Delta Discovers 67 Feet of Gas Pay, 7 Feet of Oil Pay at Palmetto Point

Delta Oil and Gas, Inc.

Delta Oil and Gas, Inc. announced that the sixth and seventh gas wells at Palmetto Point, Miss., have been drilled to total depth, deemed by the operator to be commercially viable, and have been cased for production. In total, seven wells have been drilled in the 10-well program at Palmetto Point. To date, five of the seven wells have been successful and have been cased for production.

Drilling of the first of 10 wells (the PP F-40) commenced in the first week of May 2006, and a total of seven of 10 wells have been drilled to date. Production casing has been set on five of these wells because each of the five encountered zones of natural gas and two of the five encountered zones of oil in addition to the natural gas. Two wells were not successful and have been plugged and abandoned.

The well depths and pay zone depths of each of the successful wells are as follows:

WELL        TOTAL       Thickness of Natural Gas       Thickness of
NAME        DEPTH               Pay zone(s)           Oil Pay zone(s)
F-40     3,892 feet               15 feet
F-118    3,800 feet               16 feet
F-121*   3,850 feet
F-7*     3,800 feet
F-39     3,450 feet               15 feet                3-4 feet
F-42     3,050 feet                8 feet                  4 feet
F-36     3,450 feet               13 feet
*Plugged and abandoned. 

At present, the F-118 and the F-42 are being hooked up to a nearby natural gas pipeline. The natural gas production should commence within approximately 3 weeks. Connections to the pipeline for the F-39 and F-40 are expected to follow shortly thereafter. Potential flow rates for the gas will not be known until shortly after the pipeline connections are complete and production is established. These flow rates will be reported as soon as they are available.

Drilling continues on the balance of the wells at Palmetto Point, with an expected completion date in August 2006.

The drilling program is being conducted by Griffin & Griffin Exploration in its capacity as operator. This consists of the drilling, logging, testing, completing, and equipping for production (or if applicable, the plugging and abandonment) of 10 wells. Griffin anticipates drilling to a subsurface depth equal to such depth as is necessary to penetrate the sands of the Frio Formation identified as potentially productive of oil and/or gas. Griffin has drilled, owned, or operated more than 100 Frio wells in the region.

Griffin has utilized seismic "bright spot" technology, which provides a tool to identify gas reservoirs and to delineate the reservoir geometry and limits. Utilizing these critical factors has improved reserve estimates and the geologic success ratio that has made the Frio an economical and predictable reservoir.

The Frio in the area of Southwest Mississippi and North-Central Louisiana is a very complex series of sand representing marine transgressions and regression and, therefore, the presence of varying depositional environments. Structurally, the Frio gas accumulations are a function of local structure and/or structural nose formed as a result of differential compaction features. However, stratigraphic termination (i.e., up dip shales outs of sands) also plays a role in most Frio accumulations. The stratigraphy is so complex that seismic HCL evaluations are the only viable exploratory tool for the Frio prospect.

Delta has acquired a 10% gross working interest in the drilling program.

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 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.