acreage in a five section area (3,200 gross acres), plus 30% of the farmor's acreage in an additional four sections. In addition, the Company has the option within one year to drill a well on the second four-section block. By paying 62.5% of the drilling and completion cost of the well on the second block the Company will earn a total of 50% working interest across all of the lands which are subject to the agreement. Total acreage that can be earned under this agreement approximates 2,220 net acres. On August 31, 2005 DHS Drilling Company Rig #7 began drilling the Gates Butte Unit 10-17 test well.

On September 2, 2005 the Company closed on its previously announced sale of the Deerlick Creek Field in Tuscaloosa County, AL. The property was sold for $30 million (subject to adjustments) with an effective date of July 1, 2005. The properties were producing approximately 2.8 net Mmcfe per day at the time of the sale.

Delta Petroleum Corporation is an oil and gas exploration and development company based in Denver, Colorado. The Company's core areas of operations are the Gulf Coast and Rocky Mountain Regions, which comprise the majority of its proved reserves, production and long term growth prospects. Its common stock is traded on NASDAQ under the symbol "DPTR" and on the Frankfurt Stock Exchange under the symbol "DPE."