Delta to Sell Non-Core Assets for $130MM
Delta has entered into a Purchase and Sale Agreement (PSA) with Wapiti Oil & Gas, L.L.C. (Wapiti) to sell various non-core assets for $130 million. The parties expect to consummate the transaction in August.
The non-core assets to be sold to Wapiti include all of Delta's 31% working interest in the Garden Gulch field of the Piceance Basin in Colorado, all of its working interest in the Baffin Bay field of Texas, all of its interest in Piper Petroleum, half of its working interest in its DJ Basin fields, as well as half of its working interest in the following fields in Texas: Caballos Creek, Choke Canyon, Midway Loop, Newton, and Norian. Delta also will sell to Wapiti its working interest in its acreage positions in the DJ Basin of Wyoming, Colorado and Nebraska; and other acreage in South Texas. Along with the sale of the working interests, Delta has agreed to allow Wapiti to operate the Newton and Midway Loop fields, as well as the other fields of Texas of which it was the operator.
Carl Lakey, Delta's CEO commented, "This asset sale is an important step for Delta and allows us to continue to reduce our overall leverage and meaningfully strengthen our liquidity position. We will be selling Wapiti our interest in assets that we increasingly considered non-core as we continue to focus on our main asset, the Vega Area, of the Piceance Basin. We believe the assets to be sold in this transaction are not adequately valued by the market as part of Delta, making this sale of non-core assets all the more attractive. The immediate use of proceeds will be to pay down the outstanding balance on our senior credit facility."