Delta Oil & Gas Identifies 9 Potential Pay Zones in its First Texas Premont Northwest Field Well.
September 19 2012 - 9:00AM
Business Wire
Delta Oil and Gas, Inc, (OTC:BB – DLTA) is pleased to
report that Delta and its partners have drilled, cased, cored and
logged the first well (the “Garcia #3”) in its new Northwest
Premont Drilling and Re-Entry Prospect located west of Corpus
Christi, Texas. The Garcia #3 was drilled to a total depth 3,780
feet and was cased, logged and cored in preparation for
perforating, testing and tie-in. A completion rig is expected to be
on-site within 3 weeks for single zone production. After stabilized
production is achieved, additional zones are expected to be
perforated. Although the Garcia #3 is subject to “tight-hole”
status, Delta can report that the logs and cores indicate as many
as 9 pay zones in the Gulf Coast “Frio” and “Miocene” sands with
the potential to produce commercially viable quantities of
hydrocarbons. Delta and partners are very happy with the tests of
the Garcia #3 so far which has proven up the geological projections
of the field.
After the Garcia #3 is perforated, tested and tied-in, Delta
intends to re-complete 2 previously drilled well bores in the
vicinity in which Delta expects to find analogous pay zones to the
Garcia #3. Additionally, Progas is considering an offset well to
the Garcia #3. Though the parameters of the field are uncertain at
this time, substructure mapping of wells drilled in the area
indicates it is larger than anticipated with a larger areal extent
than most Frio fields. By participating in the Garcia #3, and
paying its share of previous development expenses and lease
acquisition costs, Delta earned a 10% right of continued
development in the field which includes the drilling of no less
than 15 additional wells.
Additional information regarding the completion of the Garcia #3
and other initiatives within the Area of Mutual Interest (“AMI”) as
it becomes available.
Delta’s Interest in the
Prospect:
Delta acquired its 10% interest in the Garcia #3 and the
continuing development rights in the field on August 20, 2012 by
way of an agreement with Progas Energy Services LLC, a Texas Oil
& Gas Company (“Progas”) to jointly develop, along with other
industry partners, a newly re-discovered Frio and Miocene field
located in Jim Wells County, known as the Premont Northwest Field.
Delta acquired these interests through a combination of cash and
the issuance to Progas of treasury shares at an initial cost of
$0.15 per share. The option to pay drilling costs with its
securities remains open for the next three wells drilled in this
Prospect. The value to be used for determining the issue price of
the common shares for future drills shall be based on the average
closing price of the shares over a three day trading period
immediately prior to receipt of any forthcoming Authorities for
Expenditure, but in no event shall Delta issue shares as a payment
for less than $0.15 per common share. Delta is fully paid to the
point of production on the Garcia #3.
Progas, the developer of the field stated that it was “very
happy to have aboard the professionals and experience that Delta
brings to the field and its future development."
The agreement stipulates, among other things, that Delta is able
to participate in the drilling of no less than 15 wells, several
re-completions and all other wells drilled or re-completed within
the AMI. In addition, Delta has been given the right to acquire
more than its 10% share if and as more becomes available.
About the Premont Field:
Originally the Northwest portion of the field was thought to be
a small field extension of the Premont Field. The Premont Field has
made over 5,000,000 bbls of light oil and 30 TCF of natural gas
from the Frio and Miocence sands at depths of less than 4400’. This
agreement to participate in the development of the field included
an agreement to drill the Garcia #3, followed by no less than 3
more test wells prior to drilling another 10 wells to delineate the
perimeters of the field. The agreement also includes and earns
Delta the continued right of participation in the field including
the right to participate in additional re-entry wells controlled by
Progas.
The Garcia #3 well was the 4th successful well drilled in the
field in an effort to discover and prove up the field. The Garcia
#3 was drilled to a total depth of 3,780 feet in August 2012. On
August 13, 2012 Weatherford logged the well and took 45 sidewall
cores in the potentially productive oil and gas sands. Core samples
were not taken of several zones, which the operator felt were
adequately proven up in offsetting wells. The well was cored with
139 feet of potentially productive oil and gas sands, 3 oil (29
feet of sand) and 6 gas sands (104 feet of gas sands), proving a
total of 9 zones for potential hydrocarbon production. Encountering
this many zones in a well is quite unusual for the depth drilled
but is becoming more common for wells drilled in the field thus far
giving Progas good reason to be optimistic for additional drill
targets within the Field. Initially only oil sands are to be
completed and thereby leaving the gas behind pipe until natural gas
prices rebound.
The Primary target of the Garcia #3 was the oil bearing Lower
Barnsdall sand which was present at 3,420 feet. The well was a
pleasant surprise since the oil sands seem to be much more
developed and much higher on structure than anticipated. Logs and
cores indicated the presence of the Lower Bardsdall and that is was
11 feet thick. The Lower Bardsdall is 8 feet structurally high to
the producing sand in the Garcia #2 well one location to the north
which has produced nearly 30,000 bbls to date. The zone has an
average porosity of 26%. In addition to the Lower Bardsdall sand,
two other sands cored oil: The 16 foot thick Bardo sand (with 2
distinct and separate lobes), and a 5 foot section of the Caddo
sand below a 4 foot gas cap. The Bardo sand is 11 feet higher on
structure than offsetting wells. It too is showing a 3 foot gas cap
which Progas believes will enhance initial production rates as well
as the recoverability factor of the reservoir. The average porosity
of this sand is also 25%. Offset wells with similar shows down dip,
4-5 locations to the east tested at 59, 89 and well over 100
bopd.
The Caddo appears to be running about 2 to 3 feet higher on
structure than offset wells and the oil sand is 4 feet thick under
2 feet of gas, also indicative that this well has both gas and
water drive which is expected to allow us to produce much higher
volumes of over the life of the well. This zone has a porosity of
24%.
About Delta Oil and Gas,
Inc.
Delta Oil is an exploration company focused on developing North
American oil and natural gas reserves. Delta Oil’s current focus is
on the exploration of its land portfolio comprised of working
interests in acreage in King City, California; Newton County,
Texas, Jim Wells County, Texas, South Central, Oklahoma, and the
North Sacramento Basin, California.
On behalf of the Board of Directors,
DOUGLAS N. BOLEN, President
Safe Harbour Statement
Statements in this press release which are not purely
historical, including statements regarding Delta Oil’s intentions,
hopes, beliefs, expectations, representations, projections, plans
or predictions of the future are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. It is important to note that the Company’s actual results
could differ materially from those in any such forward-looking
statements. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, that may cause
our or our industry’s actual results, levels of activity,
performance or achievements to be materially different from any
future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Our
business could be affected by a number of other factors, including
the risk factors listed from time to time in the company’s SEC
reports including, but not limited to, the annual report on Form
10-K for the year ended December 31, 2008 and the quarterly reports
on Form 10-Q filed subsequently. The Company cautions investors not
to place undue reliance on the forward-looking statements contained
in this press release. Delta Oil & Gas, Inc. disclaims any
obligation, and does not undertake to update or revise any
forward-looking statements in this press release.
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