Delta Oil & Gas to Complete Well in Sacramento Basin

Delta Oil and Gas says its first well on its Cache Slough property has reached the targeted depth. Review of the preliminary drill logs indicate that this is a potential gas well and based on these logs, the company intends to immediately complete the well for testing. Once final testing is complete and a determination is made that the well is economically viable, the well will be tied in to a nearby pipeline to accommodate the natural gas production.

The Cache Slough area is a prolific natural gas area northeast of Sacramento, California. The property is located next to and partially on one of the largest gas fields in the State of California, the 3.5 trillion cubic feet ("Tcf") Rio Vista gas field. Pipelines located near and within the project area make it easy to transport and sell any production encountered.

The Cache Slough property covers approximately 825 acres of land. Analysis of 3-D seismic survey, in combination of all available well data, has resulted in the recognition of several natural gas prospects on the property. The initial drilling focus is expected to be on the high side of the Midland Fault, a major structural feature in the Rio Vista area that has historically produced significant amounts of natural gas.

Delta Oil and Gas has agreed to pay 18.75% of all costs of drilling, testing and completion of the first test well to earn a 12.5% economic interest. Thereafter, Delta Oil & Gas will pay 12.5% of all costs of future wells to earn a 12.5% economic interest.