Delta Oil & Gas Takes Stake in Owl Creek Prospect
Delta Oil and Gas, Inc. has entered into an assignment agreement to accept an assignment of an undivided 20% working interest in a potential oil well known as the Powell #2 and an option to purchase a 20% interest in all future wells drilled on a total of 1,120 acres surrounding the Powell #2 and an option to participate in any lands of mutual interest that may be acquired in the future by the Owl Creek Participants. The 1,120 acres is located in Garvin & McClain Counties, Oklahoma, USA. ("Owl Creek Prospect")
The Powell #2 well was drilled to a total depth of 5,617 feet on May 18, 2006. After reviewing a complete suite of open hole logs performed on this potential well, there were two potential hydrocarbon showings. The first of the two hydrocarbon showings was in what is known as the "Upper Viola." This showing was over 50 feet thick. The second hydrocarbon showing was in a deeper zone with good porosity, permeability and calculated productive. In light of this, the operator, Ranken Energy Corporation, recommended that production casing be run in order to test the two hydrocarbon showings.
The operator is currently developing this 1,120-acre field with a view to drilling an additional well on the Owl Creek Prospect as early as June 2006. Pursuant to our agreement, we would be entitled to participate in this additional well by paying 20% of the costs of drilling.
Previously, the operator has successfully completed the first well (the Powell #1) and has been producing oil and gas for approximately 5 months.
Based on this well, the Owl Creek Prospect has been classified
as a new discovery in the Trenton zone of the Viola Formation. This
prospect has the potential for 11 additional wells on 80-acre spacing
or even up to 24 additional wells if on 40-acre spacing. In addition to the Trenton zone of the Viola, other wells in the immediate vicinity have had oil and gas shows in the upper Viola, Hunton, Hart, and Gibson zones. Additional drilling will help further define the project potential in these other pay zones.