Delta Petroleum Acquires Interest in Padgett Field
Delta Petroleum has entered into a definitive Purchase & Sale Agreement with JAED Production Company, Inc. ("JAED") to acquire all of JAED's interests in the Padgett Field in Sumner County, Kansas.
The properties will be acquired for a cash consideration of $9.0 million and the issuance of 200,000 shares of Delta common stock to JAED. Closing of the transaction is expected to occur on or before June 23, 2003 and the effective date of transfer will be June 1, 2003.
The acquisition will include 22 wells that are currently producing approximately 950 barrels of oil and 500 Mcf of gas per day. The average working interest being acquired is approximately 97% with an average 79% net revenue interest. Delta estimates the total proved reserves to be approximately 1.65 million barrels of oil equivalent with most of the proved reserves already producing.
"We believe additional reserve potential exists and will undertake drilling activities to delineate and expand the size of the known reservoirs," commented Roger Parker, Chief Executive Officer of Delta Petroleum Corporation. "Also, numerous behind pipe zones exist throughout several of the reservoirs, and we believe secondary recovery could significantly increase future recovery. Upon completion of the purchase of the Padgett Field properties, Delta's net production will be approximately 21,000 Mcf equivalent per day," concluded Parker.
Delta will finance the transaction with available cash and an increase in the borrowing base under its existing credit facilities.