Delta Spuds Second Sacramento Well

Delta Oil and Gas, Inc. reported Tuesday that the drilling of its second well (the "CC 7-2") on its Cache Slough property has commenced. The targeted depth of this second well is approximately 5,500 feet and, as of this date, drilling is ongoing at approximately 2,200 feet. Total depth is expected to be reached before the end of this month.

Drilling commenced on the first well at Cache Slough (the "CC 7-1") in September 2005 and reached total depth in October 2005. Review of the logs indicated the potential of a new gas discovery and the operator of the well elected to complete the well for testing. The completion and preliminary testing of the well was completed in November 2005 and Delta and its partners in this well elected to tie the well into a nearby pipeline to accommodate potential gas production.

In June 2006 the Department of Water Resources approved our application and gave us a permit to bore underneath a Reclamation Board levee in order to connect our well to a nearby gas sales pipeline. This was the last permit required before we commence construction of the pipeline for the well. The operator is currently in contact with contractors regarding construction of the pipeline which is expected to commence in the immediate future.

The Cache Slough area, covering approximately 825 acres of land, is a prolific natural gas area northeast of Sacramento, Calif. 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 relatively easy to transport and sell the natural gas.

Delta has agreed to pay 12.75% of all costs of drilling, testing, and completion of the CC 7-2 to earn a 12.5% economic interest.

Delta Oil and Gas is a growing exploration company focused on developing North American oil and natural gas reserves. The company's current focus is on the exploration of its land portfolio comprised of working interests in highly prospective acreage in the Southern Alberta Foothills area, its interest in the Cache Slough Project in California, its interest in the Strachan Prospect, its interest in its Mississippi prospect, its newest interest in a horizontal oil well in Saskatchewan, and its newest interest in the Owl Creek Prospect in Oklahoma. Delta is seeking to expand its portfolio to include additional interests in Canada and the U.S.